One key to implementing change initiatives is understanding the why and what problem you're trying to solve, according to Jennifer Elder, CPA/CFF, CGMA. Another component, Elder says, is having a way to measure a change initiative's success. In this podcast episode recorded in Nashville, Tenn., Elder offers advice on the best approach to implementing change and comments on some of the ways organizations' change initiatives can go awry.
Also, get up to date on news coverage of what's new in federal taxes for 2022, what the IRS says about digital returns and filing dates and why tax season could be frustrating. And hear a summary of a recent GASB announcement regarding going concern standards.
What you'll learn from this episode:
- A few key topics from Elder's Digital CPA presentation on change management.
- Why, according to Elder, we all like and dislike change.
- Why we are suffering burnout as it relates to managing change.
- The traits of organizations that have been better at handling workplace changes created by COVID-19.
- The questions that should be asked when deciding to implement change.
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.
Neil Amato: This is the Journal of Accountancy podcast. I'm your host, Neil Amato. Joining me to talk at the Digital CPA Conference is Jennifer Elder, a CPA who is CEO of The Sustainable CFO, a training and staff development organization. Jennifer, we've talked on the phone. Now I get to meet you in person, so welcome to the podcast.
Jennifer Elder: Thank you. It's a pleasure to be here, and it's a pleasure to be here in person.
Amato: Your session at Digital CPA is on the topic of change management. First of all, I'd like to know, is change management different to you than managing change?
Elder: I think it is and I think while we're splitting hairs on terminology or grammar geeks might argue with me.
Amato: I'm definitely one of those grammar geeks.
Elder: But I think that change management is how we describe when we know a change is coming. How do we manage it as it happens, but we see it coming? Managing change is how we deal with it when it's imposed on us. I'd like to talk about change in two ways.
You can ask people, "Do you like change?" Some people will go, "Oh, I love it," and other people will go, "Yeah, no. Don't like change." There's that expression, the only people who like change are babies. But I would argue that we all both love and hate change. We love it when we buy new clothes, we love it when we choose to go to a conference, we love it when we try new food. That's change by choice.
Change by choice is really change management, because you know it's coming and you have some control. Managing change is really about when you change without a voice. You don't have control, so how do you deal with those things that you don't have any input on? Pretty much what we've been dealing with for the last 20 months.
Amato: Yeah, exactly. And in your session description, I'm not going to have you rehash the session too much, but this whole thing about managing change, it's very important financially. I mean you get it wrong and you can lose money, you can lose high-performing employees, maybe damage your reputation. That's one of the things you hit on. But how can people get managing change right, and what are some of the benefits to doing that?
Elder: Well, there are two things to think about. One is how you implement change, and then how you respond to it. To your point, the change management is how you implement. Managing change is your response to it. We have to think about both halves of that. We've all been part of change initiatives that started off great and failed miserably. There are those that didn't really seem to have legs and yet were fabulous in terms of results. Sometimes people would tell you it's like flipping a coin. I don't know which way this is going to go.
I think the most important thing for any organization is to answer some questions around the clarity of change. What I mean by that is why. Why are we thinking we need to change? People will come up with lots of flowery reasons and "Oh, this will be so wonderful." But really, what you have to answer is, what's the big problem?
Too often, we change just for the sake of change, and that's when we end up with real problems. We're chasing after something that is just the latest bright and shiny object.
Amato: It's almost like you actually did read the email I sent of some of those question ideas because this leads perfectly into the next question on the list that you didn't read. I heard this on a recent LinkedIn Live conversation. Leaders can't just make a bunch of changes and expect everyone to be gung ho about those changes. Is that really something that management does?
Elder: I can share a conversation I had this morning where somebody was telling me about their firm. Fifty partners on a Zoom call, all of them at home. The topic of conversation: "How do we get our staff to come back to the office?" They apparently missed the irony. We want our staff to come back to the office, but we're going to have our Zoom call from home.
You can't just impose change on your staff and not get involved in the change yourself. What's good for the goose is good for the gander. If I'm going to make my staff do it, then I need to think about leading the way and lead by example.
Amato: Obviously, starting in March 2020 there was a lot of imposed change. It's still tough for some of us to deal with. How can CPAs take the lead on that?
Elder: Again, it goes back to clarity of thinking about, why do I need the change? What's the big problem I'm solving? What are the benefits? How would you know if you're successful? Instead of saying, we're going to adopt this new RPA software to process our invoices and this will be wonderful, we'll be more efficient.
