Posts Tagged ‘five capitals of business’

“Five Eyes on the Fence: Human Capital” Featured on RBI Website

RBI Human Captial

RBI Human CaptialRSJ founding partner Tony Rose is not just an experienced accountant, he is also the author of two books: “Say Hello the Elephants” and “Five Eyes on the Fence.” His thesis that a business’s success must be measured not just by Financial capital, but by the strengths of its Human, Intellectual, Structural, and Social capital, has been cited and discussed many times. Tony’s most recent article on the Five Capitals appears in the March Features and Analysis section of Russell Bedford International. Click here  to read the full article.

President-Elect Trump’s Impact on Your Taxes

Capitol Building

Capitol BuildingWhile 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.

Say Hello to the Elephants Quadrant Two: Solutions

RSJ founding partner tony rose

This article by Tony A. Rose first appeared in the Fall 2014 issue of Business World magazine, a publication by Russell Bedford11057214-rbnewlogobkeyrc International.

We all have elephants – problems, needs or truths that we ignore even though we must face up to them. Often our elephants may be of a professional nature. We may also have personal elephants. In Say Hello to the Elephants I offer a way to confront issues, along with tools to address problems, achieve clarity, and make decisions. I call this Quadrant Thinking. In this, the second of four articles, I present an overview of Quadrant Two: Solutions.

Solutions

In Quadrant One we looked at reaching clarity and how that makes everyday problems manageable. Having achieved clarity and defined your goals you know where you want to go. In Quadrant Two we will look at how you get there: your solutions.

Above all, your solutions must be SMART:

• Specific
• Measurable
• Actionable
• Relevant
• Time-bound

Obstacles are stepping stones that narrow the solution

When people talk about goals they cannot achieve, they usually name a list of obstacles.

By changing your perspective you will begin to see that most obstacles are milestones that represent achievement. If you plan to eliminate obstacles you move one step closer to your goal. In this context, obstacles are not barriers but welcome milestones.

Sausage is subjective

You cannot make a blanket statement such as, ‘I love sausage’. Sausages come in all flavours; depending on individual taste nobody can unequivocally love sausage. This is also true of solutions. Your solutions must suit your tastes. What tastes good to another may not taste good to you.

When you consider solutions to complicated problems with your advisers, be sure to question the solutions and ensure they are the right fit for you. If you understand a solution you will be able to answer these questions:

• What is it?
• How is it applicable?
• Why does it work?
• What can go wrong?
• Who must be involved?
• How much does it cost to implement?
• How much does it cost to sustain?
• What must be done to sustain it?

And make sure your advisers offer multiple solutions because sausage is subjective.

The artichoke theory

When you work towards achieving a certain goal, remember to keep it simple. You should always break the steps down into small, achievable milestones.

The smaller the steps the simpler things get, and the more likely you are to achieve a favourable outcome. I call this the Artichoke Theory. In other words, you should eat an elephant the same way you eat an artichoke: one leaf at a time.

Stop and ask yourself Is what I am doing right now directly related to reaching my main goal? The answer will always be yes if you keep things simple. If the answer is no, you are making things difficult for yourself.

Slow down. You are in a hurry

Once you achieve clarity you will feel a surge of energy to accomplish your goals. But when something is important, you must slow down, focus on the solutions, or risk making rash decisions. Take a deep breath and stay calm. Only then will you have the wherewithal to address obstacles, make rational decisions, and move your plans forward.

The law of unintended consequences

All conduct has unintended consequences. The unintended consequences of negative behaviour are inevitably negative but positive behaviour brings positive unintended consequences.

With clarity, your unintended consequences become strategic by-products of your planned conduct. Strategic by-products are always positive because your planning, the purposefulness of your goals, and the alignment of your goals with your values all create a solid base to which positive things can attach.

Choosing the right trusted advisory team

Regardless of your skills, one thing is certain: you are too close to your own situation to evaluate objectively your whole picture. Finding the right team of advisers will help you define your clarity and solutions.

The ideal adviser is trustworthy, competent, reliable, and team-oriented but these commodities are rare in the real world.

Trust comes in many forms. Fortunately, David Maister, Charles Green, and Robert Galford – authors of The Trusted Adviser – designed a formula to help evaluate and rate a trusted adviser.

Based on a one-to-ten scale, a trusted adviser’s rating is the sum of competence + reliability + intimacy divided by self-orientation. The higher the number the more intensely you will trust your adviser.

Being in control of the process

If you give someone else control they will take control. Although you might rely on various advisers you must sit at the head of the table and raise your hand when you disagree or do not understand.

It is your story, your family, your business, and your goals. When you are clear about where you are going, no-one else can conduct your affairs better than you. No adviser can take that power unless you surrender it. You may not be an expert in your advisers’ areas but you are the expert in the most important area: you.

Managing by gut

Many successful businesses not only employ a team of consultants to help them find the right solutions, they also use specific tools. One such tool is the Kolbe A Index.

Kathy Kolbe developed the Kolbe Wisdom in the 1980s. She understood that many instruments measured intellect (IQ) and the affective mind (personality) but could not find one that measured how people behave when free to be themselves (conative mind).

Most tools try to define what people are not good at and encourage them to do better. Kolbe tells people to concentrate on what they are good at and leverage those strengths.

Learn more about our International Business Services.

Read Say Hello to the Elephants Quadrant One: Clarity

The Importance of Nurturing Your Relationship with So-Called “Strangers”

I write in my second book, Five Eyes on the Fence, about the importance of protecting your social capital. My thesis is that financialFive Eyes on the Fence_WEB capital is a byproduct of four other types of capitals. When human, social, intellectual, and structural capital are well-tended, financial capital flourishes.

Social capital can be summarized in two words: Relationships matter.

The strength of your relationship with clients, potential clients, vendors, employees, and colleagues determines the extent to which these relationships can be accessed as a resource. The stronger the social capital, the more likely your financial capital will benefit.

And the stronger your relationship with strangers, the better your social capital.

I know what you are thinking, “Wait a minute: How can a person have a relationship with a stranger? Isn’t not knowing the person the very definition of a stranger?”

And therein lies the problem. You don’t know what you don’t know. You don’t know whether someone else knows something about you. You don’t know if a so-called “stranger” has an eye on you.

When you walk through life, consider that you are often being observed. If you are being ungrateful, pessimistic, or otherwise unpleasant, “strangers” are noticing. When you post hostile messages on someone’s social media site, “strangers” are reading these messages. When you are rude to the barista, “strangers” are less inclined to engage your conversations.

Those strangers might be people who would have otherwise turned into important components of your social capital network.

This February, I spoke to the students at the University of Southern California’s Leventhal School of Accounting about my book, and how they can use the four other capitals to help their clients strengthen their financial capital.

During our discussion about nurturing relationships with social capital, a student brought this to my attention: The following Friday, a prestigious speaker was visiting their school.

I gave this advice: “Dress like you are going to a job interview.”

One of the students objected: “There are going to be thousands of people at the event. Why would he notice me?”

My response was this: “There are going to be thousands of people at the event. Someone will notice you, and that person might just be your next boss.”

This holds true in life. Of the billions of people out there, you never know who is noticing you. You never know who will be your next boss, your next client, your next employee, or your next vendor. So many relationships are born out of happenstance. Why not give these relationships the best chance at blossoming by going out into the world as the best version of yourself?