Tuesday, December 20, 2016

My Blog is Moving

Thank you to my loyal readers and subscribers for your attention and generous feedback the past eight years. As of today, all future posts will be published on my firm’s website.  
We have two blogs you may like: the RSJ Thought Center Blog contains industry news and helpful information, while Our Two Cents is more like this one; it’s conversational and observational. If you have enjoyed reading my posts here, you will find more of the same at Our Two Cents.

Thursday, December 1, 2016

The Five Capitals - A Cheat Sheet

In my book Five Eyes on the Fence, I propose a way to look at what businesses, families

and people really possess in terms of “capital.” The success or failure of a business lays in understanding the potential and actual consequences of more than financial capital. In fact, there are four other capitals that might be even more consequential than money. The interrelationship of these four capitals—sometimes coupled with financial capital—is what actually produces expansion or contraction of financial capital.

The financial consequences of a business owner’s decisions are driven by:
  • Human capital—Who are the owners? What are their intelligences, instincts, and values? This is important because every decision is knowingly or unknowingly a manifestation of the value set of the business, family, or individual.
  • Social capital—Who do the owners know and work with? When they are intentionally nurtured, these relationships can be leveraged for opportunity.
  •  Intellectual capital—What do the owners and other members of the company know? Are their gaps in knowledge that could be closed to strengthen the product or service?
  • Structural capital—What processes do these people use to accomplish things?

In short, all the decisions surrounding these four capitals will either subtract from or enhance financial capital.

This blog also appears in Our Two Cents on rsjcpa.com 

Wednesday, November 30, 2016

Micro Promises

Most of us keep our big promises, but all too often, we make tons of tiny little “micro-promises” that we either never keep, or that we fulfill, but only with tremendous tardiness.
We say: “I will call you back in five minutes.” Then we call back the next day. We say: “Let’s have lunch soon,” but we never do. We say, “I’m happy to answer any questions that you have,” when we really don’t want to take the time to answer too many questions.
All of these tiny little promises are hard to keep track of. We make so many of them that we cannot possibly honor all of them. And we don’t take them seriously, do we?
We also break promises to ourselves. We say things like:
“I’m going to start going to bed earlier.”
“I’m going to wake up and go to the gym.”
“I’m going to call my mother.”
How many leaders, bosses, and educators make micro-promises that never come true? The answer is: too many! In fact, we take most people’s micro-promises with a grain of salt. When our long-lost friend that we run into at the store promises to call us the following week, we don’t really expect it to happen.
But all of these micro-promises, made to ourselves and to others, chip away at our social and human capital. What do other people think of us when we fail to keep our commitments? Remember that when you interact with other people, you are either building or destroying social capital. When these micro-promises are kept, the mortar that binds your relationships solidifies.
And when you keep the micro-promises that you make to yourself, you validate your own worthiness.
My friend and personal coach Michelle DeAngelis had a conversation about micro-promises, and here are my takeaways:
1. Be mindful about seemingly idle micro-promises. No promise is idle or casual. Someone might be holding you to it, so make the promise only if you can do it. Kathy Kolbe, my friend and creator of the Kolbe System, advises that people should commit, but to very few things. If you are overrun with promises, you cannot fulfill them all. So when you make a promise, big or little, be sure it is one that you can fulfill.
2. Once you commit, set up a mechanism so that you can schedule time to meet that commitment. Put it in your calendar or write it down, right then and there.

3. Finally, make sure that you do not create a culture whereby micro-promises are broken by other people (which may normalize it and/or erode your own emotional wellbeing). When someone makes a micro-promise to you, find out whether they are truly committing. Say something like: “I would love for that to really happen. What should we each do to make it so?”  

This blog also appears on Our Two Cents on rsjcpa.com 

Monday, November 14, 2016

President-Elect Trump’s Impact on Your Taxes

While some are happy and some are protesting the election of Donald Trump as our next president, one thing is certain: Changes will be made to the tax and business climate. Many are speculating about what might happen, but no one really knows what President-Elect Trump’s administration or the Congress will propose and will pass. So far the domestic markets have responded positively to the possibilities they see in the future. Europe is taking a “wait and see” posture. Both sides of the aisle agree that some sort of infrastructure initiative is necessary.
We would like to share our thoughts about the future:
  1. Overall, we might see a broadening in the tax base subject to tax, but we probably will not see a drastic reduction in everyone’s taxes. Enhanced child-care deductions are likely, as are lowered tax rates and faster write-offs for capital investments. That said, there might be an absolute cap on the amount of itemized deductions allowable, which is why we are skeptical about the likelihood of seeing tremendous reductions in taxes.

