Introducing Streamlined OS: The Operating System Built for Accounting Firms

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Rachel Dillon: This is Who's Really the boss. A podcast for accounting firm leaders who want to grow with intention and lead with purpose. I'm Rachel Dolan, and along with my husband, Marcus Dillon, we share real stories from our accounting firm, Practical firm growth strategies, and the tools you need to lead your clients, your team, and your life well. Welcome back to another [00:00:30] episode of Who's Really the Boss podcast.

Marcus Dillon: Hey, thanks for having me back.

Rachel Dillon: This might be my favorite episode to record a favorite of all time. I don't know if I've said that recently. I know I've probably said that before. Um, and so now this is my new favorite. Um, so don't mess up because it's my favorite topic. I should say. Maybe I shouldn't say it's the favorite episode to record. Maybe I should just say it's my favorite thing to currently talk about. And so I'm excited for this one.

Marcus Dillon: I [00:01:00] think you may have said something like that before, but it wasn't either when I was on the podcast or whenever it was only me on the podcast. Maybe it was like a guest that we'd had. So, um, shout out to whoever you said that with. Um, but yeah, I don't know that I've heard that on this podcast before.

Rachel Dillon: So today we are sharing about streamlined OS and that is OS as in operating system designed specifically for accounting [00:01:30] firms that can integrate with and support any other operating system that may be in place. So the one that comes to mind is iOS. This can layer in directly with that. So sharing for the first time publicly and just so excited to talk about what that actually means.

Marcus Dillon: Yeah, we actually shared about streamlined OS in Mexico at our, uh, recharge conference. And, uh, you and I, you know, we led [00:02:00] a session together. Uh, I always love when we when we get to do that, but, uh, we led a session and ultimately tease this out. And we've had, uh, firms, collective firms have tested for us have run the assessment and are essentially beginning to use the operating system. Even before we had a name for the streamlined operating system by collected by DBA. So I'm excited. It sounds like you're really excited because, um, we'll talk a little bit about [00:02:30] how this came to be and why we landed on even creating an operating system when there's so many different good options out there. You already mentioned EOS, which we have a lot of firms that use EOS, whether fully or just a portion of it. I know that at DBA we use, uh, we're inspired by EOS, I would say. Um, and so we don't hold true to it in the, in its truest form, like an EOS implementer would love you to to have. And that's we've discussed [00:03:00] that before about purity and that operating system. So we have come alongside EOS with streamlined and made sure that as far as running your accounting firm that you are, um, you know, just, just following something that has been successful in our firm and so many other firms and that you're, you're on the right path to improvement.

Rachel Dillon: Yeah, absolutely. But before we talk even about that, um, something I love probably equally as much are our in-person events [00:03:30] for collective. And so we have registration is open right now for gather. That is our fall conference for collective members. Um, it's not just for the owners or for the leaders of the firm. We have two separate learning tracks. So we have a learning track that is designed specifically for leaders and partners. And then we have another learning track that's designed for your other team members. Um, when we talk about team members and who should you bring, [00:04:00] it's really people who are, um, like change makers in the firm, people who are willing to, uh, jump on and adopt change, either champion championing that. I can't say that word. Um, or, uh, just encouraging other people. They're willing to try, they're willing to adopt, they're willing to give feedback when new things are coming through. And they're also willing to help others around them who maybe are having challenges. [00:04:30] And so those are the kind of team members that we think should be in the room for sure. We think investing in those team members is definitely you will receive a good ROI on that, um, because of how they work within your firm with team and clients.

Marcus Dillon: Yeah. Uh, the way that I've, I've boiled that down to is, uh, leading others through change, helping lead others through change. So if you do have the people that you do life with in your business, and they are helpers, they, they want to see progress, [00:05:00] they want to see improvement. They want to, you know, best, our best working with your people to, to help you improve and get things done and achieved and are open to new ideas. Those are the people that should be at gather. Those are the people at gather. And it's also contagious. When you're in a room with other people that are striving to get better. So if you've got somebody that you really believe in and you want them to meet other great people that are doing very similar things at, at very similar firms gathers [00:05:30] the place to be.

Rachel Dillon: All right. So that is October 19th and 20th. It is in the Dallas area at hotel. Then we will have not only sessions during the day, but we'll also have special events in the night. So that team can, uh, have fun let loose, uh, and then just get to meet in a social setting that other members of collective so they can start building their peer network within the accounting profession as well.

Marcus Dillon: Yeah. And that one will be, um, we'll, we'll open it up to members. [00:06:00] It's already been presale for a little bit of time. So tickets are, are going fast, which is great. We're not trying to, you know, create scarcity mindset, but the room is only so big and we do want to control the atmosphere. We do want to control the conversations and make sure that everybody leaves, uh, with, with what they came to achieve out of that conference. So, uh, yeah, the, the dates you've already said hotel vin flying to DFW get to the airport pretty easy. So yeah, I would say it's going to be a [00:06:30] great time. And some of the sessions will actually be geared toward, uh, streamlined OS and what we've been building building upon. So the last one of the last podcasts, we, we introduced the idea generator that's completely free to listeners, uh, members, whoever else could be helped by that tool. Um, streamlined OS and what's been built there because it's tied to so many of the resources within the collected by DBA, uh, community. It's, [00:07:00] it's for members. And we've built that to keep in mind that we are, um, just tying back to those resources to make sure that we are being, uh, being the best stewards of those members as much as we can be.

