If there is one thing that sticks out from last year, it is the exponential pace of change happening all around us. Every time I talk to CPAs, accounting and finance professionals, they believe it is unlikely to slow down, in fact most agree it is more likely to speed up. Of course the No. 1 driver for this is the exponential and accelerating hard trends of technology. These trends have also been the No. 1 driver of change in the accounting and finance profession since the first CPA Vision Project in 1999 and I say, 'we ain't seen nothin' yet' as I look at 2018.
Just look at the big sellers this holiday season - Amazon's Alexa and Echo Dot, Google's Home, personal drones, smart TVs, home security systems, fitness trackers, virtual reality headsets, cleaning robots, and all of these are connected to and controlled by your smartphone - that supercomputer in your pocket! While these are more on the consumer side, they are fast playing a role in our professional and business lives and changing the very nature of work itself. That is the starting point for my predictions for 2018.
Prediction 1: Digital Transformation will be playing at a theater near you.
A recent MIT and Bersin by Deloitte study of business leaders found that 90 percent of their companies believe their core business is threatened by new digital competitors. And 70% of those executives believe that they don't have the right leadership, skills, or business models to adapt. In the accounting and finance profession, there is the now infamous Oxford study that puts our profession on the obsolescence path in nineteen years and the proliferation of AI (Artificial Intelligence) in auditing and beyond. The RONI (risk of not investing) in a digital strategy are increasing dramatically due to the accelerating pace of technology and disruption.
Prediction 2: Purpose will become mainstream, even in accounting firms.
Simon Sinek said it well in his book, Start with Why, "profit is a result, not a purpose." The latest research on Millennials (now over half the workforce) shows that two-thirds of them choose their employer based on its purpose. I know of plenty accounting firms large and small discovering and leveraging their purpose to build strong cultures. See the HBR article, How an Accounting Firm Convinced Its Employees They Could Change the World. Purpose increases employee engagement and is a foundational part of your culture and will become more and more important in 2018 and beyond.
Prediction 3: Culture will be more important than strategy.
I was tempted to repeat the mantra, 'culture eats strategy for breakfast' but instead will repeat MIT professor, Edgar Schein who wrote 'culture determines and limits strategy' in his book, Organizational Culture and Leadership published in 1985. Culture is increasing in urgency as organizations adapt and transform their businesses in response to the disruptive forces in the market. Research shows 86 percent of business leaders rate 'culture' as one of their top talent issues. Our own research on accounting and finance organizations show average scores of 67 percent on our magnetic firm framework - a barely passing grade of 'D' which means there is a lot of room for improvement. 2018 will be the year to define and communicate your culture.
Prediction 4: Episodic strategic planning will die.
The days of the five and ten year episodic strategic planning sessions are rapidly disappearing and new agile strategic planning processes are quickly becoming the norm. Organizations can no longer keep a static strategy in place as Columbia Business School professor, Rita McGrath writes in The End of Competitive Advantage'. Instead we must create 'future ready' organizations through a constant strategic planning process where we are anticipating future trends and customer needs by being aware, predictive and adaptive to the changing marketplace. Strategy as a continuous process will be critical in 2018 and the years ahead.
Prediction 5: Talent (strategy and development) will be a source of competitive advantage.
You are only as good as your people. Period. Talent strategy, learning and development will rise to the top of the agenda due to the accelerating war for talent. With 10,000 Baby Boomers retiring daily and Gen X at about half the size of the Baby Boom generation, the talent shortage is expected to peak in the next five to seven years. The winners will be those who are investing and re-skilling their talent with the right skills for the future. Those that do will be readers with increased retention, loyalty and engagement as learning and de elopement continue to be one of the most valuable benefits for Millennials.
In a world of rapid change and increasing complexity, the winners will be those who can keep their L>C. That is their rate of learning must be greater than the rate of change and greater than the rate of their competition." - Tom Hood
See my post, The Top 5 Ways Learning is Transforming. My advice is to create a talent strategy based on your strategic plan starting this year.
