Accounting Innovation: It's not an oxymoron - Part 2
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Ed Kless: [00:00:31] The following podcast was recorded live at Seyed summit 20:17 in Atlanta. It is part two of the series Part 1 episode 1:43 aired first on May 19th 2017. Enjoy.
Ronald Reagan: [00:00:46] Like a chrysalis. We're emerging from the economy of the industrial revolution. An economy consigned to and limited by the Earth's physical resources. Into the economy in mind. In which there are no bones on human imagination and the freedom to create is the most precious natural resource.
Ed Kless: [00:01:18] Well to the soul enterprise business. The knowledge economy sponsored by.
Ed Kless: [00:01:24] Energizing business builders around the world for the imagination of our people and the power of technology. At class with my friend and co-host Ron Baker. And on today's show counting innovation it's not an oxymoron.
Ed Kless: [00:01:39] Tom I just want to give you an opportunity to weigh in on this whole management innovation thought.
Tom Hood: [00:01:45] As you said. So we have a young professional group that found all these problems with remote working which is kind of symptomatic of what's creating bad cultures in some of the firms and the the kind of big aha was you know the remote working culture is the culture of the future. And so if we actually could figure that out which has to do with collaboration has to do with accountability. I mean really. Yes. You know Dan Pink the book Dr. autonomy mastery and purpose. I think the innovation and it's not really an innovation but it is a real kind of resetting of way things are instead of the old let's have all these detailed strategy and levels of jobs and all that. It's more about trading the purpose the compelling purpose for the business. What are you really trying to do what you're why and then be getting this set and rebind cascade down in terms of what they do with their roles are what their accountability is. And I think as you guys said it then they can be accountable for themselves. But you've got to have transparency and systems that support that.
Ed Kless: [00:02:46] Great. All right. Three rules for questions. Three rules for questions. Number one you must state your name and your company name and then the third rule is that you must ask a question. It's. All right if you must ask a question. All right so go ahead.
Questioner: [00:03:03] And stand for Lano and the companies educate America Inc. And I get into the business. When computers were just being thrown on top of desks and you know people were complaining about cost and $3000 for computer $300 for software spent a lot of money into this and it has a lot of fighting and I had to do that and through the years I haven't had problems going in place of new technology in the way we do business. You know I became a consultant that's what my business became called educate America was because I became a consulting firm more of an accountant. I tried to create it. And as time goes on and he's now software is cost $3000 and it cost $300 a reversed. But I continue to struggle find ways to price you know you hear about OK well you can do this packaged up this way and choice this much. We're you know taxying charge per form or charge per hour and can you imagine doing it by our I mean I remember you know when we used to do it keep track of my time we had to keep track of the mailing and when he came out with timekeepers. But I'm really struggling and you kind of touched on it. He asked about pricing and everything and he keeps change and I think that's I'm strongly and does anybody have any solutions to keep up with it. Yeah.
Ed Kless: [00:04:16] Okay so we just had the value pricing questions everybody sit back grab a cocktail ready to rock n roll and that's OK. But actually let's do the panel first. Jody Why don't you talk a little bit about what you do and then Ronnell let you talk.
Jody Padar: [00:04:30] I think. The biggest thing is you just have to like buying into the methodology to start like you kind of have to to just try it because I think everyone puts up all these barriers as to why it's not going to work. And then they don't try it and it's something that you learn over time. It doesn't happen overnight. And then like you can listen to the experts and have them tell you all the detail of it. But I think the biggest thing is to say you know what I'm going to not keep time. And I'm not going up price for time and I going to go down the value pricing way. And believe it. And then you can develop your own your own way or your own way to get there. But I think the hardest part is just buying into the fact that you need to change the way you price.
Ron Baker: [00:05:20] And I'll just won't make this long. So look we I promise we've done shows on it that you can listen in the soul of enterprise.
[00:05:27] There's a lot of information at VeraSage.com on this but just think about this a service that's needed is worth more than a service that's been delivered. Is that true? That's true everyone. So what should we be pricing before the engagement. So a fixed price even if it's just a solo X Prize given to the client before you do the work is always going to be superior to billing them in arrears. The reason we write down and write off as a profession and this across the board in any size firm up to the Big Four around the world is because we find out that the client doesn't like your price after you've done the work.
[00:06:08] I rather have you find out that they don't like your price before you do the work because maybe there are some things you can do like change the scope or find another way or to achieve their objective. So always give a fixed price and if you do that then you just go on and you do the work. Your pricing will get better. It's a skill. It's like golf or tennis. The more you do it the better you're going to get. And when you get really good at it once you've had a few wins you can start offering options a green card Gold Card platinum card and that's when you can really drive profitability. It's also by the way a better customer experience and I think that's part of innovation as well as creating a better customer experience. When we buy something as a human we want to know the price. I didn't fly out here on United.
