The Role of the Transformative Advisor: An Interview With Joe Woodard [Video]

One of the best things about events like QuickBooks Connect is the opportunity to learn from industry leaders. Better yet, that learning can occur outside of the scheduled keynotes and breakout sessions.

Last week, Method’s Rodrigo Fernandez sat down with renowned author, consultant, business coach, and speaker Joe Woodard for an interview. As the CEO of Woodard Events, LLC, Woodard leads a team whose vision is to transform small business by educating and empowering small business advisors in the accounting industry. He’s also a long-time Method partner with ample experience in leveraging technology to revolutionize small business operations.

During the conversation, Woodard shared his view on the role of the “transformative advisor”: the financial professional who proactively coaches their clients on how to improve, and whose success is measured by how those clients change their behavior to increase their wealth.

Woodard also provided great insight into how advisors can use emerging technologies (such as Method) to achieve these outcomes for their clients.

“This is where Woodard Consulting was one of the pioneers in working with Method. We would go in at an operational level, very intensive level, and we would enhance [clients’] workflows. […] And we would find then that companies could scale.”

To hear more from Joe Woodard, check out the video and transcript of the interview below.

Video Transcript

Rodrigo Fernandez (RF): Hey everyone, Rodrigo here with Method and I’m sitting down with Joe Woodard, CEO of Woodard Consulting and the creator of Scaling New Heights, a staple in the accounting industry. Joe, thank you so much for joining me.

Joe Woodard (JW): It’s great to be here with you.

RF: So I’m new to the industry and I’ve been doing a lot of research. And I stumbled upon a concept that I think you coined, which is the “transformative advisor” role. Talk to me a little about what that means.

JW: Yeah, well, we themed our conference “The Transformative Advisor” and we were frankly surprised nobody else was using that term. We thought it was just gonna be out there and we just happened to call our show that theme. And when I saw that after Googling it that no one was using the term, then I knew we had an opportunity to go to sort of coining the phrase.

But we had a problem out there — you know, why aren’t more people referring to advisors as transformative? You see everywhere “trusted advisor” — but see, I don’t like the word “trusted advisor.” It’s not that it’s a bad term; it’s just not a specific term. You have passive trust and you have active trust. Passive trust is trusting say, an accountant not to reveal my private information, or trusting my accountant to file my tax return on time, trusting my accountant to reconcile my bank accounts accurately.

RF: It’s very transactional.

JW: It’s very transactional, that’s exactly right. And there could also be an element of trusted that’s transformational, but we don’t know which type you were referring to. And I’ve used the term “trusted advisor” for years with accountants and I will challenge them to become one. And the response I get back, either in their body language or their verbal languages: “I’m already that, tell me what to do next.” And what they really mean is, “I’m a passive trusted advisor.”

So this term doesn’t allow for you to be passive. To be transformative, you must be proactive. You must be a coach, you must be monitoring what your clients are doing and you must be informing the client on what they need to do better. That’s the critical difference.

RF: So as I’m reading it, what I really liked was the concept of how you measure the success of a transformative advisor. And you say that it’s by the behavior of the customer; if by what the transformative advisor suggests, the customer then gains wealth.

JW: That’s correct. So you hone in on a couple of points there. One point is how you measure the success of the transformative advisor. The measurements of success of an accounting firm are all about me. What is my realized bill rate, if you’re still using time sheets out there? You know, what is my effective bill rate, if you’re measuring it based off of payroll? How have efficiencies increased my profit margin? What kind of tax products am I using and what’s the cost to revenue ratio of my tax software investment?

And I’m not saying not to do those, though — it’s important to have those kinds of measurements. But they’re all about “me, me, me, me; my behavior, my behavior, my behavior.” I’m saying add to those measurements: the client’s behavior.

So if I’m a transformative advisor, the only measurement of transformation is, “how did my client change their behavior to increase their wealth, to increase their efficiencies?” Be measuring their cost to benefit ratios on different investments they’re making, measure their risk ratio to benefit, measure their financial benchmarking as compared to others in their industry. Create alerts around their cash flow — AR terms. If they’re in inventory, inventory terms. Anything that will be wealth-generating: if you monitor it, coach to it, and have a change of behavior on the part of the client — that’s key.

RF: Excellent. Now what type of mindset do you do you need to make that transition? You mentioned that some professionals already call themselves transformative. But yet as you approach them, they’re missing a couple of things. What are they really missing? What type of mindset do they need for that?

JW: So first there must be an identity shift. And this isn’t always a popular message, but it’s one that I’m going to be consistent about all the way through the rest of my career. Don’t call yourself a bookkeeper. Don’t call yourself a tax preparer. Don’t call yourself, in some cases, even “comma CPA.” Because all of those things are noble professions and they’re noble designations — I mean, I wish I had myself a CPA, it’s sort of on my bucket list to go get those initials.

