Discipline makes Daring possible.

Musings on people, process and responsible autonomy for small-business employers.

Category: The future of accountancy

Big questions for accountants
February 12, 2021

Big questions for accountants

I like to ask big questions of accountants in my podcast.

Professor Richard Murphy has some interesting answers.

This video of his proposes a new way of financial reporting for ‘public interest entities’ – the big corporates we all depend on for infrastructure, food supply etc., that looks at the interest of all stakeholders, not just shareholders.

I think reporting this way, even if you aren’t legally required to, could give a real advantage to some smaller, more forward-thinking businesses. 

If they dared to take it.

I’d love to know what you think, especially if you’re an accountant.

PS Professor Murphy has an even more interesting vision for audit.

No one else is doing it
October 7, 2020

No one else is doing it

Of course ‘Nobody else is doing it‘, is really an observation about risk, not isolation.   Most of us don’t like to go first, for fear of looking stupid.   Unlike my beloved, who, faced with a marquee-full of Cornish pasties and cream teas at the grand opening of the Eden Project, boldly stepped forwards with the words “My mum would expect it of me” – and broke the ice for everyone else, hesitating hungrily on the periphery.

So the real answer to ‘Nobody else is doing it‘ is ‘What’s the worst that can happen?‘.   The best that can happen is that you get results that the waiting others couldn’t dream of, and you get them first.

If you do what everyone else does, you’ll get what everyone else gets, maybe less.   Provided the downside isn’t too damaging, it’s worth taking the leap.   Then the very best that can happen is that you break the ice for the others, and everyone benefits from your lead.

 

Instrumental
September 8, 2020

Instrumental

“The product you make is not your website, it’s not the travel, its not even the delightful experiences, the product is the organisation that brings stakeholders together to produce those outcomes.”  Eric Reis to Airbnb’s Brian Chesky.

“In a humanocracy, the organization is the instrument – it’s the vehicle human beings use to better their lives and the lives of those they serve.” Gary Hamel and Michele Zanini in “Humanocracy”.

If all organisations are instruments, tools for making and shaping people and things, you have to ask:

“What kind of things does my business shape?” and “What kind of people does my business make?”.

The answer might seem obvious, but I’m not sure the obvious answer is always the ‘real’ one.   Especially for business-to-business firms and professional services.   The ‘real’ answer for you will be driven by your view of the world, but I think it’s worth exploring, because it opens up a different way of thinking about what a business is for.

For example, does an accounting practice make sets of accounts? Or does it make businesses?  And in the process, does it help shape the people who work for it and with it?

I don’t know, but I can help you find out.

Flywheels
June 30, 2020

Flywheels

If you’ve ever started up a spin bike, you know about flywheels.

They take a lot of effort to get going, but once they’re off, the energy you put in is released, making it much easier to keep momentum going for longer.

That’s a pretty good metaphor for building a system for making and keeping promises.   It takes effort to get up and running, but once it is, it can keep going almost forever.

Long after you’ve jumped off the bike.

Writer’s block
March 26, 2020

Writer’s block

Like many people, I guess, I’m finding it harder to write every day during this crisis.    Who wants to listen to me?  What have I got to say that is worth saying?  I’m not famous.  I’m not powerful.  I don’t feel relevant.

But.

I can read, and learn and think, and listen.  And I can pass on stuff I think will help.

So here are 3 things I learned this morning that I think are worth sharing:

  1. Out on my early morning walk, more people said ‘good morning’, ‘hello’ or ‘thank you’ than I’ve ever had before.  We said these things at least 2 metres apart, but we said them.   Keeping our physical distance has given us an excuse to really see each other.  I hope we can keep this politeness up.   It feels good.
  2. Richard Murphy shared this article today, from Tomas Pueyo on Government’s options for dealing with coronavirus.   It is well worth a read.   Science is always good.
  3. Richard Murphy also shared his own AccountingWEB article today, on looking to the future.   I’m going to quote the last 2 paragraphs here, because I think he’s right, we have to start thinking about this stuff now:

“Reaction five: Recovery

But the fifth, and crucial stage, is the one we need to already anticipate, however, overwhelmed we now feel. This will be the recovery stage, and although that might seem a long way off at present (and the wait may well seem interminable) it will happen. When it does, there will be at least as many problems as there or now, and in the immediate months to come. These need to be planned for, and good accountants will be doing that very soon.