[00:06:53] A bloody good airline. And and get charged four bucks a minute. It's not going to happen.
[00:07:00] In fact I pay the airfare months ago. Right. So they gave me a price we can do the same thing and million. Thousands of firms that said millions thousands of firms are you just got to dive in. I'm happy to have a chat with you or if you give me your business card send you more resources.
[00:07:17] I got tons of resources webinars book even in the book district go through this step by step. up front here.
Questioner: [00:07:25] Hey my name is Bjorn. I am just recently joined the sage family where I am a startup I got a quiet kind of. IBM Watson for SMB. So we've been building. A self driving business engine for small medium sized business particularly in e-commerce and businesses. And so one of the areas that we're looking you know to work together with our conference is to empower them to deliver more value add services. And I'm curious to hear from you what do you see as sort of the big areas where icons like to make money in the future.
Ed Kless: [00:08:06] Okay I'm going to start us up.
Tom Hood: [00:08:09] So we work with a whole bunch of CPA as we're in business as an industry. So not practicing right. And we just did a big town hall with them and you know over two thirds of them are feeling like their businesses are going through disruption. So just like we're seeing our time of disruption for the accounting profession almost every business small or not is feeling disruption. So I think that the value add is for space who can help anticipate look out into the future and help those clients think about their business differently now what clients have trouble is they don't understand the language of business which is what accounting really is. So I think our problem has been we've been kind of. Servants to getting the numbers in and right and that's where we spend all of our time instead of thinking about what the numbers mean to the future. So I think anything we can be doing this kind of look at how we could predict things are managed in different parts of our business. BI again looking ahead visualization storytelling making sense of all the crazy numbers that you see so that clients can make better decisions REITs all about making decisions that have an impact.
Questioner: [00:09:15] To that we're technically doing that right so we're essentially automating a lot of that kind of work right so we deliver answers like we say you should. And you know had a subscription model. As an e-commerce merchant then to increase your profitability by 120 percent. Right. So we're very specific and prescriptive from the office that we generate in and. I mean I can see that the accountants can be helpful in actually executing on those changes. Right. But I think a lot of the visualizations that so the basic analysis like those are the kind of things that actually will be automated as well.
Tom Hood: [00:09:59] So correct but your but I think the so I would say it's the domain expertise of the account I give you if you know that industry really well and you can relate it to other groups of other businesses that you've seen and the trust component so when that computer spits out says you need to convert your model to a subscription model. Right no matter how pre-scripted that is the client's probably going to want someone that's a human to go. I've seen that work by this and I've seen it not work in that way and maybe you better watch for that just like just like that guy saying about value pricing right. He was he could have told him to do value pricing but he was a listen to Ron and Jody go well here's how you do it. And here's the practical real life application that's I think to me that's where it is. But it has to be that deep domain expertise that the computer will be able to do instantly. Now maybe in five years it will but that's about my perspective.
Ed Kless: [00:10:50] Give it going to go on here on this. Any additional services you want to weigh in on this question. So get out.
Gail Perry: [00:10:57] I'd say other than for the accountants who are serving really large firms that are primarily large businesses being audited on the area that's not lacking. And the greatest opportunity that I'm seeing right now is financial planning and that doesn't necessarily mean you have to manage someone's investment portfolio. Well venture but how thing the even if your clientele is small businesses. These are all run by people. And helping those people achieve whatever their goals are financially and just in their life. And I think that is an area that is largely overlooked by accountants.
Ed Kless: [00:11:37] Well it really was the thing that Darryl Goldman asked when he interviews we will have the first question he asked a new potential customers a colleague of ours in San Diego is what are your hopes and dreams. First question that he asked a new potential client regarding your hopes and dreams.
Ron Baker: [00:11:51] So a sole proprietor in San Diego and in his view he doesn't try and productize his services. He's there to provide a transformation to the customer to take them from where they are to where they want to be. That's estate planning. If that's financial planning well planning. His job is to move them from where they are to where they want to be. That if you think about it is the highest point of value because then the client becomes the product the client's the product it's the transformation. It's like it's like a plastic surgeon right. You're training somebody changing the image. Think about the estate planning done for Warren Buffet or Bill Gates you're planning their legacy their legacy. How important is Bill Gates legacy. So I would say just the services. I see having incredible potential just from a demographic perspective. Just looking at demographics. That's all you were looking at. We've got an aging population. I'd certainly go after eldercare and estate planning. All right. Those are going to be really in demand and we get rid of the estate tax which could happen. The other thing I'd say is things like KPI is pricing consulting. I am appalled actually how many CPA don't do accountants bookkeepers don't do pricing consulting because every business grapples with pricing. You could be doing the same type of pricing innovation that you do in your firm with your clients. The last thing I'd say is I really see and I wanted to get the panel's view on this as well. I really see niche you've got a niche. You can't be all things to all people. That's got to stop.
