Making the Most of Your Career, By Former Rea & Assoc. MP Tim Michel

 

In 1973, Richard Rea did something that was very innovative at the time in the public accounting profession.  He decided to take the firm’s current and soon-to-be CPAs on a multi-day retreat to discuss the firm’s policies, procedures, and most importantly, its future.  There were 12 people in attendance at that 1st retreat held at Sawmill Creek Resort.  This year marks the 36th annual retreat.  We are still focused on the future.

 

Let me ask you, do you believe in fate?  We make decisions every day, but rarely do we think of the long-term effects of those decisions.  What if you would have attended a different school?  Think of the relationships that would never have formed.  What if you had not come with Rea?  Where would that road have taken you and your career?

 

Now that you have taken this road, where will it lead you?  Do you believe fate alone will decide your success?  Or will you have a major hand in it?  We often talk about the concept, “Begin with the end in mind.”  Are you prepared to take advantage of the opportunities this firm and profession present you?

 

Sometimes it is interesting to look at the path you chose from the viewpoint of the end of the road or, in my case, my career with Rea.  This letter is about you and what decisions you make in your career, but I would like to share a few observations I have about what this firm has done for me.

 

First, let me share a little of my background. 

 

Like many of you, I suspect, I grew up in a blue-collar family in a small town in Ohio.  My father and mother had a strong work ethic.  Mom gave up her career to raise four children.  My father, a carpenter by trade, was the superintendent for a construction company.  I remember dad doing whatever was necessary to see the job was done right.  He was in-charge of laying out the building site, ordering materials, scheduling the sub-contractors, and everything else needed to make the project successful.  I remember he would often spend several hours at night doing paperwork and making needed phone calls.  I especially remember one very cold and snowy Sunday evening when I accompanied him to a job site.  He needed to refuel the kerosene heaters to keep the gravel and dirt floor inside the building from freezing so they could pour concrete early Monday morning.  Interestingly, I don’t recall that he ever complained about having to do these things. 

 

Our family was very active at Our Lady of Peace church and school.  I attended grade school at OLOP and it reinforced the solid values I was taught at home.  However, my parents never expected the school to take the lead in setting values.  I was a B+ to A- student, nothing special.  My dad “saw to it” that I had my first job at age 14.  Upon graduating from high school in 1970, my college search consisted of my dad strongly suggesting I attend the Stark County branch of Kent State University.  His deal was, “you buy your car and earn your spending money, and I will pay your tuition and you can live at home.”  I thought it was a good deal.

 

After two years at the branch, I commuted to the main campus of KSU my junior and senior year, so I could continue to work in the afternoons.  Although I knew my future wife, Karen, in high school, we didn’t start dating until January 1972.  We became engaged five months later.  I guess I made decisions quickly even back then.  We married after my junior year.  I remember Karen and I made just $7,000 our first year, but we were happy.

 

Rea formative years – “Fate”

 

I interviewed with a few Big 8 firms and a few large companies in industry before graduation.  However, one spring afternoon in March 1974, I decided to take a handful of resumes and visit public accounting firms in Canton.  I guess this was my first experience at cold calling, and the rejection that often comes with it.  However, a young partner by the name of Ed Harter ran the Canton office of a firm I never heard of, Rea & Associates, Inc.  Ed not only took the time to talk with me, he also took me to a restaurant for coffee.  Ed arranged for an interview with Richard Rea and Chet Stocker in the home office in New Philadelphia.  I liked what I heard from Ed, Mr. Rea and Chet.  They told me that Rea was about helping clients be successful.  They told me how the firm’s people were active in the communities they served and believed in giving back to them.  I noticed a feeling of family and knew it was important to them.  They also talked about working together to build a firm, sharing in the rewards and making a place for myself.  Most importantly, they offered me a job.  I started the day after graduation at $10,200 a year.

 

When I joined Rea, I really didn’t know that much about what I would be doing in public accounting.  I knew some things about accounting and auditing and tax, but I didn’t have a clue about the rest, such as consulting, building relationships, being a trusted advisor.  Rea has taught me all of this.

