As he approaches his retirement, IMA chief Jeff Thomson reflects on the changes in the profession over the past decades, and what he sees ahead.
Transcription:
Dan Hood (00:03):
Welcome to On Air with Accounting Today, I'm editor-in-chief Dan Hood. On this podcast, we tend to focus more on the public accounting side of the profession, but it's always worth remembering management and corporate accounting make up a major part of the field, and they've been faced with just as much change and uncertainty in rapid evolution as the public side of things.
Now no one knows that better than Jeff Thomson, who's been the president CEO of the Institute of Management Accountants since 2008, and who over his decade and a half at the home has helped make the one of the fastest growing and most influential accounting membership organizations in the world with more than 140,000 members in 150 countries now. He's retiring early this year, and so we're glad to take this opportunity to get his thoughts on where the profession has been and where you expected to go in the future. Jeff, thanks for joining us.
Jeff Thomson (00:43):
Hey, Dan, thanks. It's a pleasure and an honor to be with you as always avid reader of Accounting Today and it's various publications but again, pleasure and honor to be here. Looking forward to the conversation. Yeah,
Dan Hood (00:56):
We're looking forward to getting, I guess we're drilling into your long experience. And I should point out I mentioned you've been with IMA since 2008, but you had two decades in a career before that with at and t and in a bunch of different roles and operations and finance before ending up, I think it was the cfo, F O of a major business unit. So you got an enormous amount of experience in a bunch of different aspects of the profession. And so from that sort of perspective one of the first questions I want to ask you is what do you see as the biggest changes you've seen in the profession over your career?
Jeff Thomson (01:24):
Oh, great question, Dan. You make me sound really old though, but that's okay. <laugh>
Dan Hood (01:30):
Wise,
Jeff Thomson (01:32):
Seasoned, interesting. IT experience is great, but how you leverage that experience to the next new context is really what business and leadership's all about. So I have to tell you, I've been really, really fortunate to witness an incredible evolution of the profession in terms of relevance and influence globally. I think there are so many exciting career paths inside of L, broadly speaking, finance and accounting. So what I've observed from the minute I was named a strategic business partner to an 18 billion business unit at and t, and I asked, what the heck does strategic business partner mean? Back in the nineties, they said, well, don't worry, you'll still be able to call yourself A C F O because that's the brand. But the C F O position, even back then has evolved to be this partner at the table helping to drive value creation, not just account for it fusing together, not just technical accounting for reporting and statutory requirements, but also to add finance and operations at technology and strategy. And now we become accounting 2.0. So given the pace of the business environment, we need to keep that up and maybe consider an accounting three point, but the breadth and depth of opportunities to make a difference for stakeholders is enormous. We just need to do a much, much better job at telling our story.
Dan Hood (03:07):
That's amazing that they were I guess shouldn't be surprised that at t was ahead at the time, but I mean for them in the nineties to be looking for strategic partnership from the accounting area, it was pretty, I mean, I'm think feels like it was ahead of a time. I mean, we know a lot of companies that didn't really realize this until the pandemic,
Jeff Thomson (03:24):
Right? Right. Yeah, absolutely. And of course, a big company like at and t, it was one business unit of many, and they brought in a executive from another company who's who started talking about this strategic business partners trusted business advisor concept. And to many people it was all new. And then in the ensuing years to some extent it got scaled. But again, what an incredible opportunity. So long as a ecosystem and a global profession can step up to the obligations of these opportunities in this leadership by upskilling and experiential learning and opportunities.
Dan Hood (04:06):
We're going to get into mean not the IMA has been its forefront of helping with that UPS skill, but helping direct the profession in those into going into that direction, try to usher them into that direction and that set of skills, that new role or newish role. But before we dive too deeply into that, I sort of go back and say, I mean, would you have imagined this sort of changes we've seen? Was that what you expected? And I guess some of this is as we, because we're going to ask you about looking forward, right? I mean the notion of could you have predicted the changes in the profession that gypsy
Jeff Thomson (04:36):
To some extent, because I had that opportunity and a big company undergoing significant change in an environment undergoing significant change, I did have perhaps arguably a bit of an advantage in, I'm not going to say predicting the obvious, but at least predicting the trend toward accounting two point and the accountant as an influencer focused on futures not just the past. But yeah, I am pleased at the pace that we've gone in terms of the multitude of career paths, as you mentioned now, the onset Dan, public accounting, private accounting industries of all sizes and shape and the world is much, much different. However, it is a beat bit of a race for relevance. It's a battle of velocities, the velocity of change in the business environment relative to the velocity of change in our great profession. So bottom line, yet to some extent, I predicted it. I didn't necessarily go to Vegas and place a wager, although I'm not sure there'd be a whole lot of betting on this particular opportunity. But I think it's the path forward that counts a month as much, and are we going to be able to deal with the velocity the rate of change? You could tell I'm a math major, data science type <laugh> by some of the infusion of my comments there.