[00:13:23] We've got to focus on a niche and go really really deep I mean first off you get more interesting clients get more higher up on the value for everyone in this room would get on a plane fly to Rochester at the to the Mayo Clinic to find an oncologist that had the type of cancer you'd been diagnosed with probably by Watson but you would not you would not. Fly up to Rochester for a general practitioner you'd google your area code so which one is more profitable. We need to specialize because the strategy of your firm is determined by clients you don't have and by what you don't do. And I think too many firms try and be all things to all people because we're so scared of turning any work away. So the most profitable firms bar none bar none. Not even close are the ones that work in one industry. Randy was my first senior at Pete Marwijk.
[00:14:18] He's got a be seven digit net income and all he does is dentists. That's it.
[00:14:26] But he can do a dentist from womb to coming out of school getting a divorce whatever it might be he can handle whatever part in life they're at he can do it because he's done a million times. So he's very selective. He doesn't even advertise he has no web site. He's not on any social media. And this guy turns away about 80 percent of the dentists that come to him because he just doesn't find them interesting. So the riches are in the niches. That's really true. I hate that sounds cliche but it's really true that those are the most profitable firms across all professional sectors not just accounting.
Ed Kless: [00:15:03] Yeah I just recommended a book to Gary earlier today I'll throw this out there for you but I'm about halfway through it called micro slices which is very interesting because it's written from the perspective of a purchaser of consulting services rather than someone who's giving advice to a consultant so it's a purchaser of his who's reading it and this guy is absolutely adamant that it is it is not just niche it's like it spits dry cleaners or specialized in white clothing. I mean like that that's where he got to get down to this level. And when he looks for is an intersection of three different areas. Right. To develop the net she's the one that you want to get three different specialties and be able to focus on three different categories. Some of them psychographic some of them demographics some of them and that's where you want to draw the specialty. Very interesting book micro slices.
[00:15:51] Thus concludes the first segment of part two of our special live podcast recorded at Seyed summit 20:17 in Atlanta. More audience questions in the next segment after this. From our sponsor Leading Results. And now the second segment of part two of our special live podcast recorded at Saint summit 2017 in Atlanta.
Ed Kless: [00:18:09] Ronald only got a question right on.
Questioner: [00:18:11] Yes many of his Ronald also work for sage and the role that I have in say you have to learn a lot about the industry because I deal with people who deal with. People such as yourselves up here. And one thing that I studied I saw a recent study in the ICRA in Canada and there are some similar studies in the States over the last year year and a half the one from this year a really grabbed me. It was two thirds of customers or two thirds of taxpayers who had businesses who told a C or A When they ask what do they want out of their account or what do they want another CPA. They wanted the consultation type of thing that you guys are talking about. They wanted someone's wisdom to help them navigate their business. But this year they said only one in five offered it and the numbers are very similar in the States from what I can tell. So my question to the panel is if we know that the majority of people when asked wanting this I want to pay you not for the work that you're doing for me but for your knowledge and for your wisdom because I can get some value out of that. But only one in five let's say do it. Why is that gap so big. Because to me just looking at it from you know back here that's a huge market and it's a market that people are saying I want this but they're not getting it. So I would like to hear from the wisdom of the panel on this.
Ed Kless: [00:19:48] Gail laid off then we'll go to Gary.
Gail Perry: [00:19:50] To a great extent we're looking at a situation where we have a profession of people accountants who are really busy and don't have the time or are don't think they have the time to make room for adding additional services into their practice and don't even take the time to step back and look at their practice and say what could we do that could bring more value to our clients. And could we streamline our client base and maybe offer better services I think they're so swamped and they think this is nirvana. I get to run my 10 can add up numbers all day long and I get paid for it and and aren't even thinking about what the value to them would be and the satisfaction of doing more worthwhile work. So I think at least from a starting standpoint out of the gate that we've got accountants who are already working more than full time can't get well.
Gary Boomer: [00:20:48] That's what I hear too. The profession we're too busy and I say you're too busy picking up $10 bills off the floor when you get pick up off hundred dollar bills off your desk. And the second reason is that people don't feel comfortable consulting. They feel comfortable when they're the smartest person in the room in a taxer audit situation. So take it from there. I think it's mindset. You have to have the mindset that you're going to be a game changer and you're going to do what takes the client forward. And I like transformation. I think that ties back to Joseph Schumpeter model of creative destruction. And if you're in the role of transformation agent you're always going to be relative. If you go in a cycle you may have some really great times but then you're going to be in the down cycle and you don't want to be there. So I think that's the reason and I think the younger people really want to do this is just they need different training and you need to do it as a collaborative team not as a rugged individualists.
