Leadership Capacity with Hilani Ellis
Leadership Capacity is a limited conversation series with founders, CEOs, and executives who know firsthand that as companies and teams grow, leadership has to grow with them.
Hosted by Hilani Ellis, each conversation brings forward the experiences, decisions, challenges, and lessons that have shaped how accomplished leaders lead today. From building companies and developing teams to navigating change and preparing for what comes next, Leadership Capacity gives curious leaders a closer look at what leadership requires when responsibility grows.
Leadership Capacity with Hilani Ellis
From Two Maxed-Out Credit Cards to Building a Firm: What Matt Fargo Learned About Leadership (E: 004)
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Matt Fargo started Kurtz Fargo in 2010 with two maxed-out credit cards, 400 square feet of office space, no clients and a belief that accounting could be done differently.
Today, he leads a multi-office firm with more than 80 employees—but this conversation is about much more than accounting.
In this episode of the Leadership Capacity Show, Matt and I talk about what he learned while building the firm, why copying the best companies in your industry can still leave you average, and what founders can learn by looking outside their own field for better ways to operate.
We also get into professional-service pricing, why Kurtz Fargo moved away from traditional billable-hour thinking, what a home remodel taught Matt about client value, and how alignment, employee experience and failure have shaped the way he leads.
In this conversation:
How Matt accidentally found his way into accounting
Starting Kurtz Fargo with two maxed-out credit cards and no clients
Why he kept a list of everything he disliked about public accounting
What businesses can learn from industries outside their own
Rethinking billable hours and client value
Building a culture around alignment and employee experience
Why fear of failure can create mediocrity
What Matt would tell himself 15 years after starting the firm
Leadership Capacity is a conversation series with CEOs, founders and experienced leaders about what leadership has actually required of them—and what they've learned along the way.
New conversations every Tuesday.
#Leadership #Entrepreneurship #FutureOfWork
00:00 — Preview
00:47 — Meet Matt Fargo
02:18 — How Matt Accidentally Chose Accounting
08:01 — Starting His Career at PwC
10:44 — Learning to Lead, Not Just Do the Work
13:37 — Why Matt Decided to Start an Accounting Firm
14:51 — Two Credit Cards, No Clients & a Big Idea
15:37 — What Exceptional Clients Taught the Firm
17:30 — Why Copying Your Industry Isn't Enough
19:28 — Rethinking Billable Hours & Client Value
22:34 — What Remodeling a House Taught Matt About Business
27:52 — Learning From Other Industries
32:48 — What Matters More to Matt Today
36:01 — Why Fear of Failure Creates Mediocrity
39:50 — What Matt Would Tell Himself 15 Years Ago
Kurtz Fargo: https://kurtzfargo.com/
Matt Fargo on Linkedin: https://www.linkedin.com/in/matthew-fargo-cpa-ab6b82a/
Grab the Leadership Book: https://www.hilaniellis.com/hilani-ellis-capacity-the-new-advantage
Subscribe to Leadership Insights: https://www.hilaniellis.com/
Follow along on LinkedIn: https://www.linkedin.com/in/hilaniellis/
Pull up and there's like a circular driveway with a big fountain and a you know multi-car garage and all this kind of cool stuff. And I was like, man, what does your dad do? And she's like, he's a CPA. And I was like, I'm gonna do that. That sounds that sounds good to me. Awesome. If you look internally at your industry and all you do is try to copy the best performers in the industry, all you're ever gonna be is a also ramp.
SPEAKER_02Yeah.
SPEAKER_01You know, rather than try to copy, why don't we try to do better? If you're afraid of failure and failure's not an option, then mediocrity is what you end up accomplishing.
SPEAKER_04Mediocrity associates with mediocrity, high performers associate with high performers. And what do you do when you have a mixture of that and on the team?
SPEAKER_01That's right. Intentionality behind the failure is really what's the most important thing to look at.
SPEAKER_04Matt Fargo, it's great to see you and physically be in person with you. I've known you for a long time. I remember the first time we met. It was actually with Sean Stigler's uh event, who was another guest on the show. And we found ourselves kind of in the side area of this uh brewery, and we were just having a great conversation. Uh, and we've worked together since, which is awesome. And I've seen you grow to multiple locations. Uh, you're in the accounting space.
SPEAKER_01Yes.
SPEAKER_04Uh, which it makes me and my palms sweat a little bit when it comes to accounting, which is why I have a full-time bookkeeper. But for two decades, you've been helping founders and executive teams understand not just the numbers, but uh the things happening behind their business that are associated with the numbers. Uh but what interests me most isn't the accounting, clearly, as I mentioned, uh, with my hands getting sweaty, it's the perspective that you've gained by helping these leaders, uh, whether they're a startup, whether they're now a merged company, um, and helping them make just some better decisions uh to avoid some small issues that could turn out to be bigger, especially when it comes to their books and accounting and your founder as well, which is exciting. And I know here in the Denver area, well known. Everyone knows about you, everybody should be using you. And so I'm excited to have you here today on the Leadership Capacity show. And I look forward to our conversation.
