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Innovation, Adaptation, and Transformation in CPA Firms

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Polling and survey results from three session about the future of accounting from the Allinial Global Summit in Boston on 11-13-17. The session covered the future of audit, future of tax and firm of the future and were based on our research and application of the Anticipatory Organization framework from Daniel Burrus using the hard trends formula to identify key trends that will impact accounting and finance.

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Innovation, Adaptation, and Transformation in CPA Firms

  1. Allinial Global Summit Firm of the Future Your Audit Practice in 5 Years Your Tax Practice in 5 Years Polling Results November 13, 2017
  2. Insights We are pleased to provide this investment in you and your organizations. We hope you will take some time to review these results and think about how they relate to your firm. The words of Netflix co-founder, Marc Randolph seem to be appropriate, ‘Disrupt yourself before someone else does.’. The innovation scores and challenges indicate a sense that many firms are behind and likely to proceed slowly as it relates to innovation and change. We encourage reflection and discussion around how fast you believe there is a need for change. Consider the Change Equation and start with the ‘dissatisfaction with the status quo’. Are your partners ‘future ready’? That is aware, predictive and adaptive of trends and changes? If not, they will likely resist any bold moves by your firm. VIsion is another major opportunity to engage the firm in thinking about the future. Do you have a compelling vision and is everyone in your firm bought into that vision? This is another opportunity to shape the vector and velocity of your firm. We have resources and services to help you elevate and accelerate your transformation journey. Let us know if you want a consultation to review your situation and how we can help you elevate and accelerate your transformation. Contact me at tom@blionline.org or 443-632-2301
  3. Firm of the Future
  4. Biggest Leadership Challenges Growth Lack of accountability Transition to next generation Motivating and keeping up with change Creating future leaders My capability increase Moving to more formal governance Finding talent Getting higher qualified people Old and stale partners Growth Developing people faster Staff retention Staff retention Keeping people motivated Bringing in new partners Transitioning knowledge from retiring partners Growth Partner alignment Speed of change in technology and capital to keep up Older partners letting go Changing mindset Ability to develop doers into supervisors Older partners unwilling to change Transition to an advisory firm Finding next generation of leaders Getting partners to adapt to changing landscape Hiring and keeping talented people Managing growth Growing the next generation of leaders Transition of leadership to next generation Succession Projecting the future The hole left when senior partners retire Developing the next generation Developing talent Training at a faster rate Developing next generation of business developers Helping partners adapt to change Managing growth Deploy capital properly Who replaces baby boomers. Partners willing to change Influencing partners to learn new skills Good people, transition to younger people
  5. Our team at BLI can help you design a change process that will accelerate your ability to set your vision and increase the velocity that your organization can achieve to move faster. https://blionline.org/services/strategic-planning/
  6. Size of Firm
  7. Top Challenges 1. Being proactive vs reactive 2. Finding the right people 3. Talent retention 4. Keeping up with technology 5. Succession and retirements 6. Competition and client retention 7. Partner alignment and buy-in
  8. Top Skills Needed 1. Critical thinking and Problem Solving 2. Communication 3. Innovation 4. Leadership 5. Anticipating and serving evolving needs 6. Inspiring and motivating others 7. Tech Savvy Data Analytics
  9. Innovation
  10. How good is your organization at innovation 33% said they are good at innovation which is low given the speed and scope of changes facing the Profession. While 87% say Innovation is very important or critical to their future.
  11. Innovation & Growth Score 56% (19.6 / 35) This is a low score or F equivalent. Examine your firm processes to ask how you can increase innovation & growth activities.
  12. Vision for the future These scores speak to the Change Equation in slide 7. With only 5% of partners ‘very aware’ of changes and trends and 40% in ‘somewhat’ or ‘very little’, you can expect resistance to changes. Only 8% have a fully formed vision, another key element to buy-in, engagement, and alignment.
  13. Primary Challenge to Innovation 1. Legacy thinking 2. Fear 3. Lack of compelling vision and why 4. Lack of alignment in partner group 5. Past success
  14. Magnetic Firm Culture Score 74.88% - 59.9 / 80 This is a good score indicating strong cultures needed to support change and innovation. Our average scores among firms are in the mid 60s.
  15. Some Q&A
  16. Biggest Takeaway from the Session Change or die Clear vision for the future to address trends Our firms must change, and now I have a lot of work to do. We need to change and innovate now Just do it now! Need to develop a strategic plan That a rapidly changing future is already here We need to move faster and we can’t rest on past accomplishments From smart to healthy - culture matters We need to be a lot more urgent with our thoughts Disruptive thinking Must align partners and go Time is running out Disrupt yourself before someone else does We need to innovate a new biz model Make change management a core competency Anticipation of trends needs to be competency Push for change Do something sooner rather than later Energized to lead change Firm must Adapt NOW Sell the vision Anticipation snd culture I need to lead the charge... Now We need to be agents of change at our firms. Create a process to encourage innovation and transformation Need more creative service offerings We need to move faster than we are Increase the dissatisfaction for the status quo Need to plan now My job is to do a better job at inspiring innovation and change. Move faster. We are losing ground We are behind the curve