But the moment that we begin to brand ourselves around a specific service within the accounting profession, we’ve limited the client’s perception of what we can bring in terms of value. And unfortunately “CPA,” though a trusted designation, is also a determined designation. They predetermined your role and it’s very hard to break out of that role.

So instead it starts with identity; that’s the mind shift. Call yourself what you’re going to do. it could be business coach, if you want to get fancy about it. Could be fractional CFO or outsourced CFO, though some non-CPAs shy away from that term. It could be outsourced director of business development. There’s so many broader but yet specific terms you could use.

And then still provide bookkeeping and tax, still provide assurance services if you wish to do so — business valuation and all those other things that CPAs do. But you’re doing those as a means to the end. And the end is to coach the client into increases in wealth.

RF: Now Joe, when you say increases in, wealth does that mean financial wealth?

JW: It does mean financial wealth. So obviously the first thing we should do is get profits up, getting all the way down to net income up. So analyze GNA, because it’s the fastest levers we can pull to create a financial ROI for the investment they’re making in us.

But don’t stop there. And as accounting professionals, it’s going to be very tempting to stop there. Increasing the top of the line revenues is still a financial impact and we can do that through helping our clients to market better, to brand better, to provide better pricing around their services.

They probably are not large enough to have their own pricing officer like a chief revenue officer in-house, so provide that outsourced role. And just like we challenge as thought leaders, accountants to value price and to price commensurate with the wealth we’re generating, get them to do the same thing with their customers. And then through brand differentiation, they can break through all the price anchors that take place in whatever their field is and they can start to increase wealth that way.

But there are other softer ways. You can increase a client’s wealth if you just change their culture. Enhance their peace of mind. In some cases, you can even make their domestic life better. I love telling a story about a guy named Joe who’s a CPA, or he works for a CPA firm, and he is a tax preparer, he’s a QuickBooks consultant. And he saved one of his client’s marriages by changing the way that they value their inventory.

Because the wife who didn’t want to work had gotten commandeered into the company to take all this costing, all these cost models they had to create for a particular supplier. And she was doing all this work in Excel and Joe said “no, if you’ll just change this to this in QuickBooks” — and I won’t get into all the specifics — “QuickBooks will give you those reports internally.” And the guy came back about a year later or so and said, “You saved my marriage. You didn’t just save my company about 30 hours a week; you saved my marriage.”

And so then that comes into all this pricing challenge because we don’t have crystal balls, right? So how would Joe possibly have known all the impact of that? But Joe could determine “save the company 30 hours per week.” And that efficiency, though maybe it may take a while for it to hit the bottom line, especially if that employee is now back home and it’s not really increased well for the customer, there was the soft benefit of domestic harmonization, work-life harmonization and overall scalability for the company as they increase their distributions.

We need to be looking at the long range with our clients. And this is where, as you know, Woodard Consulting was one of the pioneers in working with Method. We would go in at an operational level, very intensive level, and we would enhance their workflows. And then we would take their custom process, their proprietary process, and we would run it through Method for collaboration and in some cases, many cases, automation, and even field deployments and productions. And we would find then that companies could scale.

Our premium example, flagship example, is a company that’s scaled from a 30 million dollar company to a 40 million dollar company without any increase in cost of production. So we generated $10,000 in clear wealth generation, but we did it as operational advisors. We didn’t do it as financial advisors.

RF: So let’s talk about the intersection of technology and the transformative advisor. And there’s this concept that technology, of course, improves operational efficiencies, which of course creates wealth. What are some other ways that emerging technology can increase that?

JW: So I was talking in my Method example about the sort of front lines, the field services, the production, and the management of the company’s operations. But that back office is the first place to start because it’s the accountant’s warm spot. We know how to run a back office. We are more familiar with the technologies involved in that. It’s many of the ones that are on the show floor here at QuickBooks Connect and also at my show, Scaling New Heights.

So we know them. And when the client doesn’t want to outsource their bookkeeping to us, first step is to automate their bookkeeping in-house and create those efficiencies. And through doing that, we create more accurate, real-time, and manageable financial data, and that gives us the building blocks for our coaching, all right.

So start there — it’s your comfort zone. But then niche. And by niching, you can become a specialist in a particular vertical solution, whether it’s an ERP solution, inventory controls, your point of sale, medical billing. To find that technology that you can specialize in and then layer that operational technology consulting to it.

Make sure that what you’re putting in on the front end talks to the back end, whether you’re outsourcing the bookkeeping and it’s your back end, or if it’s their back end. Because you want to try to get to, say, 80% automation of bookkeeping process, and you won’t get there if the front end doesn’t tie to the back

Now I’m gonna go back to Method for a minute, because even though I am a big proponent of niche, anytime you’re doing the bookkeeping, tax or accounting work, niche is always by industry. But what our consulting created [was] a niche that wasn’t by industry. We were come-all takers when it came to embracing a small to medium-sized business client. We’d take anybody. Our niche was around Method.

