By Samantha Mansfield, Director of Corporate Communications, CPA.com – an AICPA Company
There seems to be two typical times of the year that leaders in CPA firms take time to do planning: at the end of the year before tax season -- the lull before the storm -- and right afterwards, making plans to do better next year. You likely have typical areas you focus on: revenue growth, staffing, workflow processes, etc. But how much are you really involving technology in your strategic planning? I am not just referring to analyzing how your tax software performed, but looking at the potential impact of disruptive technology on your business and that of your clients.
Templosion is the implosion of everything in a condensed period of time. This is a broad concept, so how does it apply to the accounting profession? As a result of templosion, we are seeing businesses become dominant players in a market very quickly, and while other businesses decline because they haven’t planned accordingly. Examples we are all familiar with are video rental stores, record stores and book stores. Newer examples are Uber and crowd funding sites. Typically, when we think of the speed of change, our minds leap to technology and that is a significant driving force behind the growth we see due to reduced need for larger staff and infrastructure, but it is not the only area affected by templosion. Visit AICPA TV for a video series that delves into this concept and the accounting profession.
Describing this environment, Tom Hood, President and CEO of Maryland CPA Society, says, “It’s a VUCA world – Volatile, Uncertain, Complex, and Ambiguous… the answer to rapid changes and hyper-competition is a bold vision and core values; maintaining values that don’t change while constantly re-inventing the shorter term strategy.” You have to stay true to your bigger vision for your practice and the value you provide. Go back to the principles of Simon Sinek’s “Start with Why”.
Changes in the short term will largely involve the products you provide. Accounting services are a product as well and they have a life cycle. As a result of templosion, all product life cycles are shortening. Technology enables your clients to be more involved and accomplish more on their own. But we know that doesn’t mean they are using these tools correctly, therefore, they have inaccuracies. This is where your services evolve while staying true to your “why.”
Watch for Disruptive Technology
Isn’t this what the futurists do? As Yogi Berra said, “It’s tough to make predictions, especially about the future.” It is almost easier to identify how a piece of technology will affect us in 30 years -- how we respond and plan for it in the next three years can be much harder.
Is disintermediation taking place? This is the function of removing the middleman where technology can connect the service straight to the consumer or end user… Let’s take the example of an industry that has all but almost vanished: travel agencies. With the growth and sophistication of online sites, the use of travel agents has narrowed significantly.
Look at your clients. Are any of them in an industry in which this could happen to them? A practitioner shared with me that he has serves a niche for private limo drivers. Uber has had a negative impact on his clients and by extension, the success of his business. Being aware of disruptive technologies that could impact your firm and clients will help you to be more proactive in adjusting your service model and differentiating. Geoffrey Moore describes it this way:
Your service becomes a commodity, so you need to differentiate and specialize. As you do this, you will continue to optimize the process, leading to more outsourcing of services -- and so the cycle continues.
This should be viewed as opportunity, though, not something to avoid. Being aware of changes allows you to be proactive in adjustments to your business. Ignoring the disruption is where you can be left trying to scramble to catch up.
Action to Take
- Establish a culture of innovation in your firm. This is not as difficult as it sounds. Often, we put too much pressure on ourselves by saying innovation is a skill we lack, but as a leader of your firm you are doing it to some degree. Innovation is basically business problem solving, as I heard it described by Amy Radin, a pragmatic innovator who has worked on brands like Citi and American Express. The key is to get new perspectives and search out others that will help you push that boundary.
“How to build the innovator's temperament. There is no best temperament. But there are traits that innovators share in common, and these can be cultivated and made into habits. Among these are a restless curiosity, stubbornness and a habit of seeing past the present from an angle that's at least a bit off from everyone else's. Innovators are not just thinkers but people of action who hold their focus against all the challenges to execution.”– The Daily Innovator: Born or Built?
- Participate in a community of peers, like those at Boomer Consulting and Digital CPA Network, to gain new perspectives, fresh ideas and novel approaches.
- Schedule time to stop and think. Pulitzer Prize finalist and New York Times bestselling author Nicholas Carr, points out the importance of deep attentive thinking. In this digital era of information always at our finger tips, you need time to step back and let the thoughts meld together.
- Involve representatives from across your organization as you conduct your strategic planning and weigh the impact of disruptive technology. A recent survey by Deloitte found that in midmarket businesses, 62% of the C-suite leaders are somewhat involved in tech adoption and 33% are leading the charge. The heads of each of the functional areas – CFO, COO, etc. -- are beginning to actively engage in incorporating technology into their businesses.
Future is coming fast
A study conducted by CPA.com and Dr. James Canton of the Institute of Global Futures revealed:
- 10% of CPA’s view themselves as innovative
- 8% of CPA’s think the profession is future ready today (fall 2014)
- 20% of CPA’s believe disruptive innovations will be a driving influence by 2025
- 80% of CPA’s see their role changing significantly by 2025.
(See more findings from this study)
So what does this all mean? The future is fast approaching. Strategic planning done right involves having a strong long-term vision for your practice, being nimble in the short term and arming yourself with insights and perspectives to cultivate an innovative culture. If you navigate this well, you can anticipate changes from templosion and create a path of fast growth for your firm. With CPAs continuing to move to more advisory and consulting roles, you can use these principles to help your clients be mindful and plan strategically for the future success of their business.
About Samantha Mansfield
Samantha Mansfield is driven by her passion to help public accounting practitioners leverage relevant technology strategically to grow their businesses. Her love of sharing information and helping others develop is seen in her 15 year career and personal hobbies. She has a bachelor of arts in business administration/ marketing from Hillsdale College; she has served on the board of 2 non-profit organizations and spends time volunteering. Samantha is currently the Director of Corporate Communications at CPA.com.
In 2015 she was honored on the CPA Practice Advisor’s “40 Under 40” list, and mentioned as an up and comer on Accounting Today’s “Top 100 Most Influential in Accounting.”