Interview . . . May 15, 2009

All the World's a Cruise Ship, as APA Captain Leads `Congress' Crew to Safe Harbor

Dan Maddux laughs easily but presses his message about the increasing importance of payroll professionals in an ever-changing tax environment and the effectiveness of combining fun and education. Maddux, who is the executive director of the American Payroll Association, talked with BNA May 11 about the upcoming "Congress" (the APA's annual conference), the parallel growth of the association and the profession, and why theater school is a perfect dress rehearsal for a career in leadership.

The birth of the APA from the remains of a large New York City-based seminar company that had gone bankrupt in the early 1980s is a comforting tale during recessionary times. Maddux started out playing a supporting role—in 1982 he became association founder Don Sharper's first employee and a part-time one at that. Sharper had been laid off not long before the two met but was asked to return to start APA, he said.

Maddux's new job turned out to be a happy combination of structure and freewheeling creativity. Sharper was grounded in the fundamentals of direct mail, which he shared with Maddux, but he was unaware of the traditional ways to build an association. Maddux said this allowed the APA to take its own shape and to develop more like a company than a nonprofit.

He says his tools were a purchased contact list from Dun & Bradstreet and a telephone, and his job was to interest payroll professionals in coming to the new association's seminars and starting local chapters. He also was called on to help find seminar speakers who not only knew the material but could deliver it effectively.

It was the perfect job for a mature, bossy self-starter who knew how to stage a theater production, and in 1992 at the age of 30, Maddux became APA's executive director.

Today the association, headquartered in San Antonio, Texas, has 23,000 members and 149 chapters. Its annual Congress is not only where professionals go to keep their education and certification up-to-date but also to get their fix of the group's elaborately staged conference side events. APA Congress aficionados know that Maddux appears in costume at the event's major party each year—but who he will play is always a closely guarded secret.

Building an Association From Almost Scratch

BNA: Have the payroll profession and the American Payroll Association grown up together? I'm guessing that prior to the APA's founding there wasn't that distinct a profession.

Maddux: No, there wasn't. APA started as an offspring of a worldwide seminar company called AMR International in New York City. They had a four-page newsletter, Payroll Exchange, with roughly 250 subscribers and they gave a few payroll seminars in Chicago and had moderate success. That's when they began to notice that payroll was a profession that warranted more professional development and education.

The president of the company trademarked the name of the association—it had had thousands of employees but had gone Chapter 11 and the New York office was down to just a couple of people. Donald Sharper had been part of the layoff but he was asked to come back and start the association.

He knew he had to hire someone and since in his younger years, he had attended the American Academy of Dramatic Arts, which was right across the street, he called a counselor at the school and said he wanted to hire a student who needed a job after school. I got pulled out of class one day—my teacher said I was one of the more mature students and she knew I was supporting myself. So I went across the street and I interviewed and I got the job on the spot and I started the next day.

BNA: Do you know why you were hired?

Maddux: He wanted an acting student who could schmooze people on the telephone. He hired me to call people cold and talk to them about the APA and get them to join or come to a seminar and had an incentive for me to do that. I didn't really have any tools. It was just the telephone back then, and you got numbers from D&B that you could call on, and you had to figure out the name of the payroll person and try to engage them in discussion.

BNA: How did you know who to talk to?

Maddux: What we would do is just get companies of a certain size and I would call and ask who the payroll manager was and try to get the name and get a hold of the person and speak to them. Back then that's how you did it.

It's interesting being here since 1982—back then we didn't have any technology and for the most part it was just resourcefulness. For me, with the yellow pages you could pretty much find an answer to any question you had in life. So I just cold-called people until I could create some synergy around people being interested in APA. At that point, too, we were starting one of our first seminar series and Donald would be the administrator for some of the seminars and I would stay in the office and talk and network with people over the telephone, and at the same time if I could get someone engaged enough I would try to entice them with the idea of starting a chapter in their area.

BNA: Great idea.

Maddux: There are all sorts of purposes for calling on people. I will tell you what's funny — to this day, some of the people that I cold-called and got to know over the telephone are still members today. So they remember the humble beginnings.

BNA: What was the first chapter?

Maddux: The first chapter already existed in Cleveland and I talked them into coming over and being an APA chapter. They had a group that was already formed that met on an irregular basis. That was technically our first chapter.

BNA: How many are there now?