Rachel Dillon: Absolutely. So back to our regularly scheduled topic of streamlined OS, um, really talking about this today because success in accounting firms is no longer coming from just working longer or working harder, um, [00:07:30] or even hiring more people. Our firms are operating in a completely different environment than we were even a year ago. And so AI automation, client expectations are all changing how work gets done and how value is delivered. So we have for sure friends and clients who are saying, I dropped this into clod or I dropped this into ChatGPT and it said, and I think that we're not unique in that of when [00:08:00] we've sent out financial statements, when we've sent out tax returns, um, maybe not secure for them to be dropping these things into these LMS, but they are, and then they're coming back with questions or ideas that they want us to validate or advise on. And so streamlined OS is really what's needed to help as our firms are evolving very quickly or should be evolving very quickly.

Marcus Dillon: Yeah. Um, as you've mentioned, yes, [00:08:30] streamlined OS, um, really it's just the operating system built to simplify execution and drive aligned growth for the firms that are in collective that have kind of come alongside us and we feel honored to serve and walk through life with. Um, this could apply to so many firms that are just trying to figure it out. Um, it connects strategy, execution, measurement and improvement. And what I would say is like we, we were doing this before it was ever documented, but we had no idea that we were doing [00:09:00] it. Uh, it's a little bit better to see it now that it is documented. I think the, the goal of this operating system came out of conversations that you were having with other firms that, um, Amy, Leslie, Ben, uh, they were also having as, uh, as those firms came to collective and we were working with them to help them improve, help hold them accountable, and even measure their success of working with our team and all the hard work that they were doing to improve their firms. So really excited [00:09:30] about one, the assessment, but then also the overall operating system, um, and how that can guide firms on their path to improvement.

Rachel Dillon: Yeah, absolutely. And so we you mentioned we presented this to the attendees who were at recharge in our session, building optionality in your firm. And some of those key areas that we were looking at is making our firms less owner dependent. Could you step away, you know, for a number of weeks at a time [00:10:00] and not lose performance within the firm? So I think that that's something that second part is what often is overlooked. People are like, sure, I take vacation all the time, I take off a week or I take off whatever. But if you were to be gone for an extended period of time, would your business continue to operate at that sustained level or even continue to grow? Or would things start to decline in your absence after a period of time? [00:10:30] So that when we think about kind of owner dependency, so streamlined OS is built for that to help improve that owner dependency, we'll say. Also looking at processes and team structure, leadership within the firm. Are there other leaders or not? And so these are the some of the things that streamline OS not only identifies where there are gaps or where there are challenges, it's going to also give you the tools and resources [00:11:00] to improve those areas. And then the KPIs to track that improvement. And so that's what's super awesome about streamlined OS. That's why I like talking about it. Great. We all love an assessment and an evaluation and a benchmark and comparing ourselves to our friends. But then what do we do next? We've got six challenge areas or things that are weak. What do I prioritize? What do I do first? And oh, by the way, there's this new software that I'd really like to do instead of any of those things that were just identified [00:11:30] as weak areas. I'd rather go play with the new shiny thing over here. And so streamlined OS is definitely for kind of all of those areas. And so excited to just keep sharing a little bit more about it.

Marcus Dillon: Yeah. And I think the, the reason this was built, it wasn't built. Um, you know, out of lack of complexity, um, within our own business, you know, as, as new clients come in the door or even new team members and just [00:12:00] the way that you, you work, the way that you come together as a team shifts with every new relationship that you have, both internally or externally. It's kind of firming up, taking all the things that you you want your firm to stand for and all the services you want to provide. Make sure that you're consistently making choices that reinforce the firm that you want to build. So, um, you know, I think the most, most firms, as you mentioned, um, we used to just be able to [00:12:30] put in more hours. We used to just work harder. Um, that, that's how we worked harder is we just worked more. Um, so most firms don't lack an effort. Um, you know, honestly, we're working harder and more than maybe most have ever in their career. Uh, and that's, that's sad. Uh, you talked about owner hours and I know that if that's the case, uh, and there's typically, uh, you know, extra hours that does go to the director level. It goes to the owner level. [00:13:00] Just the leadership is who's usually putting in those hours.

Marcus Dillon: And that's not, that's not what we set out to do that that wasn't the dream that we had when we came into this profession. And so what we, what we hope is that we can get back to the original reason why and, um, you know, build clarity and structure that connects efforts to outcomes. And so what, you know, what we keep seeing is that KPIs exist. People love to talk about KPIs, but they aren't actionable. Uh, as you mentioned, we all [00:13:30] loving taking the assessment. We all love what that means as far as the new tool that we can use or the resource that we can pull. But if you're just doing KPIs just to measure yourself or just to, you know, weigh yourself if you're equating this to like a diet, um, but you're not doing anything different. Uh, there's no action, there's no actionable steps to take. So KPIs without calls to action, um, aren't valuable at the end of the day. And then just the dashboards, um, you know, in most of our firms, [00:14:00] it's kind of the story of, uh, the cobbler's children. Uh, and I think we're really good with clients. We're really good at building dashboards for people that pay us to build dashboards. But when it comes to who your most important client should be, uh, your own business, we fall short.

