Accountants are experts who solve technical problems. Their solutions are largely based on technical knowledge and clearly established principles. Compliance services that address technical problems – preparing financial statements, lodging a tax return etc. are done using well-established methodologies. Clients come for advice; accountants provide it. That’s the business model.
But, technology is destroying many aspects of that business model. Digital disruption is profoundly effecting the profession.
Some commentators estimate that even if an accounting practice did not lose one client over the next five years, their revenues will plummet 40 – 50%. My work with accounting practices indicates that this prediction may not be too far wide of the mark. It is getting tougher for the accountant in public practice.
As a result practices are needing to look beyond compliance work and move more strongly into other areas such as Business Advisory Services.
While accounting practices have been embracing the Business Advisory space for many years few have developed these services into sophisticated core service offerings in the same way as their Tax or Audit services. For many, Business Advisory Services remain an adjunct to the core compliance services, delivered by a relatively small number of people in the practice who have a passion for the particular service offering. Rarely do the methodologies used in these service offerings form part of the training for the broader firm.
As accountants seek to grow their Business Advisory Service offerings they will encounter a new challenge that most have not anticipated – the mix of problems business will need assistance with will be different. A bigger proportion of the problems will be adaptive challenges rather than technical problems. In simple terms adaptive challenges are the human element of a problem. For example, while a succession plan contains some complex technical problems, it is often how the human problems are dealt with that are the ‘make or break’ elements to the plan.
Each type of problem – technical problems and adaptive challenges – requires a different approach and a different conversational style.
|Type of problem||Technical Problem||Adaptive Challenge|
|These problems are…||Solved||Evolved|
|Level of client ‘ownership’ in the solution||Low to medium||High|
In their book “The Practice of Adaptive Leadership” the authors Heifetz, Luisky and Grashaw make the comment that, “The most common cause of failure in leadership is produced by treating adaptive challenges as if they were technical problems”. Based on my experience of over 35 years running my own accounting practice and consulting to practices the same could be said about accountants in their approach to addressing adaptive challenges with their clients.
Addressing adaptive challenges and using an inquiry conversational style is more than simply asking questions. Indeed accountants are more than familiar with asking questions, they do it regularly. It is more about the nature and quality of the questions that are asked and also the underlying strategy behind the questions.
To demonstrate this, I often start my training sessions by breaking participants into small groups to solve problems. One person nominates a problem they would like to address while the others in the group help this person solve their own problem. And I have two rules – those helping are only allowed to ask questions or respond to questions. They are not allowed to make statements or give unsolicited advice. In effect I am taking their default conversational style (advocacy) away from them. They struggle, initially, but then start to see the power of this type of conversation as they practice it and become proficient at asking quality questions.
The objective is to help the person (i.e. the client) think more deeply about their own problems and guide them in finding the solution rather than providing an expert solution.
As digital disruption starts eroding the value of this expertise, accountants risk being relegated to the status of technicians and remunerated accordingly. If they are to continue to be relevant and flourish into the future, accounting practices will need to start thinking more about how they converse and work with their clients, particularly in the Business Advisory Space.