SPEAKER_01Thanks, Helani. Super stoked.
SPEAKER_04So you like numbers?
SPEAKER_01No.
SPEAKER_04So you you started your career, early career in accounting, evolved, evolved. Now you're a founder. Give us some of that backstory.
SPEAKER_01Wow. Where to go back to? Well, I was born in Sacramento. No, I won't go back that far. Um, so well, I'll start. I'll I'll start. Uh I grew up in Alaska. Um so I I actually moved to California from California to Alaska when I was about five years old. And um and my my father was actually an entrepreneur. And so um I grew up watching him grow a company, uh, something he bought with a partner out of bankruptcy and grew to uh a very large company and eventually sold it, um, moved the corporate headquarters down to Arizona when I was in high school. So I got to spend some time in Alaska, moved down to Arizona. Uh, I spent a number of years, uh, you know, kind of my formative years as a uh high school or junior high person, uh, working for the Boy Scouts. Um I actually never spent a summer at home since I was 14 years old.
SPEAKER_04Oh wow. Always been out in the wild.
SPEAKER_01Yeah, I was teaching leather work and basketry for one year and then graduated up to some of the cooler things like you know, scout craft and learning how to do all kinds of knots and uh, you know, rescue people and then working. I I ended up uh being high adventure.
SPEAKER_04Why you like hello skiing?
SPEAKER_01I I do love hell skiing.
unknownYeah.
SPEAKER_01But um eventually I I was a mountain guide for the Boy Scouts in their high adventure program in the Chugach range up in Alaska, which is one of the places I like to go heli skiing as well.
SPEAKER_00Okay.
SPEAKER_01Um and so kind of in those formative years, you kind of uh learn different entrepreneurial traits. Sure. Um, and so you know, going uh a little further forward into college, um, you ended up going to the University of Colorado. And uh I went I picked there out of a whole lot of different schools because I was interested in being in the outdoors. And you know, it's the late 90s, so extreme sports, right? Um, but uh, you know, the things I was looking for was, you know, some social interaction, some opportunities. Obviously, you want to learn in college too. So I started looking at fraternities and uh you had the typical Greek system stuff at CU, uh, CU boulder is where I want go buffs. Um, but I wasn't finding a house that I was super excited about. They were all kind of your more traditional fraternities. Sure. And I met a couple of other guys who actually also happened to be Eagle Scouts. Okay. And they were looking for a a different kind of fraternity. And so we actually joined up as a group and formed one. Oh my gosh. My freshman year was some of these guys, sophomore year. It was a group called Theta Zye, which I believe is now the largest uh uh Greek house on campus or the fraternity house on campus at CU. But the that was actually my first foray into entrepreneurialism was was starting a fraternity.
SPEAKER_04Recruiting people. Yeah.
SPEAKER_01So we had to figure out how to, you know, from scratch, how do we go recruit people? What's the company all about or the fraternity all about? Like what what's our what's our vision? What is what is uh what's gonna draw people to this group over others?
SPEAKER_04And I imagine there was a whole process of getting approval to start another fraternity.
SPEAKER_01Yeah, that's exactly right. So it was a lot of fun. We started out, it was, I think there was six or eight of us at the beginning. And by the time I graduated, it was somewhere like 60 or 70 people, somewhere in that round range. We had a house and all these other things. But when I look back at college, that was kind of one of the biggest things that I that I used to learn how to become a business owner was actually just applying all the things you're learning in class to growing an actual enterprise, if you will. Yeah, it was really fun and make the mistakes and you know, figure out how to be different from all the other ones on campus and how do you get people to pay attention to you? Um, and so that was a lot of fun. Um, and then how did I pick accounting? Uh so originally I wanted to go into aerospace engineering. My grandfather was uh a rocket scientist, and I thought that that would be really cool. Um, and then after spending a you know a very small amount of time in the engineering center, I decided that was not at all the kind of college experience that I wanted.
SPEAKER_02Sure.
SPEAKER_01Um, so I I went into business school. But when you first start at CU, you you're a business major, but you're not, you don't, you haven't picked an emphasis yet.
SPEAKER_00Yeah.
SPEAKER_01And so um my original, you know, freshman and sophomore way of thinking was, I'm gonna be in management. So because I want to be a manager someday, I want to be in charge. I want to be in charge. I'm gonna take a management degree. And I remember my dad always had all these great sayings for me, but um, I remember going back, and my dad says, Hey, you know, what are you thinking about uh majoring? And I said, Management. He goes, Oh, I didn't realize you made the football team.
SPEAKER_00So my love.
SPEAKER_01Um, and and his suggestion was why don't you look at something like finance or accounting or marketing? Sure. Um, and finance and accounting, he said, were the language of business, and you can use that skill set to go almost anywhere.
SPEAKER_00That's right.
