The top three trends you need to watch
Almost every major issue affecting business and the CPA profession can be categorized under these three "mega-trends":
- 1. Globalization
- 2. Technology
- 3. Workforce issues
You can add a fourth -- the concern over the economy caused by rising energy costs, heath care costs and taxes.
These trends are further affected by drivers of change, some enabled by technology and globalization, some created out of the complexity of these changes. Dr. James Canton of the Institute for Global Futures outlines them very well in his new book, The Extreme Future. These fundamental drivers of change in the near future are:
- Increasing complexity
Think about the top three trends and add these five "Extreme Future" factors and you have turbulent times ahead.
I was fortunate to be in the room with one of our profession's top leaders a few weeks ago after a meeting of the AICPA Council in Florida. Bob Bunting, chairman of the CPA firm Moss Adams, former chairman of the AICPA and deputy president of the International Federation of Accountants (IFAC), came to a meeting of the CPA-SEA (State CPA Societies Executives Association) to share his insights on the monumental decision by Council to accept IASB as a standard-setter under the AICPA Code of Conduct and what it means to our members. Bob said the movement toward international standards is minor in comparison of our need as U.S. businesses to become conversant in a global economy.
He shared some interesting statistics and examples that made me think. Here are a few:
- Did you know that 36 percent of Quickbooks users do international transactions?
- Have you visited your local wine store yet to see the variety of countries shipping wines in U.S.?
- Have you looked at where the top moneymakers are from in the Forbes 400 list? Russia, India, China and the Mid-east.
His point was that we, as CPAs, have to embrace this new world of global commerce. Not only do we have to learn the "new" language of business (IFRS), but we also have to learn the "new" way of working in a global economy -- new business structures, new laws, new cultures. He challenged state CPA societies and the AICPA to work together to help our CPA members go global.
I was reminded of the CPAs' core purpose that came out of the CPA Vision Project (for the year 2011): "CPAs: Making sense of a changing and complex world." Isn't this what we all really do as CPAs? Everything is ultimately translated into financial and accounting terms and we happen to be the experts in that language. Now we may need to learn a second language.
Back to why I started this post: Bob concluded with a recommended read, Managing in Turbulent Times, by Peter Drucker. Although written in 1980 and updated in 1993, it is so relevant and on target, it is scary. I highly recommend you add this to your summer reading list because we all need to learn how to manage in turbulent times. I went right out and bought it and read it on the plane trip home. It really is a handbook for how to manage in turbulent times (or as we used to say in the CPA Vision Project, become navigators of change).
I want to leave you with the essence of the book and promise to post more on this in the future. Drucker puts it so very well in his foreword:
"But a time of turbulence is also one of great opportunity for those who can understand, accept and exploit the new realities. It is above all a time of opportunity for leadership. The task is to manage what there is and to work to create what could and should be." Leadership and strategy and the ability to understand the "brutal facts of your reality" are paramount. Using these trends and sizing up your organization's strengths to look for new opportunities will allow you to endure these forces and harness the winds of change.
I remain optimistic as I have seen our profession endure much worse and come out stronger each time. What is your view: Are you optimistic or pessimistic about the future?
- Listen to an interview with Bob Bunting on our podcast (CPA Spotlight on iTunes) by clicking here.
- The CPA Vision Project report (created in 1998 for the year 2011)
- Several sessions at the Maryland Business and Accounting Expo deal with the top three trends, from international standards to workforce and technology.
- Listen to all of our podcasts on breaking news and emerging trends here.