Surf report: Big waves of change
World Economic Forum Executive Chairman Klaus Schwab recently wrote that we are entering an era he calls The Fourth Industrial Revolution. He describes it this way:
“We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.”
These big waves of change are the result of a “perfect storm” of sorts — the convergence of three “hard trends” of exponential technological innovation, the demographic shift as baby boomers retire, and globalization. Key challenges facing accounting and finance professionals are automation and digital transformation, succession and talent shortages, a “brain drain” as experienced people retire, business model changes, and the increasingly VUCA world (that’s volatility, uncertainty, complexity, and ambiguity) in which we find ourselves.
Several recent studies (from the WEF, Oxford, McKinsey and MIT) report that accounting, auditing, and tax are among the occupations most at risk for complete automation within the next 20 years.
As a result, the accounting and finance profession is rapidly approaching what Andy Grove, retired CEO of Intel Corporation, described as a “strategic inflection point.”
“This is where there are two major pathways: doing business as usual, or embracing and adapting to the new,” Grove says. “At the moment these are fairly close together, but they will soon diverge into a growing gap between growth and success, or entropy and decline.”
[plugin:quote]”You can’t stop the waves but you can learn how to surf” – Jon Kabat-Zinn[/plugin]
Oceans of opportunity
As we look through this fog of uncertainty, we can see positive signs that spell “opportunity.” The key will be to look at these opportunities with a new lens and new skills.
- Ninety-one percent of CPA firms expect to continue record hiring levels.
- The U.S. Bureau of Labor Statistics projects a 11 percent growth rate of accountants from 2014 to 2024, faster than the average for all other occupations.
- Accounting enrollments continue to trend upward at record levels, ensuring the future supply of talent.
- Accounting (No. 3) and financial analyst (No. 10) took two spots among the top 10 jobs based on high pay and low stress by US News and World Report.
- Accounting practices were named THE most profitable small businesses in 2016 according to Sageworks.
- Accounting and tax practices are showing growth rates at an average 12 percent, a significantly faster pace than the average private companies.
- Sixty-one percent of small businesses are demanding cloud-based computing, according to Sage.
- Advisory and outsource accounting services are showing an exceptional 91 percent growth from 2010 to 2014.
- CFOs are increasingly taking on strategic management roles like COO and even CEO in organizations.
To take advantage of these oceans of opportunity, accounting and finance professionals will need to learn how to ride these big waves or risk being crushed by their frequency and force. The critical thing to know is that ‘business as usual’ simply won’t work anymore.
Here are six ways to learn how to ride these big waves of change now and in the future:
- Embrace digital: Learn how to elevate and accelerate your job using technology and to race the machines, not against them. Think SMAC − social, mobile, analytics, cloud.
- Anticipate: Learn the critical competency of anticipation. Only those who constantly try to anticipate change will survive when change happens.
- Collaborate: The collaboration curve is quickly replacing the experience curve. Who you know is replacing what you know.
- Learning is the next competitive advantage: As editor Robert Safian wrote, “the most important skill is the ability to acquire new skills.”
- Protect the core: When everything is changing, it is important to know what should not change. Core purpose and values for individuals and organizations should serve as that anchor or grounding.
- Make time for the future: Your time and those of your people will be your No. 1 challenge, and nothing will change if you are overwhelmed and too busy. Smart organizations will be proactive and make time for the future.
The hard trends are forming these big waves of disruption and change. The soft trend is whether the accounting and finance profession will recognize them and respond proactively. Will we be like the taxicab industry fighting Uber, or will we embrace and extend these oceans of opportunity and learn how to surf?