History Impacts Innovation…so can you!
Innovation requires hindsight, insight and foresight; yet too often we focus only on looking to the future and the disruption caused by the new technology, processes or thinking. In his recent book, How We Got To Now: Six Innovations That Made The Modern World, author Steven Johnson provides a long-zoom historical perspective to look at “the bigger picture.” The tendency is to look at the short-term based on one’s perspective and life span. Johnson explains how during the Cretaceous Age, 145 million years ago, Hummingbirds were attracted to the flowers’ nectar, but to drink the nectar, they had to learn to hover. Their wings evolved to a shape where lift was created with each upward and downward stroke. This evolution is known as the “hummingbird effect.”
The Renaissance, generally defined by the 14th through 17th centuries, saw what is described as intersectional innovation rather than directional. Intersectional innovation today can be described as the convergence of multiple technologies, e.g., sensors, networking, artificial intelligence and robotics. During the Renaissance, it was referred to as interdisciplinary, where agriculture, medicine, architecture, law and technology interacted. Exponential rather than incremental change occurs when there is convergence or interdisciplinary interaction.
Innovations generally start as an attempt to solve a specific problem, but once they get into circulation, they trigger other changes that are more difficult to predict. These unplanned results can be referred to as strategic byproducts. Johnson refers to six areas that have profoundly impacted civilization over the past 500-1,000 years. They are glass, cold, sound, clean, time and light. One must think well beyond their own lifetime (short-term) to understand the impact he is referring to when he talks about the long-zoom of the bigger picture.
Glass is an example that ranges over millions of years. At first, it was used for ornamental purposes, then monks found it useful to correct farsightedness resulting the birth of spectacles during the 1300s. Gutenberg invented the printing press in 1440, increasing world literacy. Then in the late 1500s, Hans and Zacharias Janssen developed the first microscope with the telescope shortly after that. Mirrors changed the world, not only from an artistic viewpoint but also with Isaac Newton’s invention of the reflecting telescope in 1668. The book is well written and a fascinating read, with many of the examples either within my lifetime or within the last 100 years.
What does this mean for innovation in the accounting profession? How and when should we change? Why change when the profession is hugely profitable? These are valid questions, and there is no shortage of opinions. As a CPA with a background in both economics and technology along with an interest in history and psychology, I believe each person will react in their own way based upon their experiences and beliefs. The old saying that those with the strongest opinions generally have the least amount of knowledge may be valid in some cases. Waiting too long with both technology, new thinking and processes can result in technical debt where ultimately you will have to invest and pay back the debt. This debt can be in the form of training or resistance to staying current with technology.
From the historical long-zoom perspective, we have witnessed the mini-computer, personal computer, spreadsheet, word processing, laser printer, networking, the internet, mobile, the cloud and related applications just to name a few disruptive technologies over just the past 50 years. But my question is, has this really changed accounting and tax-related services? Or has the profession just automated the process while retaining their antiquated value system in an effort-based economy? Has the profession only focused on optimization rather than transformation?
These questions should cause one to think and develop a system and tools to increase focus, establish priorities and reduce emotions. The system and tools are based upon a few basic questions. Here are five to start you thinking and talking within your firm.
Do you want to be a game changer, sustain success and be future-ready or are you satisfied with conventional success and maximizing current earnings? Neither answer is right or wrong, but it is difficult when partners put their personal interests in front of the firm’s interest. The strategies are also different.
Are you meeting the wants and needs of your market (clients)? Wants are different than needs, and too often firms lack the time and resources to provide higher margin advisory services such as outsourced CFO and strategic and succession planning services. Advisory services require different mindsets, skillsets and toolsets than do compliance based services. As you answer this question, think about Dan Burrus’ quote, “Clients today don’t know what they want, because the things they most want are things they don’t yet know are possible. Give your clients the ability to do what they can’t currently do, but would want to, if they only knew it was possible.
Do you have the right unique ability team? Often firms are comprised of too many “mini-mes” where the skillsets are similar, and they don’t have the skills to provide advisory and consulting services. In other words, they have been trained to comply and report, not consult. Growth in the larger firms is coming from performance and strategic advisory and consulting services. They are also hiring an increasing number of non-accounting majors to join their collaborative teams.
Do you want to grow both personally and as a firm? Growth is key to both continued success and relevancy. Without growth, it is difficult to attract and retain quality people and clients.
Are you a lifelong learner who reads? Charlie “Tremendous” Jones is known for his quote, “you will be the same person in five years as you are today, except for the people you meet and the books you read.” Learning and training are a two-way street.
Short-term innovation can happen rapidly, and firms are developing the necessary culture, leadership and environment for success. Don’t be afraid to test or experiment with your ideas. Start an internal idea factory where you award and recognize people for ideas. Try the 5 X 5 X 5 Sprint method that was developed at Google. For smaller firms, use 3 X 3 X 3 Sprints.
Failure is part of innovation, so fail quickly and fail forward! Michael Jordan states, “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games, and 26 times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over again in my life, and that is why I succeed.” This is about progress and not perfection!
L. Gary Boomer, Visionary & Strategist of Boomer Consulting, Inc., is recognized in the accounting profession as the leading authority on technology and firm management. He consults and speaks around the globe on several topics including strategic and technology planning; mindset, skillsets and toolsets for the future; change management and developing a training and learning culture. He also acts as a planning facilitator and coach to some of the accounting profession's top firms.