How many times have you heard the cliché "change is inevitable"? Probably more than you can ever count, though quite overused it is a truth we cannot deny. A lot of things are changing around the world, within our organizations, and even in our personal lives, that's why learning how to deal with change is an important skill everyone should have. In this episode, Jamie Nau, our host and Summit CPA's Director of Accounting sits down with Jody Grunden, Partner at Anders CPAs + Advisors, and Douglas Ferguson, President of Voltage Control. Voltage Control is a change agency that assists businesses in igniting, accelerating, and strengthening innovation. Douglas talks about managing change in an organization and shares his experience working with businesses that we all can learn from so we can thrive in a constantly changing environment.
"I think a lot of it has to be started through exploration because if we don't start with a mindset around exploration and learning...If we're just changing for the sake of changing, then we really, we're not coming from an informed perspective." - Douglas Ferguson
The finer details of this episode :
Episode resources
How to manage change and thrive in it with Douglas Fergusson
Jamie Nau: Hello, everybody. Welcome to today's show. I'm very excited about today's topic. It is a topic that is pretty much relevant, any time of year. We're always thinking about changes. And so today we're bringing in Douglas Ferguson from Voltage Control, who knows a lot about change and works with a lot of companies on change.
So welcome to the show, Douglas, and we'd love for you to give a little bit of introduction about your background and your company.
Douglas Ferguson: Well, as Jamie mentioned, I’m the founder of Voltage Control, and we're a change agency, which means that we help organizations navigate change and actually thrive through change.
A lot of times, folks see change as something they have to wade through, or it can be sort of a struggle just to be stuck in that messy middle, thinking it’s gonna be frustrating and difficult.
We believe it can be a time to thrive. And, especially in these uncertain times we're in, change just begets more change, begets more change, right?
And so, how do we look at it as something where we can thrive? And so we help people navigate those moments and also build the skills that it takes to look at future changes with less fear.
Jamie Nau: Awesome. In addition to Douglas, we have Jody here. So Jody, welcome to the show again.
Jody Grunden: Thanks, Jamie.
Jamie Nau: I know you're someone who loves change and strives for change and is always thinking about change. So, I'm excited to have you have you on the show, and I'm gonna actually let you give Douglas the first question, because I've worked with you long enough to know you’re not afraid of change.
Jody Grunden: Yeah. So, so obviously you can't be afraid of change, right? So change has gotta be something you've gotta be able to embrace. And with a lot of people, that's just not the case. Change is something that they kind of hide from. They kind of push off, and there's tons of excuses or reasons why they don't want to make changes.
So what's a healthy middle? Obviously you don't wanna make a change for the sake of making change; that doesn't make sense either, but you wanna make reasonable change. And so how would you help a healthy medium of a person with change, you know, dealing with change?
Douglas Ferguson: I think a lot of it has to be started through exploration because if we don't start with a mindset around exploration and learning, then we don't really know what we're walking into. Right? To your point, if we're just changing for the sake of changing, then we're not coming from an informed perspective.
And we can't always have all the data; we're not always operating from a 100% clear, this-is-how-this-is-gonna-unfold perspective. I think it's really important to constantly be evaluating, exploring, and learning. And then also realizing that, especially if we're dealing with a large staff, that's where change really becomes very difficult, because to your point, we're gonna have folks that are really excited for the change. And we're gonna have folks who are really struggling with the change, and we're gonna have some folks that are actively opposing it.
How do we navigate, what's the strategy of how we're gonna lean into that, and how are we inviting conversations to really hear from folks to understand what's blocking it?
And I'll say the number one thing we run into is identity. People’s identities are at stake when we are moving through quite a lot of change.
Jody Grunden: What do you mean by that? Identity is at stake. I'm not following you on that.
Douglas Ferguson: So imagine that, let's say AI is like all in the news these days.