Prediction 6: Cloud technology will pass its tipping point.
You cannot read any news article today without mention of the 'cloud', yet many accounting and finance organizations are still stuck in on-premise legacy network systems. Add to this the pressure on organizations to adopt their businesses to serve a 24/7 mobile customer base and it is only a matter of time before legacy accounting has to make the leap. Last year I heard Oracle announce that they predicted all enterprise ERP systems will be in the cloud by 2025. The SMB (Small to Mid-size Business) market is full of cloud accounting packages (Intacct, Xero, Intuit and many more) complete with full ecosystems of 'apps" to move your organization to the cloud. In the CPA Firm world, cloud accounting services and CFO advisory services are the fastest growing service line. If you need help, reach out to your CPA firm. I predict that in 2018 many more accounting professionals will actually not just move to the cloud but lead business transformation projects using the cloud (See post- Are You leading the Transformation of Finance and Accounting?)
Prediction 7: The collaboration curve will begin to replace the experience curve.
You remember the experience curve, right? In today's fast economy, the shelf life of a college degree is down to three years (as of 2014) and recent research shows that 75 percent of college grads thought their expertise in their fields was "rapidly becoming outdated." Given the hard trends of proliferating standards and regulations, tax laws and global business complexity - how do you keep up? The answer lies in your network, at work and beyond, provided you have strong collaboration skills. I first came across the term, 'collaboration curve' from the book, The Power of Pull - How small moves smartly made can set big things in motion by John Hagel III, John Seely Brown and Lang Davison. I got to experience this first hand with two profession-wide visioning projects - CPA Vision 2011 and CPA Horizons 2025 that used the 'collaboration curve' to crowd source a vision for the CPA Profession across several thousand CPAs and stakeholders. We are now teaching this powerful technique and using it to design collaborative strategic planning processes (See Prediction 4).
Prediction 8: Engagement will replace retention as the top talent challenge.
The Gallup organization reports that only 32 percent of employees are engaged at work. Another 25 percent are actively disengaged. On top of this, Josh Bersin of Bersin by Deloitte, proclaimed 201 as the year of the 'overwhelmed employee' due to the overload of emails, texts, distractions, and intense pressures to do more with less. Our own surveys of CPA firms and finance and accounting teams showed employee engagement to have quickly risen to one of the top five challenges in one quick year. The means you have an untapped energy source if you focus on engagement this year. All of the research points to increased performance, higher retention and job satisfaction scores for those who can move the needle on this goldmine. Furthermore, purpose, collaborate and learning are all tools to help with your engagement efforts.
Prediction 9: You can predict the future.
This past two years we spent working with Daniel Burrus, best selling author of Flash Foresight: How to see the invisible and do the impossible to help us lead the profession in becoming #futureready and capable of leading in these turbulent times. Dan quickly convinced us we can learn how to anticipate the future and be much more proactive by using The Anticipatory Organization™: Accounting and Finance Edition. This innovative learning system is being used to elevate and accelerate firms and accounting teams to systematically learn how to be proactive and spend more time on being opportunity managers than crisis managers. The results so far, are impressive, as it creates the right future-focused mindsets, has a robust toolset, and builds skillsets in a bunch of critical skills needed for today.
Prediction 10: If you ignore these predictions, you will have predictable problems.
Almost all of these predictions are based on 'hard trends' or future facts around technology, demographics and increasing standards and regulations. Dan Burrus would say that ignoring a hard trend will create predictable problems like being disrupted by competition, rising turnover rates, employe burnout, customer attrition and more. The answer lies in identifying the critical hard trends and finding opportunities to address and even harness them. The question you should be asking is what is the cost of NOT addressing them or your RONI - The Risk of Not Investing.
Let me know your thoughts and what I missed. Wishing you a wonderful, prosperous and happy 2018.