SPEAKER_01And so um, like any good kid, I took my dad's advice and uh I started in accounting and finance, but I wasn't particularly interested in it. And you're kind of just taking the original, you know, freshman and sophomore courses. You haven't really started on your your course yet, even though you've claimed that as your as your route. And so um it was actually my girlfriend and uh who's now my wife, her father was uh CPA. Okay. The first time I visited their house, I think it was towards the end of my sophomore year or something like that. Um, it was in Scottsdale. Oh really nice part. This is the fancy part of Souskill. Uh it's uh Paradise Valley, and pull up and there's like a circular driveway with a big fountain and a you know, multi-con garage and all this kind of cool stuff. And I was like, man, what does your dad do? And she's like, he's a CPA. And I was like, I'm gonna do that. That sounds that sounds good to me. Awesome. Um, so the lot of thought process went into that. You know, fast forward a little bit longer. I I had claimed my major as an accounting major and uh a company called Pricewaterhouse Cooper's. Uh you might have heard of them, I don't know. Small company, but they they they sent an email, and I'm I suspect, I don't know for sure, that they just scraped, you know, students who are accounting majors with a GPA above X. And they just sent out an email. And again, this is early 2000s. And uh so I get this email. I'm already planning on going up to Alaska and working as a mountain guide again. And I see this email, it's like, hey, Prosswaterhouse Cooper's just coming to campus and do you want to interview? So I looked at it and I was like, well, I think I've seen their name in the Wall Street Journal. Um I bet that's a good paying internship. That's right. Maybe I should go to that.
SPEAKER_00Yeah.
SPEAKER_01No idea what the company did. They could have been like a they could have been waste management or whatever for all I knew. So I I showed up with a suit on, went to the interview, and uh lo and behold, it was one of these situational interviews where you spent a lot of time talking about leadership and situational things. And um I had lots of great stories, and so it went super great.
SPEAKER_00Yeah.
SPEAKER_01Um, so you know, a couple weeks later, I was skipping class, going skiing in Bail, and I got a call from the head of their recruiting group, and they said, We want you to come back in and do a second interview. And so again, I called my dad and I was like, Hey dad, I just got this second interview with this company called Price Waterhouse Coopers. You ever heard of it? He's like, Yeah, dumbass, that's the largest accounting firm in the world. Uh you should probably prepare for that one.
SPEAKER_04Yeah, yeah. Get back to Arizona and prepare for that.
SPEAKER_01That's uh I ended up passing the second interview and and getting the job, but got a summer internship with PwC. And um, I wasn't as completely unprepared as I acted, but sure uh it it went great. I got to work on the Vale Resorts engagement. Arthur Anderson had just kind of gone under, and so there was a there was a bunch of stuff that came over to PwC and an MBA then.
SPEAKER_04Oh, it was essentially in business.
SPEAKER_01Oh, it was awesome. Awesome. It was it was an amazing summer, tons of fun. Uh we we capstoned the program with uh a leadership training for a week, I believe, at Disney World. Oh, that's um in in their leadership training program. And uh every intern in the country went to that from PWC. It was it was such a cool experience.
SPEAKER_00Spectacular.
SPEAKER_01And so I finished that and I was like, man, this is great. Uh public accounting is so much fun. Nobody works past five o'clock. You can come in at nine, and uh and you get the they said you had all these really fun places. Like, I'm totally taking this job. So I went my whole senior year with a job offer in hand.
SPEAKER_04Amazing.
SPEAKER_01Uh, which was amazing. Yeah.
SPEAKER_04So amazing.
SPEAKER_01That's how I started in accounting by accident. Yeah. Um, so then early career, uh, I was at PWC probably four years. Okay. Um, got to spend some time working on some really big engagements, typical big company stuff, uh, publicly traded companies. We did some IPOs, a bought interesting things. And I really found that I enjoyed uh complex equity, complex debt transactions, just kind of digging into those kind of things, corporate structures, things like that. Um left PwC after four years and went over to a company called CBIS, uh, which as of last week just announced that they're being acquired by Grant Thornton. Oh. But at the time, I think it was the seventh largest public accounting firm in the country. So still a very large firm, but had grown through acquisition rather than like the big four. Sure. And so um that was such an interesting place to be because they they had done a bunch of acquisitions over the course of a number of years, and the Denver office was one of the largest offices at the time. Um, and a lot of interesting things, leadership trainings, uh, those types of things were coming out of the Denver office and kind of being uh pushed out across the country. And so I got to go to that company, do still the things that I did from a technical uh standpoint there, but I I got to also be part of the team that built their national training program and help, which was one of the ways that you taught culture across the national organization. When you've acquired all these little companies, pulled them together. Now you're teaching trainings to a large group of people, you know, this is how the company is going to do things.
SPEAKER_00Yeah.
SPEAKER_01Um, we were rolling out leadership trainings that we were testing out in the Denver office and then did well.
SPEAKER_04But you don't normally think about stuff like that when you hear the word accounting.
SPEAKER_01Yeah.
SPEAKER_04If you say, you know, mattress salesman, there's unfortunately bias that, you know, immediately arrives to the thoughts. But when you hear accounting, there's an additional bias. Right. Not some of this exciting stuff that you're talking about. Yeah. So that's very cool, especially for your great sort of bifurcated mind.