Right? And so that's an easy one to capture some fears because it's still quite uncertain for a lot of us. And so if you thought, we're gonna introduce some AI capabilities into this new software suite that's going to basically automate all audits. Well, if you're an auditor, then your sense of identity is in question, because what does it mean to be an auditor in a world where we've got software that automatically does it for us?
But the thing is, we have to unpack it and say, what does that mean? We have to have that conversation, that dialogue, and explore that future and the people that are eager for the change probably see it. They probably can't articulate. They certainly haven't visualized it, and we can create moments where people can come together, and the people that are excited for the change can slow down enough to provide ways for them to communicate to the others.
So they start to see it and go, ‘oh, wait a second. I can reimagine who I am.’
And it's a transformation they have to go through. Because you can't just flip a switch and have them go from, I'm an auditor to I'm an XYZ. Or I'm an on-prim engineer, and now I'm a cloud engineer.
It's just a totally different mindset shift that people have to learn about and reimagine and rethink who they are.
Jamie Nau: You talked about the learning and then, obviously, with what you just mentioned, how do you find that line of when to do that learning?
I think whenever you're making a change, there's kind of two directions you can go; you can say, we're gonna include everybody in the company in this decision, and we're gonna talk about it and we're gonna do everything and we're gonna spend months making sure this is the right decision.
Or you can just make the decision and say ‘deal with it people.’ So I guess what's the fine line between those two? And how do you determine what amount of people to bring in ahead of time to make sure that the change is right?
Douglas Ferguson: I personally am a big fan of creating a culture where everyone is curious.
We get people to the point where they're constantly asking themselves, ‘how can this be better? Or is this serving us?’
The worst is when we have processes that are so mature and so established that we hold them sacred, and we won't let go of them. But, at the end of the day, they're, they're not serving their function anymore.
Right? They're actually a disservice; they're slowing us down. They're just there. It reminds me of the movie Office Space where it's like the TPS report. It's like, what are these TPS reports we have floating around our companies that we could creatively disrupt?
And, I think that if we breed a culture of curiosity, everyone's constantly having those conversations. So it doesn't create this moment of like, ‘oh my gosh, we had to bring everyone in and do a giant survey.’
I don't believe those pulse surveys work. I think it has to be a continuous, healthy habit of being curious and learning and creating those opportunities to flex. And that gets into other cultural things where, if everyone's overloaded where they're running at the max, then there's no slack in the system for them to thrive and innovate and think in these ways.
And I think, definitely on the spectrum of, ‘this is the change we need, and you're gonna have to deal with it,’ to ‘let's just constantly be changing all the time,’ I think if we find ourselves in the middle where we create a culture where change can kind of emerge and people are allowed to create local solutions to their problems, then we can double down on the things that are working.
It is like, ‘look what Susan did over here. This is really cool. This is a great prototype of how we might do it.’
But now, when we pick this up and look at it over in this other department, or we think about how it might work if we start doing this for this client or that client, then we might have to change it or adapt it or evolve it. And so that's when we bring in other people to the conversation and kind of percolate it out.
Jody Grunden: Basically, it sounds like you wanna go from a small group outward then; is that what I'm hearing? If you get too big of a group, then everybody's kind of numb to that change or numb to making a decision or numb to delaying it because of whatever reason. Whereas, with a very small group, you can decide what you want to do.
And then you want to broadcast that change amongst everyone else. But then, giving them the option of autonomy to actually make minor changes to that as their department needs or their department wants. Is that what I'm hearing correctly?
Douglas Ferguson: I think what ha what happens is, you have a bottoms up and a top down, I would say, symbiotic relationship, right?
Because if leadership isn't supporting from a structural standpoint and from a resource standpoint and from even just a cultural mindset point, these little grassroots movements can't happen. But, if we try to just command everything and puppet everything from the top, that's not gonna work either.
So I think what we had to do is think about it like, this leadership should think of themselves as gardeners, right? I can't make that plant grow, but I can create the conditions by which the plants will thrive.
To thrive, the plants have to find their local optimizations, right? Like if the sun's not quite shining where they need it and the plant starts to grow toward the sun. It locally modified and adapted.
