CPA Success

Are you asking the right questions?

We don't need more answers, we need more powerful questions.

A recent FastCompany article featured the work of Bill O'Connor at Autodesk who set out to find the secret to innovation. He worked with a team of students from Hult International Business School and came up with these six questions:

1. What could I look at in a new way? (Steve Jobs looked at the computer in a new way, leading to the Mac and the personal computer revolution.)
2. What could I use in a new way? (Paleolithic humans turned fire from a scourge into a means of cooking, heat, light, and protection.)
3. What could I re-contextualize in space or time? (The Sumerians moved language from spoken to written form, expanding its power and reach.)
4. What could I connect in a new way? (Thomas Edison connected the light bulb to the electrical grid, leading to electrified cities.)
5. What could I change, in terms of design or performance? (Nearly 3 million years ago, the world’s first “innovator” transformed a simple rock into a stone hand-axe.)
6. What could I create that is truly new? (In 1776, American colonists created the first “intentional” nation, based on specific abstract principles.)

When you begin asking powerful questions, make sure you are focusing in inquiry and not advocacy or you will quickly shut off the creative and collaborative flow of ideas.

Turns out that innovation is not invention. Innovation involves a fresh look at what is versus the creation of something brand new, insights if you will. Our i2a:Insights to Action Strategic Thinking System is based on this premise and develops the ability to ask questions and facilitate collaboration. 

• Ten powerful questions for the CPA profession
• Eight questions for planning to grow in 2011
• The top five skills of Innovators

Here are a few titles for training your team on innovation from our Business Learning Institute (contact pam@bizlearning.net for more information).

Are you looking for answers or asking more questions?

Opinions diverge on the economy

Note: The following is a guest post from the MACPA's director of finance, Skip Falatko, CPA.

========

The Maryland Bankers Association held its fifth annual First Friday Economic Outlook Forum in Baltimore last month, where prominent economists and chief investment officers opined on the economy and markets.

It’s always an interesting event, but more so this year because of diverging opinions on which direction we’re going. I especially liked the fact there wasn’t much “on the one hand / on the other hand” economist-speak. They just put it out there.

This year’s panelists included:

• Jay Bryson, a global economist with Wells Fargo Securities, LLC
• Gregory Miller, chief economist with SunTrust Banks, Inc.  
• Jeffrey Schappe, CFA, chief investment officer with Sterling Capital Management/BB&T

 Moderating the panel was Anirban Basu of Sage Policy Group.

 First, let’s look at comments from last year’s panel and see how they stood up.

• Last year, the panelists predicted the range of 2011 unemployment to be around high 8 percent to 9 percent. Officially, we finished 2011 at 8.5 percent.

• Panelists predicted 2011 GDP to range from 2.9 percent to 4.5 percent. Actual 2011 GDP was 1.7 percent.

• BB&T’s Jeffrey Schappe was bullish on the 2011 stock market. The Dow finished up 5.5 percent, the S&P 500 was almost exactly flat, and NASDAQ was down 1.8 percent.

Here are the comments that stood out among this year’s panelists:

• Wells Fargo’s Jay Bryson expects more of the same economy we’re currently experiencing -- not necessarily a recession, but low growth. So, 2012 and 2013 will be a lot like 2010 and 2011. Europe is the biggest risk factor to our economy as Italy and Spain are too big to bail out.

• SunTrust’s Gregory Miller noted our problems are more than just housing. They are complex, have been a long time developing and will take years to work out. That being said, Miller anticipates 2012 GDP to be around 3.5 percent based on fewer negatives than in the recent past. These negatives include housing contraction and government intervention in the economy which he sees diminishing.

• Gregory Miller added that the real labor market issue is the decline in real wages which impacts 140 million Americans.

• BB&T’s Jeffrey Schappe was less optimistic, noting that people are too complacent about the economy. Schappe stated third quarter 2011 GDP was revised downward (twice) to 1.8 percent, industrial production contracted in November, much of Europe is in a recession, China is slowing down, and we have weak (0.21 percent) gross domestic income, which he sees as a better economic indicator than GDP. Schappe predicts a return to recession in 2012, albeit not as severe as in 2008.