Marcus Dillon: And I think this is what gives you the insights and the dashboards to actually, um, you know, drive decisions across your leadership team. And that way everything's visible to the people that can [00:14:30] really drive impact and change across your team. And then, you know, the final thing that we kept seeing was, uh, just teams. You know, we talked about them being busy, uh, but they were being busy in different directions. They were not aligned. And so those processes, while you may have a million different processes, they just aren't consistent. They aren't consistent across team. And, uh, you know, we, we showed the idea generator, um, the last couple podcasts just so that it could be used and it [00:15:00] could firm up, uh, just one consistent process, even when it comes to prompt engineering within your firm. Um, so I think when we look at processes, when we look at services being inconsistent, you're actually fracturing further away from the firm that you intended to build because it's just so hard to maintain and because it's harder to maintain, you end up working more. You end up putting more duct tape on things, uh, just to get it through the next day.

Rachel Dillon: Yeah, absolutely. So, um, just some gaps that we were [00:15:30] seeing for our own firm, for Dillon Business Advisors, that we didn't really have systems that connected what we measure, what we're trying to improve, and what we're actually executing on daily best efforts. We have, um, agendas for our lead team meeting where we keep, um, at the, at the top of that, we have all of our initiatives and goals by quarter so that we're checking over what we're supposed to be hitting. Um, and we check back on those almost weekly, if not every week, [00:16:00] uh, that we're going through that to make sure that we're still on the right track, uh, but not necessarily a dashboard where it's quick and easy and visible for everybody. Um, and so the other part of that is just making sure, um, that what we are doing daily is improving what we're trying to improve. So those initiatives that we're setting out, like are the daily behaviors and actions and tasks that we're doing actually driving us forward. And [00:16:30] so the goal for streamline OS is really to create a system that shows us what's working, what's not working, and exactly what to do next.

Rachel Dillon: Um, so many firm owners and us just get stuck on what to prioritize first. We have all of these great things and they're all, every single one of them is important. Which one is most important first? And what we've seen is some people choose the one that is important, [00:17:00] but not first. Um, so they do step three or step four. And it causes chaos with team or with clients or with both. And they see team members leave. They see clients leave. And it's, it's really detrimental to the business. It's very stressful for the owner. Um, but even throughout the whole team, when you have team members leaving, um, that really hurts the culture. And when you have clients leaving, that upsets everybody. And so just want to make sure, right, that we know [00:17:30] exactly what to do next. Um, and it's, it's going to be very clear with streamlined OS, uh, you don't have to figure it out on your own. Streamlined OS is going to just kind of deliver it to you.

Marcus Dillon: Yeah. Um, it's exciting because I feel like it's a, it's a culmination of not only what DBA has been doing for the last 15 years. And it's crazy to think, you know, that, uh, we've been around for 15 years. I've been in the industry more than 20. Um, which [00:18:00] is, you know, you don't want to admit that you're that old. Um, but it's one of those things where it was, it was even evident this past week when I was in Nashville, um, at an event. And, you know, you get carded whenever you go into some of these clubs and bars to see live music. And, uh, the, the guy at the door didn't even card me. He said, you're old, you're okay to come in. And I'm like, I took I was I was kind of offended because I try to do my best to fit in. But [00:18:30] whenever most of the room is your daughter's age, uh, you do stick out a little bit. So, um, you know, I got the salt and pepper thing going, and I'm sure that that, um, is easy to pick me out of the crowd, so. But yeah, this is from real world, uh, accounting firm owner experience, not only DBA, but you think about our leadership team, the team that, um, we're just so honored to do life with. Uh, you being a part of DBA. Leslie being a part of DBA and collective, [00:19:00] you being a part of collective as well. And then, and then Amy with her background consulting with firms for decades, uh, been consulting with firms for decades. And then Angel angel owned an MSP who served accounting firms.

Marcus Dillon: Uh, you know, so I think even Angel worked with multiple accounting firms before ever coming to DBA and collective. So, um, you know, our, our combined experience, if you will. Uh, I was going to say hundreds of firms, but we're probably into the thousands of firms [00:19:30] that we've seen this. And so these resources, this operating system is built from that experience of what we've seen people be successful, where we've seen them have challenges and pain points, and how we've seen the the best firms navigate through that to improve. Um, the main thing in this too is, as some people know, DBA did a couple of acquisitions in 2025. So leading up to those acquisitions, we were at a place of, hey, we have a lot of excess capacity. [00:20:00] Things are, things are clicking along the, the clients are stable and secure. And there's not much going on from a client standpoint. So just like any, uh, good experiment, you know, the, the, um, the acquisitions that we did in 2025 reminded us of how, you know we can help others navigate through changes in their firms and having introduction of new team members, having introduction of new clients, maybe all at one time, like through an acquisition or through a [00:20:30] merger. How do you navigate that and how do you get those new clients and those new team members up on the wheel of service or doing things the way that you want? Because that's, that's the playbook that you live by. And so that also helped contribute to firming this up. So we, we can live by it as well.

