Future leaders, be advised: ‘What got you here … won’t get you there’

Tom Hood, CPA/CITP, CGMA, executive vice president–Business Growth and Engagement at AICPA & CIMA, understands why accounting skills are often ranked outside the top five of key skills in informal polling of finance audiences.

“It’s not because they’re less important, but because the other skills are more important,” Hood said.

The core requirements remain, but the ability to adapt and add new skills has grown in importance with the pace of transformation accelerating.

In this episode of the JofA podcast, Hood expands on some recent themes of his travels and what he looks forward to from the Future of Finance Summit in December.

What you’ll learn from this episode:

• Why mindset is more important in transformation than the toolset of technology.
• Details of a recent report about skills from the Pennsylvania Institute of CPAs.
• The skills that rank ahead of the “table stakes” of technical accounting skills.
• Why it’s important to “grab these new skills.”
• The new way that Future of Finance Summit attendees will get a summary of the event.

Play the episode below or read the edited transcript:

— To comment on this episode or to suggest an idea for another episode, contact Neil Amato at Neil.Amato@aicpa-cima.com.

Transcript

Neil Amato: Welcome back to the Journal of Accountancy podcast. This is Neil Amato with the JofA. Joining me for this episode is a repeat guest, a familiar name to listeners of this show. He’s Tom Hood, executive vice president–Business Growth and Engagement with AICPA & CIMA.

Tom and I are going to talk about a bunch of topics focused on the future of the profession. If you’re a JofA podcast listener, chances are you’ve heard Tom’s voice before. Tom, first, welcome back. Thanks for being on the JofA podcast.

Tom Hood: Awesome, Neil. It’s always an honor and a privilege to be on here with you. I’m looking forward to this conversation.

Amato: Great. For our audience, chances are you also follow Tom Hood on LinkedIn. He’s a dynamo on that platform, always on the move, always enthusiastic about the profession. We’re going to talk some about — I mean, basically, I go through your LinkedIn posts and get the ideas for the conversation because you’ve got a lot of good stuff out there. I’ll start with this. In late October, you presented at a New York State Society conference. You polled attendees on the top skills finance and accounting professionals need for the future. I guess the first one was strategic and critical thinking. That’s maybe not a surprise, but tell me what else was on that list.

Hood: Let me set that context. It’s funny, because that week I did three of these presentations in two days with different groups. The [Securities Industry and Financial Markets Association] conference, the securities industry AICPA conference was going on in New York as well, and then I did the Maryland Association of CPAs at our launch of the apprenticeship at Junior Achievement. But all of them had similar future-of-the-profession stories where I always, when I can, poll the audience. Let me give you a little bit of context because the polling is in the context of a presentation we call Riding the Waves of Transformation: Insights and Actions, from our Future of Finance Leadership Advisory Group.

It’s in the scheme of, as I like to say, we stand on the shoulders of these giants — 50, 60 large corporate CFOs, controllers who give us the wisdom of what they’re dealing with. Then we test it in the market at these conferences, state societies, our own [events], etc., and hear that feedback, which then gives us the places, where do our members need the most help or what can we do to support them even better?

In this case, one of the other pieces that gives you a bit more context about this is we had research, I call it the best research we ever did that nobody read, released in March of 2020. That’s why nobody read it. But in that research, they talk about what’s the big success factors of transformation and, obviously, with an eye towards finance and accounting transformation.

Turns out, it’s basically three things that equal 80%, by the way. If you’re trying to tilt the odds in whatever transformation project you’re working on, this is the formula. Mindset 39%, skill set — and when they say skill set, it’s about success or power skills — 24%, and leadership at 17%. Add them together, 80% is about those key components, which means, the toolset, the third item, technology, is the lowest in the ultimate success of a transformation. I’ve been guilty of doing this the wrong way before, too. I put the technology in to try to drive change, and that’s actually the exact opposite you have to do.

Back to your question, what were the key skills that the group identified? From our research, we present a list of about 10, and the strategic and critical thinking, every group I’ve done, no matter what size, that is No. 1. In fact, that’s probably the most important one. Leadership and sense making was No. 2. Data and tech savvy, which included AI prompting, by the way, which obviously got added to that, and data analytics, three and four. No. 5, communication and storytelling, technical accounting and finance skills sixth, and anticipation and serving evolving needs was No. 7. These are not unusual when we do this around the profession.

