This blog is the fourth in a five part series adapted from the AICPA White Paper, Becoming the Firm of the Future, which is available here.
In his book Flash Foresight, Daniel Burrus points out the transformation that will take place due to extreme advances in processing power, digital storage and bandwidth. This hard trend (meaning it will happen, whether we believe it or not) threatens the economic engines of almost all CPA firms which rely heavily on the chargeable hour (time) as the driver of value. As things get faster and faster, we will have less and less value under this model.
What is the real relationship between time and value delivered? For years, many in the accounting profession and, notably to his credit, Ron Baker, have pointed out the disconnect between actual value delivered and time incurred. I’m afraid we do not have the luxury of continuing this debate. It is time to focus on outcomes, deliverables and their value to clients. In the future, time will be less and less of a factor in many of the things that CPAs do today. We must begin conversations with clients that help us understand what they value. It is time to prepare for this hard trend, not ignore it, fight it or continue to debate it.
Compounding the urgency for us to move away from the chargeable hour as a measurement of value is the war for talent. We are in a free agency market for talent where potential talent will call the shots and they will have innumerable options. They will look for vibrant high energy cultures led by a strong mission and purpose. Flexibility and results will dictate the choice of many of the most talented.
How does tracking every 15 minutes of your time promote flexibility, a strong culture and results? Time sheets have become a crutch for managing people, which prevents us from growing new leaders and promoting creative cultures. The chargeable hour restricts our ability to change how we work as well as limits the ability to build a vibrant culture. Valuing time only reinforces the status quo and is a huge disconnect for the Millennials who are focused on results. Valuing time rather than results is hurting our cultures as well as our client relationships.
Today’s technology transformation and the war for talent make it imperative that we move away from time as a determination of value and results. Our clients are going to pay us for results. Our team members are going to be focused on results. Our time clocks are going to be irrelevant for many of today’s functions in public accounting. For our profession to remain relevant, it’s fair to say that time stinks.