Marcus Dillon: And, you know, we'll get into the sections here in a little bit, but it breaks down between a stabilized systemize and scale. And I would say in [00:21:00] 2024, we were at that scale phase. We we made it through the different levels of stabilized Systemize and scale. And then now after acquisitions, you know, still pretty fresh as far as what we're doing to assimilate clients and team, we are not at scale Today. So for us to move, uh, fast and go through scale, it would be a mistake. So that's just something that we continue to even put ourselves through this assessment and put ourselves through this operating [00:21:30] system so that we can grow and we can continue to be good stewards of the relationships that we've been given. So when we look at, you know, just the what's being developed, the pattern recognition that exists, it's pulling all that data that exists from so many different sources within the firm. It's bringing them all together so that your leadership team can have insight and take action on what's missing. You know, as mentioned, this evolved over the years. We didn't even know what we were building until one day you had the great idea, like, we should probably put this [00:22:00] all together in a, in a way that we can see it clearly and share it with others. And so I think this is a lot of heart and soul into this. And maybe that's why this is your favorite podcast episode ever, because it's, it's, it's driving what, you know, we've built together over the years and sharing it with the world.

Rachel Dillon: We were talking to an outside business coach, a Christian business coach. Just having like a discovery call with them. You know, when we hired [00:22:30] Amy in directly as our director of operations and business advisors, she used to be our outside perspective and our outside accountability. And then once she came in, um, then we thought, you know what? We're now we're all very close to what's happening in the business. And so we actually had a discovery call within with a different, even outside of the accounting industry, just somebody completely different to look at the accounting firm as a business [00:23:00] and as we were, um, as we were talking with him, he was sharing some things about, oh, I have this operating system that works that this is, this is what I go through. And as he was talking about the things I was like, that's collected by DBA. And at that moment, I'm like, but what we need is the piece that puts all of these resources, all of these educational tools in the form of webinars, [00:23:30] in the form of SOPs and templates, uh, focus groups, all of the things that we're doing in a way that we can track and measure those things and that we can get a starting point and kind of a benchmark set of data and then track our progress going forward. And so, uh, with the help of every single one of our collective bi DBA team members, we have, uh, put this together. And when, as you mentioned, just with [00:24:00] the most recent acquisition, we were kind of talking about the firm in two parts. So instead of talking about DBA as a whole, um, as we were measuring different things like financials out by the 15th or, uh, service delivery.

Rachel Dillon: How things were going out to clients. We were talking about it in two separate ways. And so, uh, in one of our, uh, in one of our lead team meetings for DBA, I was like, oh, we need to use this resource from collective. [00:24:30] We need to go through the grading our clients exercise. We need to go through and go back to, of course, all of the things that we had done in the beginning to transform our firm, all of the resources related to team of three in aligning clients to a team of three, all of those exercises we need to to do again, because our newest acquisition has never gone through that. And so that's where we needed to check in and see, okay, where would we rate ourselves? [00:25:00] And then we need to figure out what is the first priority. Because as you just heard me mention, that was 2 or 3 things that we needed to do. And as a good leader. You don't do all of those things immediately at the same time. Uh, it will overwhelm the team, especially if you decide to do those things during tax season. Like we usually decide to do things. And so, um, yes, so streamline OS is definitely coming from a place of we're using it as [00:25:30] well and just taking all of the things that are available, um, adding to that as well, but putting those in a fashion that is clear and visible and measurable, um, so that we can continue to track and progress forward and also that members can continue to track and progress forward.

Marcus Dillon: Yeah. And I love, you know, people know that we're using it and that we're experimenting and that, you know, we [00:26:00] obviously shifted down from scale to stabilize or systemize and are improving and getting better and working through those resources. Like you mentioned, grading clients and just remembering what we what we did to be successful, um, along the way and continuing to do it. Um, what I would say, like I, you know, I love that we're a use case, but we've also seen, you know, just in the short time collective has been around and how, you know, the leaders from DBA have been sharing for years. Um, you know, even like firms [00:26:30] implementing things that we believe in and that we've tested, but maybe at a different pace than what we did. And it's real easy to see DBA 3.0 at year 15 and just take and run with some of the processes or some of the things that we've done and not not give yourself credit for where you're at today and maybe how you should move through your team and clients to improve, um, at a pace that's sustainable and at a pace that, that gives [00:27:00] grace. And a real world example of this is we had a firm that it was in then collective and they loved the team of three. Model or let's say the owner loved the team of three. Model and thought it would solve a lot of pain points in their firm.

Marcus Dillon: And so they dove right in and they took their team and they created pods. And then they allocated team members into roles and were moving along at a pace that was was honestly even for us pretty quick. And [00:27:30] so, um, you know, checking in with that firm to see how it's going. And, you know, soon after, um, things started to shift around. There was, there was cracks starting to develop, just given the pace of how fast change was moving, uh, and being initiated at the highest levels. And so, so with that, you know, we kind of had to make sure that, um, that progress was moving at a pace that made sense. Uh, unfortunately, some of the, the change that was pushed too hard, uh, [00:28:00] created relationships to fracture and team members to leave and clients to leave. And so all that to say, like, it's really easy for us to compare ourselves to others as humans, as, as leaders, as people who own accounting firms. But, um, you know, some of this is very specialized and individualized to you and your team and how fast you can move and even want to move. And so this is a tool, the operating system that even our advisors, [00:28:30] our mastermind group facilitators, you know, everybody in collective now follows. And that way we can help firms progress and improve at a pace that makes sense for their individual situation.

Rachel Dillon: Yeah. Are you ready to jump into what streamlined OS includes?