Amato: I’m going to touch on one thing you said. I think it was in No. 2 on that list. What is “sense making” to you?

Hood: Sense making, literally, it comes from the CPA Vision Project from 1999, which is the notion that we have to make sense of the changing and complex world. For a finance leader, they have to have the ability to put what they’re reporting on in context of the strategic initiatives that the company might be facing. It is about giving that CFO or controller a windshield view looking forward and not just reporting on what happened.

Amato: Help me make sense of this. Technical and accounting skills, No. 6 on that list. They’re still important, but they’re low. How do you reconcile that?

Hood: In our conversations, when we talk through this with members — Why did you did this? Why was it ranked that way? — it’s not because they’re less important, but because the other skills are more important. Now, what’s happened is those have become elevated in the urgency relative to transformation and changing roles of finance and accounting, and, effectively, those are table stakes now, Neil. You’ve got to have those to get in the door of the profession.

I would argue that in a finance team, you’re assuming that everyone’s got those, especially if they’re a CPA or a CGMA. They gotta [have them]. Now you might have to do a course here on a new standard or a change in standards. But the overall curriculum should be much more about those other newer skills than those “old skills.”

Amato: Got it. Thank you for that. Now, also in a recent Future Ready Live with Jen Cryder, CEO of the Pennsylvania Institute of Certified Public Accountants, or the PICPA, you discussed a few things with her. Tell me a little bit more about that and what were some of the highlights.

Hood: Great research by the Pennsylvania Institute and Jen. Jen is also a former CFO, now CEO of the Pennsylvania Institute. She was giving her own anecdotes about what her experience was. But, effectively, and it turned up in an article that was called “CPA Skills Aren’t Enough to Be a CFO, CPAs Say.” Now, the beauty of this report, it was done by hiring managers and often other senior leaders, not the CPAs affected, so to speak. Effectively, these people were saying, “What got you here as a CPA won’t get you there.”

In fact, we see that’s very true. In other words, a CPA who’s been in public accounting, doing auditing or any other kind of professional services, think that they can automatically march into a company and be the controller or, yet even more, the CFO. The research would say that’s not true anymore. Yes, they can get in there and do the basic reporting and all that really well, but many of them lack the critical skills that you might need to be a senior finance leader on a senior team in a company. That’s what this report brings to bear.

In fact, there were some other stats that were reported that show that [fewer] CPAs were making it into those roles than in the past. Now, we hope to flip that around with what Pennsylvania’s done. By the way, Pennsylvania’s research is very much aligned with our whole CGMA curriculum and our own research. What’s in that report is consistent with everything we’re doing. That’s kind of the punch line of what we’re talking about here. But a couple of critical skills emerge from that report that I think are worth underlining for our audience. It’s got a future-focused financial acumen. That’s back to that windshield view, Neil, that we talk about. We’ve got to move away from a rearview mirror to the windshield in terms of our finance.

By the way, EY just did a report called the DNA of the Financial Controller that totally aligns and supports this. Effectively, the controller skills are moving as fast into this new domain of being future-focused and not just reporting on history.

The ability to adapt — and you could argue the ability to adapt and acquire new skills is another new skill. One that’s important because the pace of change is accelerating. Strategy and growth are now in the job description and can’t stop at compliance, so that’s what you see in that report from Pennsylvania, critical thinking, strategy creation, talent management, and collaboration all are part of that mix — again, identical to some of the things that we’re seeing. Then finally, one that they covered that we don’t always double-click into is the idea of emotional intelligence, because they’re working across the organization. And I know you’ve done on this show, Neil, you’ve talked about our T-shaped professional.

That’s exactly what this report is validating. The baseline skills, the core at the base of the T, those are your financial, data analytics, accounting [skills]. You’ve got to have those. Then you put this big boundary-crossing piece on the top — strategic and critical thinking, collaboration, communication, storytelling. Those are the money skills now that make you move up into that new domain.

