Are large accounting firms moving the Elephant?
Industry insightsView more
Article by Alex Davis
Over the past 12 years my children have conditioned me perfectly on the levels of urgency. There are 3 levels based on the pitch, volume and cadence of their outbursts. Those three levels are ‘should do’ (I should do something but I just sat down), ‘want to’ (I want to do something but after sitting down I realized BT Sport are finally showing a football match I want to watch) and ‘have to’ (OK, I need to stop the world from ending). In years 1 to 5 I acted on level 1 but now it takes a level 3 emergency for me to act… Don’t judge me, It’s their fault, they conditioned me!
For the past 4 years I have been working with large accountancy firms asking them about their views on the industry – do they see change coming? What is that change? What will the impact be? What are their plans to act on that impact? Up until 3 months ago, it has been a level 1 emergency. ‘You know what… I get it, we are an innovative firm, we have been through countless changes (RTI, Auto Enrollment) and we should do something about what is on the horizon’…. But I just sat down…. Well, things have changed. In the last 6 months alone 9 of my partners have recruited dedicated ‘Cloud Transition’ champions who will be fronting the drive to move clients on-line. These champions are (all!) young, bright, enthused and can’t wait to get on with the challenge. Yet each one of them has expressed one clear concern, one perennial issue has raised its head… ‘people seem to hate change!’ How can I spark this revolution if no one wants to do anything differently?
Well, do not despair. My summer reading was a truly excellent book by Chip and Dan Heath called Switch – when change is hard. The Chip brothers ask you to picture an Elephant being ridden through a jungle. For the Elephant to get from A to B (and make change happen) you need to pay attention to the mood of the Elephant, the effectiveness of the rider and the path in front of the them. Think of the rider as the logical side of your brain (what is the best way for this to happen? What could go wrong?), the Elephant is the emotional side (I am scared, threatened, excited.. and very very hard to move!) and the path is the road ahead of them. For change to happen all 3 aspects need focus. Let me give some examples of what I have witnessed, both good and bad:
Direct the rider – Riders love to analyse and think ‘why not’ rather then ‘why yes’. They look for excuses and reasons to procrastinate. So, look for bright spots, where is change happening and working? What, specifically is working well? One of the firms I work with holds cloud clinics with internal bookkeeping and accounts staff where once a week, they ask one of the team to present (very informally) on a recent client that has gone through a transition. What went well, what did not go well and what would they do differently? These are short sessions but they are not a sales pitch, they are not based on theory, they are based on real life examples. This does a number of things, it helps the cloud team iterate their process, it shares good practice but most of all, it brings belief across all staff that it ain’t all bad.
Motivate the Elephant – ‘you know what… they just don’t seem to get it’… if I had a pound. People will only change when they know why and only when the pain of not changing is higher then the pain of changing. This decision will be based on 2 key elements, consequences (what are the pros and cons?) and identity (who am I and am I the kind of person that needs to change?). I see plenty of the 'consequence conversations' but very little of the 'identity conversations'. One firm I work with has actually substituted ‘Tax’ in MTD and started to talk about Making (insert firm name) Digital. They refer to their staff as cloud evangelists and they seed a number of these people in various offices. They publicly celebrate staffs' first cloud migration and in the internal roadshows they ask staff to fast forward 10 years and picture what accountant they want to be. What is their identity, forget MTD, forget cloud technology, forget AI, how do they want to be known? To move the Elephant you need to make it personal and you need to move peoples' emotions.
Shape the path – ‘what do you mean, no one understands the process, it is on the intranet along with the 10 page 'how to guide' and 25 stage decision tree!’ The Heath brothers provide countless examples of when people think the process is hard, they run away. The most powerful example is of 2 government authorities in the US when trying to help residents lose weight. One published a large (and very clever) pyramid showing countless food groups and their nutritional merit. It took people 10 minutes to read it and 10 hours (if ever) to understand it. The second authority noticed people in the area were drinking a lot of whole milk and started a campaign to encourage people to drink low fat milk instead. Dead simple, drink a different version of milk. The results….. people in the second group lost weight, the first group… nothing changed. The point is, make change simple. Forget the 25 stage process, what is the first thing they need to do? Just let them know that bit and how simple it is. The successful firms are creating websites, emails, webinars all geared towards onboarding clients simply. They are designing training and education programs for clients that are one-to-many and scalable via platforms such as YouTube and Zoom. This gives staff belief that there is a clear and very well trodden path, one they would be happy to walk along.
My final piece of advice is measure progress. People do need to be accountable, but they also want to understand the impact they are having, and the momentum being created. Use tools created by the likes of BlueHub and neXus to put KPIs in place and track what has been done, what is being done and what needs to be done.
To find out more about how we are helping accounting firms gather client data and plan for MTD please go to www.nexus-cloud.co.uk
To see more from Alex - https://www.linkedin.com/in/alexldavis/
You might also be interested in
neXus Making Tax Digital planning software enables control and real-time granular reporting on your clients MTD transition. Cloud hosted with access for all staff to update key information. You can track progress from firm wide, down to department and individual level. With built in task management, the whole process can be managed in one...