Ed Kless: [00:22:06] Jody And then Tom.
Jody Padar: [00:22:07] Yeah so I think we it's been trained out of us right. So if you work in an old school firm you're not allowed to talk to the client until you're been there for two or three years sometimes right. I've been getting all you've gotten is negative review points as to what you've done wrong. No one's actually coached you and to dealing with a client in a relationship. And so from my perspective the cloud has not only added capacity but it's changed it because it's made you learn how to work in real time with your end user who's your customer. So no longer can you send your team member seven pages of review notes because you're working in real time on a lie file. And if she's touching that file she has to be given constant feedback. As to how to fix the file or how to make sure that the file is done correctly. So from my perspective what I've seen happen in the kind of firms is they become a lot more confrontative because they've had to because real time data. Disruption your firm it's not it's not the Internet and it's not the software itself it's the real time that creates the chaos that new firm firms have had to learn how to learn how to do consulting around that data. And that's why the next gen firms are killing it and consulting because they've learned how to do it. There's no time for seven pages of review now.
Ed Kless: [00:23:33] Tom give me an answer and then what we're going to do after that is we'll take that beyond question and then what I want you guys to think of is if you on the panel have a question for others on the panel see. Now we're turning it on ourselves. All right so Tom we go through the answer.
Tom Hood: [00:23:46] So I agree with the time issue there. They're so busy they don't know how to think about but it's skills and the generation between the I'd say the experts and the boomers. We weren't taught those skills actually some of the kids coming at college today are starting to get those skills but skills like strategic thinking and really applying it to kind of business situations. That's what many accountants were not trained in the traditional way.
Ed Kless: [00:24:12] Going back up to you second crack at the question barrel all aerial.
Questioner: [00:24:16] Actually I had one comment OK if I may. So I think you know we've been working with some bigger consulting firms and you know some accounting firms that are doing consulting as well. And one of the things that we found is that one reason why they have not been able to do this transition that you've been talking about and being more open and so more assistance is not just because they are busy but also because of the way of how those organizations are typically typically structured by their partnerships where every time that they invest into innovation or something new it goes out of their own pockets. Right. And and that's been you know for us kind of being innovative new to full these firms as being the major hurdle in delaying. So you know being deployed to their customers.
Ed Kless: [00:25:10] And that's all. Run in a you want to comment on that you've had thoughts about a partnership model for years in fact that is nube relatively new blog post up on various ages. Great read but I'll I'll ask you to talk about this and then I'm going to ask you guys your questions so be ready.
Ron Baker: [00:25:23] I'd just love to blow up the partnership Mollo because I think Margaret Thatcher said it best in partnership models a consensus model right that people to sit around and agree on the color of the carpet. You know once you become a cart partner you're in interior decorating.
[00:25:37] You can do it all right. There's not nothing you can't do. And that's a consensus model. It's not a leadership model. And Margaret Thatcher said you know consensus is the absence of leadership. And I think she's right so our next goal at Paris is kill the partnership model. But I just wanted to make another comment about the difficulty of making this change from accountant to consultant. I think one of the big problems with making this change is it's a mindset idea like Arie was talking about is everybody in this room is an expert. Right you're a professional and we pride ourselves on being able to answer questions. Your clients come to you they've got a tax question that bookkeeping accounting question whatever it might be. We have the answer and we don't have it on top of our head. We're going to find it really fast and get back to them. That's part of our self-identification and how we value ourselves.
[00:26:27] Consultants are the complete opposite. Consultants aren't paid to answer questions. Consoles are paid for the question. And that's a very difficult mindset change. I think for a lot of professionals who are taught you better have an answer. No no. Like Socrates said half the wisdom half the value I'd say even more than half is in the question. A great question is transformative all by itself. And you don't have the happy answer these snotty nose kids at McKinsey that they send out all with them. They have no clue how to run a business or stand and sitting across from somebody who is a fifth generation you know family for what they have at McKinsey protocols and the right questions. That's what makes them valuable. So if you really want to transform to a consultative mindset you've got to be coming you've got to become really good at questions and there's a beautiful book. We did a whole show on it called a more beautiful question which is just spectacular start.
Ed Kless: [00:27:31] Yeah. Gorenberg or not that judge Wernberg a different guy but it is a fantastic book in the back of the book has an index of all the questions in the book really actually not an index of the answers. OK let's bring my buddy up quickly. Thank you and then we'll take this and then you guys are going to start. QUESTION I want to try to wrap this up.