 

My first job was Bates Metal Products, a client we still have.  I hand-posted their journals, took the totals to a hand-posted general ledger, took off a trial balance, prepared adjusting entrees, closing entrees, financials and the tax returns.  This allowed me to see how the pieces fit together. 

 

I got to work closely with a local quality home builder, Hostetler Construction.  Because of my father’s work, I felt comfortable with this client and it was my first close client relationship.  One Saturday, the owner and his wife were tragically killed in a motorcycle accident on Route 39.  This was my first exposure to the double tragedy that hits a closely-held business when they lose their leader.  Not only is there the personal family issue, but there are the business issues to deal with. Wow, they didn’t teach me anything about this in college.  Somehow the children, the oldest in her early twenties, continued the business successfully for many years.

 

 I got to work on many audits including three savings and loan companies, several manufacturers, and a major coal client.  I really enjoyed the manufacturing clients and learning how things were made.  There was a company in Newcomerstown that patented a method of cutting a groove in vinyl covered particle board without cutting the vinyl.  This allowed them to fold the board into audio speaker boxes, TV cabinets, tables and other furniture.

 

Early on, I was in-charge of the audit of a door company in Medina.  This allowed me to work with Frank Festi who had just started with Rea in Medina.  It was interesting to see the components of and variety of doors made in the plant.  The owner of the door company, Bob Warn, was a really good businessman.  I learned a lot from him about business.  He taught me that you can be technically very strong in what you do, but without business knowledge and skills, you are not going to be successful.

 

Rea had a large group of coal companies in Ohio and Kentucky.  We did annual audits on these companies as well as consult and prepare tax returns.  This required some of us to spend 3 to 4 weeks out of town in January and February each year.  I remember flying out of Harry Clever Field in New Philadelphia in a single engine plane on cold winter mornings to go to Whitesburg, Ky. where the coal mines were located.  The landing strip in Whitesburg was on top of a mountain and looked like a gum strip from the air.  The pilot always turned the plane on its side to buzz the runway before we landed, looking for ice.  And there was a bump about one-third way down the strip, so he landed just past it, which meant we had a shorter landing strip to work with.  It was scary, yet exciting.  On one trip, Mike Noretto’s bottle of mouthwash froze and burst inside his suitcase.  Pretty funny stuff.

 

Whitesburg was a small coal mining town with sulfur-smelling water in its drafty hotel.  We used to say that if God were to give the earth an enema, he would stick the tube in Whitesburg.  However, the truth is that it was a beautiful area in the mountains and the people were good, hard-working and caring.  One of our jobs was to account for the expensive equipment in the mines that was collateral for the bank loans.  This required us to climb into a mine car with our miner’s hat and light strapped to our head, and travel two miles down into the mountain through a tunnel with a 36 inch ceiling.  You could watch the timbers flying by overhead.  What an experience.

 

After being with Rea a short time, I ran into a high school classmate who was with a Big 8 firm.  I asked what he had been doing.  He told me he had been working on test of transactions work on an audit of a major company.  In that same time, I had completed accounting, tax and audit work on various clients in different industries.  I knew I had made a good choice in coming to Rea.

 

There were several opportunities for me to get out of my comfort zone in those early years.  My first objective was to pass the CPA exam.  I had passed one part in the spring of my senior year at Kent, but still had work to do.  I remember Ed Harter and Mike Taylor coming up to me at the team retreat in 1975 encouraging me to get it passed.  We had an unpopular senior manager in-charge of audits, and they wanted me to get up to speed so we didn’t have to rely on him.  I passed the exam in November 1975.  I was in Columbus on the Coal Co. audits and had dinner with Richard Rea.  He was on the Accountancy Board and I am proud to say I have his signature on my certificate.  Meanwhile, back at the home office, the troops went out to the local bar, as was tradition when the grades came out, and celebrated.  They were kind enough to call Karen to join in the fun.  That is what family does.