SPEAKER_01Well, it made it made the job interesting, right? Like, I mean, you can do research and you can memorize accounting and debits and credits and all these other kinds of things. But at the end of the day, like you get to a certain point and you've done it over and over again enough times that it's not particularly interesting anymore. Um, whereas, you know, building an organization, uh, building culture, uh, building uh, you know, teams, that's really fun. Yeah. That is constantly evolving. And so that's really where I got, you know, Sebas was great and had its struggles at the same time, as with any company that anybody works for. But um I really got to try out how to be a leader at that firm rather than just be a an employee of a company. And you know, I was always reaching out for those things at PDBC, but when you're at a lower level within the company, you just don't have those opportunities. And so, you know, towards I think it was the fourth or fifth year, I think it was four years at C Biz. Um, towards the end of that, um there was a group called Tech Stars and Boulder that was starting out. Sure. Um, you know, the tech industry was starting to bubble back up again. And uh that was something that I was getting connected to. Sure. Um, C Biz wasn't particularly excited about working with startups or a national firm. And uh a business partner of mine, Chester Kurtz, who I worked with at CBiz and I had been chatting. And we said, hey, why don't you know Chester? So Chester and I were talking, we said, hey, you know, we've got this idea to build out a division to focus on fast growth, early stage and mid-stage businesses. And, you know, rather than put a team around them that is the most uh junior people, let's surround them with people and treat them like large clients and grow with them throughout their life cycle. And these companies were just growing differently than everybody else, right?
SPEAKER_04You know, it's different needs.
SPEAKER_01Yeah, it's not steady eddy. Every single year the company is different than the last year. That's right. And so um we tried to build that out within C Biz. It wasn't super well received. And then we said, hey, you know, all these guys are standing on stage, giving pitches and starting their own companies. Why can't we?
SPEAKER_04That's right. So here we are.
SPEAKER_01We did.
SPEAKER_042010, you started Kurtz Fargo.
SPEAKER_012010, we had two maxed-out credit cards, we had 400 square feet, uh, and two guys with no clients.
SPEAKER_04Yeah.
SPEAKER_01And and a big idea.
SPEAKER_04Oh, and here you are now.
SPEAKER_01Yeah, and I had a six-month-old at the time.
SPEAKER_04Oh my gosh. So your wife is great. Yeah. She's great. The support at home, uh, letting you launch. So you're now three offices, Boulder, Denver, Grand Junction.
SPEAKER_01Uh Durango.
SPEAKER_04Excuse me, Durango. Yeah. Okay, great.
SPEAKER_01Yep.
SPEAKER_04You were two people in 2010. How many people across all the locations?
SPEAKER_01It's a great question. I'm gonna totally misquote it, but I think because we're starting intern classes and new hires and things like that, but I think we're somewhere in the mid mid to high 80s. Amazing. Yeah. Yeah.
SPEAKER_04What do exceptional clients teach exceptional firms?
SPEAKER_01Yeah.
SPEAKER_04So every client that you've interacted with, you you've learned alongside them. You've learned while they're living it. Uh and then what sounds fantastic, and thank you for such a great backstory, you know, PwC and then CBIS, I mean, you saw clients, you observed clients, and you had to have taken all the little golden nuggets along the way of those eight years and then loading into 2010 to become an exceptional firm. Yeah. Kurtz Fargo. What do exceptional clients teach exceptional firms?
SPEAKER_01Well, it's funny, we actually started out, you know, instead of writing down all the good things that you should do when we first started, I had a little black book with a sticky note on the front that said, There's things that suck about public accounting. And I would just make bullet points every time because it's so much easier to think about the negative than the positive, right? So it is so true. I would just write down, you know, this thing sucked, this thing sucked. And then and then we just tried as we started the company to not do any of the things that sucked.
SPEAKER_04Um to allow yourself to also stand out, especially when you saw this need in the market. And Boulder is such a great ecosystem for that. And I'm just thinking about the tech stars and then Foundry in 08, then 09, and then 10. And even though the tech bubble kind of had its moment, there was, and then the real estate had its moment in 08, things were happening.
SPEAKER_01Yeah, the vibe around Boulder at the time was just incredible too. Cause you know, you you had the tech bubble that burst kind of early 2000s. You know, it was really kind of bubbling back up in 2007, eight when Tech Stars was popping up, and it was really this heavy focus on early stage companies. But your question about, you know, what do we learn from exceptional clients? Um there's so many things to learn. So I I I'd say as a firm, part of the way we grew was if if you look internally at your industry and all you do is try to copy the best performers in the industry, all you're ever gonna be is an also ran.
SPEAKER_02Yeah.
SPEAKER_01Right. And and and there's also a lot of groupthink within any industry. And so you go to industry conferences, you go to industry meetings, you meet with other CEOs, yeah, and you're all kind of coming from the same bag of tricks, if you will. So early on, we were looking at what the startup companies were doing, and and and they're just breaking the mold every single time. They're rethinking industries in in in their entirety, and you know, how do we disrupt something?
SPEAKER_02Yeah.