Marcus Dillon: I thought you were going to say ready to jump into a demo. And I'm like, I did not prepare for that.

Rachel Dillon: So we have we have an upcoming webinar. Um, I'm not sure [00:29:00] if the podcast, the podcast should release right around the same time as the webinar for members. So if you're not yet a member, I'm not sure what you're waiting for. We have really cool, uh, tools and resources and assessments that help you decide, determine exactly what you should be working on and when. Um, and then help you track and make sure that you've completed those things and are continuing to move forward. Um, and really that whole thing from the optionality [00:29:30] session at recharge was to increase the enterprise value of your business. So your accounting firm may be one of your largest assets. And that is what we're hoping for. That's what we are trying to do with DBA. Um and that is what firms in the collective are trying to do is just to continue to increase the value of their business that they've invested so much into. Um, and so streamlined OS starts with, um, a [00:30:00] dashboard, uh, in your browser. And what it includes, it's going to have real time KPI tracking. We have correlated KPIs to specific objectives that you're working on. Um, and then also you're going to have a centralized location for all of leadership to look in and see exactly where you are, exactly what you're working on and the progress that you're making over time.

Rachel Dillon: Also will show some variations between where [00:30:30] different leaders or team members might think the firm is on different improvement areas. And so, um, so it starts in the dashboard. Then from there, uh, the firm owner can start inviting or whoever you give access to whoever's an admin for your streamlined OS dashboard, they can start inviting team members in to take the initial assessment. So that's really where streamline OS starts is with an assessment. There are 62 questions [00:31:00] we suggest, uh, carving out about 30 minutes to take it. You could definitely take it faster than that, but just making sure that you have that amount of time. The nice thing is if you get distracted or you get called away from taking it, it does say you don't have to start over. Um, it does save all of your data there so you can come back to it, but also you can continue to compare to that after future assessments. And so again, 62 questions. [00:31:30] Multiple team member team members can take it. And then the streamlined OS is going to aggregate or compile that data for you so that you get an average. It'll also show variations again between answers between team members, so that you can see that's also a really great conversation to have. If um, different team members are scoring the same area very differently.

Marcus Dillon: Yeah. And I would say, you know, going through this with, with our leadership team, um, maybe you don't [00:32:00] have a leadership team. Maybe it's people, you know, beyond you as the owner or as maybe a smaller leadership team where as mentioned about who do you bring together? It's those change agents within your firm, who do you want to buy in and sell the vision and continue to help your firm move forward? So those are the people that are invited. Uh, you let us know who you want to add in and we'll add them in. Right? And so I think those are the ways that we can, uh, make sure that your team is all on the same page. And, and as mentioned, like when our team took it, like [00:32:30] for the most part, we were all aligned about, hey, this is where we're doing well, this is not what we're doing well. And, um, you know, one of the first things is like, hey, here's the assessment, sit down as a team and go through it and like, where did we score each other? And here's the average and like, who's really off the mark and why? And be able to talk through some of that. Um, probably some of those were just like, I didn't understand the question. Like, uh, like me personally. And I answered a certain way, but, um, and maybe that's what, what you have [00:33:00] to uncover as you go down the path, but the assessment is just the first part and that helps build it out. Um, you know, the improvement areas are really where you draw focus to, um, throughout the, throughout the use of the operating system.

Rachel Dillon: So with the results, uh, and back to your point about maybe you didn't understand the question on each question, there's also a notes section. So you can put why you chose that score. So if you're like, I was between a, it's a rating scale of 1 to 5. So you're like, I was between [00:33:30] the descriptor of a two and a three or a. If this were different, I would have answered this number. So that's really awesome too. And the results, you'll be able to see those notes and go back to that to understand why maybe somebody chose what they chose if they were having a hard time identifying. But with those results, you're going to immediately receive improvement areas. You're also going to receive your strengths. So strengths of the firm will be highlighted. And [00:34:00] then also improvement areas. And so it's going to automatically highlight underperforming areas. It's going to identify where bottlenecks in service delivery or performance are happening. It's going to prioritize what needs attention attention first, because as I said, that's not everything all at once. Even though we want to, even though we want to go fast and these things are important, it's not going to be everything at once. And then it really turns that data, like we mentioned [00:34:30] before, into action items. It turns it into a focus on this first and then focus on this next. Um, and it doesn't stop there. So from identifying those focus areas, then we get into the suggested next steps.

Marcus Dillon: Yeah. Well, and I think the the main thing to kind of highlight is those clear focus zones that, that just stand out. Um, and that are, that have [00:35:00] resources attached to them. That way you can see exactly maybe what we recommend, or you can pair that with your other operating system. If you use something like iOS to make sure that you are on track. Um, but that it's, it's speaking and kind of, um, weaving into your overall plan for your business. And we do know that some, some businesses don't fully use another operating system. So we're inviting them to adopt this one as one for accounting firms. But yeah, like as mentioned, [00:35:30] this was shared, uh, or teased out at our recharge conference. And you know, something that we can even share today are just the, the most important KPIs, the five that we really track within the operating system. Um, is it okay if we at least share that today on this call.

Rachel Dillon: Yeah, absolutely. Um, and so these are going to also be collected in the, in the dashboard. And what it will actually allow you to do is collect them every single month if [00:36:00] you wanted to. And then it's going to compare and create visuals for month to month or period to period. Um, kind of, um, comparing those metrics. And so yeah, KPIs, if you want to share those five, you can go ahead and share those.