So there you have it. Three divergent views of where we’re headed economically. 2012 will bring us anywhere from a recessionary negative GDP to 3.5 percent GDP growth. Given the weakness in the U.S. and world economies, I tend to be more pessimistic. I’ll predict 2012 GDP of 1.5 percent.

What do you think?

Learn. Share. Repeat.

My daughter had one of those "Why do I have to learn this stuff?" episodes on the way home from school recently.

Using, without a hint of irony, some of the math skills she's learned on the way to fourth grade, she said, "I can't believe I have to go to school for 12 more years!"

Partly because parents are required to say stuff like this but mostly because I believe it, I said, "If you do it right, sweetheart, you'll be learning new stuff for the rest of your life."

That's what I love about CPAs -- you get to learn for a living. Most of us struggle to carve out time to learn new stuff, but your designation -- your very careers -- depend on it.

How cool is that?

And yet I still hear instructors complain about folks who come to their CPE programs and hide behind newspapers or laptops for two or four or eight hours. "I don't really want to learn anything," these "students" are implying. "Just give me my hours."

Really? In a life this short, you're going to blow this opportunity to learn something new?

Given the rate of change and complexity these days, you could throw a digital dart at our online catalog and find a relevant technical topic you need to learn. Or ditch the technical stuff and brush up on some "success skills" -- leadership, sustainability, social media, change management, personal growth. There's plenty of that to be found through the Business Learning Institute.

Or forget about CPE for a while and learn something really radical -- like computer programming, or web development, or pretty much anything that MIT has to offer. Even places like iTunes U, TED and the Khan Academy offer fantastic education opportunities -- and they're all free.

Here's a great list of some other free educational opportunities floating around out there.

Look, I don't care what you do. Play guitar. Cook. Needlepoint. Map your family tree. Rewire your house. Create a blog and start writing for it every day. (Imagine that.)

Just learn something. Then learn something else. Then share it. Don't forget about that part -- share what you've learned with others. Help other people learn. (Social media is a great way of doing that, by the way.)

The point is this: Always be learning. Most everything else is a waste of our all-too-short lives.

New CGMA designation puts CPAs on a global pedestal

I don't know much, but I know this: Modern accounting goes way beyond the numbers.

Business today is global. The really good CPAs add context to the numbers, scan the horizon for weak signals of disruptive change, and help their organizations navigate an ever-changing world.

In short, CPAs and management accountants today are more than number-crunchers. They're strategic business partners.

Now, they have a designation that reflects that role.

The AICPA and the Chartered Institute of Management Accountants have launched their new Chartered Global Management Accountant (CGMA) designation, a title that emphasizes the strategic role management accountants play in their organizations.

The designation moves the spotlight away from the investment world's obsession with short-term financial results and places it squarely on long-term strategy. The CGMAs themselves will lead that conversation by helping companies "experience maximum integration between financial and non-financial information" and "make better informed decisions," AICPA President and CEO Barry Melancon said.

The designation also dovetails nicely with a couple of other important trends:

• CGMAs are emphasizing the human nature of modern business. An AICPA / CIMA report titled "Rebooting Business: Valuing the Human Dimension" says that "relationships with customers, employees, partners and communities ... will be key to getting things moving again and sustaining success over the long run." Now where have I heard that before? It's a people-first world, and the CGMA is built to thrive in it.


• CGMAs also focus relentlessly on transparency. Said CIMA Chief Executive Charles Tilley: "Global business leaders have to embrace and harness transparency if they're going to succeed in these changing times." I'm guessing XBRL, with its promise of data transparency and efficiency, will play a role in the CGMA world going forward.

But don't ask me. Ask a few of the world's first CGMAs:

MACPA Executive Director Tom Hood: "The CGMA puts an exclamation mark on the CPA license for those of us in business and industry. It recognizes the broad set of skills required by a management accountant in today's rapidly changing and increasingly complex world."

Joselin Martin, an MACPA board member and financial manager with Hayles and Howe, Inc.: "The CGMA credential tells users -– both internal and external -- that I have the skill and experience to translate business data into strategic insights that are future-based, accessible and understandable. It is the perfect complement to my CPA to position myself as the trusted source of strategic financial information in my company."

MACPA Director of Finance Skip Falatko: "The CGMA credential will help me, as an industry CPA, deal with an increasingly complex world by broadening my skills in strategy, leadership, and communication. In short, it will help me connect the dots -- not all of which are financial -- inside and outside my organization.”

