I went on a business retreat last week with some of our accountancy team. It felt good to hang out and share ideas in person again. One of the things we did was the Big 5 Personality Test, a psychometric tool that scores you on the traits of openness, conscientiousness, extraversion, agreeableness and neuroticism.
My results seemed accurate to me. I’m orderly, polite and stick to rules, even if I disagree with them. I’m not confrontational. My way of being in the world is based more on facts than feelings, which could be seen as a quintessential quality among accountants. I also reflected that I get on better alone or in small groups when working. I’m out of my comfort zone socialising with bigger groups, being openly emotional, and talking about nuanced things like politics and philosophy. Maybe I’m naive in that I prefer the clarity of facts.
Was I born with these preferences and peccadilloes, or did I accrue them via years of studying and working in my field? I expect it was a dynamic process whereby my disposition, which is only one factor among many others that include when and where I was born and the options open to me, brought me to the decision to train as an accountant. Maybe, once I was ensconced in this career, non-accountant-like traits began to drop away, whereas they might not have if I had chosen a different career. I might be more au fait with the emotional side of life by now if I was doing something else. Although it’s hard to imagine.
If there is a pattern in the kind of people who choose a certain career, this is worth knowing when you are working on your business. To be a dentist, for example, takes a certain type of person. You will presumably find the safety, sensibleness and compliance required of dentists appealing on some level. You are then trained for many years to cultivate these qualities. Eventually you may feel that this risk averse way of being is so deep rooted in you that it can’t be changed.
Fine. The most interesting thing about risk in dentistry is the yawning chasm between actual risk and perceived risk. Something strange happens to many associates when they buy their first practice. Many identify as risk averse but are suddenly afflicted by a massive blind spot: they don’t see stacking up debt to buy a practice as a risk. To any other non-dentist investing everything they’ve got to launch a business using skills they haven’t yet learnt, the situation would look risky indeed.
This is about your perception of what’s normal. And we’ve said here many times (and it’s truer now than ever), it used to be normal to do your FD, do your time as an associate and then set up shop and make loads of money without taking much interest in the mechanics of business. Now you can’t do that. Walking blindly into this situation without preparation isn’t just risky, it’s self-harm.
On the retreat we talked about something from management theory called the Peter Principle, which states that if you perform well in your job you will likely be promoted until you reach the point where you can no longer perform well. No one tends to get demoted and no one tends to stay at the last job they were good at, so everyone in a hierarchical organisation, the idea goes, is operating inefficiently because they’ve all been promoted beyond their skillset.
When you buy a practice you need business skills, and as an associate you’ve never been taught these skills. You’re at risk of falling victim to the Peter Principle at your own hands. However, by engaging with our multi-disciplinary consultancy many of our clients have not just mitigated this risk, they have completely transformed themselves and their businesses. They’ve geared themselves up to bounce back from Covid and then their businesses have kept growing.
Yes, this is really happening, they’ve exceeded pre-Covid revenues even when operating at significantly lower production capacity, because they have been able to make efficiencies even with fallow time. Practices that aren’t run properly won’t be able to turn a profit this year. The question is, can you change enough to meet this challenge? You may not need to change your deepest values, just your perspective. We’re here to support you.
