Embrace uncertainty to develop more business acumen

Embrace uncertainty to develop more business acumen

A mere accounting professional is not the same as a full-fledged
finance professional. At least that’s how consultant David Axson sees it.

The more evolved finance professional, Axson says, considers the
business environment, embracing its volatility, and then adapting to it.

“Being comfortable with uncertainty is, to me, the difference
between an accounting professional and a finance professional,” Axson,
a partner at Accenture, said in an interview with the JofA.
“Finance professionals are comfortable with ambiguity. They like doing
forecasting. They like doing planning. They’ve proven they can do the
backward-looking piece.”

The backward-looking bit is the foundation of an accounting
professional. But many accountants could stand to spend more time
looking through the windshield rather than the rearview mirror, he

Instead of more rigid, once-a-year budgeting, for instance,
accountants must do more scenario planning that enables flexibility
based on economic conditions, said Axson, who spoke this week at the
AICPA Financial Planning & Analysis Conference in Las Vegas.

Many accountants aren’t doing that kind of predictive work because
it’s not their responsibility. Others resist the notion of looking to
the future, content with providing historical information that others
can use to set strategy, Axson said.

That resistance to things such as scenario planning is akin to an
everyday golfer’s aversion to practice anything more than hitting the
ball as far as he or she can. Failure to consider the scenarios an
organization could face is the business equivalent of going to the
driving range, where each ball is teed up before an open field, with
obstacles such as trees or ponds noticeably absent, Axson said.

“Most people stand up there and bash their driver,” he explained.
“It would be far more useful to stand in the trees, off to the side,
and practice chipping out to the fairway. They’ll face that situation
rather frequently, but you never see people practice those shots. If
you practice situations that you may encounter in executing your plan,
then you’ve got some thinking about what you’ll do if put in an
unexpected situation.”

Learning to be an adaptive rather than inflexible planner will help
finance workers ascend to more strategic roles, Axson said. In short,
finance must know the environment in which the business operates—the
market, the regulatory challenges, the customer’s needs, and the
competitive landscape.

“If you want to be a successful finance executive today, you really
have to understand how a company makes money and not just be able to
count the money at the back end of the process,” he said.

One piece of advice Axson gave: Think a question or two ahead. Let’s
say the finance department is asked as part of an annual planning
process, to estimate GDP growth for the year. Instead of simply coming
up with an answer of, say, 2%, which of course is no more than an
educated guess, finance should make recommendations based on that
number as well as others.

“What if it turns out to be zero? What if it turns out to be 4%?”
Axson explained. “Finance needs to have answers. ‘Under this set of
assumptions, this is what we think our performance will look like. As
things happen to change, here’s how we change our mix, reprioritize
our initiatives.’ ”

How top companies juggle priorities

Finance professionals must also use technology to change the normal
weekly work flow, Axson said. If much of the week is spent compiling
data into reports for other people, then the time for attaching
insight to that data is sparse.

“In too many organizations, [a] vast amount of finance staff time is
spent assembling data rather than performing analysis,” he said.
“Companies with lots of fragmented data systems and source systems are
forcing the finance people to compensate for a lack of an integrated
technology infrastructure to assemble all of that data.”

If accountants have more time to analyze, they’ll become more
comfortable living in an ambiguous world. Additionally, companies that
empower finance to add insight instead of simply compiling numbers
will be able to attract a more talented, analytical workforce, Axson said.

Accenture research shows that top-performing companies are more
likely to allow finance to think more about data and less about
collecting it. Not only are those companies able to be more in touch
with changing economic conditions, they also are more likely to be
able to recruit top talent.

“The companies that do that well—that can get to that point of
what’s happening, why is it happening, what should we do, much earlier
in the cycle—they’re going to be in much better position to respond in
a volatile environment,” Axson said.

Neil Amato (

) is a JofA senior editor.

Research & References of Embrace uncertainty to develop more business acumen|A&C Accounting And Tax Services

4 thoughts on “Embrace uncertainty to develop more business acumen

  1. Pingback: Melanie Bowen

Leave a Reply