The AICPA and CIMA are offering a ton of resources to examine the new designation in detail. They include the following:

• The official CGMA website
• Creating a new worldwide designation to meet the challenges of global business: A Q&A with Barry Melancon and Charles Tilley
• FAQs about the CGMA
• How to qualify
• Why CGMA?
• Benefits of becoming a CGMA
• What is management accounting?

New skills for a new designation: BLI's got 'em
In launching the CGMA designation, officials emphasized the new "success skills" that are critical for sustainable success. They including things like leadership, change management, strategy and ethics, and they're at the center of the MACPA's Business Learning Institute.

"These skills are based on the research from the CPA Vision 2011 Project and were recently refreshed and renewed through the CPA Horizons 2025 Project," said Hood. "We at the Maryland Association of CPAs are ready to help our CPA.CGMA members succeed in the new economy."

Learn more about what BLI has to offer here.

There's no ROI in social media. Now start socializing.

Social media ROI has taken on urban legend status. It's like Bigfoot: Every now and then you hear about a sighting, but mostly, it's just a myth.

I think it's time to bury it once and for all.

Michelle Golden wrote a brilliant blog post recently in which she said the whiners who complain that they're not getting any return on their social media investment simply aren't doing it right.

"How have they been using social media?" Michelle asks. "Did they define their purpose? Specify goals? Once that was done, did they use the right tools? In the right way? With the right groups or people? And for how long? Did they track the right success metrics? ... Social media isn't the problem. Lack of planning and spotty execution are the problems."

I'll take it a step further. The whiners themselves are the problems.

In "Linchpin," Seth Godin puts forth a pretty radical idea: Generosity generates income.

Godin believes in giving stuff away -– giving away our knowledge, our resources, adding value to other people’s lives and not expecting anything in return. That’s how we become indispensable.

Pretty radical idea. It flies in the face of everything that capitalism stands for, right? The classic business model that we've all grown up with was all about product and profit. Make something and sell it for more. People were merely cogs in the production machine.

Here’s the thing, though: That business model? It’s dying. It’s been dying for probably five years. The rules have changed. We’re living in an era in which people are at the center of everything we do. Tom Hood likes to say we’ve moved away from an era of command-and-control to one of communicate-and-collaborate, of building communities and relationships. That takes people, trust, and a commitment to serving others, not just making money. People first.

Back to the concept of giving stuff away. Godin says there are three "circles" of gift-giving.

• The first is a circle of true gifts -– stuff we willingly share with friends, family and co-workers. You invite a friend over and give her a meal. You don’t charge her for it.


• The second is a circle of commerce. People in this circle willingly pay us for what we produce –- our consulting services, our financial advice, the books we write, the widgets we make.


• Now, the Internet has given us a third circle, and it’s kind of a combination of the first two. It consists of people who might one day pay you for what you do, but first they need to know you and trust you and be comfortable interacting with you.

Social media is part of that third circle. It's a place where we give away stuff, share what we know, add value to people’s lives. It's where we build trust, credibility, and relationships.

Do that, and you stand a decent chance of moving your followers into that all-important second circle. Fail to do that, and you're a relic in a changing world.

And still, the social media naysayers spout their nonsense: “Where’s the ROI? How come we’re not making any money on this stuff? I’ve been on Twitter for a week and nobody’s bought anything yet.”

There is no ROI in Twitter, or blogs, or Facebook. Not if you do it right. Those things are simply the tools we use to build relationships in a social world.

What's the ROI of social media? As Michelle Golden says, that's like asking, "What's the ROI of my phone?"

The ROI isn't in the tools. It's in the relationships you build through the use of those tools.

The irony is, the more we give away, the more we’ll make in return.

That’s today's business model. In a people-first world, maybe our organizations need to become more human.

Top eight challenges facing finance executives

Our friends over at Financial Executives International recently shared this list from FEI's CEO, Marie Hollein. 