That's how these systems evolve. But we have to tend, and we have to, as leaders, provide those conditions to allow them to do those things.
Jamie Nau: I think that's a great point. I think it goes back to action, right? I think a lot of companies and a lot of businesses and a lot of leaders say, ‘this is who I am,’ but it's like saying I'm a gardener, but I've never actually planted a plant in my life.
So I think that if you wanna have that culture of, ‘okay, we're gonna be curious and we want everybody to bring ideas to us.’ Yet every time someone brings an idea to you, you shut it down and all ideas come from you, then it's never gonna work.
So I think that you really have to live out that core value if that's what you're gonna do.
It’s like, ‘Hey, this idea was brought to us by Bob who's a web designer. He had brought this idea of a process improvement. Let's go down this path and this is what we're gonna do going forward.’
And I think that as long as you're embracing it, that naturally comes. Because people think, ‘Hey, if Bob brought that idea, maybe next time I’ll bring an idea to the leadership, and they're gonna let me do it as well.’
And so, I think it’s really about action. Not just saying, ‘Hey, I'm a garden.’ You have to actually live it out.
Douglas Ferguson: I think there's two things there, too, which is really examining where ideas go to die in your organization.
Like, how are they getting squished? Some people talk about the frozen middle, or you just mentioned leadership shooting down the idea. Where does it happen? And then, how can we have an intervention where we say, ‘Let's prevent that from happening.’
Because we can't just bring in best practices from elsewhere. We had to look at where it's breaking down for us organizationally. And, it's also easy to repeat a mantra where we're gonna let ideas flourish. It's like, okay, great.
But if we don't go in and examine and it's like, what Drucker used to say,
“what gets measured gets managed.” And so, if we don't measure where the ideas are getting stifled, we have no chance of fixing it. We have to understand that point.
Jody Grunden: What about for the person like myself where, I come to the table with a lot of different ideas. I'll go to a meeting or a conference, and I'll hear these great three or four different things or ideas that I want to implement right away into the company.
And then, when I come back to the meeting and I talk about it, of course, they get shot down or they get stifled in some manner; they’re great ideas, but they don't get any further than that.
At what point should a leader continue to push for that change or for those new ideas? Or at what point should they say, this is not the right timing or not the right place or not even a good idea? How should that process actually flow?
Douglas Ferguson: In that case, if I understand it correctly, it's like the leader’s at a conference and the leader bringing an idea that he heard?
Jody Grunden: Yea, nobody else heard about it yet, just the leader’s experience. So, when you bring it in, the leader's been thinking about it for three, four days, about how great this is and hearing everybody else talk about how great this is. But then, when the leader brings this idea to the table, it gets shot down, left and right, for obvious reasons.
Douglas Ferguson: There's a number of things that might be at work there. One is, again, if we built a culture around protecting the way things are done, and we haven't built a culture of curiosity and creating a space of safety to experiment, then it's cultural; it's like the antibodies of the organization are coming in, and it's less about those people and how they really feel deep down.
And, it's more around, they're kind of playing the roles that we kind of taught them to play. They've been conditioned to respond that way.
And so sometimes, you have to have the conversations to break that down. I think as a leader, someone who brings an experiment up, when you bring these things in, if they are getting shut down, really drilling into what the opposition's about.
I really love to treat everything like a prototype, because if we come in and we say, oh, this is the best idea possible, and we have a culture where people are used to shooting down things, they see a target; they're ready to shoot things down.
If you come in with the humility of, I'm not sure about this. It sounded interesting, but there might be something good here. Can you help me figure out what's good about it?
Or, what could we learn from it? Then it frames from, ‘we should do this.’ And now they're thinking, we're gonna have to change everything. This is gonna be a pain in the butt. It shifts the perspective around encouraging them to think and pull out the good bits.
Like what do they like about it? And then go, okay, well, based on what you like about it, what could we start doing? So instead of importing something from somewhere else, cherry pick the good bits.