SPEAKER_01And so one of the things we stole from that industry was just disruption, right? Absolutely. Exactly. Rather than trying to copy.
SPEAKER_04Which is the black book, yeah, right. Everybody else.
SPEAKER_01That's right. So it's it's you know, rather than try to copy, why don't we try to do better? Like at the end of the day, accounting is a professional service. Yes. Uh and and but why can't a service be productized to a certain extent? And so, and and you had a lot of that going on at the time where you went software as a service and you're taking a product and making it a service. Sure. What what if you could take a service and make it a product? And what and really looking at like what does a customer actually want to buy? Where do they find value in the relationship, those types of things? And so just trying to rethink the way the industry was built. And we took that from you know, the structure of the business and how we form the business, how we put together our compensation structures, how we created aligned interests within the organization. So great. All those types of things we're trying to just rethink the entire thing. Hey, we get this wonderful opportunity to start uh an accounting firm from scratch, yeah, with no attached baggage. For sure. What would you do different? Right. And so that that was kind of the thought process. But there was there was one company very early on that I still think about to this day, um, who we learned a lot from. And it was it was around our model of billing. One of one of when I think of, you know, one of the things we think a lot about in our company is aligned interests. And it flows through so many things, but um, aligned interest as it relates to clients is trying to figure out what what is the client value. It's not billable hours. Nobody cares. Like you've never walked into a a car dealership and been like, gosh, that car feels really expensive. How many hours did it take you to build it?
SPEAKER_04Right.
SPEAKER_01Um, let's talk about how much we should pay based on how much time it took to to construct it. Right. So and there's this weird thing where when you use billable hours, for the most part, one party on either side of the transaction is upset.
SPEAKER_02Yeah.
SPEAKER_01Either the client got an answer to something and it took an exorbitantly long amount of time, and maybe it legitimately took a long amount of time to get there, but they don't understand why it took so long. Sure. Or you gave them an answer really, really fast, but it was super high value and you made almost nothing on something that saved the client a ton of money.
SPEAKER_04Um have you heard the story of the hammer and the mechanic?
SPEAKER_01Yes, exactly.
SPEAKER_04Exactly. He charges a thousand. Yeah. And he comes in, hits his hammer somewhere on the engine. You know, mechanics are shaking their head, they can't get it to work. The hammer was hit on the exact spot. Now the car's working, and they're pissed that it's a thousand dollar bill. The hammer is a dollar ninety-nine, but the education is the rest.
SPEAKER_01Exactly. Yeah. That's exactly right. Yeah. Well, and and you know, you'd think accounting is such an old industry, and so is law. Sure. And and when you go around and you talk to accountants or lawyers or, you know, just about any professional service person, like, I can't possibly know how long it's gonna take. So I can't give you a fixed fee.
SPEAKER_00Right.
SPEAKER_01And so this was always the issue. And and accounting had come up with some of the dumbest ideas I've ever heard on how to come up with a fixed fee for a client. One was called value billing. And see how this feels.
SPEAKER_04So that didn't test well in your.
SPEAKER_01And you say, Great, that's that's wonderful. How much is it gonna be? And I say, I don't know yet. Uh, I'll let you know when I'm done. So then I finish your tax return and I realize that I've saved you some significant money. Yeah. So maybe maybe I saved you $30,000. Wow. It only took me two hours to do your return, but it saved you $30,000 by fixing something your previous C CPA screwed up. So I'm gonna charge you $10,000 to do your return.
SPEAKER_00Yeah.
SPEAKER_01Uh and you look at it like $10,000? What are you talking about? And you're like, well, that's what it's gonna be. Quit complaining about your bill. And so there was this, there was no agreement up front on that. And it was accountants trying to figure out a way to capture value, sure, but they weren't they weren't communicating value back to the client uh up front. Um yeah and then there was these different ideas around, you know, maybe we just charge by the page or we charge by in there's there's only trying to be creative. Be creative, but like when it all came down to it, nobody sat back and said, what's the scope of the project? Yeah. And do we really need to make it this complicated to engage on on uh uh uh some work together. And so um as we were going through this and I hated the idea of doing uh hourly work um and we'd been playing with some of these ideas and none of them were really working I'm remodeling my house. And so this is probably like 2012 or 13 or something in that range. So I'm remodeling my house and we hired this company in Boulder um really nice guys. They were starting a company at the time. Sure. And they were doing a new concept called design build. Okay. And it hadn't been around very long, but it was a contractor that you hire to come in and do your bathroom or your or your kitchen or your entire house which is what we were doing. And they give you a fixed fee.
SPEAKER_04And so I was thinking Oh my husband's in construction so now my wheels are spinning.