Dan Hood (06:10):
Well, and guid know if I know from your background explain up. Sure. Did you have that background? You started sort of in data analysis back, I mean this feels like back, but it was before people really thought of it as data analysis the way we do now.
Jeff Thomson (06:21):
Yeah, absolutely. And again this spirit of being seized and experienced and not all it was absolutely my very first position at an and t coming out of graduate school in math and statistics was the equivalent of a data scientist. Yes, we did not call it a data scientist back in 1979 say that real fast. But it truly
Dan Hood (06:49):
Was. I was avoiding years, but if you're going to throw a year in there, I can't.
Jeff Thomson (06:53):
But we played the role of a data scientist working with operations and strategy to bring analytics to the forefront as a competitive advantage to provide greater foresight and insight to the business. And one of our big pushes that I m A is we need to build in data analytics, not bolted on in terms of our training, our curriculum, our mindset, and how we tell our story to millennials and young professionals who think that accounting is whether well don't, young professionals don't even know what a slide rule is, but <laugh> Green was a green eye shade, pocket protectors and boring. You're going to be replaced by robots anyway. Why would I want to enter your profession? And actually there's a strong story to be told there.
Dan Hood (07:47):
Absolutely. Well, let's talk a little bit about what that story is, and now you mentioned the pretend potential shift to accounting three point. What do you see coming up for the pro profession I, as you look forward, what do you see?
Jeff Thomson (07:59):
Well, I'm the eternal optimist. So I have to from a risk tolerance and opportunity assessment, I have to admit, I do gravitate more toward the opportunity because I see great things in the profession and the accounting and finance ecosystem. I think we are proud members of iac, the International Federation of Accounts, with 180 member bodies representing over 3 million accountants of all types around the world and our partners closer to home. I think we've got a great potential to continue to collaborate and partner to advance the profession in ways that we perhaps never could have imagined. Starting with technology and analytics continuing with diversity, equity and inclusion and in belonging and human talent continuing even further as we are on the E S G sustainability journey our ability to influence, make a difference, make the world better, not just investors better but the world and people better. The opportunities are just boundless and enormous. And I believe with the trajectory where we're on, we have the potential to continue to make a difference and be relevant and influential.
Dan Hood (09:23):
Excellent. Well, that is the optimistic take. It is pretty reasonable when you look at a bunch of other industries to say, look to the future. They see disruption and at disintermediation and confusion and so on. And for accounting, there's going to be disruption. There's going to be change, there's going to be a lot of necessary change but the upside is tremendous. The potential to be enormously valuable to whether it's your organization or whether it's clients or whatever, to whoever you're serving is enormous. It's just particularly with the tools as you're bringing on data, new data analysis, artificial intelligence are pay, all those different tools are only going to make accounts able to be much more valuable, much more exciting, much more interesting profession.
Jeff Thomson (09:59):
Absolutely. And I often refer to the business environment now and in the foreseeable future as a vuca. In fact, I did not coin the term. VUCA always sounded to me like Hungarian goulash, but I don't believe it is. But vca, <laugh>, VUCA stands for volatility, uncertainty, complexity, ambiguity. It's the uncertainty in which we all face. Back when I was at and t, it seemed like our biggest challenge was the two Cs customers and their complexity and need for bundled services and competition has now expanded into traditional and non-traditional competition where once you're in squarely inside your industry vertical, it's what other verticals can you expand to? I mean, just look at Amazon, even look at and t, but now we're facing a world where global health pandemics extreme weather events and more are the geopolitics, wars or potential wars supply chain disruptions, inflation impacts. These are all variables that the accountant who is fit for purpose in strategy and strategy development and analytics really comes to the forefront to deal with all of this uncertainty and risk, create scenarios that give CEOs and boards and other stakeholders options. But again, it's our ability to significantly enhance our technical abilities and our leadership abilities that is very well going to make the difference in terms of this race for relevance that I referred to. Right.