1. Controlling the U.S. deficit
2. Tax reform
3. Health care uncertainty
4. Dodd-Frank Act implementation and revision
5. Employer-provided retirement plans
6. XBRL
7. Convergence of U.S. GAAP and IFRS
8. Private company accounting

Last August, the MACPA had a group of CFOs and controllers in for a roundtable on what was keeping them up at night and came up with this list:

1. Communicating effectively (new tools vs. face-to-face)
2. Talent / training / succession planning
3. Economic environment
4. Generational / work-life balance
5. Supply chain / rising costs
6. Strategic planning in uncertainty
7. Financial literacy about business
8. Increasing government regulations
9. IT security / privacy
10. Multi-tasking and increasing workload

Then there's the latest top trends to watch in 2012 from the CPA Horizons Future Forum process. And here are the lists from 2009 and 2008 from our CFO roundtables.

What I find interesting is that the current list from FEI is focused purely on the business finance and economics issues, whereas our group of CFOs (and the CPA Horizons 2025 research) included much more of the general business, talent, and leadership issues. 

We have been gathering resources for CPAs in the form of training, articles, and podcasts to help them deal with these major issues. Here is a page with each major future trends and links to resources. We also have plenty of programs available for almost all of these topics, either in our conferences and public seminars or available to your firm or organization through our Customized Learning Team. 

Here is our "future trends" resource center. Click on each trend link to see all of our resources for you.

The other interesting insight I take away from all of this is the change from 2009 (in the thick of the recession) from the other years. Three of the seven issues -- layoffs, capital spending cuts, and access to credit) -- have disappeared. Does that mean we are seeing bright posts on the horizon?

Here are upcoming events just for our Business & Industry members:

• Don't miss our special town hall / professional issues update for our business and industry members on March 21 in Timonium (free to MACPA members). Register here.
• Our Business and Industry Conference will be held on April 20 at Turf Valley in Ellicott City. Register here.
• The MACPA's CPA Summit features lots of programming around these big issues. It will be held on June 12 at the BWI Hilton in Linthicum, Md. Get details here.
• Leadership development with our 2012 Leadership Academy is scheduled for May 7-9.

What do you think? Are the big issues of leadership, generations, talent, and communication bigger than the more technical economic issues and why or why not? 

See the top 5 skills of the post-recession leader.

I learned all I need to know in 4th grade basketball

My daughter is playing 4th grade basketball this year. It's her first foray into team sports, and she's learning all of the really important stuff -- how to dribble with one hand, the virtues of boxing out, the bizarre randomness of the 3-Second Rule. This is a girl who won't watch anything on TV that doesn't involve teen rock stars, and I actually caught her paying attention to a Mizzou basketball game the other day.

Here's the deal, though, and I mean this: Some of life's most important lessons are being taught to 4th grade girls' basketball players.

• This game's not about you. There are a bunch of other folks who have a stake in this thing, too. Work together and you can perform miracles. Work alone, and you'll die.


• Learn the fundamentals. Dunks and no-look assists might land you on SportsCenter, but you won't get there unless you learn how to dribble and pass first.


• Improvise. We all have set plays that we like to run. Our opponents want to stop us. Sometimes we have to ditch the game plan and try something else. Don't be afraid to do that. Life is all about rolling with the punches.


• Be aggressive. You won't get what you want by sitting around watching someone else drive to the hoop. Go after the ball. Give and go. Set the tempo, or it will get set for you.


• Cheer on your teammates. A little encouragement goes a long way. This is a team, after all: When one of us wins, we all win, right?


• Be a good winner ... and a good loser. A few nice-games and way-to-go's will go a long way. You're going to be on the other side of every result eventually. How you react in every situation will define you.

Finally -- and I can't stress this enough -- plant that pivot foot. I don't care if you are in 4th grade. I will call you for traveling.

What am I missing? What's the best lesson you learned in grade-school team sports?

Social media's promise: Be nice, or pay a price

The problem with social media isn't loss of control, or the ROI mystery, or privacy, or time management.

The real problem is this: In a social world, you can't fake it.

Humorist Dave Barry puts it this way: "A person who is nice to you but rude to the waiter is not a nice person."

In other words, if you're combative by nature, your true colors tend to shine through sooner or later.

Thanks to social media, we're learning that lesson over and over and over. Cooks Source. United Breaks Guitars. Kenneth Cole. Chrysler. Ashton Kutcher. People continue to speak without thinking ... without realizing that, in today's world, everything you say is on the record and open for debate.

