The discussion in the accounting profession, and in business overall, has shifted from just talking about change to managing the change that is occurring.
Just as practitioners are no longer asking “why cloud?” and now want to know more about what and how, they are asking how exactly to move forward in the right way in the current business environment. Many also not only want to just survive, but thrive. Answers to these questions come from colleagues who have success stories to share, but also from thought leaders like Tom Hood, who heads up the Maryland Association of CPAs.
Hood has not only been a proponent of change and progressiveness for his own state society members, but for the profession as a whole. He regularly speaks and writes on how accountants should not just be “managing” change, but actually “leading” it.
AccountingWEB recently spoke with Hood about how accountants can and should actually go about such leadership, while still managing the day-to-day challenges of their own practices and being more “future-ready.”
AW: Discuss why the theme in the profession has moved from “change” to “change management.”
Hood: I think of it as change leadership; I don’t really like the term “change management.” Change usually manages you if you’re not leading and that’s creating a sense of urgency in the profession. If we initiate change, that’s more welcome. What’s happening is awareness of the speed of change is creating a level of urgency not seen in this profession in the past. There have been waves of disruptive change. Look at the PC revolution and programs we could use to do work. We migrated through that, then the Internet and mobile and apps came, and the pace is almost dizzying.
The other part is now consumers and small businesses are leading the way in what and how they want to work. It’s an app economy. You don’t have to install things on your server anymore, and what happened in the days of installed software was accountants held power for the most part. The CPA had to make sense of things, but now accountants are playing catch up. That’s a reason many accountants are trying to figure out how to get and stay ahead. Being reactive is a fool’s game.
AW: What are the top three things a firm should be doing today to plan for tomorrow?
Hood: It starts with asking are you even aware of the pace of change and where it’s coming from for you and your client? That means being aware, predictive, and adaptive of trends and issues in technology, demographics, social media, and other key areas. Then focus on things you can predict.
Most CPAs are thinking, “I can’t get on top of my work today, so how can I plan for tomorrow?” But there are things you can focus on that you can predict, then be adaptive. Predictive says there are three hard trends: technology and its speed, demographics in the workplace, and government regulations. The idea is to start with those first. The profession used to be more predictable and it’s just not anymore, not that things today can’t be predictable, but it’s just not the same things it once was.
AW: Where are you seeing the most encouraging changes come from in the profession?
Hood: For the small firms, accounting practices have had the highest profitability in any industry. It’s the first time we ever beat chiropractors in small professional services. The reality is, I think, in larger practices the gap is growing, those that are innovating and offering consulting – specifically the use of cloud accounting – is growing dramatically. There are big waves of change and oceans of opportunity. The hope I have is that I remember being taught accounting with planning and predicting, and we often got stuck in the data and keeping the numbers right. For me, technology unleashes that power and we as accountants can go understand the language of business in a way others can’t. For every firm that says, “I’m busy, I’m stuck,” there’s many more that are doing great things today.
AW: What do you say to firms that want aspects of their practice to change, just not “how?”
Hood: When firms feel stuck, they need to simply take the time to see what others are doing. The big “how” part is about creating capacity. You don’t always have enough time, so how do you manufacture that? Well, the technology you have or have available to you, get trained, make sure staff are, and that will create time. Use that time to invest in the future.
Workflow is also another big one. New tools plus workflow can help transform your firm, like having a more collaborative tax process. Then there’s client ranking. It’s been beating for a while, but firms don’t always do it right. You tend to serve your “D” clients at the expense of your “A” clients, and that wastes time. Engage your people. If you have a few people working for you and they help you figure things out, let them help you.
Tom Hood will be speaking in a session entitled “Practice: Using Your Sixth Sense to Prep Ahead” where he will speak more specifically about anticipating the latest trends and forecasts – and their impact across your firm, employees, and clients at the upcoming Xerocon SF 2016 conference August 15-17.