And then, the other thing that I'll say too, and this applies to both scenarios, where we were talking about before and what you're mentioning here is, small risky bets can be really powerful because when a bet is so big, that's when the antibodies really come out. Right?
Imagine you don't have a strong immune system. If you scuff your knuckle, it doesn't bleed. But, you get a gash that requires stitches. There's a big response, there's a lot of swelling, there's a big reaction.
And so, organizations are very similar. They're gonna react based on the threat, and how big the threat is. If we minimize that threat and we make it small enough, the potential risk is much smaller.
Because that blast radius, that potential damage, is contained, but let's make it really, really risky. Because the riskier it is, the more we can learn. So anytime we're doing a little experiment or test or trying something new, let's actually swing for the fences, but let's do it in a way that's not gonna damage the business in a big way so that we can undo it if we make a mistake.
Jamie Nau: Yeah, I think that's a really great point. I think a lot, like you said, every idea doesn't have to be a home run, right? Sometimes the small, little change will really make a big difference.
So I'm gonna piggyback off Jody's question a little bit here because I think Jody and I experienced some of the same things. I could tell with his question. When I started at Summit, we were probably 20, 25 employees. And so a lot of the ideas were coming from a couple of the CFOs, Jody, Adam, and I.
We were just generating a lot of the change, and I think as we've gotten larger and now, as part of a even larger firm in the last six months or so, I think that one of the obstacles to this is, I'll bring a change in and I'll be like, ‘Hey, this is what we should do.’
And you don't realize that 50 other changes are already happening because we've built a culture, like you said, where we're not the only ones bringing ideas and changes anymore.
So can you talk a little bit about how change-management needs to change as the company gets larger?
Douglas Ferguson: I think one thing that you're speaking about is maintaining your portfolio of change. Right? However you wanna track it, everyone has different project-management tools. And this may vary across the organization. Agencies are a special breed because in an agency, no matter how big you get, even as you grow and get really, really huge, pretty much everyone's of the same ilk.
But, if you look at a software company or CPG or something, there's so many different departments and roles that get quite, quite big. And a lot of times those departments will have their own mechanisms for project management or their own little tools.
Or sometimes, it's not even a very good tool; it might be email or something And so, I think listening to some of your peers around how they're doing it can be really powerful because we might already have licenses to some project-management tool, whether it'sSauna, Trello, or whatever, but Ithink tracking those things.
I've mentioned Drucker’s “what gets measured gets managed.” And, I have a similar saying, “What gets visualized gets velocity.” Anytime we can see progress, that begets more progress. That's one of the things great project-management tools can do is really kind of surface up the project.
I don't really care what tool it is, as long as we can visualize what's happening really quickly. I'm a big fan of,whenever tools have a con-bond view where you can visually see the arc of progress, it’s really powerful because that tells us if we've got too much work in progress.
I would say any kind of change-management work should be treated with a lean-methodology mindset. So if we’ve got too much work in progress, it can grind stuff to a halt because we’ve just overloaded everything. And so, that's something you had to experiment with: what is the right amount to have in progress as far as what's healthy? But, when you get there and you've got too much, you can feel it, right?
If you've got a way to visualize it, then it helps quantify it and helps you see it. And you can kind of back off that edge a little.
Jamie Nau: The one thing we've done in that area is, not only have we measured it, and again as I mentioned earlier, we are a very change company; we love change, we think about change, we're always trying to change.
And so one of the things that we did probably when we were hit about 30, 35 people, Jody, is we actually hired project managers. Because of that, we needed more than just a tool of let's put all our changes into this tool and everybody watch them.
We needed someone to actually watch it. And someone who's really good at project management to be able to push back at us. Because like I said, Jod, and I just love change. ‘Like, Hey, we should do this.’
And we needed someone that had that project management in mind to be like, yeah, we can do that. But just so you know, it's like, 15th on the list of all the projects we're working on.And so, if you wanna move it up, some of these other projects are gonna have to stop.