Paul Christoforo is the latest example. The magnitude of his social media mistake is seemingly surpassed only by his own ego. Anyone who believes the crowd should cut him some slack because "ultimately I’m not a bad guy" doesn't understand the world we're living in.

You're not a bad guy? Prove it by treating your customers -- all of your customers -- with dignity and respect. Telling an impatient customer to "put on your big boy hat and wait it out like everyone else" is a recipe for disaster in today's social world. Christoforo is learning that the hard way.

What's the lesson here? Simple. Be nice. All the time. To everyone.

And what's wrong with that? As lessons go, you can do a whole lot worse.

Data (and XBRL) is the new plastics

Remember the Simon & Garfunkel song "Mrs. Robinson" from the movie, "The Graduate?"

It follows the story of recent college grad Benjamin Braddock, who was trying to figure out what he wants to do with his life. He then gets seduced by an older woman, Mrs. Robinson, only to fall in love with her daughter. It is a classic '60s comedy featuring some great performances. 

If you were rewriting the movie script for "The Graduate," you could change the scene where the guy walks up to Benjamin Braddock (Dustin Hoffman as the young graduate) to give him career advice from "Plastics ... enough said" to "Data ... enough said!"

That is structured and standardized data, the kind that XBRL Global Ledger creates. Combine standardized data with data visualization tools that help make sense of the data and you can see why data is the new plastics!

Actually, the full "Graduate" reference is from Steve King's post, Data is the new Plastics, over at Small Business Labs, and I couldn't agree with him more. Steve is the futurist who helped Intuit examine the future in its 2020 report. (He also attended the CPA Horizons 2025 future forum in San Francisco last spring.) Here is what Steve said in his post:

"Last week we held a workshop on data and analytics with our research partners at Intuit.  We had a mix of experts on data and analytics from both large and small organizations. 

There was a very clear consensus that there is a shortage of people with data and analytical skills  -- and this shortage is going to get worse and last a long time."

Data ... enough said!

Once again, the research from Intuit and Steve King is spot-on with the research from the CPA Horizons 2025 report, which identified technology (XBRL, transparency, the cloud and social technologies) as the biggest driver of change (and opportunity) for CPAs in the future. Check out these three key insights from the Horizon's report:

"The way CPAs report and analyze financial information will be changed because of changes in technology."

"Technology is going to drive financial reporting to be faster, even to the point of being real time."

"The profession will need to adopt and become a leader in effectively using new technology."

Then there is our own experience with data. We used XBRL GLobal Ledger to tag all of our transactions from several systems to create drill-down financial statements and automatically generate our KPI analysis. See our case study and the presentation to the XBRL US Conference. You can also follow all of our posts about XBRL here.

See our earlier blog post, Dy-no-mite opportunity for CPAs. 

The writing is clearly on the wall. Data is the new plastics for CPAs.

Wanted: CPAs who understand technology and have data and analytical skills. 

What do you think? Is data is the new plastics?

Here's to you, Mrs. Robinson ...

The top 10 trends to watch in 2012

The top 10 trends to watch for 2012 (and the time to address is now), according to 1,200 CPAs in future forums around the United States, are:

1. Changing demographics: Aging workforce, diversity, four generations in the workplace
2. Increased globalization, economic shifts and increasing competition
3. The technological revolution: Cloud, social, big data and XBRL
4. Issues around information security, privacy and data integrity
5. Shift to consumer and employee power (from push to pull)
6. Changes in the way we communicate: Mobile, text, Skype
7. Work-life challenges or conflict: "Do more with less," 24/7 work
8. Information overload: Filter failure
9. Increasing complexity of rules and standards (IFRS, GAAP, PCAOB, SEC)
10. Economic uncertainty: Deficit, debt and pressure on government

See the 10 key insights from the CPA Horizons 2025 report here.

Speaking of crowdsourcing the future, see the views of leadership in the future by our young professionals from MACPA's Leadership Academy.

We have been gathering resources and programs to help CPAs and businesses and have them organized by trend topic here. (Dlick on the trends to see blog posts, podcasts, articles, and courses.)

What do you think is the most important trend to address in 2012? 

More resources about the future:

• MACPA's complete report from 14 future forums in Maryland here.
• CPA Horizons 2025 Project from the AICPA.
• View the AICPA's research about the world in 2025 here.