State of Accounting: How Business Would Improve If More Accountants Were Proactive, Not Reactive

In this series, professionals debate the state – and future – of their industry. Read all the posts here and write your own (use #MyIndustry in the body of your post).

There’s a reason the windshield is so much bigger than the rearview mirror.”

That was one of many key messages from Daniel Burrus, a world-renowned technology forecaster, innovation expert, and New York Times best-selling author who delivered the keynote at a recent gathering of CPAs and accountants hosted by the Maryland Association of CPAs and the Business Learning Institute.

His point is well-taken.

The need for future-focused accountants has never been greater. In a recent national survey, 76 percent of small and mid-size business owners say their CPAs are not proactive, and 75 percent have changed firms because their CPAs are providing reactive services rather than proactive advice. Another recent survey found that only 6 percent of CFOs, controllers, and management accountants say they are future-ready and unable to deliver the game-changing value their organizations desperately need.

The urgency of the highly competitive marketplace and pace of technological change are fueling the demand for an “anticipatory” accounting and finance professional who can help businesses and organizations look through the windshield instead of the rearview mirror to see around corners.

What’s in the way?

The biggest barrier to delivering proactive, game-changing advice is “not enough time.” Over the past year, we have surveyed hundreds of CPAs and accountants in public practice and corporate settings and found various permutations of the same top five challenges:

1. Not enough time.
2. Being reactive versus proactive.
3. Doing more with less.
4. Information overload (standards and regulations).
5. Managing change.

It seems that across the entire accounting and finance profession, everyone is so busy getting the work done and the numbers right that they don’t have time to focus on the future and look ahead. According to Burrus, this will only get worse as the exponential pace of technological change continues and Moore’s Law is compounded by equal laws of bandwidth and digital storage. The bottom line is that the “busyness” we all feel will only get worse unless we learn some new ways to deal with this dizzying pace.

You can't stop the waves but you can learn how to surf." — Jon Kabat-Zinn

The hard is soft and soft is hard

In 2011, we worked with the American Institute of CPAs to create a vision of what the CPA profession will look like in 2025. That vision is contained in the CPA Horizons 2025 Project. That project identified a vision based on a profession that “will help people and organizations shape their futures, combining insight with integrity” – in other words, a future-focused, value-adding profession that goes way beyond the stewardship and scorekeeper roles of our past. To make this shift, the profession will need to learn new skills.

The critical skills necessary to achieve this vision were identified as:

1. Communications – the ability to effectively exchange reliable and meaningful information using appropriate context and interpersonal skills.
2. Leadership – being adept at influencing, inspiring, and motivating others to facilitate change and achieve excellence.
3. Strategic and critical thinking – skills in evaluating facts, challenging assumptions and applying judgment to develop relevant solutions.
4. Anticipating and serving evolving needs – abilities in identifying strategic directions and opportunities to meet the evolving needs of those we serve.
5. Synthesizing intelligence to insight – expertise in connecting data, performing analysis and using business acumen to provide astute guidance for better decision making.
6. Integration and collaboration – effectiveness in building strategic alliances and working collaboratively to provide multidisciplinary solutions to complex problems.

Notice that these are all “soft skills” (or as we like to call them, success skills) and are in addition to the core technical skills that are the foundation of the CPA and accounting/finance professional. In fact, these soft skills are the true differentiators that produce hard results.

The anticipatory CPA / accounting / finance professional

Last year, we heard Daniel Burrus speak at an industry conference where he said; “The best organizations are all good at reacting and responding, and they have learned how to be agile. In addition, the best are good at being lean and they have learned how to execute at a high level. However, none of these competencies helped Blackberry, Blockbuster, Sony, HP, Dell and a host of others avoid major problems. The missing competency was the ability to anticipate the future.”

After meeting with Daniel, we discovered that over the past thirty years he had developed a methodology to accurately anticipate disruptions, problems, customer needs and new opportunities. His Anticipatory Organization? Model has changed how many of the most successful companies plan and innovate, and we learned that he had just finished designing what he calls the Anticipatory Organization? Learning System and is in the process of licensing it to Fortune 100 companies.

We found that Daniel’s learning system includes anticipatory leadership, strategic thinking, vision, innovation, creativity, problem-solving, collaboration, and communication. Look familiar? These are almost identical to the set identified by thousands of grassroots CPAs in 2011. That led us to the conclusion that anticipation is the missing competency for accounting and finance professionals

All of this led us to work with Daniel to take his Anticipatory Organization Learning System and create the Anticipatory Organization: Accounting and Finance Edition, which was enhanced with the input of MACPAs customer co-creation team made up of a select group of CPA firms, CFOs, and controllers to create real-life examples that are built into the job aids and rapid application tools embedded in the learning system. We see this as one way to accelerate our efforts to get out of our boxes.

Investing in “success skills” like anticipation and the critical competencies identified in our research is just the first step in making the shift from the rearview mirror to a future and proactive focus. The next step is the deployment of enabling technologies like the cloud, social, mobile, and analytics.

Due to the exponential pace of technology changes, new applications and tools are emerging every day to help accountants automate workflows and transaction processing and create new dashboards and analytics. These tools can add major productivity enhancements that will free up time and allow CPAs to add value with their knowledge and insights. This is a case in which it takes time to save time. The initial investment in looking for new solutions is critical.

The third critical step is leadership. In order to shift to this future-focused approach, it requires developing and nurturing a culture that emphasizes learning, collaboration and everyday innovation. It means collaborating across disciplines inside organizations and externally with customers, suppliers, and stakeholders. These new skills and new behaviors will need strong support from the top, and that takes bold leadership. This is transformational change, not incremental, and it will require a lot of energy and effort.

Stimulate progress AND protect the core

Amid this clarion call for the “revolutionary evolution” of our profession, it is equally important for us to focus on what should not change. While we work on this shift to a future-focused anticipatory approach, it is essential that we stay grounded in the core values that make us the “most trusted advisors” — integrity, objectivity, and maintaining the public trust. These values become the strong foundation that we stand on and build upon as we work to create game-changing value to our organizations and clients.

I am reminded of a Jim Collins quote: “Sometimes you have to change what you do to remain who you are.” The world is demanding new things from us. If we don’t respond by changing, someone or something (think computer or robot) else will.

The No. 1 app is your calendar

One major insight that participants highlighted from our session with Dan Burrus is the need to break out of the box by spending one hour a week working on these future-focused skills. Dan said the No. 1 software/app we all have is our calendar — how we choose to spend our time. While we will all continue to be really busy, we can make a small step to move in that future direction.

We have spent years building our boxes — in my case, 33 years! Isn’t it time we get out of our boxes? What if we work with the younger generations to help us see new ways out of the box while we reinforce the core values and wisdom gained over our careers?

What do you say? Let’s start with just one hour per week.

TOM HOOD, CPA.CITP.CGMA is considered one of the most influential thinkers in the CPA Profession and the CEO of the Maryland Association of CPAs (MACPA). Tom is also the founder and CEO of the Business Learning Institute, the innovation and learning affiliate of the MACPA, a leading talent development and strategy organization for CPAs, finance and accounting professionals in the US. They provide strategic planning, consulting and customized, competency-based curriculums and a portfolio of “success skills” and technical programs designed for the Finance and Accounting Profession. For more information click here:  Anticipatory Organization: Accounting & Finance Edition