The Audit Opinion Issue #3 - Featuring Matt Sutorius
Mark Edmondson
Inflo CEO | Audit Technology Expert | ex PwC | Author -> Follow for posts on innovation, leadership, & audit.
Table of Content
1. Making strategic decisions with Matt Sutorius
Oracle research in 2023 highlighted 85% of business leaders suffer from decision distress - regretting, feeling guilty about, or questioning a decision they made in the past year.
When it comes to bigger strategic decisions that are difficult (or embarrassing) to reverse, this distress can cause a feeling that no decision is better than the wrong decision.
But is it really?
Is it the right approach to stick with something you know isn’t working? Just because you aren’t 100% certain or aligned on which new approach is the best one to change to?
One inherent decision making challenge for many accounting firms is the Partnership model.
It can cause what I call “indecision-by-committee”. This is particularly problematic for strategic investment decisions which impact only one department of the firm, but are voted on by others.
I regularly see leaders growing frustrated with bureaucracy and an inability to gain approval. Investing time in politics rather than making progress.
One helpful framework which can support Partner groups making better decisions is S.P.A.D.E. – developed by Gokul Rajaram.
What I like about this framework in a Partnership situation is the appointment of roles for the specific decision, evaluating the alternatives (I would emphasize, that doing nothing must also be evaluated), and that the group all get to privately vote.
This isn’t how I would run a business, but it respects the legacy Partnership model.
Importantly though, one person ultimately makes the decision and explains why.
It is critical from there that all leaders get behind the decision, regardless of their personal views.
Timing these discussions correctly is an element Matt Sutorius shared with me was key in his experience at Clark Nuber PS .
Before you get to decision time, it is beneficial to seek input from important decision makers. But starting open-ended Partner debates is risky. Instead, advance your thinking so you are presenting possible solutions, as this will yield far more valuable discussion.
Being clear on what input you are seeking is also key. Is today’s meeting agenda item an update, a request for input on a particular challenge, or a decision which now needs to be made? A soul-searching debate is going to kill momentum if you need to leave the meeting with an agreed way forward.
Matt promotes the involvement of junior team members in evaluating innovation options. This is a great approach and helps present the views of the firm while building support for the intended change.
The perspective of the team can be kryptonite to objections from the laggard Partner close to retirement, throwing stones at every investment suggestion.
One of the stones that will likely be thrown at any technology decision is the “this won’t work for [X] clients” stone.
It infuriated me at PwC how much time we spent in our innovation efforts trying to support a very small number of strange clients. It slowed everything down and made all our innovations worse.
Matt shared two key tips on this challenge:
Firstly, it is important to focus on your ideal client and the areas you want to specialize. This means all your innovation, process improvement, and general operations can center on providing great services to these clients. Consider moving away from non-ideal clients.
And secondly, take the solution that is 80% of what you need. It will likely be better than what you currently have, will naturally evolve, and you can easily work on the 20% as you go.
That should alleviate decision distress. Provided you can get that leadership decision made...
Mark
P.S. You can listen to the conversation between Matt and I here. And in case you missed them, my interviews with Jim Boomer and Jim Bourke also touched on change management.
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2. In Case You Missed It – My Recent Content
3. Technical Resources
A variety of industry cheat sheets, tips and guides.
4. A Book Recommendation – Surrounded by Idiots, Thomas Erikson
When it comes to communicating and working effectively with a group, I would highly recommend a Insights Discovery session.
Surrounded by Idiots reflects the feeling of frustration when your communication doesn’t seem to be working. The book explains the key concepts of Insights, including a key takeaway for me on how people have different communication preferences, and how adjusting your communication style and method can help you connect more effectively.
The Olympics may be in the rear-view mirror, but the race to replace legacy desktop audit platforms continues…
5. Audit News
Top Story:
The CPA talent pipeline continues to be a red hot topic. This month the National Pipeline Advisory Group (NPAG) released a final report of their recommendations in response to the AICPA’s resolution on the topic.
Their recommendations are: 1) reduce cost and time of education (150 hours), 2) more engaging academic experience, 3) enhance the employee experience, 4) expand access to the profession, 5) support CPA Exam candidates, and 6) tell a better story. Read more.
On this last point, check out this promo video from the Australian Institute (who have a hill to climb on the image of accounting post the PwC tax debacle…).
?Other News:
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