Dan Hood (11:46):
Well that's because that's important. I'm glad the way you put it is the opportunities there for those accountants who are fit for purpose, who have the skills and have the abilities to serve in those functions in that capacity. I want to dive more deeply into that, but we're going to take a quick break and we're back with Jim Thompson of the ima talking about the past in the future and what's ahead and the opportunities for accounts and the fact that there are a lot of them for those who are ready for 'em. And that's sort of when I talk a little bit now you mentioned the sort of potential discrepancy between the velocity of change and the velocity of adaptation of the profession. I'm sort of paraphrasing that, but the degree to which accounts are preparing themselves for this potential new role, which is an enormous exciting interesting, profitable, valuable role if they're ready for it. And maybe we can start by talking about, as you look at people going into the profession, what skillsets do you think they need? What do they need to be do? How do they need to be developing themselves to be that accountant 3.0?
Jeff Thomson (12:48):
Great. Great question, Dan. That's why you're doing what you're doing and I'm doing what I'm doing right. Seth <laugh>, great question. Yeah. So again I think again, in the spirit of accountant 2.0 and going towards 3.0, I think first of all, it's important to get the table stakes. I don't want to imply by focusing on all the cool evolving stuff, whether it's analytics, technology, sustainability strategy, all cool sounding stuff where we could add influence from a value creation perspective. We have to get the basics, the table stakes. We first and foremost, our profession must be a leader, must continue to be a leader in ethics, trust, integrity, respect. And that comes about through our competence in producing, for example financial statements that accurately and ethically present the past to future investors, whether they be millennials working for the company or investors and other stakeholders investing in the company.
(13:54)
So table stakes are really, really important. But I would be gobbling up all of the analytics and technology courseware training that I possibly could. There's a little bit, whether you're at a young accountant or a middle-aged accountant saying well, listen, I was not trained as a statistician, a mathematician, I'm not a PhD. I think we need to change the mindset. So having taught, for example I was also a high school math teacher and I've taught at the college levels and adjunct in business math for something like 20 plus years. Business statistic applications, mathematics to business problems is eminently teachable and eminently learnable, if that's a word. So we can, because we all have our stories about our least favorite course in high school or even in college oftentimes, sad to say that was a math teacher whether it was Mrs k Crabtree or Mr. Miguel, you know, still remember those names.
(15:00)
But I, I've been married to a math teacher, I was a math teacher. I've been inspired by math teachers. Mathematics statistics at the applied level can significantly enhance our profession's capability to not just provide oversight in hindsight, but to also provide insight and foresight at the table. But we have to get over, it's like a change management thing. We need to build those capabilities right into our profession from the get-go. And maybe even in high school, but certainly in undergraduate accounting. And then associations like I M A A I C, P A A C A, we must commit to building in and not bolting on these critical skills to win the race for elements.
Dan Hood (15:49):
I mean to everyone could use more math not just accounts, but everyone throughout the educational
Jeff Thomson (15:55):
System. I would agree actually,
Dan Hood (15:59):
And I'm thinking of my math teachers and apologizing in my head to them now but also two things of very quickly, I want to note that the longer we talk, the more it seems like you've had eight different careers, tweet, math teacher and at and t and Im a you. You're doing more than anybody else can cram into usual be a relatively small period of time, which explains where you are and why we're interviewing you and you're not interviewing me. But I want to talk a little bit about that in terms of just because there is a lot of talk about, hey, we should be doing more in terms of data, more in terms of the basic math underneath accounting, and there are movements of foot to adjust the curricula for that. I'm always reminded that there's a phrase that talks about you don't need to know how to build the watch, you just need to know how to tell time. And I'm wondering, do you see room for a spectrum of skills in that area where the basic account absolutely has to have a core skillset but you can only increase your value by diving deeper and deeper into it? I mean, I guess really, really is there a huge core competency that really all accountants should have?
Jeff Thomson (17:01):
Yeah, and I think the answer, the sweet spot of the spectrum, Dan, that you mentioned is something that of course we as an institute management accountants feel an obligation to help define. And so we have developed an IMA management accounting competency framework that describes at various positions different knowledge, skills and abilities in the domain, for example, of technology and analytics in a very, very high level in terms of trying to thread the needle or the sweet spot. On one extreme, I would say that no, we don't have to turn every accountant, even accountant 2.0 or 3.0 into a PhD theoretical mathematician, statistician, data scientist, scientist or econom trician. However where we are today we're pretty much at the lower end of the spectrum in terms of analytics and insights. I'll bet you could go to many, many organizations around the world and dip yourself into their monthly results review, and you'll still see a lot of very, very basic diagnostics and analytics.