So you can create an entire practice niche around the deployment of a particular solution. And in Method’s case, its benefit was it wasn’t vertical. We could deploy it at any business at any time. We always had a bit of a learning curve if we were new to the model, but we were doing it so specific to that client, so proprietary to that client, that we could just immerse ourselves in there, become business process workflows experts and then build into Method. So specialization could take place at a vertical level by industry or by product, when you have a product as wide-reaching as Method.

RF: So as many people know, [with] Method our go-to-market strategy is the CRM portion. But Method beyond the CRM is a no-code platform where you can build pretty much any business workflow and extend the CRM. And by that, also extend your accounting software. In our case, we’re built exclusively for QuickBooks. Share with me some of your experience with our no-code platform.

JW: Yeah, well, I’ve had a lot of experiences with it. And our favorite kind of client was a client on some sort of proprietary or legacy code system. And we would come in, not programmers. To this day, I don’t know how to write one line of code; I can do some SQL strings. I don’t know how to write one line of code; I couldn’t do an API code if my life depended on it — I always outsource the API.

But I would go into a client that was using, say, Linux or, you know, some old DOS-based program that they had somebody build for them in the 1980s or 90s. And we would completely rebuild that program in Method, without me having to write one line of code.

Now these guys back in the 80s and 90s paid six figures back then to have people do Linux coding because they were building custom software. So they already had a talk about a positive price anchor; they had a price point in their mind that was six figures twenty years ago. So we would come in saying, “Well, you know, times have changed; it’s gonna be a little bit more expensive to rewrite a program now, but these are the benefits in us doing it.”

And we didn’t call it a no-code program; in a configuration platform versus the code, because the code will never go legacy. And so we would sell it based on that. We would charge, say, 50 to 75 percent more than they paid back in the 1990s and we would do it in 20 percent of the time. It’s a fantastic model.

RF: That’s amazing, that’s amazing. So, talking about Method and its role in this journey of the ProAdvisor and the accountant into the mentality of a transformative advisor, what do you advise them as a way of leveraging Method as a core piece of that journey?

JW: Alright, so I’m gonna answer your question by telling you a story. The very first time I ever encountered Method, I went up to your booth at a show, at another person’s show, and I asked, “what do you guys do?” And it was Paul Jackson working the booth, the CEO and founder of Method, because there were like five guys in Method at the time. And Paul looked back at me and said, not in a coy way, but just an accurate way: “whatever you want it to do.”

Alright, so I’ll answer your question now by saying, Method will do whatever you want it to do. And I mean almost without limitation. So what I would say to any accountant without fully understanding Method, without being certified on Method, without having gone all the way down the rabbit hole on what Method can do — because it’s vast what it can do — I would say this. Anytime your client — if I’m speaking to an accounting professional — anytime your client can’t accomplish what they want to accomplish with something off-the-shelf, deploy Method.

And you will find that’s almost always the case. So Method could serve as a process gap-filler between other solutions, including integration because it has an API. It can serve as a process gap-filler without integration. It can serve as a highly proprietary custom solution for micro-verticals that don’t have a good QuickBooks-integrated solution, and those are plentiful right?

And remember: as the accountant, you don’t have to do what Woodard Consulting did. You don’t have to go in and completely revamp a Linux system for a six-figure engagement because that may not be your model. What you have to do is identify the need. Keep in your mind that almost without exception — I’m not being hyperbolic — if they have a need for software and it doesn’t exist as a micro process or a macro process, just go to Method’s website and start chatting with them. Because it’s 99.9% that Method can solve the problem. And do so at a very low developmental curve as compared to custom software.

RF: Excellent. Joe, thank you. Let’s talk about Woodard Consulting. You seem to be all over the place. There’s a lot of things going on on your end. I’m loving the TV show and all of the different webinars and resources. What’s next on your roadmap? What’s at your heel right now?

JW: Well, we’re gonna lean into the things we already have in our portfolio. So you mentioned the tech makeover reality show. And you can go watch that at www.woodard.com. Check it out: it’s cable television-level reality TV show, but it’s really a video case study of us transforming small businesses with technology. So I would encourage anybody watching this interview to go to www.woodard.com and check that out.

We’re gonna lean into webinars with even more strength and you’re gonna see a revamp of that. We’ve got our podcast. And we’re gonna make Scaling New Heights always bigger and better, bigger and better. The only new thing we’ve launched and the only new thing we will launch over 12 months is an online version of Scaling New Heights, in a virtual platform, state-of-the-art video game kind of interface where you walk around and go to a virtual exhibit hall and a virtual lobby. You have three tracks of training to choose from. You have world-renowned keynote presenters.

So we’re giving everybody a taste of what they would get at Scaling New Heights on-site, for those that want an incremental Scaling experience and for those that can’t make the premise show. And there’s even a free option if you just want to come and listen to the keynotes.

RF: Excellent. And they can register now?

JW: Yes, so registration is open at www.scalingnewheights.com.

RF: Amazing. So Joe, thank you so much for your time. You are an incredible Method partner and we really value you. Thank you.

JW: Well, it’s been great to be here, thank you.

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