Amato: As the horizontal line on that T gets wider and wider, I guess, there’s kind of that, “OK, what’s next?” That’s going to lead into my next thing. What is that next wave of uncertainty that this profession is going to have to ride, so to speak?

Hood: We poll our Future of Finance Leadership Advisory Group all the time to track how these issues are moving and where they think it’s going. Our latest one, as of August, still shows digital transformation No. 1 because the software is still evolving and every finance team is tasked with updating it and getting better information. Those systems now are building gen AI into them and some other things that are enabling this future view. They’re doing more FP&A-type work, etc. No. 2 is gen AI and AI. That flew into the picture last July. Well, a year ago, July, and that’s No. 2 on the issues list, the need for new skilling, which is this whole piece.

In other words, now we’re at this inflection point with finance and accounting that if we don’t begin to grab these new skills, we’re going to become less and less relevant, and we don’t want to become irrelevant. That’s the critical movement we have to embrace. Finding and retaining talent, another one, growth in a hybrid workforce with culture.

Then the other one that showed up in the last year was growth and innovation. This gets back to now the CFO’s role in strategy. Let’s imagine the landscape. Bigger waves of change coming faster. Everyone agrees on that when we do the raise your hands, driven by two big accelerators. COVID accelerated e-commerce by 10 years in two years, and ChatGPT is like a turbocharger on all that.

Everything is moving at a faster clip. Next [to] those items in the middle — culture, new skilling, and talent — are what you have to do to prepare your team to serve the company better. And then, finally, growth and innovation is your seat at the corporate strategy table. You’ve got to be ready as a CFO or a financial controller to take that seat, and you’ve got to upskill your team to be able to support you as you have to give those deeper and deeper demands of the board and the CEO.

Amato: You mentioned the Future of Finance Leadership Advisory Group. That group and others are going to convene soon at the Future of Finance Summit, Dec. 11, San Diego. I guess we’ll continue on the waves theme with that destination, but what do you see as things you’re looking forward to about that event coming up here in about a month?

Hood: I got to start with how this community has defined itself over the last, this will be our fourth summit, so four years. It’s about 50 senior finance leaders. Actually it’s up to 70 senior finance leaders now, and they help us create this agenda. It’s built by the community, for the community, and we open the invitation to others who had the right framework of thinking, but it’s going to be the top issues that we just talked about. There’s going to be a bunch of gen AI, there’s going to be digital transformation. We’re going to do case studies of people’s transformation projects. Last year we had Verizon and Disney. We’ll have some more of those examples going on.

We’ll have a bunch on culture and some on leadership, but I will say the thing that I’m most excited about is we’re going to as we like to say, drink our own champagne, because gen AI is so important, we found an app called Snapsight by Gevme. And we just tested it on one of our internal working meetings that was a day’s worth of work in person, and it blew us away. It’s an AI tool that works live in these conversations.

With a speaker and with people at roundtables that are reporting out at tables, etc., all that conversation is captured in real time and analyzed in real time, and the program starts showing thought clouds and bubbles and summarizing it as we go, which is an incredible user experience. But at the end of this conference, we’ll probably have a 30- or 40-page compendium of everything that was talked about, so that we can share the wisdom of our group in a much broader context. That’s our whole purpose, is to be able to share among each other, but to be able to have a resource to make us all even better finance leaders in our roles.

All those bucket of issues will be dealt with: talent, apprenticeship, all that. And then you’ll get basically a book, along with our graphic recorders that are recording some of the critical sessions. Our goal is to really turn information into wisdom, go beyond knowledge, but this is wisdom because it’s actually the output of the conversation and what all that means. That’s what we’re really super excited about around the content is the resource that everyone will be able to take away.

Amato: That’s great. The JofA podcast will be recording episodes live at that event. Look forward to being back at it. Tom, anything else you’d like to add in closing?

Hood: Well, I just want to applaud you for all your coverage of all these issues and things that we’re doing. It’s important to get the word out and show our members out there that finance and accounting, the business and industry side as we talk about it, is a critical component of our membership, and that includes CPAs and CGMAs. And we’re here to spread that word and to provide resources to make us all even better, even more relevant leaders in the future.

Amato: Tom Hood, thanks very much.