Marcus Dillon: Yeah. So most of them we've talked about, most of them are very standard industry specific. Um, but I would also say that just these five KPIs, like we realize that [00:36:30] some leaders haven't been transparent across even maybe their leadership team or other people that they see as change agents. These five, we believe that they're simple enough and that your leadership team, the people that you see as change agents, as your in your firm, They should be mature enough to want these five KPIs to be important and improving, and just as best numbers as they possibly be. If there's any animosity [00:37:00] or anything else that builds because you're sharing these and being transparent. You need to have a one on one conversation with whoever that is. So we would say, don't shut this all down just because you don't want to share and be transparent. We believe that transparency is key to improving as a team.

Rachel Dillon: So we have an experience that, yeah, from sharing, the more that we've shared, the more engaged our team has become. And I won't say that [00:37:30] we, we shared, um, without like stress or anxiety the first time, every single time it was kind of like we're about to walk into this room naked in front of our team members. You know, it was scary. Um, but we haven't had any negative feedback from sharing or team members. There was no animosity that developed. And so I think you're right in saying if it does, that's maybe a bigger conversation and potentially it's just more to communicate [00:38:00] with that specific individual. Or perhaps that individual is not the right fit for the firm that you're leading. So there, there's those two options. But to calm any fears over 15 years, and we didn't start sharing these numbers until maybe year five. I would say.

Marcus Dillon: No, it was I would say we we didn't really start sharing these numbers until five years ago. Like I would say, you know.

Rachel Dillon: Maybe, maybe like 2019. Uh, we [00:38:30] began sharing some things and then have just shared more and more and more each year. Um, but again, that it wasn't taken lightly, it didn't feel like, oh yeah, everyone should do this. This is so easy. Why? Why haven't you ever done this before? Um. It was it was with careful consideration that we even shared one thing. And then the team responded very well. And so it just helps to build that trust and transparency, transparency, um, and then visibility for the whole [00:39:00] team because if they're working towards a goal, they need to be able to see, you know, kind of what you're measuring them by.

Marcus Dillon: Yeah. What I, what I would say as well before, you know, we get into the five, um, since we have started sharing these five KPIs, we have had two leadership team members actually leave DBA to start their own firms, one through acquisition and one, um, just started, um, kind of as an organic start. And I would say that's not a bad thing. Um, [00:39:30] that's, that's something that is natural and as a mature person now looking back, like that's the right call for that person. And I'm, I'm glad that it happened that way. Instead of building a firm and a business around people being in certain roles, I would rather have conversations like that sooner. And so sharing things is just natural. Um, people may opt in or may opt out.

Rachel Dillon: Do you think that was correlation or [00:40:00] causation? Sharing the KPIs was correlated to their timing of leaving or caused them to want to leave.

Marcus Dillon: Maybe a little of both, I don't know. You probably have to ask them, but, um, you know, owning owning a CPA firm can be a very good investment, a very good business. And that's why we're doing this, right? As we talk about enterprise value and having something that you enjoy and love running and love owning, and that produces a great profit for you to do cool things in life. Um, none [00:40:30] of, none of the owners that we know or do life with created businesses to work 80 hours a week and barely, barely, you know, skate by and not miss and or miss um, family events and things like that. So all of us are in this for the same reasons. Uh, and to those team members who have come and gone, it's, it's natural. And I would say it's just a matter of transparency. Once you've made the call and moved beyond it, what happens, happens. That's our approach. We have heard [00:41:00] from other people that have not moved forward and not improved. Their hesitation is around transparency. And part of the frustrating part on our side is because they lack transparency. They still get frustrated at their lack of improvement, and in that situation, it is correlated that they can't fully bring people in to help the business move forward because they aren't being as transparent as they are needing.

Rachel Dillon: Yeah.

Marcus Dillon: Yeah.

Rachel Dillon: So [00:41:30] that's good.

Marcus Dillon: All right.

Rachel Dillon: So you built a you built up.

Marcus Dillon: The.

Rachel Dillon: Suspense so much for these five KPIs. So go. So share them.

Marcus Dillon: And these five KPIs are rolling your eyes for every CPA, right? You know, or accountant. So, uh, the first one is gross revenue. Um, you know, that's easy, that's easy to track if you don't share that with your team and aren't transparent about it, like you're, you're missing the boat just because it helps give context. Uh, obviously it's one of those metrics that can easily be boasted or be a vanity metric, but it is [00:42:00] important just as you build out budgets and build out like, hey, what are other firms in these buckets doing? It does help you group certain things. And even when we think about enterprise value and systems and team and things that come along with certain buckets of revenue, um, it helps kind of place you in a certain certain role in a certain, um, demographic for that. So gross revenue is number one, uh, gross revenue per FTE is number two. Uh, we see that as being just a very, um, common [00:42:30] industry benchmark, uh, even across firms of all sizes. And so if you can continue to improve your revenue per FTE, you're you're doing well. And what we would assume is with advancements in technology and how fast things are moving there, um, you could probably do more revenue with less FTEs in the future. And so not saying you need to go out and, you know, disrupt or do a reorg or anything like that. It's just, can you continue to grow with the same amount of FTEs that you have or [00:43:00] listen to your team members? Maybe someone wants to work part time or half time or wants to retire. You know, those are the conversations that can happen without disrupting the business.