SPEAKER_01Yeah okay so they give you a fixed fee and a fixed timeline. Uh and so you're thinking okay first of all sounds like Chivajuan games they're gonna flip the house into seven days right like they're they're gonna give you a number and it's gonna be 20% off and it's gonna be way late. It's gonna be normal construction but absolutely so but we drank the Kool-Aid and we tried it out. And these guys were wonderful people and so um we trusted them. Yeah and so we we scoped out the project we spent a bunch of time on the front end talking about what we wanted to get out of the project and what we cared about. And then they told us how much that was going to cost and then we had to pair it back a little bit to make it work. But it was just this very honest conversation on both sides about this is what you'd like to get. Here's how much that costs. If you'd like to get a little bit less from a cost perspective, we can get a little less from a scope perspective. And then we agreed on a fixed price and a fixed timeline for a fixed set of scope.
SPEAKER_00Yeah.
SPEAKER_01And lo and behold, we finished the entire project within 2% of budget and within two weeks and this is this was an eight month project within two weeks of the original deadline but more importantly you could trace back the two weeks and the two percent cost difference to a handful of change orders that specifically said what the additional cost and the additional timeline ad would be as a result of those things. Spectacular so perfectly on time perfectly on budget. Yeah and they nailed the quality at the end of it.
SPEAKER_04They did so much due diligence.
SPEAKER_01Totally yeah they were cutting holes in walls they did a lot of upfront scoping. So then I I went back and I was like I was talking to my team I was like guys okay so everybody in accounting says I can't scope your project because I don't know how long it's going to take your to do your tax return. But these guys can somehow remodel an entire house out of a home in Boulder County which are generally old and crappy and they can do they can figure out how to figure it fit it all in the scope, come to an agreement on pricing and hit the deadline and everybody's happy at the end. I have no idea what profit margin they made. Yeah. I don't care. Yeah because I got what I wanted out of the project and they got what they wanted out of the project.
SPEAKER_04When I started talent acquisition work in 2017, not knowing anything about sort of the the environment of recruiting but knowing it was a little bit of car salesman and mattress salesman, I said I'm gonna totally be different and I'm gonna charge a flat fee so that I can constantly have compensation integrity discussions with executives such as yourself. So if you gave me a range of X to X and I needed two grand more above your ceiling, you knew it was especially after you met the candidate, the candidate is totally worth 2000 more, we're gonna put them on our team and I get all the time, which is awesome, it's so refreshing Hilani. We know what we're paying, we know you know the milestone structure that you have and we also know if you're gonna offer someone more, you're not making any more money. I'm like, yeah, I'm sure if I really had someone who was in the business world with me would say I'm leaving a lot of money on the table. But that really goes to then there's this relationship, which is so powerful, which you build that with the construction company. There was trust instantly in the beginning. Now there was a lack of trust because you're like, wait a minute, this is too good to be true. But then on the backside it and the question you know was what does exceptional clients teach exceptional firms it's how you sh approach business which ultimately is packaged very well in trust and relationships. That's exactly right.
SPEAKER_01Well in in the your business model well which we've engaged in multiple times. So good and I've told because we we hire I wish you hired more than just administrators. I actually have just expanded by the way start the side conversation for later.
SPEAKER_04So uh I launched a new company called Exceptional Talent Group, which is going to be doing more because I'm getting clients such as yourself who come back and say we love your process. We have trust with you you know our company we want you to do this one. I'm like, let's go.
SPEAKER_01You were the first recruiter we ever worked with that one charged a fixed fee. Yeah. Which absolutely created that trust level yeah but more importantly than the fee structure was the amount of time you spent up front yeah learning about our company learning about our ways of doing things our culture the personality styles within the business and literally every single person you've placed at our company except for one I know there was the one the one but you know what it that one was replaced super fast. I think I've done six with you if not five I think almost every single one of them's the longest she's still there yeah exactly yeah yeah I mean it's been incredible and actually just gave your name to uh somebody today thank you for this exact reason yeah appreciate it um yeah as far I mean your your question on you know what do we learn from these from these other companies or clients uh it's a lot we actually steal I'll say steal why not uh borrow steal um copy like a lot that we copy yeah uh from a lot of industries so you know early on accounting firms had massive amounts of turnover it wasn't abnormal to see 25 to 30 percent annual turnover of is it just because it's so hard and I just think it's hard season. Yeah I mean again it goes back to old ways of thinking but you've got these taxes but also another one we stole from the the construction industry was um how to how to plan projects. It you know a lot of times accounting firms will will drive their busy seasons by tax deadlines. Well tax deadlines are government set. So if you wait for a client to go, oh my God, I really need to get my tax return done before April 15th or October 15th or September 15th or whatever the date is for the particular entity um I should send my stuff in. And they usually send it in as close to as possible to the deadline. Yeah. And so you end up with these giant peaks and valleys uh within the year. Well why does the client do that? Because you didn't ask them for it earlier. Sure. And so what the best construction companies were doing is they were managing the process. That's right. And what I learned from this same design build company that I worked with a long time ago was, you know, when when when an a company makes you feel like they've got the process under control and they're going to guide you through the process, then you don't have to worry about all the deadlines.
SPEAKER_04The cognitive load relief is spectacular. That's right. Which is in the work of placing executive assistants in now other roles, I mean you get to like delegate that out. That's right. Come at me when it's time in the meanwhile I'll try to be as best disciplined with receipts and the organization so I can deliver the books to you. Yep I'm kind of shocked that that's not always been that way in accounting.
