It May Be Time to Reinvent Your Firm!

Tom!Hood,!CPA,CGMA,CITP!June!29th,!2016!

Your Learning Journey

Download today’s slides at …

www.SlideShare.net/thoodcpa

Vote for a question

Respond to Poll

Ask a Question

BLI.CNF.IO Select your sessionand join the conversation:

CPAFMA!:!Reinven>ng!Your!Firm!

Magne>c!Firm!Score!

Perfect!Score!=!80!

=!67%!

CPAFMA!:!CPA!Firm!Innova>on!

Source:!The!2015!CPA.com!Innova>on!in!Public!Accoun>ng!Survey!

Perfect!Score!=!35!=!62%!

Top!5!Challenges!1.  Doing!more!with!less!2.  Being!reac>ve!versus!

proac>ve!3.  Change!management!4.  Not!enough!>me!5.  Talent!reten>on!

Top!5!Skills!Needed!

1.  Strategic!&!cri>cal!thinking!2.  Communica>on!3.  Analy>cal!skills!4.  Inspiring!and!mo>va>ng!others!5.  Collabora>on!and!mobilizing!consent!

Reinvention is not changing what is, but creating what isn’t. A

butterfly is not more caterpillar or a better or improved caterpillar; a butterfly is a

different creature.

“The definition of innovation is broadening. Once deemed the

exclusive province of R&D departments, it is now widely

accepted as a fundamental part of every aspect of a business.”

Source: CGMA Report Managing Innovation: Harnessing the power of Finance

WHY?

#PSTech

“One interesting finding of the survey is that CPA firms, early majority or not, don’t really see a competitive threat from specific challengers.”

– Erik Asgeirsson – CEO of CPA.COM

Race Against the Machines?

Source: Frey & Osborne – The Future of Employment – Oxford University

74%Next gen leaders do not believe their organizations are encouraging practices

that foster innovation Source: Deloitte Millennial Survey

The Shift Change

1. Leadership!2. Learning!3. Technology!4. Generations!5. Workplace!

The!New!Big!Six!

Source: Gallup

www.blionline.org

No. 1Issue is People!

1.  Look!Beyond!the!Billable!Hour!2.  More!Focus!on!Career!

Development!3.  Engage!Us!in!your!Vision!and!

Purpose!4.  More!Coaching!and!Mentorship!5.  More!Frequent!Feedback!6.  More!Leadership!Development!7.  More!Transparency!8.  Thank!You!!9.  More!Collabora>on!10. More!Focus!on!the!Future!

Ten!Things!Young!Professionals!Want!You!to!Know!

www.blionline.org

The BLI Magnetic Firm Framework

Creating the Magnetic FirmPurpose Driven Great

LeadershipCulture

Of GrowthInspiring

Workplace

Vision, Purpose and Values based

Transparent and Inspirational Leadership

Learning Culture- Self and Formal Development

Flexible and Open Work Environment

Focus on Strengths and Positivity

Build Consensus and Commitment

Career & Growth Orientation – Career Paths

Work/Life Balance

Inclusive and Diverse Leadership Development at all levels

Customer focused Coaching and Feedback

High Performance – Insight to Action

Anticipatory and Proactive

Collaborative and Team based

Effective Technology Tools - mobile

The Six Steps of Talent & Leadership Development

1.  Talent & Leadership Strategy 2.  Competencies 3.  Career Path (Ladder) 4.  Curriculum & Content 5.  Compliance & Governance 6.  Communicate and Inspire

Geoffrey Moore: Innovation

“Any type of differentiation in your practice that drives

preference.”

Innovation is creating value in anticipation of future trends

& customer needs.

!10 Types of Innovation: Many

Options

Source: Ten Types of Innovation, Larry Keeley “Pragmatic Innovation” by Amy Radin at Digital CPA Conference 2015

7. Service how you service your customers

6. Product system extended system that surrounds an offering

Product performance

Offering Product system

Service

5. Product performance basic features, performance and functionality

Channel

Delivery Brand

Customer experience

10. Customer experience how you create an overall experience for customers

8. Channel how you connect your offerings to your customers

9. Brand how you express your offering’s benefit to customers

Core process

Process. Enabling process

3. Enabling process assembled capabilities

4. Core process proprietary processes that add value

Business model

Finance Networking

2. Networking enterprise’s structure/ value chain

1. Business model how the enterprise makes money

Inside-out Outside-in

!Combining Types: Strongest Path

Business model

Finance Networking

Channel

Delivery Brand

Customer experience

Core process

Process Enabling process

Product performance

Offering Product system

Service

Source: Ten Types of Innovation, Larry Keeley “Pragmatic Innovation” by Amy Radin at Digital CPA Conference 2015

Top ChallengesWe asked: What are you biggest challenges - Pick the top 5

Most Common Drivers of Innovation

1.  31% organizations with and “innovation culture”2.  17% have financial incentives for employees who innovate

successfully3.  15% distribute regular employee surveys that ask for

innovative ideas4.  13% have a clearly defined risk appetite that sets the

parameters for innovation5.  10% use “stage-gate” processes that help early-stage

innovations while limiting risk6.  5% participate in “crowd sourcing” through software or

social media

Recipe for Innovation

1. The right culture – collaborative and inclusive

2. Purpose-driven and visionary leadership

3. Continuous learning and improvement

4. Competencies and skills to support innovation

5. Tolerance for risk and failure

Tactics – How to jumpstart your innovation

Understand the hard trends•  Technology•  Demographics•  Regulations

Get an outside-in view of your organizationStart with the customer (not your product or services)Ask questions like ‘what is hard for you?’ Keep abreast of what other firms are doing

Build new competencies•  Anticipation and Identifying trends•  Comfortable with failure•  Collaboration

Set priorities12-18 monthsReview every 90 days

Top Skills Needed for Accounting and Finance Professionals

75% covered by these Top 5

Skills

Q: To what extent does each of these functions contribute to innovation at your organization?

