Accounting firms generally are not who you think of when you mention "innovation," yet many firms excel at innovation and there is a pattern to their success. Innovation is directly linked to growth and not an epiphany like many think; but rather a process that combines hindsight, vision and insight. The accounting profession is going through significant changes and I am often told by firm leaders they just don't have the next generation of leaders in their firms.

In many cases there is validity to their statement and a better understanding of innovation and how firms get into this situation can help firms take the necessary steps to balance between "discovery" and "delivery" skills. Discovery skills focus on new opportunities, trends and creativity while delivery focuses on execution. You need both, but the tendency is to focus on delivery.

Mature and typically declining firms are dominated by people with excellent delivery skills, but often lack the proper balance of discovery skills. Typically, one or more firm founders were entrepreneurial and tended to hire people for their delivery skills and not their discovery skills. As a result, many partners and managers don't know how to think about discovery or give enough value to the importance of innovation.

Accounting programs teach people delivery skills while most experiences and on-thejob training also focuses on delivery and execution. In fact, many of the discovery skills are viewed as nonproductive - more about that later. I believe innovation or lack thereof can explain some of the frustration and what firms must do in order to develop the next generation of innovative leaders.

DIRECTIONAL VS. INTERSECTIONAL

Let's look at two different types of innovation and then how the most successful firms are modernizing their practices to meet the needs and wants of their clients. Accounting majors are taught the rules and regulations of the profession in school and throughout their careers. This is not a negative, but rather a fact as their perception is often different than those with different training and aptitudes. Upon graduation, most accountants going into public practice start in audit and/or tax. This has been the traditional approach and is the primary reason most innovation in firms is directional innovation. Directional innovation tends to improve a service in fairly predictable steps with a well-defined dimension or goal. The majority of innovation is directional and is accomplished through increasing levels of expertise and specialization (delivery skills). This is a low risk approach and one with which many CPAs are comfortable. There is nothing wrong with directional innovation, yet it is limiting due to the fact most of the participants are looking at the problem from the same perspective.

Darwin John, former CIO at the FBI once said "if two of you have the same opinion, then we don't need one of you". This may be a bit extreme, but the point is that for real innovation (discovery) to occur it requires multiple perspectives. This is often called intersectional innovation where multiple disciplines meet in the attempt to solve a problem or improve a solution. From my experience in the CPA profession, two areas within firms that have been responsible for innovation over the past 20 years are firm administration and technology. Leaders in these areas have been attempting to bring the silos together and improve performance through improved communications, efficiency and effectiveness.

• 1
• |
• 2
• |
• 3
• |
• 4
• |
• next