That's one thing that we've done. I doubt there's very many CPA firms out there that have project management. There's something we had to do in order to really get our hands around that change management that you mentioned.
Douglas Ferguson: Yeah. I'll say this; you know, this is an old, agile adage that came out of QA, and it was this idea that if everybody owns quality, nobody owns it. Because there were organizations that didn't have QA staff. And they were just saying, ‘oh, well, everyone should be responsible for quality because we care about quality.’
But at the end of the day, to your point, if everyone is ultimately responsible for it and we're just looking at this tool, who's gonna be sweating the details? Who's going to make sure it's accurate and notice things?
And so, whether it's in a formal title of project manager, or if it's just people that are identified, because I think whether or not you own the role, someone needs to embody the role to really be identified as a go-to person to get questions answered and to kinda steward that progress.
Jody Grunden: A hundred percent agree with that. I think creating systems and so forth is the same thing. When you're creating systems, you have to do the same thing. Everybody can write down everything that they do and map everything out in detail, but you really need somebody that is gonna be the person that's in charge of that–someone taking that lead and being the person that's overseeing it, pushing it, making sure that it's all consistent across the board. Without that, you'll never create your systems and processes. You'll never systemize everything to where you need to be.
So I think that part of the change management is having somebody focused and responsible for it, somebody that's leading it. I a hundred percent agree with you.
Douglas Ferguson: You brought up a pet word of mine, which is systems. I’m a big, big fan of systems thinking, and anyone who's a fan of complexity theory has already noticed that I've been pointing out a few different complexity theory things.
Funny enough, that's where I got the name of Vulture Control because I have a massive modular synthesizer. And back when I was a chief technology officer, I would often remark on how patching up my synthesizer was a lot like working with teams, because if I were to just move one little cable or turn one little knob, that can have a ripple effect throughout the whole organization, and it reverberates back and forth. That was massive; such a little tweak had a massive impact, and that's the way systems work.
And we have to really respect that these phenomenons require a bit of care and a bit of understanding. We shouldn't take those things lightly. We have this diagram that we like to show in our facilitation training, which depicts the amount of connections between people; the more and more people you add into a meeting, but this also applies to organizations, right?
You've got two people. There's one connection. You've got three people, there's three connections. You've got four people. There's you know, the connections are just exponentially increasing until it gets unmanageable. How do you measure and understand these network dynamics?
As well as all the other impacts of the systems that are at play. And I think we won't always get it right. You know, we can't always afford it. I mean, if you're gonna hire someone like Peter Gray from UVA to come in and do a massive network analysis, that's hundreds of thousands of dollars, even for a medium-sized business. You're not gonna do that for every change.
But I think being aware that these things have impacts and staying curious, we won't always get it, but being aware of it is huge because, when something doesn't respond as we expected it, we're not apt to blame people or just being frustrated. We're like, oh, okay. The system responded in a way that it was unexpected. Let me try this instead.
And so, that's like what we talk about in complexity theory–probing the environment and seeing how it responds. I think that's a good mental model to carry into these situations.
Jamie Nau: I think that's really good, too. You kind of talked about the network connections. When we do a change on my team, and obviously Summit's going through a pretty big change now with the merger we're doing, I can't talk to every senior account to see how they're feeling. Right? I could, but it would take a little bit more time.
So, what I need to know as a leader is who is going to be the best at understanding how the senior accountants are feeling about this. Who's gonna have the best understanding of how the CFOs are feeling about this? Who's gonna have the best understanding of where the CFOs are feeling about it? Or the auditors are feeling about this.
So I could just go to three people, as opposed to trying to go to a hundred people. So I think really understanding how those network connections work helps you understand change and really get the picture of what's going on because I have no clue because I'm not doing the work of what this means for our senior accountants.
I don't know what a senior accountant’s day looks like now that we're merged with Anders, versus what it looked like six months ago. But, if I went to the accounting trainers who work with them every day and asked them how it's changed and just talked to one or two of them, they might be able to give me the right picture, this has changed them a lot more than you think, Jamie, or actually this hasn't changed them at all–understanding those network connections is really important to be as effective.