  17. Tax Practice in 5 Years
  18. Biggest Leadership Challenge Staffing and competing for staff Secure talented people Getting staff ready to be consultants Staffing Culture Staffing Keeping the staff up to date with rule changes Employee retention staffing, leaders Staffing/technology Leading people in change Staffing Long-term staffing retention and development Training Keeping up with technology changes Transition to next generation Transitioning retiring partners Artificial intelligence Supply side - how to train & keep the staff Staffing Managing change and getting people on same page of what the problems are. Retaining staff Change management staffing Technology Getting excellent staff members Staff retention Staffing Staffing Transitions people Willing to change to the times
  19. Demographics & Size of firms
  20. Top Challenges 1. Finding the right people 2. Being proactive vs reactive 3. Talent retention 4. Succession and retirements 5. Doing more with less 6. Keeping up with technology
  21. Top Technologies with Greatest Impact 1. Artificial intelligence cognitive computing in audit and tax 2. Big Data analytics 3. Virtualization and automation of processes and services 4. Adaptive and predictive cybersecurity 5. Advanced cloud computing 6. Blockchains 7. Virtualization of desktop and storage 8. Mobile apps for business processes
  22. How important is innovation? These scores speak to the Change Equation in slide 7. With only 5% of partners ‘very aware’ of changes and trends and 40% in ‘somewhat’ or ‘very little’, you can expect resistance to changes.
  23. Innovation & Growth Score 58.9% (20.6 / 35) This is a failing grade. Examine your firm processes to ask how you can increase innovation & growth activities.
  24. Challenges to Innovation 1. Legacy thinking 2. Lack of compelling vision and why 3. Lack of alignment in partner group 4. Control 5. Past success
  25. Innovative Tax Services
  26. Biggest Insight from this session? Change is not coming, it’s here, get up to speed Where is job security? Need to have the right technology partners and be able to switch ruthlessly Technology Will we be able to keep up as an industry The dire need to be forward thinking. Scary stuff The time to plan is now Have to innovate and do it aggressively. Can’t sit still. Urge to change This can’t be ignored!!! Change The time for change is now Fear We need to change our mindset. Things have changed Act now Change is inevitable adapt to change Be Proactive Change how does local firm afford the technology to stay relevant and competitive? Who moved my cheese? How fast things are changing Firms of all sizes are making AI investment
  27. Audit Practice in 5 Years
  28. Biggest Leadership Challenge Change Management Getting new talent that wants to say and become partners Keeping good people Post-merger integration of audit team Succession Retaining staff Retaining capacity to manage growth Finding experienced people Analytical ability of young staff Preparing for technological disruption Getting correct staffing for serving clients year around Being prepared for the impact of changing technology Finding qualified people Line of over auditing Developing future leaders Keeping training needs updated. Development of more niche practices to retain high performers Train to be critical thinkers Transitioning to new a&a partners Tech & comp Attracting good people Consistent training throughout the firm. Developing young leaders Keeping up with change - standards, tech, etc Technology
  29. Size of Firm
  30. Top Challenges 1. Keeping up with technology 2. Being proactive vs reactive 3. Talent retention 4. Finding the right people 5. Keeping up with standards and regulations 6. Competition and client retention
  31. Top Technologies 1. Artificial intelligence cognitive computing in audit and tax 2. Big Data analytics 3. Advanced cloud computing 4. Blockchains 5. Virtualization and automation of processes and services 6. Adaptive and predictive cybersecurity 7. Virtualization of desktop and storage
  32. Innovations in Audit Practice
  33. 90% said Innovation is ‘critical’ or ‘very important’ but only 24% said they were good at innovation.
  34. Growth & Innovation This score is a D- which is not good. Examine your firm processes to ask how you can increase innovation & growth activities. 62.8% (22 / 35)
  35. How good are you at innovation? Only 24% said they are good at innovation which is very low given the speed and scope of changes facing the Profession.
  36. Challenges to Innovation 1. Legacy thinking 2. Fear 3. Lack of compelling vision and why 4. Past success 5. Lack of alignment in partner group
  37. Biggest insights and takeaways Future facts are a way to anticipate the future Energized Awareness Emphasis on need to change to survive/grow. We are not alone in where we are Shift more focus on planning for change Need to be anticipatory. Need to change with a plan Stop thinking about how technology will disrupt; just do it We got a lot of focused work to do Need to respond to the inevitable Either adapt or plan to sell Prepare for change Hang on...the change ride has just begun… Anticipating and understanding future trends is a critical competency
  38. Resources
  39. • Anticipation • Strategic Thinking • External Awareness • Vision • Continuous Learning • Innovation • Creativity • Problem Solving • Prioritization • Business Acumen • Decisiveness • Influencing/Persuading • Emotional Intelligence • Consensus Building • Collaboration • Inspiration • Risk Management • Communication www.blionline.org/ao www.blionline.org/ao
  40. 28 lessons – 4 modules – 1 hour/week • Very short single-concept videos (mini TED Talks) • Rapid application exercises • Visual job aids to reinforce learning Anticipatory Organization - First Nano Learning for Accounting and Finance Professionals designed to learn more in less time
  41. 43 Our MBA Express and 8-Hour MBA program were featured in an Inc. Magazine column. http://blionline.org/featured/mbaexpress/
  42. http://www.blionline.org

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