CPA Leadership Institute

Dustin HostetlerLSS Master Black BeltOffice: 330-345-1646 Mobile: 614-288-6426

Email: Dustin@flowtivity.com

Twitter: @Flowtivity

Six Sigma for CPAs

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AgendaIntroduction to Lean and Six Sigma5 Principles of lean9 Categories of Waste5-Step Process Improvement Model3 Universal Lean Strategies to Improve ProcessesChallenging the Status Quo in CPA FirmsTax and Assurance Specific ExamplesDelighting Your Clients

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What is Lean?

• Velocity!

• Efficiency

• Capacity

• Value “Moving fast is not the same as going somewhere”

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What is Six Sigma?

• Quality!

• Consistency

• Capacity

• Value “There’s never time to do a job right, but always time to do it over”

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5 Principles of Lean

• Customers define value

• Identify the value stream – what is value added

and what is “waste”?

• Make the process flow

• Implement “pull” to the process

• Continuous Improvement

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9 Categories of Waste in ProcessesD efects

O verproduction

W aiting

N ot utilizing people’s talent

T ransporting

I nventory

M otion

E xcess Processing

+

A ttitude

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Lean Thinking - Summarized

• Definition:

The focused elimination of wasteful activities

“The wise do only what needs to be done”

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Powerful Model for Process Improvement

• “Begin with the End in Mind”Define• What is the Current State?Measure• Put the process under the microscope• Beat it up!Analyze• Target improvement ideas to create the Future StateImprove• Develop and Sustain Buy-InControl

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The Lean Six Sigma Team

TOPS model Lean Companies Use: • Team-Oriented Problem Solving

– Champion– Team leader– Facilitator– Cross-Functional Subject Experts

“No one knows the work like the people doing the work” – Henry Ford

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Lean Six Sigma

• Challenge the Status Quo

– Avoid saying: “We’ve always done it this way?”

– Why?

“Progress requires change. If you never change, you’ll never progress.”

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Lean Six Sigma

Let’s Summarize by Getting back to Basics:

• “Voice of the Customer” (VOC) • “Voice of the Process” (VOP)

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3 Key Lean Strategies• Reduced Transportation

• Level Loading• Focused on constraints• Smoother Process Flow

• Reduced Batch Sizes• Controlled WIP

Challenging the Status Quo

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Expectations and Accountability• Are you building in quality from the start?

• Are you effectively and consistently setting expectations?

• Who’s taking ownership and when?

• Your people want some expectations set!

• E.g. Quick Checks

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One-Way Workflow• Why do we love circles?

• Can you think of a client that has as many circles as you have?

• No Egos Allowed – we know you’re smart!

• Is that Point helpful in any of the following ways?• Helping the firm make money?

• Helping a client make money?

• Meeting a Standard?

• E.g. Collaborative Review© Flowtivity, LLC

Safety Nets• What is a “Safety Net”?

• How many do you have?

• Why don’t you build a stronger one at the top (earlier in the process)?

• More safety nets = more quality issues

• E.g. Level Loading

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Managing the Front Door• Quit blaming the client

• Make it easier to do business with you

• Invest time to save time

• Is your team on the same page before starting?

• E.g. Gatekeeper

• E.g. Planning Meeting“Invest time to save time”

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Project Management• Are your managers “managing”?

• Staff

• Partners

• Workload

• Client

• Do you promote based on a) years of experience or b) demonstration of management skills and capabilities?

• Who’s the manager on the job?

• E.g. First question staff ask is not about the client

“Being chargeable can really get in the way of being productive.”

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Dealing with Exceptions

• Do you let your technical personalities dictate a new process / add on to the process for every exception?

• How many processes do you have inside your firm for the same product line?

• Set up your process for the majority

• Don’t let them say “But this client is unique because…”

• E.g. Rollout excuses© Flowtivity, LLC

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Examples• Tax Process Improvements• Quick Checks, Safety Nets, Collaborative Review,

Managing the Front Door, PBC Lists and Organizers

• Assurance Process Improvements• Project Management, Time Shift (e.g. use of Interim),

Collaborative Review, Managing the Front Door (e.g. verifying client readiness), PBC Lists

Kano Model of Client Satisfaction

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Process Change Relies on Buy In…• Remember, understanding comes before commitment.

• Using the methodical Lean Six Sigma process and tools helps build the case for change.

• Allow for continuous improvement of ideas…continue to challenge individuals to further improve the process.

• Remind everyone, there will always be exceptions. We can’t set up the process to meet every exception.

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Benefits of Lean Implementation• Increased throughput and capacity

• Better quality from the start

• Improved morale and work-life balance

• Less partner time in “the mud”

– allows time for high level activities and identifying value-add solutions for clients

• Increased Client Service & Satisfaction!

Are you ready to grow?

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Specific Firm Results• Increased realization from 87% to 101% over a 2-year period (Top

100 Firm, Multi-Office)

• Increased throughput results (Top 150 Firm)– Increased throughput by 9% by March 15

– Increased throughput by 6% by April 15

– 3 Less FTE’s compared to previous year

– Fewer Chargeable Hours

• Increased realization from 79% to 91% in 1-year (Top 200 Firm, One-Office)

• Decreased Cycle Time from Fieldwork to F/S Issuance by 10 days in first year (average 2 week turnaround)

Are you ready to grow?

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Thank You!www.flowtivity.com

Twitter: @FlowtivityEmail: Dustin@Flowtivity.com

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