SPEAKER_01It hasn't been which is crazy. No I feel like for the most part in accounting people have been like what's the worst way we could address this particular service and let's do it that way. So let's bill them hourly let's create a let's create a comp model that makes all the partners fight against each other. Let's create equity models that create no value within our companies. Right. And there's a lot of history to those things but um you know stealing from other industries and looking at what they what they do is really important. And what I was was what I was getting at with the the different uh turnover issues that accounting firms were having is uh the benefits were weren't lining up. The the hours people were working, the money they were getting paid, but the benefits also weren't lining up. And so uh anybody that's been in you know leadership for a long time knows that certain benefits have more perceived value than cost in certain cases. And so you know healthcare is one of those ones that has a very high perceived cost. It actually has a high actual cost too sure. But I would bet you if you were to survey most of your employees, what they think you're paying for healthcare, even at the high cost that it is now is still more than what it actually cost.
SPEAKER_04If we actually pulled back the curtain on that a lot of employees would go, oh wow.
SPEAKER_01Yeah really that's right.
SPEAKER_04Yeah.
SPEAKER_01Yeah but it's it's the most important thing and there's a number of other ones in there you know there was flexible Fridays there was uh this paying attention to outputs rather than inputs. Yeah. You know, it doesn't matter how many hours it's going to take why don't we just produce a product and then we can start focusing on the inputs component and driving that down.
SPEAKER_00Yeah.
SPEAKER_01And so you know all these things kind of came together to kind of create what is our culture today.
SPEAKER_04Which shout out to Sam.
SPEAKER_01Yeah.
SPEAKER_04You know, I met her for the first search and we've built such a rapport and uh this will be a great segue actually to my next question. And I'm not saying this because you're sitting across from me. I have worked with 215 placements and some of those are repeats. You're six of those repeats, right, in that 215. The amount of patterns, the amount of um employee benefits I mean I've seen from companies that are global and I'm like, this is what you're offering? This is going to cause me a problem because I just worked with this smaller organization that's doing better and right by their employees. I'm gonna have a harder time finding you candidates because you have to compete against that. And that was one of the things I so appreciated, especially during COVID, you had this really nice package for the remote work which Molly was a part of that kind of environment in that season for the company in like the world when we were dealing with COVID. And I was like give me more Mats I said the same thing to Sean during his conversation you know give me more mats because you're thinking beyond the bottom line and you know that all the people there, which is my great next question, all the people there help, yes, with the bottom line because no founder gets up to just sort of stay in stagnation and have the same, you know, repeat year over year. And so what became more important to you today than it was when you founded the firm?
SPEAKER_01That's a good question. I think what's more important today than when you founded the firm. You know at the end of the day I don't know that I don't know that the things that when we founded it were more or less important. I think they just kind of ebb and flow over time. But you know I think the things I I would say the concept that matters the most is alignment. And and you can apply that through a lot of different things. But um you know part of the reason we have the benefit packages that we have is I want to create employee alignment within the company. And if if the company's goals are aligned with the employees goals and the reward structures align with that then everybody's pointing in the same direction. And so you know how we accomplish that at different points in time within the company's life cycle change. But you know today, you know, we we we look at our benefits our employees actually look at our benefits on an annual basis and and we do surveys on a regular basis to find out what's working, what's not sure um what are the areas that we might be falling behind, um, where are the areas that we're way ahead and actually just uh earlier this week we found out we won um accounting today which is the largest publication in our industry. Congratulations we won uh best best companies to work for according to them, which is really cool. Um I mean I'm always surprised when we get it because you know as a founder you always think you're screwing something up.
SPEAKER_04You're hard on yourself and it's like how can we be better without you know burning people out. Yeah.
SPEAKER_01Exactly but we our turnover rate's extremely low and that's just something that we constantly are focused on. But but at the end of the day we're we're growing a business organically there's a lot of firms in our space that are getting acquired there's a lot that are uh partnering with private equity um there's there's just a lot of change going on in the industry right now and there's a lot of reasons behind it. But when we look back at what we've built, what we're trying to build is build is something that's sustainable and uh will grow for the long term. Yeah. And we've had really strong organic growth since the beginning and and that's been through creating alignment since the beginning along a whole bunch of different areas. And the one of the biggest ones is is treating the employees right, but also giving them purpose.
SPEAKER_04Oh so true.
SPEAKER_01And so if if they feel like their opinion matters, if they feel like there is uh an opportunity for them to continue to move up in the industry, they're gonna stay with you. Yeah and and growth is so important for that. We want to hire the best of the best. So I'm competing I'm not competing with the local firms or the regional firms for the top talent. I'm competing with the best firms in the marketplace for the best talent and I want to attract them here, which means that I have to continually grow the business in order to make sure that they have the opportunities to continually so it's just like this this crazy cycle that that continues a little chicken before the egg kind of thing.
SPEAKER_04That's right.
SPEAKER_01But I I I think the one of the biggest things that our company talks about on a regular basis is um is is talking about failures. So I remember when I was at some previous firms that I worked for um you were really afraid of failure.
