Over lunch many years ago, a bank manager suggested that I was an entrepreneur.

Definitely not!

A4G have many entrepreneurs as clients and they all have an appetite for financial risk that is way beyond my ability to sleep soundly at night.

But like most people who run owner-managed businesses, I like to think I have an entrepreneurial spirit.

Occasionally that means challenging conventions.

A lot of our practicaes are as a result of challenging some of the conventions of the accountancy industry. And boy, are there are a lot of those! That does occasionally get the odd raised eyebrow when we get one of our regular visits from our Institute to check that we’re still complying with their rules but I can live with a raised eyebrow.

Our systems, processes and ways of managing our workflow are more based on ideas from the manufacturing world with inspiration from The E-Myth Revisited and The Toyota Way. Our goal is to systemise the 90% in order to humanise the 10% i.e., the contact with you. The more we can systemise the repeat stuff, the more time we have to help meet our clients’ real needs and wants, whatever they are.

One of my partners interviewed someone a few months ago via an agency. That’s not our normal route for recruitment (more on that later) but sometimes we have a gap that needs filling by someone with experience. The candidate in question did ok in the interview but afterwards he asked the agency to withdraw his application telling them that he thought we were “weird”. I’m still chuckling now. In the context of traditional accountancy firms, we probably are.

And if he concluded that in a one-hour interview, then he definitely wouldn’t have fitted in here! We probably had a lucky escape.

But the occasional bit of weirdness is necessary if you want to differentiate yourself. Or even if there is a big problem that conventional thinking has failed to solve. I suspect that a bit of “weird thinking” was required by the boffins in Oxford to develop their COVID vaccine in a matter of months instead of years. Without that weird thinking, I wouldn’t be sitting here looking forward to a great Summer wearing my mildly aching right arm like a badge of honour after my vaccination this morning. Yay!

Back at A4G, perhaps the time when we challenged convention the most was in our choice of location. Not many accountancy practices buy derelict nightclubs which formerly operated as the most famous bikers’ café in the South East and then convert it into offices. I won’t bore you with all the complicated details of how it all happened, but I can definitely say it was one of my better decisions.

And when we did our official opening, we did it on the theme of the bikers’ café and served everyone bacon butties and mugs of tea. Win-win for an accountant like me when it came to the catering bill!

Most of our competitors are still in conventional offices in town centres even though most owner-managed businesses operate from business parks, converted barns, people’s homes, or all sorts of other locations. But that’s how it’s always been, I guess.

Of course, some conventions are there because they work. “If it ain’t broke, don’t fix it” as they say.

But even if it ain’t broke, that doesn’t mean it can’t be done in a completely different way that’s better than the original or that there is something that you can add (let’s call it a twist).

If that twist that you add is something that is attractive to a lot of potential customers, then that can become your “Unique Selling Point”. You should use it as the basis of your marketing and highlight it in as many places as possible. There’s no point doing something different and not telling people about it.

Or you can completely re-think the whole approach to the service or product.

Up until ten years ago, A4G pretty much always recommended Sage to our clients for their accounting software.

Sage dominated the market. All my team knew it inside out. We had systems for setting it up and advising on it and if a member of staff who had a client using Sage left, it was usually reasonably easy to find a replacement with those skills.

How did Sage come to dominate the market in that way?

Well first of all, it was in the market early. But then their marketing strategy was incredibly effective. If you bought their cheapest package (back in the 80s this was about £600), you could fill in a form and become a Sage dealer. Then if you sold someone the same package, you would earn 45% of the sale price. Sell three and you’ve got back all your initial cost and have a profit on top.

It was really effective pyramid selling scheme with a good product at its heart.

But somewhere along the way, some clever people in New Zealand challenged convention and identified the inherent weaknesses in a self-contained, PC-based bit of software and came up with something better. Much better.

They developed Xero which is Open Database Compatible. That means that any other software company can write a link so that their software links seamlessly with Xero. As a result, there are now thousands of cloud-based software packages which link with Xero and very few with Sage. All of which makes Xero much more attractive to buy.

Sage now seems to have given up the fight to catch up in terms of technology and is only growing via acquisition of other companies.

Who are the big players in your industry? Where are they vulnerable to a more nimble owner-managed competitor? What can you do differently to steal market share from them in the same way that Xero has done from Sage?

One way is by identifying undervalued talent and there are lots of opportunities in the next 12 months.

If you like a classic David beating Goliath story, the book Moneyball (later turned into a film starring Brad Pitt) explores how the Oakland As baseball team upset the odds against the wealthy baseball elite through unemotional analysis of statistics which identified which players were overpaid and which were underpaid (and therefore under-valued).

The reasons why some players were undervalued will challenge you to re-think your employment strategy. Almost all professional sports teams try using the Moneyball approach to recruitment now. But most companies in other industries don’t. They stick with convention and recruit through the same recruitment agencies often taking on the same conventional individuals who jump from one company to another sometimes causing havoc wherever they go.

Sport of course is the great innovator and challenger of convention as I discussed with Steve Backley and Roger Black in this week’s Mindsetting video.

From the most conventional of sports, golf, a young American with a long name has emerged who is challenging every aspect of his sport to see if he can find a better way. For the non-golf fans amongst you, Bryson DeChambeau (nickname “The Scientist”) deliberately put on 40lbs in weight (pretty much all muscle) in order to be able to hit the golf ball extraordinary distances.

He analyses every hole on every course to identify places where he can land the ball to have a better second shot. Sometimes those landing spots are on different holes! Some fans think it’s the most exciting thing to happen to golf in years. The purists hate him.

But breaking conventions requires a great deal of bravery. To be prepared to not just fail but to be seen to fail trying something that’s never been tried before. Perhaps it’s better to fail in the same way as anyone else. Reject notoriety and choose anonymity instead.

So, what can you do differently? What could you do that could become a Unique Selling Point?

What are the conventions in your industry that are unwittingly holding you back? And how are you going to break them? Maybe it’s time to try some weird thinking.

Have a good weekend.

Contact me today!

Malcolm Palmer

FCA

Managing Partner

01474 853856

Send me a message

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