Maddux: Today there's 149, but I'll tell you that even back then within just a few years we had over 50 chapters, so that there obviously was a grass-roots interest in the association developing. I originally was just sort of a jack of all trades. I did the marketing, I guess to a certain extent public relations, writing for the newsletter, meeting planning, whatever there was.

BNA: It must have been kind of exhilarating.

Maddux: It was. I was working for somebody who knew traditional direct mail marketing and could teach me some of that but for the most part there really were no rules, so if I had an idea I could try it out and implement it.

Had we been started by anyone who understood the "methodology" of a nonprofit organization we probably would have gotten too riddled with bureaucracy quickly to have really thought like a company. Our primary purpose was professional development for payroll practitioners, but the way we were going to do that was through education and networking and then eventually certification.

I'll tell you what happened in the early eighties that really put us on the map—we started to see some significant tax reforms and employers needed that information, and they responded very well to direct mail marketing. There really wasn't anyone else out there trying to provide this information. That's really where we got our bearings and grew our legs in the beginning. Tax law was changing rapidly.

BNA: What was happening with tax law at that point in layman's terms?

Maddux: Third-party sick pay was one of the big issues and we did some tours on [the topic]. It was interesting ... back in the beginning it was hard to find anybody to do the teaching. You had accounting firms and they had information but it wasn't necessarily tooled so that it could be articulated to the practitioner.

 I remember at one point we found a consultant that knew a lot about payroll and he would go out and speak for us and I traveled with him. He didn't have any payroll experience but he certainly knew a lot about tax law changes. I remember back in the early days, he would have some of these payroll people so scared that they would leave the room crying to call their employers to talk about how out of compliance they were.

What I had to learn early on is that we needed people from the profession who could be cultivated to be good speakers—because it really needed to be from a practitioner's point of view. What we also needed to do was to make sure that people understood their responsibility—but without instilling fear in them. They needed to understand that here are the laws. Your company may not be abiding by all of them but here is the direction you want to move in.

It was more than just giving people information; it was empowering them to have the professional acumen to be able to go back and present the information in a way that they wouldn't be alarmist. I learned a lot about human dynamics because you realize that to a great extent you were putting a great deal of responsibility on these people, and they took their jobs very seriously.

But you're also introducing them to how much more important that responsibility was becoming. There's a fine line for them to walk in sharing the information with their employers—you certainly don't want companies to be so alarmed by what you heard that they won't send you to another class. It called for a certain business savvy.

BNA: How many states were those first 50 or so chapters in, besides Ohio.

Maddux: Maybe 20. We had a lot of interest on the East Coast and in California and Texas, primarily some of the larger states, and then it began to filter to other states as well. We had our first statewide meeting in Ohio—at the suggestion of Mary Lou Hanners, who passed away quite a few years ago.

And I attended that. It's really interesting to have been with an organization for so long because I've spent a great deal of time over the past year going to chapter 25th anniversaries—I'll be at Ohio's in the fall—and it's wonderful, starting with the association at such a young age and still being here, I sort of make the joke that at our convention coming up in Long Beach I am the only one who has been to all 27.

BNA: Amazing. How have the savvy and the look and the knowledge base of the payroll professional changed from 1982 to now?

Maddux: Oh it's changed immensely. One of the continuous changes is through the legislative and regulatory changes that center around this profession and also through certification.

When we first started certification in 1985, there were people who would say "What's this going to do for me?" Well, initially it's not going to do much for you unless you do something with it. Eventually everything takes its course—if you believe in it and your employer believes in it and your peers believe in it, then you will start to see momentum. After a decade you'd start to see the [certified payroll professional classification] appear in classified ads for jobs, and employment placement companies would say "CPP-preferred." Then people began to see the impact of what we started.

When people would ask what it would do for them, you have to remind them that a lot of it depends on what you're going to do for yourself. One of the important things I've learned is that while we have been the leaders of education in this industry for all these years, a lot of the success that this profession has reaped has also been the professional development that we have helped cultivate among this society to believe that they're worthy. That's one of the important things—you can provide people with all the education you want and the networking opportunities, but they have to feel empowered and that they are worthy of that professional standing, that their certification is worth something, that they truly do effect change for their employers and the people they serve.

So I would say the self esteem was an important part of it, which I think a lot of associations wouldn't acknowledge. I think that was one of our most important roles. The education will help you get your foot in the door, but it won't keep you there.

Continued...