  2. Lifting some of the regulations on businesses might make it a bit easier for you to operate and plan for the future. By lifting or moderating some of the regulations under discussion, more new businesses will have a smoother road to success. Likewise, existing business can act more “business-like” and less defensive.

  3. There will be some effort to further eliminate estate and gift taxes for all but the wealthiest of our clients, but it is possible that many people will end up paying more money in taxes related to assets passed between generations. The trade-off will occur because we suspect that adjustments to the income tax basis (for determining gain or loss on the eventual disposition of those assets) will remain the original cost plus capital improvements the original purchaser paid for those assets.

What can you do now?
1. Be watchful and pay attention to not only the rhetoric but also the actual proposals that are floated by those who will be in control of the executive and legislative branches.
2. Be attentive to state and local proposals for both legislation and regulation so you won’t be surprised by state-level changes.
3. Spend time evaluating the human, structural, social, and intellectual capitals of your business and how a changing environment might change your strategies related to each. For instance:
  • Mind your human capital by considering whether proposed changes in regulations will change the way you will deal with your employees. How will changes to the Affordable Care Act (or repealing the Affordable Care Act entirely) impact you? See your employee benefits purveyor to help understand these changes.
  • Protect your intellectual and structural capital. Think thru innovations and other technical issues in your industry. How does technology affect the way you get things done? Are you cyber-secure?
  • What about social capital? Be sure you are speaking to your customers and your vendors about how, if at all, your relationship with them will be impacted by changes that might occur in Washington or your local State House. Keep your customers informed about changes that might come about in your industry that could affect their ability to utilize your value.

Regardless of whether you are celebrating or grieving the new administration, now is a great time to spend a minute and evaluate where you are and where you want to go. The currents move on, even if we want to stand still.

We are thinking about these things and more at Rose, Snyder & Jacobs, and we want to help you be intentional and understand the future so that we can work together to make the best decisions. We stand ready to assist you as you consider what the next four years or more might look like for you, your family, and your businesses.

Wednesday, October 5, 2016

My Advice on Gifts in Financial Advisor Magazine

I was happy to share my thoughts with Eric Reiner for his article on "Tax Tips to Close 2016." My advice on gifts appears in the current edition of Financial Advisor Magazine. Click  the link below to read the full article -- in which I am quoted -- and let me know if you agree or disagree with the tips that made the list. http://hubs.ly/H04DdCw0

Monday, July 11, 2016

Open Letter to John Stankey of AT&T Entertainment Group

Dear John Stankey:

We have never met, so you don’t know a thing about me. You don’t know that as I write this, it is almost the one-year anniversary of my son’s death. Jonny died a month shy of his twenty-ninth birthday.

You don’t know that his mother, his sister, and I recently decided to convert his bedroom—the room in which he died—into a commemorative room where we could watch hockey, his favorite sport, as a family.

You cannot possibly know that Jonny’s hockey sticks and his diploma from Southwestern Law School hang on the wall, alongside his certificate admitting him to the California State Bar Association.

And you cannot know that my daughter, Katie, planned a surprise for me. While Chris and I were out of town, Katie decided to do all the heavy lifting. She bought a satellite dish and a 50” TV, which she lugged into my son’s room, so that come August, we can watch the Olympics as a family in Jonny’s room. Come winter, it will be a perfectly cozy place to watch the hockey season.

There is no reason that you would know that on Monday morning, I sat in that room and had a really great cry.

But here is what you do know: You know that your company’s internal structures have been carefully crafted to keep all of your employees from bearing responsibility for solving a customer’s problem. I know that you know this because my daughter, my assistant, and I have spent about twenty hours of our lives talking to your employees.