(18:15)
But just as you know, there's been so many books on statistics and analytics, but one of them is competing on analytics, the new science of Winning by Tom Davenport of Babson College. And just think about that when you think about the new science of winning. And by the way, this book was written in 2007, I believe. You know, think about apps, you think about customer consumer facing websites and services and you don't think about back office infrastructure. Things like data where you can merge structured behavioral, I'm sorry, structured financial data with unstructured behavioral data to create insights that create whole new businesses, whole new products and services that could ultimately change the world. So it's that sweet spot that I think we're trying to hit. Listen, I taught business statistics, one in business statistics two at the college level. It is again, eminently teachable, and I'm still not sure this is a word eminently learnable. As long as we commit to the change,
Dan Hood (19:22):
It is now a word officially. It's now a word. If you say it twice, it becomes a word that is apparently the rule. Exactly.
Jeff Thomson (19:27):
Hell your rule, you're the boss
Dan Hood (19:29):
<laugh>. Exactly. On this podcast, it's word. That's excellent. Alright, I do want to talk a little bit about Ima, I mentioned the really, I don't want to say explosive trophy, but it's pretty spectacular of growth over the past 15 years. And given all that, where do you see the institute going forward?
Jeff Thomson (19:46):
Well, I think the institute, the association will continue to be a valued partner as we keep going on the trajectory in the profession. I've already alluded to the fact that we as a profession need to do a better job at telling our story and raising the game on the story itself. So I see I m A I'm proud to say, I mean the numbers of the numbers look, numbers come and go but just like in your personal family life and even your business life, friends are forever and reputation and integrity are forever. So more than anything else, and look, a's numbers are up and down, up and down, especially through Covid, right? But if nothing else we've built a reputation that I'm strongly believe will be long lasting. And so long as we do that, we'll ride the ebbs and flows of economies and markets and continue to make a difference.
(20:52)
The world of work has changed, the world of work learning has changed. Where we work has changed, obviously even in terms of hybrid work and that kind of thing. But there's nothing like your reputation, your relationships, your core values and what you stand for. So I expect to see more of the same from i m raising our game in terms of the future of education and learning. There's more of an emphasis on gig type learning and focused real time and time to market which is very, very important. So just as a couple of very quick examples I m A recently launched two new significant certificate programs in E S G and Sustainable Business management. That's one. And another certificate program culminating at a digital badge in diversity, equity, and inclusion. And who would've thought 10, 20, 30 years ago, right? Back in the day.
Dan Hood (21:56):
Excellent. Well, I mean that's exciting stuff and as you say a tremendous reputation, not just over the pandemic, but I mean when you say, yeah, I had a really good pandemic in the sense of built a tremendous reputation for supporting its members, supporting the profession, and really helping it get through and not just get through, but really succeed throughout the pandemic and come out of it hopefully as we hope, approach what we hope is something like the end of it in a better position than ever. So great stuff. Alright, Jeff Thompson of the I m a, thank you so much for joining us. Thank you for sharing all your insights and thank you for your contributions over the, I won't say a long over the years, but over the course of your career. Thank you for all that and for all you've done for the profession.
Jeff Thomson (22:37):
Great. Thanks Dan, and thanks for all that you do for the profession. And yeah, Heather been feeling a little bit older than I started 20 or 30 minutes on the podcast. I am invigorated by what I see as the future of the profession. I've told folks that I'm not leaving the planet, I'm still going to find a way to remain active in the profession, and again, proud and honored to be part of the podcast.
Dan Hood (23:01):
Excellent. Well, thank you for joining. So we look forward to seeing what Jeff Thompson 3.0 looks like. I'm sure as you say, I'm sure. We'll sure. We'll hear from you. So thank you
Jeff Thomson (23:09):
Again. All right, Dan. Thank you.
Dan Hood (23:11):
Excellent. And thank you all for listening. This episode of On the Air was produced by Accounting Today with audio production by Kellie Malone. Rate and Review us on your favorite podcast platform and see the rest of our content on accountingtoday.com. Thanks again to our guest, and thank you for listening.