This is the first of two articles examining the challenges and opportunities in making the shift from compliance to advisory services. Our industry is full of men and women who have worked hard to build their practices. They’ve got many attributes in common — attention to detail, highly specialized skills, and a strong work ethic. Only a handful, however, have reached the pinnacle in our industry and attained the mantle of “Trusted Advisor” in the eyes of their clients.
Why is that?
The skills, focus, and mindset required to excel in the fields of audit, tax, and compliance are vastly different from those required to excel in the disciplines of strategy, advisory services, and coaching/consulting. The core distinction lies in the difference between whether you are seen to be an expert, or to have expertise and insight.
The client will always pay more money for expertise and insight because their perceived value to the business is much higher.
This first article focuses on the key steps you must take to plan and orchestrate the move. The second article will highlight how to successfully execute the transition by acquiring the right set of skills, focus, and mindset.
Moving From WHAT to WHY and HOW
As an accountant or bookkeeper, you are already a deep subject matter expert in all things financial. However, most of what you do for your clients is focused on the numbers that describe the past and present of the business. Audits, financial statements, tax returns, and key performance indicators (KPIs) all help answer the basic question of WHAT has transpired in the business to date. However, these compliance tasks are highly price-sensitive, the scope of work is limited, and it is almost impossible to leverage them to create influence with your client.
In order to create influence, you must move into the domains of WHY and HOW — these hold the key to helping your clients move forward. Coaching and advisory services are the gateways to WHY and HOW, respectively. The graphic below sets out the three gateways and illustrates the path from accountant/bookkeeper to coach and trusted advisor.
Both WHY and HOW require a future-based, big-picture focus as well as a broad, inter-disciplinary approach. While all three dimensions require deep subject matter expertise, only the trusted advisor possesses the key set of skills, focus, and mindset that leverages their specialized knowledge in a way that is impactful and influential.
SHIFT to Help Your Clients Move Forward
The acronym SHIFT summarizes the five key strategies you must put in place to move your firm from compliance to advisory services:
- Solve Problems
- How To
- Time Is Your Enemy
(See description of each of these five components below.)
Cloud accounting and machine learning (or artificial intelligence) are putting more data and power directly into the hands of your clients today. As a result, there is a very real possibility that most of the WHAT tasks you’ve been doing will be automated in the near future.
To take an example, IBM created a computer, nicknamed Watson, that can diagnose your medical condition without human intervention. Watson has memorized two million pages of medical textbooks and 25,000 training cases. Along similar lines, Associated Press and other global news agencies already use robots to write sports reports and finance updates. You might have even read one today in your newspaper without knowing it!
Contrary to what you might think, it’s not just blue-collar workers who are being impacted by this development and will continue to be. It’s skilled professionals just like you.
According to a research paper released by the Centre for Economic Development of Australia (CEDA), “In the next decade there is a high probability that occupations such as accountants, estate agents and even economists will not exist or will be significantly depleted.” The researchers even go so far as to hypothesize that 94% of what you do right now as an accountant or bookkeeper will be replaced by machine learning and artificial intelligence by 2030.
That is only 13 years from now. Are you ready to retire or lose your practice?
This is why thought leaders, industry bodies, and training organizations are urging you to focus on becoming the trusted advisor.
Yet, as already noted, achieving this mandate continues to be elusive. Why?
Our industry and the way we educate and train new recruits is focused on technical skills, legislative changes, and GAAP processes. These establish you as an expert but are not enough to elevate you into the realm of expertise and insight. When you sit down to advise your clients, it’s easy to fall into the trap of “explaining accounting” and focusing on WHAT, as opposed to focusing on the specific steps and strategies your client must implement to grow safely and profitably.
There is very little training in university, on the job, or in our industry bodies to show you HOW to become the trusted advisor. Becoming the trusted advisor is about connecting with your clients and communicating in a way that inspires and empowers them to take action to improve their results.