Marcus Dillon: If you're focused on some of this and improving in certain ways. Uh, the third one, uh, this is one that actually may, you know, get people kind of riled up as far as should I really share that and it's earnings before owner comp percentage of gross revenue. So, you know, in our, in our, in our world, uh, CPA firms have always [00:43:30] kind of been a third, a third, a third, a third goes to labor. Or third goes to overhead and a third goes to profit. Well, that's not really holding all that well anymore. As as labor costs, you know, increased on the other side of Covid and all the scarcity and team that we were seeing in the accounting industry. So what we're seeing in collective is that labor, if we include all benefits, all insurance, all, you know, retirement, all the fun stuff, including taxes, um, you know, it could be 40% for some firms, it could be a little bit higher. [00:44:00] Um, but it's definitely not 33. Um, and it's not 33 with balanced owner involvement, uh, is what I would say. So we do have, uh, some firms that are under 33%, but the owners are the highest, uh, producing team members in those firms. So, um, just not what we're looking at here. Um, so we would just want to see improvement in that percentage of gross revenue. If it does dip, we want it to be explained. We want it to say, hey, this was an investment [00:44:30] in an additional team member or a technology and go from there. But Ebok is the acronym earnings before officer comp or owner Comp percentage of gross revenue.

Marcus Dillon: Uh, the fourth one monthly recurring revenue, MRR, percentage of gross revenue. And so, so many of the collective firms, so many of the firms that we've done life with over the last 15 years have wanted to move from annual, just in time ad hoc relationships with clients to more [00:45:00] of a recurring touchpoint. And that monthly recurring revenue could be tax advisory, it could be client accounting services, it could be bookkeeping, payroll, whatever. But we do continue to see when it comes to, uh, enterprise value, that sticky services recurring revenue is safer and that it does help build value regardless, this enterprise value conversation is regardless if you ever have a transaction, you just want to continue to build the most profitable and the most stable business that you can. [00:45:30] And then finally, the last KPI is not really anything to do with your PNL. It's actually just owner production hours. And so we couldn't have listed another, you know, PNL driven one without the balance that comes along with life and owning a business. So owner production hours is there for a very specific reason, because you could kill it on those top four and, and live an awful life, you know, 2800 billable hours or whatever. And I've seen that before and it's crazy. Uh, and by all means, you're, [00:46:00] you're killing it and you're killing yourself. So those five, we believe out of the other KPIs that we track at collective are the ones that are sitting center of your dashboard really telling you how it's going as you continue to drive improvement throughout your firm.

Rachel Dillon: Yeah. And those owner hours are also going to increase or decrease the value of that business based on how many you actually work and how many people it's going to take to replace you if you ever do not work [00:46:30] in that position. And so again, it is about balance. It is about, uh, life and lifestyle, but it's also about the value of your, of your firm at the end of the day. Um, and I think we've for sure talked about it in previous podcasts, but there will be a transaction right? At the end of the day, there will be a transaction. So whether you sell or whether you shut the doors or something's going to happen at the end of your business. [00:47:00]

Marcus Dillon: Well, and I even think about it even, uh, maybe different or evolve from that. Um, I think I said this to you, I said this to leadership team. Um, for the most part, if any other team members listen to this, but, uh, they may be surprised to hear it, but I don't, I truly don't believe that any of our team members are going to retire from DBA. I think that there, there will be evolution. There will be people that choose to move on in life. There will be new team members that come. But as it sits today, the Christmas [00:47:30] card picture of the team in our mind. Um, I, I don't see them as retiring and getting the Rolex from DBA when they're ready to hang it up. Um, it's just one of those things where, uh, how people work and navigate their careers in life have changed quite a bit since like the generation before us. So that's the way that I think about it. And maybe I'll be wrong, but it also helps me care for the people while I have them, uh, better and, [00:48:00] and be more focused on what should we do now to improve as a team versus they'll always be here. They'll always be in that office down the hall and you kind of lose sight of, um, you know, the, the cool opportunity that you have to do life with people in the, in the time that you do. So, um, that's how I think about it. The same thing about like clients, I don't know that any client's clients going to retire from DBA as well, so it's just serving them the best way we can whenever they are in our care. And that's just [00:48:30] a mind shift. Like, y'all could totally prove me wrong and I could be weakened at Bernie's in the corner and be living forever. You never know.

Rachel Dillon: I totally am blocking out everything you just said. I want to keep team and clients absolutely forever. Um, like, until they're no longer breathing, uh, with us. And so you just gave me an idea that maybe if we let them know, uh, you know, if they make it so far, it is Rolex time. Uh, maybe people will stay even longer than [00:49:00] they had originally planned for. So the, you know, the trips and that kind of thing. That's definitely helping to keep team members where they are. Um, but maybe now we include the Rolex. I, I am definitely of a different mindset. I am okay if it is a new season for someone, but my intent is that they would be Happy and fulfilled enough to stay, that we would continue providing opportunities and a place for them to stay. Okay, so back to streamline OS. Those were [00:49:30] the KPIs that we're tracking through through the same dashboard. That way, all of these metrics are in one place. As we are making decisions, as we are checking on our progress and continuing to build and grow our teams and our firms. Then we have these five KPIs included as well. So with streamlined OS we talked about, we start with the assessment to get a clear picture of where we are right now, identify our strengths and identify our improvement areas. [00:50:00] Once those improvement areas are identified, it's actually going to prioritize three or less for you to work on and provide the resources links directly to the resources.