Questioner: [00:27:51] On a Peebles with sage accounting solutions. So I worked for C.H.. My question was more for Tom. Jody I follow Yasmin Lankton. I look at you guys with thought leadership. I engage a lot of accountants. I look for you guys for leadership. You know I also follow you to. But. My question was How do you feel social media engagement innovates the accounting profession. I see you guys out there all the time.
Jody Padar: [00:28:17] So. The question was How does social media innovate in the profession. How do I leverage the social media and the profession.
[00:28:28] So it's leverage me to a thought leadership that didn't exist. So you know 10 years ago you couldn't necessarily be considered a leader until you went from conference to conference and you spoke all these places. And when I began it seven years ago I thought leadership was built on Twitter. So I started making comments about things that I thought needed to change and they were original thoughts and they became my platform to stand on some of the thought leaders didn't necessarily like that but it happened right. And so that's evolved. And now my customers who are not my are my leads who are not my customers come to me because they see the leadership that I have in the profession. And so it's directly related to building my business because my end users or my customers know what new vision stands for before they walk in the door and instead of saying Will they buyer it's where do I sign. Right. How do I buy from you because they know me and they know what I stand for and therefore they're ready to buy product from me before they even come in. And our practice is national and even global I would say so our customers don't aren't from Chicago. I mean some of them are but the majority of them are from all over the country because I have that big of a presence on social media.
Ed Kless: [00:29:56] Tom anything to add.
Tom Hood: [00:29:57] Yeah let me just say the best thing I've ever done. I mean I'd say it's my number one tool for learning. It's the number one tool for staying up on the future trends that are going in the profession. All I need is a Twitter feed and you know and it's it's the connecting point. So I think you know you go to a conference like this go through the social media feed connect all the people on social media on your Twitter feed jump on LinkedIn and connect them on LinkedIn. And the beauty of social media is people follow you because they want to not because they have to. So when you're following bills it means you're saying something that matters. So the last point I say is your point of view. So if you're adding something of value in that whatever it is what you're commenting on someone's post or read kind of put your thoughts around something they'll just retweet or regurgitate everything. Add your point of view then your people will look at you your customer base will say you stand for what I stand in. Right. So it gets to that if you really want to narrow down who you're working with whether it's friends or partners a man I met Jodi on social media that's to me that's that. That's the beauty of it.
Ed Kless: [00:30:58] That concludes the second segment of part two of our interview with Tom Hood. Jodi paid our Gail Perry and Gary boomer at Seyed summit 20:17 in Atlanta in the third segment. We take a few more questions from the audience and wrap it up by asking each other some questions. But right now we want to remind you that you can contact Ron or myself by e-mailing us at ask t s o e at various age dot com. Also be sure to visit our website. The soul of enterprise dot com for more information on our shows and show notes from previous shows and previews to upcoming shows as well as our schedule.
[00:31:36] If you want to come out and see Ron or myself live. But right now a word from our sponsor. He is here now to showcase your corporate individual organisation live event visit voice America dot com forward slash live events to see all of our past live events and find out more whether it's a multi-day conference special speaker or single the event. We've got everything to make your event a success. We can do a few hours or a few days. For more information about taking your event to the next level call Jeff's Benard at 4 8 0 2 9 4 6 4 17. Or e-mail info at Voice America dot com. Again that's Jeff spinor at 4 8 0 2 9 4 60 17. Send us an e-mail to info at Voice America voice America is where you are and where you want to be. Join us around the globe as we broadcast live from some of the most interesting events available. Don't forget to view all our live events including demand access to past events that you may have missed by visiting voice America dot com forward slash live events. And now the final segment of our session at Saint summit 2017 in Atlanta about accounting innovation it's not an oxymoron here. Gary
Ed Kless: [00:34:12] you got a question for the panel the esteemed panel. Mike please.
Gary Boomer: [00:34:17] Sure I've got a question. There is a man by the name of Charlie. Tremendous Jones. And he had a quote that said who you will be in five years or you'll be the same person you are today in five years except for the people you meet and the books you read. So I'd like to ask the rest of the panel what was one of the best books they recently read.
Ed Kless: [00:34:42] Gail let's start with you. OK.
Gail Perry: [00:34:47] Actually I say the most interesting book I've read recently is I think it's called Why Men work why men work.
[00:34:58] I think that's OK. Yeah.
[00:35:00] It's a basic basic premise quickly the basic premise is that society is transforming the gender role in business and that men used to work because they were expected to be the breadwinners. And now in many cases they're not expected or required to be the breadwinners anymore and it's changing their outlook on going to work and their role in the workplace.
Ed Kless: [00:35:27] OK guys down here Joey.
