Complexity and the volume of knowledge have exceeded the individual's ability to deliver the benefits of that knowledge correctly, safely and reliably. The accounting profession is no exception, but lessons can be learned from other professions like medicine and the airline industry.
In The Checklist Manifesto: How to Get Things Done, Atul Gawande provides several lessons from both the airline industry and medical profession that can be applied to the accounting profession. Humans are fallible and lose attention when it comes to routine matters that can easily be overlooked under the stress of deadlines and fatigue. People can skip steps even when they remember them. In complex processes, like the preparation of a tax return, certain steps don't always matter. Checklists seem to help provide protection against failures and instill a discipline that leads to higher performance.
The problem comes when checklists attempt to become all-encompassing. Gawande points out that checklists can be boring to doctors who may feel above the routine steps, yet his research proved that a simple checklist of five steps significantly reduced infections in hospitals when putting a central line into a patient's body. Doctors are supposed to:
1. Wash their hands with soap;
2. Clean the patient's skin with chlorhexidine antiseptic;
3. Put sterile drapes over the patient;
4. Wear a mask, hat, gown and gloves; and,
5. Put a sterile dressing over the insertion site once the line is in.
These steps are no-brainers, yet in a test, more than one step was skipped in a third of the cases. The line infection rate went from 11 percent to 0 when the nurses were instructed to stop the doctors when they skipped a step. Checklists do establish a higher standard of baseline performance, yet resistance remains in all professions.
Technology can be both a blessing and a curse in all professions. The complexity and number of procedures and services have grown exponentially. Technology enables professionals to track steps and procedures even when irrelevant and redundant. If checklists become too long, people will not pay attention or lose focus. Thus, professional judgment and updating are required. This is where technology can be useful if properly utilized. If not, the result is often extremely long checklists that waste time and do not improve performance and results.
AUTONOMY AND DISCIPLINE
Each profession has a code of conduct that typically includes selflessness, skill and trust-worthiness. Gawande points out that aviators have a fourth expectation: discipline. The medical profession cherishes autonomy. To me, discipline is the most difficult in that it requires accountability. The accounting profession requires both autonomy and discipline, which can be direct opposites depending upon the service and client relationship. Discipline is something that requires constant learning and work. So the question becomes, how can the profession better use judgment and improved checklists?
In my accounting experience, I have seen several trends that are understandable, but alarming. First, firms tend to allow people with departmental perspectives to make technology and procedural decisions, which often result in lack of integration, redundancy and complexity. A good example is the number of databases that firms utilize that contain duplicate data requiring continual updating in many locations and reconciliation. Trust in the accuracy of the data quickly diminishes.
An example that Gawande uses is the attempt to build the world's greatest car. He gives the example of connecting a Ferrari engine, the brakes of a Porsche, a BMW suspension and a Volvo body. What do you get? A pile of expensive junk! I am confident many of you can relate to the analogy.
In order to break through the ceiling of complexity, you must simplify. This is precisely what the medical profession has done by shortening checklists and consistently using professional judgment to focus on the items of highest risk and importance.
Captain Sully Sullenberger, the pilot of the US Airways flight that landed in the Hudson after the plane ingested geese into its engines, credits the success of the landing to the crew effort and its teamwork and adherence to procedures. This required discipline and accountability. The two pilots had never flown together before that day. Through the use of checklists and a few short minutes prior to leaving the gate, they transformed themselves into a team. Part of the checklist was to introduce themselves and the crew. They considered the odds of anything going wrong extremely low, far lower than we do in other professions. But they ran through their checklists anyway (discipline).
ENSURE A PERFORMANCE BASELINE
The fear most people have about protocol is rigidity. But what happens is just the opposite. Taking the time in advance gets the "dumb stuff" out of the way and clears the mind to focus on the harder stuff.
You may say that the accounting profession is different from the medical profession or the airline industry. My response is ... not so quick! We can learn some lessons.
First, checklists are important and must continually be revised to reflect the most important steps in reducing risks and ensuring a higher baseline of performance. This can only be accomplished when checklists are integrated with professional judgment. In my opinion, too many CPAs have relied on published checklists as the Holy Grail, without incorporating the proper amount of professional judgment.
The second lesson is that training and discipline/accountability are paramount. I also believe that too little training time is focused on management, processes and the use of professional judgment.
In the case of the landing on the Hudson, all of the team knew their roles. Sullenberger took over the controls and looked for a place to safely land, while Skiles, the co-pilot, went to the engine failure checklist to see if he could relight the engines. The rest of the crew was preparing the main cabin for a crash landing. Does your team know their roles, or is it simply left to skills and hope?
Hope is not a strategy!
Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