Douglas Ferguson: There's also an interesting phenomenon too, right? Because those three people you mentioned who are your go-to sources of truth, they are interesting nodes in that network that other people can be aware of. ‘Okay. Jamie relies on these three people, so they have influence.’
And that's not necessarily a bad thing, but it's really powerful for everyone to be aware of that and to know it. And, that may not be reflected in the work chart. It may be, but often these informal pathways of information. I think it's really interesting to explore those, and it can be powerful to explore them as a team.
If we're thinking about embarking on a change, we don't have to go heavy-duty network analysis, but doing some lightweight analysis around who will be impacted by this change, or almost like racey kind of stuff like, who's responsible accountable, all these kinds of things, but who are the people in the mix?
Who do I work with often? Who do I know the least who has the most influence on these kinds of things? Adding these layers of thinking around these people can really shift how we might lean into the conversations or any of our next steps.
We made a template that's free for folks to download, which is for the exact purpose of helping people have those little quick snapshots of their networks. I'll send you a copy of that in case you wanna share it around.
Jody Grunden: How do you announce to the team without announcing it, or do you just simply announce the team? ‘Hey, these are the three people you can go to if you have any questions, Come to them. Don't come to me.’
You obviously don't do that, right? How do you do that?
Douglas Ferguson: That's a good question. I think it's gonna depend a lot on the culture and a lot on the types of information you're getting from folks. I think it'd be interesting to hear. I'd love to hear from Jamie on how he approached it.
My thought would be, it can be helpful just to have maybe those three people aware of it. Hey, I'm leaning on you in this capacity. So in your relationships with everyone else, letting them know that you're a resource that they can come to could be powerful.
So that way it kind of spreads organically, but I'm curious, Jamie, what did you find to be successful in your conversations?
Jamie Nau: I think that's exactly it–having the relationship with those people and them knowing that, not just for that one change but for any change, they know that they're my eyes and ears when it comes to that certain group of people, and they know it.
And I think that, like you said, I think the word used was nodes. I think people understand that, there's lots of different people that I'm using for those things. But those are the people that are gonna hear, and I'm going to listen to, because I have meetings with them. I have three meetings every week with three different groups of people, and those are the people I'm spending the time with who get the information.
And that's the purpose of those meetings. And so, I think the fact that they know that's the purpose of that meeting, pulling that information down to their group. So, we already talked about the trainers. I meet with the trainers for an hour every week. And that's the whole purpose of the meeting is to get the feel of the accounting team, to get the feel of the accounting processes, to get the feel of what's going on within the accounting group.
So they know that that's the purpose of that meeting. And so they're gonna, prior to that meeting, they're gonna want to come prepared. So, they're gonna talk to people, they're gonna go out and reach out to people and be like, Hey, I haven't talked to this accountant for a while. Let's go see how they're doing and see if they have any information I can bring to Jamie next Wednesday when that meeting happens. Exactly what you said. That's how I approach it.
Jody Grunden: Kind of switching gears a little bit with change itself. We've got the economic conditions that aren't the best right now. I think we can all agree upon that. And there's gonna be a lot of change coming down the road here. It could be short term. It could be long term. Douglas, how do you deal with this change? Or how do you convey this information to your team without really getting them overly excited or have high anxiety with it?
Douglas Ferguson: It's interesting; as a leader, I've found that transparency is really important, but we also don't want to obsess over things to the point where it's distracting and debilitating for folks.
And I think, to me, it's a matter of understanding 4ach individual, and what their thresholds are and what their strengths are and leaning into their strengths. For instance, if someone is really strong as an arranger, I might say, Hey, this is the way things are right now. This is the situation we're in. And I think your skills could be really helpful to help us navigate these next steps in X, Y, or Z ways. So you know, as an arranger, you might be able to help us put these pieces in place. And so to me, it's always about what resources do we have?