 

I was pretty shy and lacked confidence when I came out of college.  I knew I needed to work on this.  So, I joined the Jaycees and several local NFP boards.  I became an officer in these organizations to take an active role.  Also, Chet Stocker was approached by a person at Kent State – Tuscarawas campus in need of an instructor for a beginning tax course.  I jumped on the opportunity because I knew I needed to get comfortable in front of an audience.  It was a first step.

 

One summer I was asked to help in another office.  It seemed there was a young smart-alec partner in Millersburg who was good at bringing in business and needed help.  Mike Taylor had a lot of interesting clients dealing in lumber, furniture and cheese, to name a few industries.  I remember Mike walking past my office on his way to the restroom and zapping me with a rubber band from about 20 feet.  I waited patiently for his return trip and let it fly when he was just getting to my doorway.  Interestingly it was not Mike but one of the local business people.  Luckily he had a sense of humor.  One of the neat things about Millersburg was that all of the local business people would meet daily at the same time at one of the local restaurants for lunch.  What a great way to meet people and build relationships.

 

After several years in the firm, I was approached by an “A” level client on two occasions interested in hiring me for their controller.  I was honored and they were great opportunities, but I knew it meant I would always be working for their family.  I wanted more and really liked what Rea was about.  I bought what the firm was selling.

 

During those first 11 years with the firm while I was in New Philly, I received a lot of advice and coaching from Richard Rea and Chet Stocker.  They very actively shared what was to become The Rea Way. 

 

Our work allowed me to travel to places I had not been before and experience many new things.  Richard Rea took the partner group to New York City for retreat one year.  He took us to the AICPA, the NYSE, some shows and great restaurants.  Karen was very pregnant during this trip and it showed.  After dinner one night, Mr. Rea and Karen walked backed to the St. Moritz Hotel while the rest of us continued to see NY.  In the elevator, Mr. Rea (about age 72) saw an opportunity and told Karen (in her mid-20s) to hold his hand.  They departed the elevator together to the amazement of the others in the elevator.  

 

My Trusted Advisor Years (My second career with Rea)

 

In 1984, Rea purchased a practice in Lima.  Bill Mills moved from Cambridge and joined a partner from the firm we purchased.  For a year, Chet ran back and forth trying to manage the practice while performing the managing partner duties for the firm.  It was clearly wearing on him.  In the spring of 1985, I was serving as the New Philly office manager.  Although I had only been to Lima once, and knew next to nothing about the community, I volunteered to go to Lima to ease the burden on Chet.  Plus, I saw it as a challenge and opportunity to grow a smaller office with a team of people.  I talked with Karen about it and she encouraged me immediately.  She told the kids it was going to be an adventure.  They bought in right away.

 

What I found most interesting about this experience was that I was accepted immediately by the business community in Lima.  I came to the community as a partner in a CPA firm and that carried weight and opened doors.  I quickly was placed on church, school, civic and community boards and committees.

 

While in New Philly, I used to harass Mike Noretto by doing things like taping the buttons on his phone down so it would continue to ring when he answered it.  We were always going back and forth.  Shortly after arriving in Lima, I received an envelope from the New Philly office.  In NP, they had a large wall board they used to schedule audits.  Our names were down the side and the jobs were across the top.  In the envelop was my name plate from this board and a small card stating, “Tim – This is to notify you that your last tie to the NP Office (other than the skeletons in the office) has now been severed,  signed – The Executioner”.  My good friend Mike Noretto had the last laugh.  After 24 years, I still have his note with my name plate.

 

The first year in Lima was tough.  In many cases we had the wrong clients.  What we did have, however, were the right people.  They just wanted someone to lead them.  Bill and I, working with the team, had to tear things down and rebuild.  We went from some significant loss years to being one of the most consistently profitable offices in the firm.  It is amazing what you will do when your back is up to the wall.  I remember one summer spent cold calling businesses in the greater Lima area.  And it worked! 

 

I felt a lot of pressure and stress at times.  Mike Taylor recognized this and was concerned.  He talked with me about it and helped me through this rough period.  I have counted on his counsel often over the years.