SPEAKER_04If you must have no fail forward encouragement.
SPEAKER_01Right exactly I mean but that wasn't a thing right that was something that kind of came out of the tech space. Yeah exactly um it it was you know being uh agile right yeah um but you know I like to think that if if you're afraid of failure and failure's not an option, yeah then mediocrity is what you end up accomplishing.
SPEAKER_04Oh that came up with another discussion on mediocrity, right? Mediocrity associates with mediocrity high performers associate with high performers and what do you do when you have a mixture of that and on the team.
SPEAKER_01That's right. Yeah and and if and you can create mediocrity amongst high performers which I've seen many times by creating a fear a fear of failure. Sure or or no opportunity for failure. And so we you know I I like to talk about creating a fail-safe environment which you don't you don't want to make all failures good. Sure. But intentionality behind the failure is really what's the most important thing to look at. And if somebody's intention was that they were going to create something of value and it didn't work, then all you did was hit a dead end in one place which causes you to go in a different direction. Right. So you know I I think of one of the first big I'd say internal failures that the company had was um we we had gotten to a point in our growth that we needed to put in a uh a process management software system that was different than what we had been using, something a little more enterprise level. And we looked at which we shouldn't have the one that all the biggest accounting firms were working with and we're like gosh if it's good enough for them it's gotta be good enough for us. And we went out and bought it we we we interviewed a couple different groups the salespeople of course and we bought the one that was supposed to be you know the top tier and we put it into place and I swear this thing was built in like MS DOS. It was no the the program was horrendous but more importantly you know we had been getting into an environment where mobile first was a thing you know apps were starting to become beautiful the way people interacted with software UI UX was was actually easy. Yeah and people were trying to create that ease of use and it was funny watching our team try to interact with the software and they just were like this is stupid I'm not using it. I'm not gonna use it. Yeah I'm out I'm out and so we ended up flushing all that money down the toilet. Yeah um but it was okay because what we learned from that was actually what we wouldn't have learned from doing 10 more interviews of salespeople. Sure. We learned exactly what we wanted and what we didn't want. Yeah and the most important things that we thought were the most important things were actually different. And so we ended up custom building a software system. Super um that we still use today that almost every major system that gets sold now copies some of the elements of it. But just it was cool. We got to we got to throw something away spend money on it learn from that lesson nobody got in trouble or fired as a result of it. We just got to a better solution as a result.
SPEAKER_04Yeah I find that founders have a higher risk capacity. I talked about this actually in uh chapter four of my book Capacity the new advantage and specifically pointed out also the risk reward component of what's going to be the reward if we take this risk.
SPEAKER_02Yeah.
SPEAKER_04Uh and packaging it for those that have low risk capacity that it's a learning process we're doing and living this together, right? We're living it while we're learning it together is extremely helpful.
SPEAKER_01Yeah.
SPEAKER_04Um last question.
SPEAKER_01Okay.
SPEAKER_04If Matt today went back 15 years ago and you sat across from yourself 15 years ago and had lunch which essentially is uh year one of starting Kurt Svargo what would you talk about? What would you say your 15 future self goes back 15 years to have lunch with yourself which sounds like it was about year one year two of starting the company what would you guys talk about at lunch?
SPEAKER_01Oh man that's a great question. Um I'd probably tell myself not to be so afraid that's a great question. I I uh I remember vividly when we were at Chester's pool. Okay nice well actually the the our wives took the kids to the pool and Chester and I got a six pack of beer and we went to his house and uh we're building a spreadsheet to to like because we're accounts right we put together a spreadsheet to figure out like how we're gonna build this company and if it will work and will we go broke or not. And um you know we were middle managers at the time. Sure. You know we were on partner track but we were middle managers and you don't make a lot of money at that point and certainly you don't have uh a war chest right if something goes wrong. But the perception that we had of what could go wrong and what actually could go wrong were like really really really far apart. Yeah. Because now now that I look back and I was like okay Matt if let's say for instance that you gave this thing a shot and you just sucked at being a CEO and you were not good at growing a business and you had this experience for the next year. Sure. And then you decided it wasn't going to work out and you went back to one of the companies you worked for or or maybe a completely different company but in the same industry. Sure. Guess what your resume is going to be a hell of a lot better and and you're gonna have a lot more value to the marketplace than before you even started this. So even though this path might have not worked out you're gonna fail forward into a better situation.
SPEAKER_04And the resources that you have the experience you have that someone else could capitalize on that because you decided to like go back. But you didn't and here you are.
SPEAKER_01Yeah and I think there's this this thing in the back of people's heads that that the risk is substantially higher than the reality and and and because of that you'll do anything to avoid the risk.
SPEAKER_00Yeah.
SPEAKER_04And so I would just tell myself to chill out and that matches the answer I would give myself and I was thinking about it this morning my answer is it's all gonna work out. Yeah. Right? Yeah it's all gonna work out. So not be scared is really great. This is great. I appreciate you thank you so much for the conversation.
SPEAKER_01Thanks for having me.
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