How do I know? How do I know if it was successful? What am I measuring? You really have to be able to say, what is my goal, what's my desired outcome and measure progress.
Now one of the things we're all suffering from — thank you, COVID — is a little bit of burnout because it's a never-ending change, and we're not sure if we're making progress. We think we are. Oh, wait, no, we're not. Maybe we are, oh, I don't know.
For organizations to take the lead with successful change, make sure you can track your progress and share the success with people. When you're trying to lose weight, you don't just say I need to lose 50 pounds and say, "I'll step on the scale a year from now and if I've lost 50 pounds, life is good." We look for those little wins. Yay, I lost a pound. Yay, I've lost 3 pounds.
That success breeds more success, but too often leaders will say, "This is what we're going to do. Here" — we hand it off to our staff and then we just assume that they know what's going on and they'll make it happen. But we all need positive reinforcement, that what we're doing is going in the right direction.
Amato: On the topic specifically of remote work, there was plenty of imposed change on that, but now it's just in flux. To use your example from earlier, it is in flux. It's not a solved problem yet. So how can people who are good at managing change approach that issue?
Elder: I'll go back to change without a voice vs. change by choice. We've had that imposed change. COVID hit and we're going to work from home. Now organizations are trying to think about coming back to the office and who should come back and when and all of that. Instead of imposing that on people, ask your employees.
I think sometimes as leaders, we have two issues. One is that we think we have to have the answers so that when things are in flux and things are confusing, we think, as a leader, I need to stand up and I have to be the one that knows what to do.
The second thing I think we forget sometimes is we hired our staff because we think they're smart. We think they're good. Well, you hired them because you think they're smart. They did not get dumb while they were working for you. Ask for their solutions.
What did they think will work? By asking their opinion, you have now gotten them involved, and it starts to become change by choice. Even if my suggestion doesn't get implemented, at least I was listened to. That means that, OK, they listened to me but I guess everybody else thought differently. OK, I'm all right with that, as long as I had my say.
Amato: Do you think there was any telltale sign or traits of organizations that maybe were better able to handle the sudden disruption of COVID-19 vs. others?
Elder: Absolutely. Number 1, forward focused. Now when we drive in a car, the windshield is so much bigger than that rear-view mirror. Smart organizations are the ones looking forward and saying what's coming down the pike and how could this affect me? There were organizations — when was it? March 13 when the world came to an end as we knew it — there were those that said, OK, now what do I do? Not how do I adapt because the world changed. Einstein was known for saying, the definition of insanity is doing the same thing the same way and expecting different results. I've changed that a little bit to say, insanity is doing the same thing the same way in a different environment and expecting the same results. Smart organizations take a look at what's going on out there and think about how they can adapt.
The second key trait for organizations that adapted well was transparent and open communication. That they listened. Two ears, one mouth, use them in that ratio. They listened to customers, they listened to employees, and then sorted through all of that information rather than making huge assumptions and imposing more change on people versus listening and giving them a little bit of a voice.
Amato: This has been great. Would you like to add a closing thought to this conversation?
Elder: I think the closing thought is that while we need to plan out the change, one of the things we have to remember is it's not going to go according to plan. There are going to be setbacks and there will be failures. But fail is actually an acronym. It stands for "first attempt in learning," and as long as we keep adapting, keep learning, we'll keep moving forward.
Amato: Again, that was CPA Jennifer Elder. Thanks to Jennifer for being on the show.
In other news, we start with several tax items of note, written by the Journal of Accountancy's Paul Bonner. First is an article with the headline "What's New for 2022 in Federal Taxes." It has information on exactly that: What's been added, what provisions have lapsed, and more. Read that article on journalofaccountancy.com.
Also, the IRS announced the start date for tax season and that the due date for most individuals is April 18. The IRS is urging taxpayers to use digital means to file returns, and it will begin accepting returns starting Jan. 24. However, Treasury officials anticipate a "frustrating" tax season for taxpayers this year, and the AICPA is urging the IRS, Treasury, and Congress to provide greater tax penalty relief in light of the COVID-19 pandemic and resulting taxpayer hardships.
And finally, GASB, the Governmental Accounting Standards Board, has decided to undertake a major project on accounting and financial reporting for going concern uncertainties and severe financial stress. Such financial stress affects state and local governments differently from other entities, research by GASB found. Ken Tysiac has the details on that, and we'll link to that article and the other articles mentioned in our show notes for this episode. This is your host, Neil Amato. Thanks for listening to the Journal of Accountancy podcast.