How many accountants will make the cut?
A number of years ago I headed up a national network of consultants, most of whom were accountants in public practice. We ran annual conferences, and in one particular year I decided to engage a firm to carry out personality profiles for all those attending the conference. While it was hugely successful and created many great conversations, it was also notable for another reason.
Before the conference I met with the managing director of the personality profiling firm to give him some background on what we did and where our members came from. Our goal was, essentially, to develop business ‘facilitators’ and make them better business advisors as opposed to compliance accountants. As I explained this I received a look of astonishment from the MD. When I asked about his response, he explained: “I have done a lot of profiling of accountants over a number of years and this has shown me that, only 15-20% of accountants have the profile to be successful as facilitators. So either my stats are wrong or you have been successful in attracting a large portion of accountants with the ‘right’ profile into your network”. When we did the profiles it was clear that the latter was true. Just over 90% of those who attended the conference came within the profile he nominated as being required to be an effective facilitator. While I don’t put too much faith in profiles – people can’t be put in boxes – this was a result that made me sit up and take notice.
How many accountants, I wondered, are going to be able to make transition?
Technology is driving changes that are disrupting the structure of accounting practices, now and in the future. This has particularly impacted compliance services – the core work of most accounting practices. As prices drop through technology- driven price competition and as technology is able to reduce the requirement for a visit to the accountant, revenues and profits continue to drop.
In response, accountants have cut costs trying to protect profits. They’ve taken work offshore.
Others have adopted a more progressive strategy: to grow fees beyond compliance work by developing ‘value-added’ services and moving into business advisory services.
Many services of professional service firms, and the accounting profession is no different, are based on the professional adviser, being the ‘expert’, solving ‘technical problems’ for their clients. The basic communication style appropriate for this type of problem-solving is called ‘advocacy’ – the professional adviser advocates the best or the ‘right’ decision. The dentist tells you what is wrong with your teeth and what you need to do to resolve it. While you may seek a second opinion your role is to make the decision as to whether you want to go ahead or not. Apart from keeping your mouth open, you have a small role in the final solution. The dentist solves the problem for you.
Accountants who move into business advisory services encounter clients with a different type of problem – adaptive problems. Adaptive problems do not have such clearly defined solutions – what works in one organisation may not work in another; what works today may not work tomorrow. Staff loyalty is an example.
Adaptive problems are ‘evolved’ rather than ‘solved’. Once a tooth is filled the problem is solved; staff loyalty is worked on each and every day.
Adaptive problems are evolved by a facilitator who uses an inquiry conversational style.
The inquiry conversational style involves more than asking questions; it requires a different skill-set than what most accountants are used to. There is a key shift: while experts solve technical problems for their clients, clients solve adaptive problems (under the guidance of the facilitator). Adaptive problems not only require a different conversational style but also a different way of thinking about value, problem-solving and how the service is delivered.
This is a fundamental change and will be a considerable challenge for many accountants. How many will make the cut?
Warwick Cavell is a thought leader in communicating for results and strategy implementation. For over 25 years, he has helped leaders improve business performance by changing the way people communicate and work to solve problems – both internally and with their clients. He is a highly respected facilitator, coach, speaker and trainer, and author of regular blogs.
