We don’t need to fight to survive as we prepare for tomorrow's challenges
Every day, industry publications, blogs, suppliers and practices are talking of change. Topics range from legislation and plugging the skills gap, to technology, automation and firm growth, and it’s not just the UK undergoing transformation: The World Economic Forum (WEF) recently published its paper The Global Financial and Monetary System in 2030 and the results succinctly capture the future challenges across the world.
It singles out three key aspects of the risks and challenges associated with the two seemingly opposed forces of decentralisation and integration, to which the international financial architecture will need to adapt: 1) regulatory challenges; 2) the transformation of the financial system through digitisation; and 3) current macroeconomic risks.
For accountants in the UK industry, these adaptations can be perceived as a tsunami of change: practices are spending time preparing clients for MTD VAT while juggling regulatory changes such as FRS, AML and iXBRL. Digital transformation has positive outcomes but needs skilled expertise and time before moving to more lucrative advisory-based services. Finally, changes in interest rates, how we work within global supply chains post Brexit and market shifts such as EY’s acquisition of a law firm make for exhausting reading. And amidst the crashing waves, we also need to focus on business growth.
So, what’s the best approach to prepare for these challenges today?
Sailing into the wind
It may seem that the storm clouds are close with impending changes such as MTD VAT, but preparations have become key strategic priorities according to the WEF report, “For many banks and other financial firms, innovation and digitisation have become key strategic priorities.”
Changes in priorities are taking place in practices large and small. I am in awe of the innovation and talent we have across the sector. ICAS CEO, Bruce Cartwright CA also sees the opportunities, “The accountancy profession in the UK is much more than the Big Four firms”.
We are seeing the emergence of many different types of practice; from tech-driven start-ups to lifestyle accountants, practices diversifying services to encompass life insurance, pensions, probate, commercial debt recovery and succession planning.
Preparing for challenges is not new: I’ve witnessed practices gracefully navigating the countless changes in legislation over the years and as business leaders we know the preparation starts with the end goal: the business vision, mission and strategy to bring this to fruition.
One of the ways I’ve seen accountancy practices and professionals tackle these challenges is to start by really understanding what their strengths are. Being able to prepare for and capitalise on these can help shape the business strategy and identify new opportunities based on the core strengths.
Regularly assessing the strategy to achieve business objectives is not new but, in my experience, balancing short and long-term priorities addresses the balance between concentrating on daily operations and on future growth that must exist in your business. Some of the world’s most successful business leaders regimentally plan beyond daily tactical tasks by implementing daily, weekly and monthly goals.
All hands on deck
Practices that understand strengths, debate the strategy and plan don’t leave it to the owner-manager or executive board. If it’s done in isolation, it can lead to less meaningful engagement with colleagues and probably most importantly, lack of enthusiasm for the practice. There are three tactics that have helped practice leads obtain buy-in and create passion for the business:
Executive team strategy sessions: set time aside for the senior team to specifically discuss and debate openly. Create a time and place to step away from the day-to-day urgencies.
Employee insight: involving a wider part of the accountancy practice to discuss strategy and execution helps understand what the most important strategic topics are. Employees will tell you how well the business is positioned for success and whether they can deliver the value proposition. Open discussion also helps create an environment of collaboration, a shared vision and everyone feeling they can contribute to its success.
Board and non-exec involvement: the board of directors, non-execs or business mentors are uniquely qualified to help the executive team answer and challenge some of the most difficult questions of strategy. This must sit outside of the old practice of merely reviewing the firm’s strategy as it allows salient input. Periodic direct interviews and discussions in which board members are asked about their concerns is a powerful way to engage the board more effectively.
Full steam ahead
Aligning the big picture with the day-to-day activity provides clarity, helps prepare for today’s challenges and addresses the key aspects of the risks associated with the changing landscape over the coming years.
Bruce Cartwright says that “the profession provides the leaders of most of British industry” and I completely endorse this sentiment. We know the industry is transforming. In my opinion, we don’t need to fight to survive but utilise the skills and expertise across the industry to enable every practice to thrive in the digital economy.