The Six Traps of Accounting & Finance Careers
Many accounting and finance professionals find themselves frustrated in their career progress. Few of them expect something for nothing - most recognize that hard work and talent are necessary to secure desirable career opportunities and superior compensation. Yet so many smart, hard-working financial professionals find that their intelligence and diligence goes unrewarded while colleagues who exhibit the same talent and effort enjoy much more rewarding careers. Why is there a difference?
Accounting and finance professionals who are recognized as top performers aren't necessarily more talented or harder-working than their less-successful colleagues; they have often simply avoided the 6 common career traps described in this article. These traps can thwart the ambitions of the most skilled and dedicated accountants, analysts, and financial managers. In this article, you'll learn
- what the traps are;
- how to escape traps you may find yourself in; and
- how to avoid those traps as you travel along your career path.
TRAP 1: Focusing Only on the Known and Not on the Unknown
Accounting and finance professionals love certainty. We love the exactitude of mathematics. We hate ambiguity and not knowing "for sure". And so we dwell on what we can observe and measure and know.
The focus of financial accounting in particular is on the recording of historical data. But history can't be changed; therefore, it can't be improved. The possibility for improvement lies only in the future - in the unknown.
It is in the realm of the unknown that successful professionals operate. Opportunities and risks are unknowns that dominate the future of every enterprise; top performers acquire the knowledge and skills that enable them to address those unknowns with confidence despite the inherent uncertainty. Financial professionals who seek positions where they can apply their talents to planning, launching new ventures, and other future-oriented functions are the ones who stay clear of this first trap.
TRAP 2: Focusing Only on Measuring and Not on Creating
Closely related to the first career trap is the second: accounting and finance professionals are almost always score keepers, but rarely are they score makers.
In industrial engineering and other disciplines, there is a saying: "To measure is to improve." The saying is a mis-quoting of 19th-century British scientist Lord Kelvin, who actually said "If you cannot measure it, you cannot improve it" which properly acknowledges that measurement is distinct from improvement. In any case, few enterprises consistently translate measurement into improvement, and most accounting and finance professionals choose to focus on measurement.
By itself, measurement creates no value. It is only when measured data is actionable and acted upon that improvement occurs. Top performers in accounting and finance understand this and have expanded their focus from "this is what happened" to "this is what happened and this is what we can do to improve."
TRAP 3: Focusing Only on Cost and Not Value
Many accountants exemplify Oscar Wilde's definition of a cynic: they know the cost of everything and the value of nothing. Once again, the quantifiable, knowable, riskless nature of measuring historical costs often captures the exclusive attention of financial professionals.
The more action-oriented accountant or analyst may attempt to minimize cost, but they're still missing the mark. After all, it's easy to minimize costs - just stop spending so much money to produce goods and services for your customers! Of course, "no cost" means "no value creation," "no value" means "no customers," and "no customers" means "no enterprise."
On the other hand, it's also easy to create value for customers if you just reduce the prices you charge. The real challenge is to create retainable value for the owners of your enterprise, while creating value for customers and other key stakeholders at minimal cost. Top performers concentrate on getting the most bang for the buck, not just the buck.
TRAP 4: Focusing Only on the Finance Department and Not the Enterprise
For centuries, bureaucrats have uttered the phrase "It's not my department" in response to queries or pleas for action that lie even slightly outside their scope of operation. Modern-day bureaucrats who think that the work of the Finance Department is an end unto itself are stuck in the fourth career trap.
One successful financial professional who thinks otherwise is Andy Weaver, Assistant Treasurer of Reliant Resources, Inc., a Fortune 100 provider of electricity and energy services. "My experiences point to reaching outside of Finance to create the most value," says Weaver, emphasizing the importance of adopting a cross-functional perspective. For him, "understanding the business to find what line people need to make good, informed decisions" is the key to being able to create value throughout the enterprise.
In contrast to the inward-focused, bureaucratic mentality, top performers in accounting and finance look beyond the formal boundaries of their own department to gain familiarity with other functional areas of the enterprise and to forge relationships with allies in those areas.
TRAP 5: Focusing on "The Way We've Always Done It" and Not on New Possibilities
Financial professionals in this trap could write the book "Everything I Needed to Know I Learned While Working for the Big 8" (or 7, 6, 5, 4, . . . depending on how long they've been around!). Tools and techniques learned by professionals early in their careers often remain ingrained for a long time.
Many professionals in this trap have adopted, without question or challenge, the tools and procedures passed down from predecessors who themselves questioned and challenged nothing. In contrast, Susan Veazey, Vice President of Finance for Fidelity National Title Insurance Company of New York, notes a key factor in her success: "I can recognize opportunities to improve methods and communicate the need to implement them." Top performers like Veazey keep their eyes and their minds open to new ways of working that enable them to create more value for their enterprises.
For example, there are a number of relatively modern ways you can improve your productivity in financial work, but their newness means you're unlikely to have learned about any of them in your academic studies. Furthermore, if your background includes public accounting or consulting experience, you're unlikely to have seen productivity improvements implemented on a significant scale, because they would have required an investment of non-billable time to reduce billable hours!
Don't get stuck in this trap through the comfort and certainty of the familiar.
TRAP 6: Focusing Only on Your Work and Not Communicating the Value of Your Work
In this trap, financial professionals cling to a mistaken belief along the following lines: If I work hard and do a good job, I'll get my fair rewards, including financial security for myself and my family. Decades ago there might have been some validity to such a belief, but today, it is a sad delusion.
The reality is this: your work doesn't matter if no one perceives it as relevant, unique, and valuable. And the responsibility for creating and maintaining that perception lies with you. Financial professionals who resist the notion of "marketing" themselves, preferring to "let their work speak for them", are in big trouble.
The people who can help you the most in your career, both inside and outside your enterprise, won't know about your work or be able to judge it unless you take the initiative to communicate what you're doing and why on a regular basis. This shouldn't take the form of an unrelenting barrage of "commercials" for yourself or involve the disclosure of confidential information, but rather it should be a series of subtle, truthful reminders about how the work you do helps your enterprise attain its objectives.
Hopefully this article has encouraged you to expand your professional focus. By doing so, you'll enjoy the benefits of being seen as "profit" rather than "overhead" and stay out of the career traps that many of your colleagues get caught in. Remember to focus on
- the unknowns of your business;
- creating value as well as measuring it;
- maximizing value along with minimizing cost;
- the enterprise, not just the finance department;
- new possibilities instead of "The Way We've Always Done It"; and
- marketing yourself internally and externally.
Bruce Pounder is President of Leveraged Logic, the first and only provider of live online review courses for accounting and finance certification candidates. Leveraged Logic's "PREPanywhere" Review Courses are currently available for the Certified Management Accountant (CMA) and Certified in Financial Management (CFM) examinations.
Copyright © 2004 Leveraged Logic, All Rights Reserved
Bruce regularly presents Continuing Professional Education seminars for accounting and finance professionals in business and industry. Bruce can be reached by phone at (828) 254-4812 or by e-mail at bpounder@LeveragedLogic.com.