Jody Padar: [00:35:30] So I don't read books. I read Twitter feeds and Linked-In social So that's where I spend my reading time. It's all on my own articles though and articles about it you know no.
Tom Hood: [00:35:44] But but most recent was thank you for being late by Thomas Friedman. He's new York Times Columnist The basic premise is two things One is the need for reflection kind of that deep thinking time that we often don't take because we're in the glass cage. The second thing though is he really kind of puts in perspective though. He wrote The World Is Flat. So he put in perspective that he wrote The World Is Flat before Facebook became public and his b pieces he said in 2007 when the great recession hit us we all thought the great recession was the problem that year was a year that Steve Jobs held this up and introduced the iPhone that was either Facebook went public or became a mainstay piece. It's also the year that Dhoop the artificial intelligence algorithm was released to the world. So he said at that point in time that's when everything kind of went into an exponential curve and everything fundamentally changed he's got a great perspective on that. So if you want to kind of put in the kind of the whole exponential change period in perspective great read.
Ed Kless: [00:36:49] OK Rhonda you want to add any or not. OK. Okay. Good. So they'll get scary. Gail you're up for your question for the panel.
Gail Perry: [00:36:56] OK. Oh we've been talking a lot about innovation in firms and firms having to do a lot of innovative things and many firms are not doing innovative things for one reason or another. All of us on the panel up here are trainers of one sort or another speaker's teachers educators. What can we do to make a difference. From the podium to the people we're speaking to that can ignite them and make them want to be more innovative.
Ed Kless: [00:37:26] OK let's start with that one. How do we get other people to change. That's really the question. Gary, Tom.
Tom Hood: [00:37:35] As you say I think I think we have to start kind of changing the narrative from the fear of automation taking over accounting which is becoming more and more mainstream and begin to flip it to an opportunity based mindset to say what if we start to leverage this technology to really change what we do to be a game changer that Gary talked about so I think it's more inspiration instead of fear based because fear is not making anyone move. OK.
Jody Padar: [00:38:02] Jodi stories of actual practitioners who are doing things and making different. I talked to a 160 person firm last week and they're completely value price things. So when you hear actual firms doing it I think it takes the fear away from it.
Gary Boomer: [00:38:20] OK I would say that they're now convinced of the why they want to know how and they want a playbook and that's what we've been working on for the last year is to try to give them a four step playbook because it is transformational. And you have to be realistic. They can't change within a year for the larger firms. It's probably a three year process and it may take new leadership and some to get them there.
Ed Kless: [00:38:49] I would just add to that it is an offer of possibilities I think possibility is a great word to use is that you know is it possible. And then they make a choice whether or not they think they want to engage or not because it is not possible for them then you are wasting your breath. Right.
Gary Boomer: [00:39:04] Philip is an asset works help a lot because they get confidence from peers in meetings like this are safer than going to a meeting in the office because there's one thing about innovation. Most people that are innovators go to a certain point and there's a line says Do not cross. And that's from the disruptors. So you may need an innovation manager to take that innovative idea and get it on through the firm. So that's why the skill sets are changing so much. Project management is more important than just the people management part of this and telling them what to expect it up front.
Ed Kless: [00:39:47] Awesome. OK. My new one and.
Ron Baker: [00:39:49] I just add what Gary and everybody said so far. Tom I like your change in the narrative from fear because there's so much fear wrapped around this Iowa they're going to take all of our jobs and we're going to be sitting around that we're going to need that universal basic income to survive. And I think it's a lot of yes but I would say we know that wealth equals knowledge. The knowledge is contained mostly in the heads of your people as is society's wealth it's human capital. It's 80 percent of the world's wealth hoarding to the World Bank. That begs the question then where does growth come from. Well growth comes from learning and I don't mean just learning like we're doing today sitting in a room or a school or taking an online course or C.P.. I mean experimentation and trying new things even if they fail because even if they fail you'll learn. Profits can be declining but learning can be increasing and that's a source of future wealth. So I'd love to see firms do more learning in other words more experimentation just try things fail fast if it doesn't work OK. You learn something. What did you learn. How could we iterate and maybe change it and make it better and that would be another way I think to change the narrative more to an opportunity.
Ed Kless: [00:41:08] Fascinating stuff. Jody your question for the esteemed panel here. Microphone please.
Jody Padar: [00:41:15] So do you think the partnership model is going to change in the next five years so that real change can happen to the profession.
Ed Kless: [00:41:26] Who is stark. Gary go ahead.
Gary Boomer: [00:41:27] Yes it already is and the top firms. Is more of a corporate form of leadership. Some of them have now put in a chief innovation officer. That controls the budget protects the ideas prioritizes the ideas and that's getting to be big in the top 25 50 firms.