How can we reuse our relationships and really lean in together to make the best of the situation we're in. And then also, the fact of the matter is, there's already companies that have had to make layoffs. There will be companies making layoffs. And I think the thing there is always, how do we lean into that with humility, with humanity, and grace?
We've definitely seen folks on the news that have done that poorly. I think really just being there for people in a time that's super difficult and emotional, and how do we support them?
The other thing we had to keep in mind is, that might be a move that a company has to make, and it might be scary as the people left because it's like, wow, we got a big hill to climb here.
But taking care of those people and putting relationships first is going to help out more than anything. So, it's not about cutting it loose and then, how do we fix it? How do we just keep on it? Take a requisite amount of time to make sure they're taken care of.
And that the team and anyone that's left there is also heard and taken care of because that's gonna be a big change for them. I often tell people, sometimes it's worse to be the person who's left behind because you're now doing two or three people's jobs. That's an important conversation to have and to say, how do we, who are still here, lean in together and navigate this?
The other thing, too, aside from, even if companies aren't at that point of having to deal with that, there's still so much uncertainty that we're leaning into right now. I think it's important to have those conversations. I think the age of the “super strong leader that has it all figured out” is over.
And we have to come in with curiosity. We have to ask people to bring their best selves and Hey, what are you noticing? What do you think we could do? At that point, we're in it together. It's not just like, I'm not the victim of someone making weird decisions.
And so even if we got it wrong, we got it wrong together. And I think you get a lot more resiliency on the team.
Jamie Nau: I've been a CFO consultant now for both the recession and the COVID scare. I think what we really learned during that time is to be prepared. I think we spent a lot of time when COVID hit sitting down with our clients and being like, okay, let's talk about the best-case scenario, worst-case scenario, and let's just plop something in the middle there, and then let's have decisions for all three scenarios.
If it's a best-case scenario, awesome. Nothing changes. If it's the worst-case scenario, we're gonna have to get rid of five people. Who are the five people that make the most sense, or maybe we can get rid of three people and stop using this program or let's come up with what that worst-case scenario is.
And then in the middle, what happens there? Then you're ready for when you see those scenarios and you have those trigger points, right? So if we have three months in a row of $300,000 of revenue. Guess what? That's the worst-case scenario for us. We're gonna need to take that step.
And so you're ready to take that step. And I think the other part that goes with that is not only having leadership be prepared, but having your team be aware. That's something that needs to start now, right? If you've never shown your company your financial statements, and they don't have a clue how the company does, then they're in the dark.
Where, if they actually see that every month and they say, oh, this is what it looks like when we're operating well. They can start to see the downward trends and you can say, Hey, we're going down right now. We're gonna have to start thinking about things we can do in order to keep this business going.
Or things are going great. I know the economy's down, but we're still doing really well. I think information is power. And so, I think having those conversations with your team and not just your leadership is really important from what I've seen from consulting with companies on the finance side.
Douglas Ferguson: I love the everything's good, everything's bad, everything's great. Or bad, worse, worst. These different scenarios are really powerful.
I've always been a fan of them ever since my early days in startups, and having models where we've got levers that we can go, okay, uncheck these things off, flip this on or off, and look at this. And it's like, oh man, this is not looking good.
What are we gonna do? And, there's actually a tool that I'm a big fan of called Critical Uncertainties. Unfortunately, it's a two-by-two. Not all consulting tools are two-by-twos, but quite a few of them are. The way this works is, you think about things that are both critical for the outcome.
So what we're talking about now is the finances, right? How much revenue can we generate? Then, our ability to control costs would be two of them. Right?
And so you'd say we're able to tightly control our costs. We're not able to tightly control our costs. We have a lot of revenue; we have a little revenue and we basically can create four quadrants.
And so, we look at those combinations and think, what would we do in those scenarios? The beauty of the tool is, you can dream up all sorts of things that are critical, that we don't know the outcome of that's about to happen on the horizon. And, we can kind of peer into those intersections and say, what might we do?