Picking up a mothballed business and returning it to a thriving state is not easy. It demands a lot of working capital. Many businesses will have almost none. As a result, all the usual problems from overtrading will rear their ugly heads remarkably quickly when the recovery begins, and those businesses that might have made it through the immediate crisis might then discover that they cannot make it to the end of the year unless they begin to plan now.

Planning for the future

Many of us are facing enforced time at home, with too much Netflix for company. My suggestion is that anyone with responsibility for a business should use at least some of this time to think about their plans to reopening their activities when this crisis is over. 

Deciding what goods, services, outlets and staff are key to that process, and working out how to phase the returns to normal is critical to survival. In particular, new product mixes, ways of delivery, supply chains and customer interactions all need to be thought about if success is to be likely. 

This is not the time to sit and do nothing if businesses are to survive. There’s a massive amount to do. And now is the time to do it.”

So that gives me my theme for the next few weeks or months.   How to use the unsettlement of the current crisis to think differently about how we do things, and lay the foundations for a more secure, sustainable and profitable future business.

Phew!  I can feel useful again.

 

PS Seth Godin is right.   There is no such thing as writer’s block.  You just have to write.

Growth
February 10, 2020

Growth

For the last 260 years or so we’ve behaved as if we live in a world of infinite physical resources.  We don’t, obviously.

But that doesn’t necessarily mean a ‘no-growth’ future.  It just means finding a different, less damaging kind of growth.

If the things people really want, beyond food, shelter and family are agency, mastery, autonomy, purpose and community – personal growth and development – then we will never run out of opportunities to grow these things, just as we will never run out of opportunities to ensure everyone is fed, sheltered and cared for properly.

Plenty of scope for human ingenuity I would have thought.

Externalities
February 7, 2020

Externalities

Wikipedia tells me that “an externality is a cost or benefit that affects a third party who did not choose to incur that cost or benefit.”

If I have a flu jab, to protect myself from flu.  I decrease the chances of the people around me catching flu.  That’s a benefit.

If I go to work full of cold, I increase the chances of my colleagues getting a cold, that’s a cost.  If I stay at home, that’s a benefit.

The point about externalities is that they aren’t measured.  They are literally not accounted for in a business.   We metaphorically shrug our shoulders and say “Not my problem.  I’m just trying to make a profit.”

Yet the consequences don’t go away, just because we ignore them.    If I go to work with a cold, and my colleagues catch it, everyone’s productivity is lowered.

We live in a series of systems, and ultimately a closed system – planet Earth, and sooner or later the consequences will come back to bite us.

Time then to take responsibility for all the results of our actions, not just those we choose to see.

Climate change needs to be on the balance sheet.

More than skin deep
January 28, 2020

More than skin deep

Professor Richard Murphy has sparked controversy (again) this morning with his AccountingWEB article: Do you recognise your own accounts?

In it he suggests that companies of all sizes consider their published accounts as part of their marketing, and own them in the same way they would any other part of their marketing collateral.

I agree.  Your promise isn’t just superficial fluff, it’s the essence of who you are and the change you seek to make in the world.   It should be reflected in everything you do, even the parts many people don’t see.

How you do one thing is how you do everything.  Dissonance undermines trust.

Asking for help
September 25, 2019

Asking for help

We’re not trained to ask for help.   We’re meant to be knowledgeable enough and competent enough to manage everything ourselves.   We like to present as swans, serene on top, paddling madly underneath.

Independence is overrated.

Sometimes the quickest and best solution is to ask for help.   And your accountant can be a good place to start.