Marginal gains and the four tiers of learning

Colleagues and clients who know me well will know that in addition to being obsessed with the search for perfect systems I’ve taken a huge amount of inspiration from the successes of the British and Sky cycling teams and particularly Dave Brailsford’s ongoing search for what he refers to as marginal gains. That search fits with what I refer to as the four tiers of learning.

There are sadly still many people in this world who fail to learn from their own mistakes. We know many of them and some of them do not have the excuse of youth to fall back on. Whatever they do and wherever they do it they will sadly fail to achieve their potential in life. They are on the first tier.

On the second tier are those who do learn from their mistakes. Hopefully our kids are already in this category. They might do the odd stupid thing, but they’ll learn. If they do, then progress in life, love and careers will be made even allowing for the odd setback.

On the third level are those that learn from other’s mistakes and therefore avoid making those same mistakes themselves.

It never ceases to amaze me how much a few people I know who did incredibly badly at school have achieved in their career. This compared to some straight A students I went to school with who have gone nowhere. How did this seeming reversal of fortune occur? I do wonder if the experience of the first group helped them realise that they don’t know everything at 16 and therefore continually seek new knowledge from others whether that be by observation, asking questions or reading.

And conversely others who have done so much better early in life think they can stop learning even though they are actually still near the start of their journey.

Within our accountancy practice, long-standing or old members of staff will have made many mistakes most of which we have tried to take on board and incorporate within the systems our staff now follow. All owners of businesses owe it to themselves and the vast amount of time spent in the past making mistakes and putting things right, to do the same. But systems are only useful if your team follow those systems. I read an article which suggested that “those unwilling or unable to do so (i.e. learn from predecessors) are either demagogues or ignorant”. Strong words!

But what about the fourth tier of learning? Those on that tier have re-discovered their four-year-old self and regained the ability to ask the question: “Why do we (or you) do it this way?” in relation to the way they work. Sometimes the way something is done goes against your instincts or biases but having an open mind to the reasons behind the processes allows new staff to absorb in months a volume of knowledge that it would take you take several years to acquire on your own.

Most importantly once they completely understand what they’ve inherited, they can then start to improve things. Knowledge they have brought from other parts of their life or previous jobs then allows them to build on what they have inherited.

In my younger years working for another firm, we had a contract to audit the Tote calculations at a local dog track. The amounts paid out were calculated by a computer, but legislation required us to retrospectively manually check the calculations. If one race had been paid out incorrectly, we were supposed to step in and notify the licensees immediately.

It was suggested by a colleague to take my study books with me because there would usually be dead time between doing and documenting the calculation for one race and doing it for the next. So, the quicker I did my calculations, the more time I got to study.

Once I’d understood the basis of the manual calculation, I worked out that the 5-step process was overly complicated and that the same result came from a simpler 3-step calculation. Having demonstrated this to the partner concerned and convinced him of the reasons why the answer would always be same, I was then able to get the same amount of work done in less time and get more studying time.

Interestingly, when I gave up my evening visits to the dog track in order to concentrate completely on passing final exams, the colleague who had set up the forms in the first place immediately went back to the old method of calculation for no reason (that I could gather) other than that he would have to admit he’d come up with an overly complicated method the first time round!

So, what does all this amount to?

Well it’s all about the acquisition of wisdom.

At A4G’s focus group for all our team members we talked about “finding marginal gains”. But where are they for us and for your business?

Well they’re everywhere. They are in other industries, colleagues doing similar tasks, experience brought from previous jobs. You don’t need to tear anything up, just find out how it works, why is done that way and think about whether you can improve it. You probably won’t be able to but if you do that for every task, you’ll soon stumble on one you can.

Even asking yourself the question “why am I doing this?” about something you have been doing for many years is relevant because the reason you did it the way you are doing it now might have made it right five years ago but the outside world and the rest of our business might have changed a lot in that time and the reasons might not apply.

So, what has this to do with an accountancy practice and the service we offer you?

Well, between all our staff we have dealt with thousands of businesses and tens of thousands of different situations. We are in a fantastic position to pass on the lessons we learn in one industry to the owners of businesses in others. That’s why most of our business clients have a pre year-end meeting to discuss not just their results and tax planning but also consider strategies for the coming year and the hurdles they need to get over.

Perhaps the marginal gains that come from the advice we give in that meeting might be the key to success in the coming years.

Have a good weekend.

Next week look out for a special newsletter we’ve put together to summarise some of the business lessons we’ve learned over the past 7 months. Don’t miss it as it’s a little bit different to anything we’ve ever sent out before…..