Gary Boomer: [00:41:51] Gail.
Gail Perry: [00:41:52] I agree yes. I think that the incoming millennial workforce won't stand for the current model and will have the power to change it.
Tom Hood: [00:42:04] Yeah it's raising them. I've seen some of the firms beginning to put money aside for innovation so even if they are changing the model they're changing the business model in the same way that allocates us and distributing all the earnings which is that this is the flaw. They actually are saying that reserve 3 percent for innovation projects. So they are they are starting to do that. And I think that's encouraging. It's not happening fast but it is starting to happen.
Ed Kless: [00:42:29] Well Tom your last on the question this question you have.
Tom Hood: [00:42:31] I was your best app. What's your best app. What's your best app. Wesley go with an app your best app but you only get one gallon Gary when he got what you're best at.
Gary Boomer: [00:42:44] Well mine would be Box Basok. OK. Was box icon it's content management that you can get from any device at any time so I can pull up any presentation on my iPhone or any other document in the office Scott workflow and get all of our people remote's remote so they have access to that.
Gail Perry: [00:43:07] Fax burner. It's a little app that lets you just shoot a picture and send a fax from your phone for free and burn they still want faxes but I don't have a fax machine anymore.
Ed Kless: [00:43:21] Mine's Custodio which allows me to monitor what my kids do on their devices. This is a little bit of creative VPN and I get to report it daily report every day how much time they're on each of the different applications. One of the things that really perplexes me though is they watch videos of people playing videogames which I just I'm sorry maybe I'm getting old I can't wrap my brain around like one would watch a video of someone else playing a video game. But that's right. I'm old now right. Ron do you have an app?
Ron Baker: [00:43:51] T-Sheets, no. that I have to say Kindle Kindle kindle.
Ed Kless: [00:43:59] Jody?
Jody Padar: [00:44:01] Periscope which is like Facebook live for Twitter so it is social in nature. So it's live streamed video.
Ed Kless: [00:44:08] And Tom you can answer your own question too.
Tom Hood: [00:44:12] I'd say Evernote. Evernote.
Ed Kless: [00:44:15] Evernote Evernote rocks Evernote Evernote is on the computer right now and using the notes on Evernote on that cell let Ron last at Lady thoughts you wrap this up. I learn something we were rapping about 15 minutes earlier but no one ever complains about being 15 minutes early Hey I got a rapid fire question for the group of you just give me a one word answer.
Ron Baker: [00:44:37] Keep it short whatever. What is the number one issue facing the accounting profession.
Gary Boomer: [00:44:46] Relevance.
Ron Baker: [00:44:47] You know I go I just had to bring a note from home in the last session because that's what I said. OK. Relevance. Gail?
Gail Perry: [00:44:55] In addition to that generations generations.
Jody Padar: [00:44:58] Time and how you wish.
Tom Hood: [00:45:02] Rear view mirror.
Ed Kless: [00:45:07] Fantastic. Well I want to thank our panel Jody Gail. Gary this has been a blast. Ron thanks for being a part of this.
[00:45:16] Thank you. Art is really a part of the soul of enterprise. Be sure to listen to it when it comes out thanks.
[00:45:23] That concludes the session. Accounting innovation. It's not an oxymoron. Recorded live at Seyed summit 20:17 in Atlanta. In the last segment of today's show Ron and I will be back with some final commentary on accounting innovation.
[00:45:37] But right now we want to remind you that you can contact both Ron and myself if you send us an e-mail at Ask a s k t s o e. For the soul of enterprise at their S.H. dot com. Also use hash tag ask TSA we on Twitter and we do follow that handle so please use it. And also please enjoy our Web site. The soul of enterprised dotcom where we have show notes as well as previews as to upcoming shows and our calendar where you can come out and see both Ron or me depending upon the venue live and we'll be happy to see you there. Right now we're going to hear a message from my employer and our sponsor sage. When it comes to business you'll find the experts here. Voice America a business network.
Ed Kless: [00:48:08] And we are back on the soul of enterprise this time no we are not broadcasting from the show floor of Sade's summit. Instead Ron and I are going to do a quick wrap up of this session on accounting innovation. Ron I thought this was a terrific session really was I think that there was great conversation and I think all of the guests really had quite a lot to offer.
Ron Baker: [00:48:31] They really did. And I thought some of the questions were just fantastic. I mean we we talked about remote working and you know Tom brought up Daniel Pink's for knowledge workers they need autonomy mastery and purpose. I thought that was really good. I wish we had a little bit more time to explore the results only work environment. But of course we interviewed Jody Thompson on our show so you can listen to that. And I also enjoyed the question how will accountants make money in the future. You know what services did the panel see that will be in high demand. I thought that was really good and of course financial planning came out of that and other other things. You know obviously more business advisory services in pitching.