 

While in Lima, I learned what it meant to be a trusted advisor.  I learned how important we are to our clients.  I had one client tell me how important their doctor, lawyer and CPA were to them.  One of the most rewarding experiences for me was helping a good friend and client do effective financial planning.  I earned my CFP designation while in Lima and set up a plan for this client that covered college funding for his four children and retirement planning for him and his wife.  When I returned to New Philly 13 years later, enough time had passed that we could see that the college planning had worked.  He thanked me for helping him make it happen.  This is what this business is all about.

 

Karen and I took a chance on Lima.  We moved away from our roots and found a great community to raise a family; a community with a good business ethic and caring people.  While in Lima, I was able to build meaningful relationships with clients, attorneys and bankers.  I still value them.  During those 13 years, I had four good clients (and close friends) suffer and die from cancer, heart disease or Parkinson’s.  It reminded me of the early days when Syl and Barb Hostetler died unexpectedly.  You find out what it means to be a trusted advisor at times like these.  I also spent many years on the firm’s management committee where I learned more about our business.  I spent a lot of time with Gene Flowers and others on peer reviews.  From Gene I learned that the firm always comes first.  From peer reviews I learned how other firms did things, some good and some not so good.

 

Chet took me to the AICPA 100th Anniversary in NY City where I met many of the national industry leaders.  Yes, Lima was great. But in 1998, Chet wanted to retire and I was on a short list for his position as President.  It was hard to leave Lima, but I was excited about the challenge and duty called.

 

My 3rd Career with Rea

 

Being the CEO of a regional CPA firm is both challenging and rewarding.  It is a scary responsibility to have 250+ families rely on your decision making.  Not that you go it alone.  Rea is blessed by a very talented and caring partner group.  The members who have served on Management Committee and now the Board and Operations Committee have been just plain fabulous.  They always do what they think is best for the firm and for the long-term.

 

When I first took the CEO position, I relied heavily on the experience of our then Firm Administrator and current COO, Debi Gellenbeck.  She was my go to person to know what we do and when we do it.  I found Debi to be very organized, extremely dedicated, very bright, tough and yet caring.  She can separate business from the personal.  But many times over the years she has discreetly helped employees in need by placing them with a partner who could counsel them through tough personal issues.  She does a great job for the firm and I doubt anyone is more dedicated to its people and its success.  I think we have made a great team.

 

Being the CEO of a CPA firm means you have one major client.  You have to be thinking about its people, services, growth, profitability and well-being at all times.  Probably of all things we have put together in the last ten years, The Rea Way stands out as the most important.  It is our guiding-light.  It is what Richard Rea, Chet Stocker, Gene Flowers and others left for us.  I am also happy we put the firm’s 16 Core Competencies together.  Master these competencies and you will do well.

 

Being the CEO has allowed me to know other CPAs, many of them who are CEOs of their firms, through my Management for Results group, MSNA where I served on the Board of Directors, and through national management conferences.  This profession has some great talent and very caring people.  I believe it to be a very honorable profession.

 

Like most of the partners, my goal has been to leave this firm better than what I found it. It has been an honor and a pleasure to work with the partners and members of the firm to grow from $10,000,000 to $30,000,000 in the last ten years.  We have a lot of good things in place that will help insure the firm continues to grow profitably.

 

When I walked into the Canton office of Rea & Associates, Inc. in the spring of 1974, I had no idea how it would affect the rest of my life.  But what I was told in that initial meeting and the interviews to follow has been consistent with my experiences for the last almost 35 years.  There are scores of stories I have left out in the interest of brevity, but it has been a fun and interesting ride.  Fate and stepping out of my comfort zone has given me a great career with Rea.

 

I ask you to think about the opportunities that this firm and the profession offer to you.  I challenge you to have an open mind, take a chance, and be willing to stretch yourself by moving outside your comfort zone.  You will like where it takes you.

 

Be open to the possibilities.  Opportunities abound.

 

I wish all of you the best in the future.

 

Tim Michel