We spoke with Adam from Pennsylvania, Lee and Cameron from Mississippi, Keith from Oregon, and Peter from the Philippines. And as my case was handed from one person to the next, I asked quite a few questions about the structures you have in place for your so-called customer service.

You see, what you also do not know about me is that I, too, am the CEO of a company. In fact, I have been a CEO and named partner for forty years. My firm is not as big as yours. Not many people know the name Rose, Snyder & Jacobs, but our clients would tell you that our firm is damn committed to customer service.

I don’t think the same can be said about your company. Sure, AT&T looks like a corporate success story. You just bought DirecTV, and that seems to indicate that things are heading in the right direction.

But your internal structures are a mess, and your social capital is racing downhill—and fast. Watch out, Mr. Stankey: You have a train wreck headed your way.

You have already fielded similar complaints from thousands and thousands of other unhappy customers, so I won’t bore you with too many of the details of what happened. The short story is this: Twice, your representatives were supposed to arrive at my house for a DirecTV service call for the new television that sits in Jonny’s room. Twice, they didn’t show up during the four-hour window of time that we waited. In fact, both times, we waited the entire day!

And then, for a total of twenty hours, I tried to reach a resolution with your office.

Your employees were extremely pleasant and apologetic. They genuinely felt bad. They wanted to help. But they had no recourse other than to stick me in the back of the queue. Even though the AT&T/DirecTV technicians did not arrive during the two eight-hour windows they were supposed to arrive, my request for service was stuck at the end of the line. I was being told to start from square one and wait it out.

This happens all of the time with AT&T/DirecTV.

But this is where my story is a little different from the rest.

I am the author of a book about social, human, intellectual, and structural capital, so I knew what questions to ask about the structures that a company needs to adequately manage customer service complaints. In short, I wanted to know the answer to this: What does AT&T/DirecTV do when it screws up?

Here is what I learned: The employee on the end of the line who has the most power can credit an account for $50.

Let me repeat this: The most empowered customer-service representative can give a customer a $50 credit. He cannot prioritize a case. He cannot ask a technician to make an immediate service call. He does not have the ability to get a response from dispatch about why the screw-up. He does not even have any way of getting in touch with home office to ask for an exception. They do have an address in Dallas where I, your valued customer, can mail a complaint. (What are the chances it will be answered?)

The most-empowered employee on the end of the line has no ability to take any meaningful action.

Sure, the employees can keep transferring customer service calls from one person to another, so it appears as though customer service is a priority. But your process is not built to help your customers, and you and I both know it.

Mr. Stankey, I am not a corporate giant. My firm is modest, but here is where it outshines AT&T any day of the week: We know the importance of honoring clients.

You see, I remember what happened to AT&T back in 1982. Back then, people had to wait two or three weeks before they could establish phone service in a new residence. It was frustrating, but they had no choice. AT&T had acquired Bell Operating Companies, so customers had no other option but to stand in line. They had no recourse. AT&T could take its customers money, but it could not provide an adequate customer service structure.

Then the government stepped in and forced AT&T to relinquish control of Bell. They wanted customers to have a choice. When customers have a choice, they tend to take their business to the companies who will help them.

I have such a company—a company that helps people. As a result, I am rich in social capital. My clients, my friends, and my colleagues want to help me. So in the end, I spent some of my social capital to get your company’s attention. I called a friend, who called a friend, who called a friend who is a higher-up at DirecTV. This friend-of-a-friend-of-a-friend assured me that someone will be at my home tomorrow to install my service.

Here is the truth: Even if I didn’t have connections, I wouldn’t have walked away from DirecTV. I would have waited it out because my daughter wants to watch the Olympics in her brother’s room.

But a lot of your other customers are walking away. They might not have connections like I have, but they do have choices, like Netflix and Hulu. And you can only lose so many pebbles before you have no beach left.

Rest up now, Mr. Stankey. Unless you make some changes, and fast, you have a rough road ahead of you.


Tony A. Rose, CPA
Rose, Snyder & Jacobs

P.S. I have strong social capital, and I am certain that there are other people in my circle who are fed up with your so-called customer service, so I’m sharing my story on twitter as #DirecTVService so that other people can join the conversation.