Source: AICPA Business and Industry Economic Outlook Survey, 3Q 2013. - See more at: http://www.journalofaccountancy.com/news/2013/sep/20138692.html#sthash.vVK5v2vo.dpuf

“My Firm’s Innovation Priorities over the Next 12-18 Months”

32%

50%

38%

35%

2%

62%

46%

4%

41%

Implementing a cloud-based accounting solution.

Implementing a new offering for a specific market segment we believe has growth potential.

Updating current offering(s) to be more competitive.

Deciding and moving forward on what our innovation priorities should be.

Responding to a competitor who is outpacing us -- new entrant or existing player.

Developing new offerings that expand the value we provide to our existing clients.

Developing new offerings or approaches to the market that attract new clients.

Innovation is not a priority we plan to focus on in the next 12 to 18 months.

Realizing value to the firm from existing innovation investments.

Source: 2015 Innovation in Public Accounting Profession Survey, by CPA.com

Changing Landscape of Technology

“Up until about 10 years ago, Durkin said, accountants would identify needs and then buy technology to fill those needs.

Now, he said, technologies are being developed before accountants even identify needs.” –

Dennis Durkin, CPA, CFO

See more at: http://www.journalofaccountancy.com/news/2013/sep/20138692.html#sthash.vVK5v2vo.dpuf

“It’s a Templosion”“I like Tom Hood’s VUCA term to define the paradox. ‘Rapid, short-term change and long-term leadership ideas and goals simply don’t

mesh well.’”-  Hubert Glover,

Author: The Making of the Twenty-First-Century Leader

“It’s a VUCA world – Volatile, Uncertain, Complex, and Ambiguous … the answer to rapid changes and hyper-competition is a bold vision and core value’s; maintaining values that don’t change while constantly re-inventing the shorter term strategy.”

-  Tom Hood, CPA.CITP, President & CEO, Maryland CPA Society

DisintermediationRemoving the middleman -- a popular buzzword used to describe how Internet-based businesses are using cloud and mobile technologies to reach customers. These companies provide products and services cheaper and faster.

These technologies are revolutionizing the way products and services are bought and sold, and disintermediation is the driving force behind this revolution.

Clients and Innovation

Group ExerciseLet’s use Burrus’ hard trend framework

How can I give my customers the ability to do what they can't do but would want to -- if they knew it was

possible? – Daniel Burrus

Identify 3 Hard trends/Soft trends predictable problems/ opportunities for innovation

1. Developing new offerings that expand the value we provide to our existing clients

2.  Implementing a new offering for a specific market segment we believe has growth

3. Developing new offerings or approaches to the market that attract new clients

4. Realizing value to the firm from existing innovation investments

5. Updating current offerings to be more competitive6. Deciding and moving forward on what our innovation

priorities should be7.  Implementing a cloud-based accounting system

Top Innovation Priorities for ‘Early Majority’ Firms over the Next 12-18 Months*

*CPA.COM Innovation in Public Accounting Survey

Innovation Tools•  Business Model Canvas•  Anticipatory Organization to build skills

and create an innovative culture•  RONI - Risk of Not Investing

Tools: Business Model Canvas

•  An>cipa>on!•  Strategic!Thinking!•  External!Awareness!•  Vision!•  Con>nuous!Learning!•  Innova>on!•  Crea>vity!•  Problem!Solving!•  Priori>za>on!

•  Business!Acumen!•  Decisiveness!•  Influencing/Persuading!•  Emo>onal!Intelligence!•  Consensus!Building!•  Collabora>on!•  Inspira>on!•  Risk!Management!•  Communica>on!

http://www.blionline.org/ao

Disruption and RONI !The gap is widening, faster!

Source: Clayton Christensen, “Innovation Killers”

We think this is trade-off

“I am currently putting time and effort into building new ways to differentiate our practice to build client

preference, either for existing clients or to attract new clients”

54%38%

7% 1%

EARLY MAJORITY RESPONSESTo a great degree To some degree To a very limited degree To virtually no degree/ not at all

Source: 2015 Innovation in Public Accounting Profession Survey, by CPA.com

Closing Thoughts

When everything is changing it is important to know what should not change…

If there is a conversation about the future of the profession, you're bound to hear Hood's name mentioned as one of the people leading the way. – Accounting Today

Tom Hood, CPA, CITP, CGMA

CPA Practice Adviser Accounting Hall of Fame Named the Second Most Influential in Accounting by Accounting Today Magazine 2013 - 2015 Top 150 Influencer by Linked-In Top 25 Influencers in Learning & HR - HR Examiner Top 25 Public Accounting Thought Leaders - CPA Practice Adviser Co-founder of the Business Learning Institute

CEO Maryland Association of CPAs (MACPA) www.macpa.org Business Learning Institute (BLI) www.blionline.org

http://www.linkedin.com/in/tomhood/