Ed Kless: [00:49:16] Yes and the one question that was also asked about you know hey we're comparing what people say they want on a survey to what accountants actually offer and I believe that question was by my sage colleague Ronald Thomas. Right. And we didn't get it and I don't think you and I really chimed in much on that we just kind of let the panel go. So what were your thoughts on that.
Ron Baker: [00:49:38] Yeah I the only thing I did say that you know he said he said only one in five accountants offer business advisory services even though the majority of people surveyed and I believe this was by the CIA and Canada but he said that it was just as very similar down here in the states that they wanted these types of services from their account. But the only one of the five accountants offered I come back to this idea that you know it's really hard for an accountant to make the mind sort of switch from being an expert to being a CPA to being a consultant because one is paid for answers which would be a CPA and the other paid for questions. Right. And I think a lot of accountants are afraid to show their ignorance by asking questions.
Ed Kless: [00:50:27] Yeah that could be. I also think there's a certain amount of you know the TV show you and I love a house in that and that is that the customer you know everyone lies. Houses and money montra. And I'm not calling customers liars. What I am saying is that I don't. While they say that I don't think that they would even begin to look at their CPA for that. And I guess what we can say is well CPA should do a better job of letting others know that they can in fact do financial planning or whatever the additional services are. You know you have a saying that one of the things used to look at is is the the organizations that you are the accountants and you would look at their expense item for consulting and try to dig down on what that was. Turns out you probably could have done half the stuff that was there.
Ron Baker: [00:51:13] Exactly. And I think this goes back to our colleague Tim Williams who taught us the brand can only stand for one thing. I mean let's face it I believe customers do pigeonhole accountants. Oh you're my tax guy. You're the one that has the financial statements. They don't think of us top of mind as a business adviser as and as a consultant. So we're going to have to really educate them if we really want to make this transition. And I think accounts are so busy doing the you know the compliance work. You know it was brought up I think Gary Blumer said that on the panel but he said you know that the accountants are picking up dollars off the floor and they're letting the hundred dollars or sitting on the desk go by because they're not paying attention to it. To building the time too.
Ed Kless: [00:51:59] Yeah. No I tend to agree. Hey one thing I wanted to clarify because Gail Parry came up to me after the session and mentioned that the book that she was recommending she had given the wrong title and the correct title of the book that she was reading which by the way I have heard this guy I haven't read the book but I have heard him interviewed. I think it was on our friend Russ Roberts shell and is men without work. America's invisible crisis. New threats to freedom series. And this is by Nicholas Eberstadt and certainly we will put that in the show notes as well. But I thought that rested a great job interviewing him is a very interesting premise. I'm not sure I'm fully onboard with it but I just wanted to mention that that was the book that she was referring to.
Ron Baker: [00:52:41] Right right. Yep yep. And Nicholas Eberstadt you know he's the guy that wrote the tyranny of numbers and taught me a lot about how numbers can just actually. Obviously the truth rather than reveal it because you know measurements like we've talked about on previous shows they can hide they can hide real wisdom because they crowd out wisdom and judgment and all of that right.
Ed Kless: [00:53:05] Right depending on where their numbers are taken and all of that. What else Romney got about a minute and a half or 90 seconds or so to to wrap up here with anything else that you wanted to just mention.
Ron Baker: [00:53:15] Well I guess when they asked you know what your favorite app was and of course and I think you said ever. No no no. You said that thing that Custodio the custodial parent to monitor your kids biases and of course I said teach sheets. I got confronted by the CEO of two suits Matt Rizzo who by the way I really enjoy and really like and he knows where I stand on timesheets where you and I stand. I told him basically yourself in the buggy whip with the knowledge here. And he's I give him this he's very curious about it and wants to learn more about why we feel that way. So it's a good dialogue.
Ed Kless: [00:53:55] Yup yup. Outstanding. Well want to mention that we are going to do this kind of show again from Canada sage summit in Canada a slightly different name though. I don't think we're going to limit ourselves to accounting innovation but we'll look for at least one more possibly two more shows with Ron and my interviewing panels from before a live studio audience. That was such a lot of fun. So that'll be good. And Ron I guess I'll see in 167 hours.
Ron Baker: [00:54:23] Sounds good and Ed.
Ed Kless: [00:54:34] This has been the soul of enterprise business in the knowledge economy sponsored by Sage. Energizing business builders around the world to the imagination of our people and the power of technology. Join us next week on Friday at 4:00 p.m. Eastern 1:00 p.m. Pacific. In the meantime please do visit us at w w w dot the soul of enterprise dot com