Hernán Cortés & Accounting Conquistators

In July 1519, the Spanish conquistador, Hernán Cortés, strode onto a sandy beach on the eastern coast of what is now Mexico and ordered his lieutenants to burn his fleet of eleven ships.

Knowing that his crew of five hundred men were growing weary in the face of resistance from the forces of the Aztec Empire and sensing that talk of retreat was growing, Cortés chose to scuttle his fleet, removing one strategic option from the table and leaving his crew no option but to continue. Sometimes, change management is as much about your options as it is your commitment.

Exactly five hundred years later, the story of Cortés and his radical ‘Burn The Boats’ strategy popped into my head during a conversation over dinner in Cape Town with a local accountant, Keith Cullis.

The following morning we were due to stage the Xero South Africa 2019 roadshow event in the city to over a thousand of Keith’s fellow accountants. It was always helpful to gather a small group together the night before to thank them for their support and garner insights, anecdotes and stories about how their cloud transformations were going and about where Xero needed to focus or improve.

Like many others, Keith had become a passionate Xero advocate but had outpaced almost every one of his peers with the speed with which he migrated his practice to the cloud and led his team to transition all the processes and tasks they relied upon to serve their hundreds of small business clients. I pressed him on how he’d managed such a major transformation so quickly.

He told me that despite initially making what he believed had been a clear strategic decision to move all key workflows and processes to the cloud and after a lot of hard work to make that happen, Keith was still seeing stacks of client folders containing paperwork and documentation lying on desks throughout the office. Some of his team had changed their processes, but many were evidently struggling to get there — they may have landed on the shores of the digital New World but hadn’t yet conquered it.

Me: “So, what did you do?”

Keith: “Oh, one weekend, I arranged to have all the filing cabinets removed from the office.”

And so there you have it — the Hernán Cortés of accounting.

This anecdote is a great example of the importance of leadership when attempting any kind of change or transition in business and is actually quite reflective of the reality I saw a lot when accounting firms attempted to carry out their digital transformation projects.

It’s much simpler in enterprise cloud software deployments such as with Salesforce or Workday, where every staff member within the business is mandated to use the new system, whether they like it or not, after a short staging or transition period.

However, if yours is a two-sided business model where your growth depends on progressively distributing and deploying your product to end customers through a third-party community, such as reaching SMBs through accountants in Xero’s case, it’s rarely a one-and-done endeavour.

Even if you have product market fit (note: you probably don’t) and even if you think you have the buy-in from the owner or lead decision maker, that’s often just the beginning of the story.

In the particular case of working with accounting firms, another dimension of complexity is dealing with firms with more than one partner or co-owner. These firms can often operate like semi-autonomous democracies inside a collective federal entity, where one partner is free to decide to do X with her clients, but another partner is quite happy to stick with Y for theirs. This quickly boils down to no single strategic mandate for the firm as a whole, and it sounds crazy but in the early days we’d often see half a firm migrate to the cloud and the other half stay where they were.

But sometimes, you’ll have no choice but to work with democratically fragmented customers (or practices) like this, and unfortunately, the larger the number of decision-makers, the more fraught and elongated the migration process will be.

In such cases, you may also have to contend with what are, in effect, multiple markets inside a single firm, with each partner or decision maker sitting at different stages of the technology adoption bell curve. Imagine a firm with one early adopter partner, one early majority and one who’s a laggard - good luck!

Depending on where you are on your journey and how urgently you need to demonstrate growth, you may need to park dealing with larger firms for another time and focus on less complex opportunities with single decision-makers.

These extra dimensions are easy to miss and are possibly very frustrating to uncover just as you’ve finished building your revolutionary new cloud product and you’re keen to mobilise and get some numbers on the board.

So, while you’re building your product, ensure that you don’t skim your commercial research and due diligence and ensure you get under the covers of what makes your market tick, how decisions get made and what your go-to-market playbook might need to be.

If you’re lucky, you might also bump into someone like Keith Cullis along the way.