If this combination of scenarios were to happen and, and if you take it a step further and you look across the different quadrants of where you came up with, the strategies that might deploy if those things were to come to fruition, you can look across them and say, what did I put?
What things are similar across all of them? Then those are our robust strategies. We wanna do those regardless. And there might be things that you're like, man, that's a really good one. And that's worth doing, even if this doesn't happen, right? That's a hedging strategy. Let's do that regardless.
And I think that not enough conversation is spent on exploring these kinds of hypothetical things that might happen around the corner. We talk about them like, Hey, what if this happens and there's dialogue around it. But this tool's a great way to kind of codify it down into like, okay, if A and B, or B and C or D E happen, you're comparing these different potential outcomes and what we might do to really help people rationalize about these future states?
Jody Grunden: I love that idea because, again, data is really important, right? Data helps you make an irrational decision into a rational decision.
You're making a decision based on what your gut feeling is, which is, good or bad, versus what the data actually is showing you. That's what I think adding the data, adding the information, breaking into the four quadrants, I think is the perfect way of going about it.
I think it has to be done on a very frequent basis. It shouldn't be done just once a once a quarter, once a month. I think it should be done pretty much on a regular basis. Hey, what happens if this happens? You’re constantly looking at that information and constantly making those decisions.
And like you said, you may come up with an A solution that would be great now, versus waiting until that situation actually happens. I think that's the power of having someone sitting beside you, and really guiding you and helping you make those real informed decisions.
Jamie Nau: But I also think there's comfort in the information, right? I think a lot of times that people go into this being like, oh no, we're gonna have a recession, and their thoughts go to, I'm gonna have to lay off half my employees, or we're gonna have to shut down three locations. Once you actually do the modeling out, worst-case scenario, we're gonna have to get rid of three people.
You know, I think a lot of times when you see the actual data, it's not as bad as you think. And again, that was so evident during COVID; nine times out of 10, we were either in the better tier or the middle tier. As the word COVID started to become popular, companies freaked out. They're like, what does this mean? How much revenue are we gonna lose? How many people are gonna have to lose? Once you actually did the math, it wasn't that bad.
So with that said, we're right at time here. So I'm gonna give both the podcasters here a chance for a final thought.
So I'll start with you, Douglas. Final thoughts?
Douglas Ferguson: That thing you just ended on is really powerful. We have to have models for change, and the point that was made earlier around visualizing what's happening here, as we've got those folks that are eager for change, those people that are worried about change, and maybe the people that are just freaked out and they don't know what to think. And so the more we model the outcomes, understand where we're heading, paint that picture of that roadmap.
The more clarity we can get, the more that can reduce fears and uncertainty, and we can get on a level playing field and have a real solid conversation around what it is. So I think that's really key; how do we model the change?
Jody Grunden: Douglas, how can someone get a hold of you? You've talked a lot about change, and I think everyone needs a “you” on their team. How do they reach out to you at all? And how do they get a hold of you?
Douglas Ferguson: They can find Vulture Control at vulturecontrol.com, and I'm really active on LinkedIn. If people want to check me out there, I post all my blogs and my podcast there. And hopefully, we can share that template and some other resources in the show notes as well.
Jody Grunden: This has been great, Douglas. From the very beginning, change has been something that I think is super important for a company, and if companies don't change over time, they go stagnant. And I think what you brought to light is just a big part of that.
You've gotta be constantly looking for the right change. And then you've gotta be able to bring that change to the team in a manner. They can then take the ball and run with it really. I mean, you don't wanna be as scared of change; you just wanna be able to embrace it.
And I think that's what I've heard from you, and I hope I'm not putting words in your mouth there, but I think it’s so important for an organization to embrace change like you've done in really all facets of the company.
Jamie Nau: Great. Well, definitely appreciate Jody, appreciate Douglas. I think this is a great show. I know I learned a lot and am excited to go talk to some of my companies and say, Hey, don't, don't be afraid to change. Let's do this. So appreciate you guys. Enjoy this podcast. Visit our website@summitcpa.net.