Pub. 1 2019 Issue 2

M A R C H / A P R I L 2 0 1 9 20 nebraska cpas to accomplish that goal: be agile, up-skill, and expand. 4 Be the Change Maker So, how does one outpace the pace of what seems to be an overwhelming rate of change? Somehow, CPAs, as trusted advisers, must be expert in helping their clients or employers outpace the changes in their industries. In some regard, the first step to becoming excel lent i n change management is an optimistic attitude toward change. Then adopt best practices to manage o r ga n i za t iona l , p r ofe s s iona l , a nd personal change. Also, be an intentional environmental scanner. You probably do this already as a reflex, as you scan The Wall Street Journal each day, get daily podcast briefings, and check specialty- specific news. Simply turn this process into an active habit and best practice. Technology, of course, is key. Expect (and therefore plan) to move more and more activities to cloud-based platforms. Also, invest in data management and analysis tools and training. Check out the learning paths in LinkedIn Learning, for example, or the Nebraska Society of CPAs’ courses in Excel and data analysis. Have a strategy in place to monitor industry-specific and general technological changes for their effects on your business and those of your clients: • Identify and adopt machine learning, augmented reality, and virtual reality tools. • Expect and plan for rapid deployment of stationary robots, nonhumanoid land robots, and fully automated aerial drones; and the corollar y machine-learning algorithms/artificial intelligence that will drive them. • Expect and plan for a changing geography of production, distribution, and value chains. • Understand that, as we move into this frontier, an ever-increasing amount of work will be performed by machines rather than people. That change will create a reskilling imperative. Clar Rosso, vice president of member learning and competency at the AICPA, often states this in the form of amandate: “Learn. Unlearn. Relearn.”  The nature of work and corollary skill sets will change, causing disruption in the source and quality of workers.  Workers who do not reinvest will be left behind.  Companies that do not reinvest in their workers will be less able to adapt. 5 As we move forward, be prepared to develop multiple specialty lines. Clients who struggle to outpace change in their industries will look to outsource portions of the change management tasks that they must accomplish. Think of this in terms of the Committee of Sponsoring Organizations of theTreadwayCommission (COSO) framework: a dynamic system that is constantly adapting to manage new enterprise risks. Your investment in specialty learning, though, must be intentional. Make a dynamic plan. The need for perpetual learning will change how we learn and the amount of time (nonbillable) we devote to learning activities versus chargeable activities. Revisit the leverage model. That means developing and maintaining a dynamic system or decision framework that assists you in choosing to retain work, outsource work to a network of provider partners, or automate/purchase a system. The Future of Jobs Report 2018 approaches the concept somewhat differently: it recommends a c omp r e h e n s i v e “a u gme n t a t i o n strategy,” where businesses look to use the automation of some job tasks to complement and enhance their human workforce’s comparative strengths, and ultimately enable and empower employees to extend to their full potential. Rather than being narrowly focused on automation- based labor cost savings, an augmentation strategy takes into account the broader horizon of value-creating activities that can be accomplished by human workers, often in complement with technology, when they are free of the need to perform routinized, repetitive tasks and better able to use their distinctively human talents. The changing leveragemodel will obviously change our economic model. In other words, when the value generation capacity shifts from “hours generated to produce an output” to “systems and outcomes delivered,” we will need a different economic model for pricing services and value, allocating costs, and determining profits and rewards to providers/owners. Amore technological business environment will require greater levels of understanding. Invest in education. Make sure public schools are adequately funded, support your alma mater, give to the Nebraska Society of CPAs’ Foundation, and invest in reskilling. According to The Future of Jobs Report 2018, in addition to technology and data-related skills, the following skills also will be in high demand: • Creativity • Originality • Initiative • Critical thinking • Persuasion and negotiation • Attention to detail • Resilience • Flexibility • Problem-solving Visit www.aacu.org/value-rubrics to see how the Association of American Colleges and Universities’ value rubrics webpage describes a number of those skill sets. Fi na l l y, r e cog n i z e t ha t t he l e g a l environment—legislative, regulatory, and judicial—will struggle to keep up with the dazzling pace of change. Just consider how the world has struggled to gain consensus on the taxation of the digital economy over the last two decades. Despite legislators’ best efforts, much of the lawmaking during this technological revolution may occur in the courtroom. After just starting to think through the vast changes rapidly advancing toward us, it seems sitting in my recliner is much more comfortable than thinking about what I need to do to outpace the pace of change. Since I’m not ready to retire, I might want to put that recliner in storage. t 1 Klaus Schwab, “The Fourth Industrial Revolution: What It Means, How to Respond,” World Economic Forum (Jan. 14, 2016). 2 www.weforum.org/reports/the-future-of-jobs-re- port-2018 3 Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors, 1980. 4 Kimberly N. Ellison-Taylor, “Three Ways to Outpace Change in Extraordinary Times,” Association of Inter- national Certified Professional Accountants. 5 Based largely on excerpts from The Future of Jobs Report 2018. Edward R. Jenkins Jr., CPA, CGMA, is a professor of practice in accounting at Pennsylvania State University in University Park, a tax consultant for Boyer & Ritter Certified Public Accountants & Consultants in State College, and a member of the Pennsylvania CPA Journal Editorial Board. He can be reached at erj2@psu.edu . Reprinted with permission from the Pennsylvania CPA Journal, a publication of the Pennsylvania Institute of Certified Public Accountants.