Rachel Dillon: That's training materials, templates, exercises for the team to go through within the resource library, in the collective community. And then it's also going to match those up with KPIs. Um, to help you just better track your progress across those priorities. Um, [00:50:30] at the end of the day, it's to check it off and say complete, not done. I'm never doing this again, but complete. I can prioritize the next thing now and move on and why it matters why this is my favorite, why I love talking about it. Because so often people that we talk with and we have been guilty ourselves, we stop at reporting. We just say, okay, here's what it is. This is where we're strong and this is where we could improve. [00:51:00] And then if we do nothing with that, why do we even care what it is? Um, the important part is moving forward and, and doing the actual improvement. So, um, going from visibility to understanding what it is that we need to work on, to taking action, and then to seeing or tracking that improvement over time. Um, all of these things are going to create a self-correcting operating rhythm inside your accounting [00:51:30] firm. Who doesn't want a self-correcting business? Um, I think that that is the definition of owner independent, so not dependent on the owner, which is going to significantly increase the enterprise value of the firm.

Marcus Dillon: Yeah. I'm excited about this. I think, you know, from an accountability lens, it helps, you know, raise up leaders to kind of come around maybe a sole owner or a smaller leadership team. It gives you [00:52:00] the, the dashboard, so to speak, to see when you're, uh, when you're out of alignment on one of the KPIs and when you should draw attention to that, uh, by highlighting, um, as you mentioned, the prioritized resources, hey, this is what you should focus on these three things. That's really important for people like me who just want to go take a shotgun approach and do it all. Um, so this is getting very disciplined, very, you know, deliberate in what you're doing, the improvement areas that you're focusing on. And then once you've, once you've met the [00:52:30] objective and expectation of that improvement area, you get to move on into the next one, right? And so you're continuing to build upon the improvements that you've already had and continuing to go through stabilized systemize and scale. Um, the other thing I would just say, as we continue, like the conversation point to the webinar. And then also ultimately just wrap up here in a few minutes. Um, this is part of being a part of collective, right? And so it's, there's [00:53:00] no additional cost.

Marcus Dillon: You know, it's one of those things like the software that has been built by our team, the ease of access being web based, it's all there. Um, it's there for you at your fingertips just so you can improve and share it with your leadership team. Um, we have people that we know and collective that want to move and do it at their own pace. And that is completely fine. Um, you have people that want to do it a little bit faster. And so that's when you're able to do it with your mastermind [00:53:30] group and focus group and move through that improvement and have an additional layer of accountability with people around you from outside of your firm. And then we also have people that want to move really fast and want to impact, uh, at a speed faster than either DIY on your own or with a group. That's where we have advisory. And so by working with, uh, one of our coaches at collective, that's, it moves a little bit faster and it's an individual individualized [00:54:00] to you and your team. And it's all there with inside of streamlined OS.

Rachel Dillon: Yeah. So we need to give a huge thank you to the people who made this possible. It went from idea. Uh, to actually a spreadsheet to beyond the spreadsheet because of many people who were working behind the scenes. And so Ben, um, was integral in getting this to a point where we could even start evaluating [00:54:30] and using and making changes. Uh, Amy and her insight and helping to organize. Leslie helping to review and test and give feedback. And then Angel for building out the entire, uh, dashboard and operating system in a browser based environment, uh, that is both secure and functional and, uh, useful, uh, where multiple team members, it's going to be visible and, um, just [00:55:00] helpful, helpful for improvement, something that you can go back to and really track. Again, we talk about an operating system. This isn't just meetings or meeting templates or meeting cadence. This is actually your processes and your service delivery and your onboarding of team members and clients. Um, it's your pricing. It's your leadership training and management. And so when we talk through and say it's built specifically for accounting firms, [00:55:30] um, it might not apply to a different business. This is, this is specifically what helps accounting firms continue to move forward in a specific to the processes and responsibilities that we have on a daily basis within our firms. And so, um, excited for others to use this besides just Dillon business advisors. And again, if you're not in collected by DBA yet, uh, you need to be, to be able to access these things.

Marcus Dillon: Yeah. And can't [00:56:00] wait to, you know, be a part of the webinar on May 26th, I believe is the date of that. And so, um, you know, definitely continue to, uh, watch this unfold because we're hopeful that it will impact firms like yours, uh, just improve and be the firm that you intended it to be and move at a pace that you feel comfortable with.

Rachel Dillon: Yeah. For questions or a demo, even happy to share that as well. So just email me, Rachel at collective dot cpa and [00:56:30] happy to walk through it and let you kind of poke around and see what it's all about.

Marcus Dillon: All right. Thanks for leading the conversation. Excited about this as well. So we'll see you on the next.

Rachel Dillon: Thanks for listening to this episode. If you enjoyed the conversation and want to learn more, be sure to visit collective CPA. You can schedule a meeting directly with me, Rachel, by clicking on the Contact Us page. Be sure to subscribe, like, and share so you don't miss any future episodes. [00:57:00] We look forward to connecting with you soon.