Emotional Intelligence

The Accountant’s Survival Toolkit for a Digital Future

Table of Contents Executive Summary

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1 Self-Knowledge

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2 Empathy

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3 Influence

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4 Resilience

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5 Learning

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6 Training

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7 Ethics

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8 Culture

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9 Governance

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Primary research taken from ACCA Global’s Professional Insight Report: Emotional Quotient in a Digital Age 05 November 2018

Executive Summary Mastering Your Emotional Intelligence

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There’s an elephant in the room. And you can’t afford to ignore it.

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ou might be wondering how you got here, or maybe you expected something different? The truth is, you’ve been set on a groundbreaking path. It’s one which is going to rewire your perspective and equip you with 9 critical guidelines that will safeguard your career and put you ahead of the curve. Advances in digital technology across the sector now require a more holistic skillset, one that functions beyond the technical. It’s fast becoming of great importance and critically, this skillset includes emotional intelligence. Think of it as an emotional quotient, or EQ, measured by one’s ability to respond emotionally to a changing, digital workplace. It’s now a more automated place, full of systems that make decisions based on preset parameters and beyond that, machine-learning and artificially intelligent (AI) systems that ‘think’ for themselves. Everything is becoming more flexible and decentralised, where a specific understanding of systems outside of the traditional accountant’s remit, such as blockchain and the associated ethical issues, are more vital than ever. In this evolving environment, what are the challenges for individuals at all levels of seniority and, as human-beings, how should we respond to this new world in order to remain relevant and ultimately keep our jobs? Of course, most people will have a sense of all of this. It’s likely that you’ve considered your response to the digital world. How it motivates you to think a certain way. To act a certain way. You’ve no doubt questioned how you interact with your network and how these interactions affect key elements of your psychology, aspects like motivation and trust. Nonetheless, there may exist a false illusion that being in touch with your ‘self’ compromises your judgement, because all that matters at the end

of the day is ‘the bottom line’. But nothing could be further from the truth. It turns out that emotional intelligence is the elephant in the room of the accountancy sector, and without EQ being front and centre, your business could be at risk. Therefore, the task is to build strategies that recognise and respond to this requirement. One definition of emotional intelligence is the ability to identify one’s own emotions, those of others, and learning how to manage and apply them to practical tasks. And in the most simple terms, your EQ is the framework by which you can achieve this. This means recognising the inherent value of your emotions within the context of your business role, something all the more relevant as our digital world flourishes. It goes without saying that the threat posed by new and disruptive technologies, is ever-present. There are certain tasks at which machines are just better. However, there are also aspects of the human skillset that are far more difficult to replace and it is these that will provide a competitive advantage. Building these EQ competencies into the accountancy profession, competencies which are hard for machines to replicate, is the leverage required to survive. Key to the development of one’s personal EQ is a concept known as a ‘growth mindset’; essentially the highlevel point from which improvement of all emotional competence is made. A prerequisite is the desire to work and improve, to place oneself in an environment that allows for change to happen. Experience matters and generally speaking exposure to specific situations allows for improvement to take place. Practice makes perfect, right? Naturally. But also choosing

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the right tasks is essential. And there are certain ones at which AI performs very well, almost certainly better than you. It’s these tasks which will be replaced imminently, those that require so-called ‘specific AI’. So, the main challenge is identifying aspects of the business which catalyse more effective human interactions, which could only be replaced by ‘general AI’ and which is still (thankfully?) some way from being developed to the extent it actually threatens to replace you. The main aspects of EQ can be generally defined as change-readiness, increased diversity, ethics and beliefs, cognition and learning, humanmachine interaction and shifting power. Change-readiness is the empathy needed to deal with technologyrelated job-losses and the strategies through which you can overcome the fear of change. Increased diversity means taking in the perspectives of a wider pool of stakeholders, made accessible through remote working and technology tools. Ethics and beliefs are the core structure through which an accountant’s decisions are made. Cognition and learning refers to the tools and willingness required to adapt to a fast-changing world. Likewise, human-machine interaction deals with many of these aspects; how we acquire new knowledge and disseminate it. And finally, shifting power relates to new governance structures, where the push and pull of different specialities demands that emotional influence plays a key role. Each of these categories are interconnected by 9 core competencies; Self-Knowledge, Empathy, Influence, Resilience, Learning, Training, Ethics, Culture and Governance. Read this paper, and you’ll be part of an exclusive-set; one that’s emotionally prepared for the future. Enjoy and good luck!

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Self-Knowledge ‘Temet Nosce’

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You are your specialist subject. So never stop specialising.

t was Socrates who famously taught the maxim “know thyself”. 2,500 years later, the world has changed but his advice remains as true as ever. It doesn’t matter if you’re a director, partner or executive fresh out of accountancy college, understanding how one’s emotions underpin one’s behaviour is vital to self-knowledge and professional development. Part of your EQ is that capacity to recognise the relationship between emotion and behaviour. How do I feel about myself? How does that affect other people’s perceptions of me? To what extent do my emotional responses govern my ability to learn, influence, teach and make ethical decisions? Because one of the main differences between us and machines is self-awareness. And it’s that self-awareness that defines our emotional competency. Without it, you’re no different to a machine. In this age of highvolume communications and transactions, being able to pick out a signal from the noise, to know one’s priorities, is a core skill. And in picking these priorities, you define the degree to which you want to specialise. After all, you are your specialist subject. But what does that mean? In the digital age, are you better placed to add value to your organisation by specialising in one area, or should you adopt a more generalist approach? Sure, this isn’t anything new. Your entire life, you’ve been making decisions about the type of information you wish to absorb, and what to ignore in favour of improvement in other areas. But in the context of a fastchanging, digital future, who survives? The specialist or the generalist? In answering this, two narratives emerge. On the one hand, with the threats and opportunities inherent to periods of such rapid change, natural evolutionary theory teaches us

that being able to adapt; to not get boxed in by one’s highly optimised, context specific skillset, is of serious importance. Maximise your responsiveness. React to the change and leverage it to your advantage. That is one approach you might wish to take. However, the alternate view is that trends in technology threaten to replace those that do not have a customised or bespoke element. And the keyword here is ‘element’. In essence, if it’s replicable, it’s automatable. So what specialties do you bring to the table that a machine would struggle to automate? Understanding a brief and outputting a tailored strategy. Being able to delegate and manage a team effectively. Creating new opportunities for growth outside of the existing knowledge-base or datasignals. It’s these intuitive skills that will best prepare you for survival in a digital future. Of course, your individual personality will define what suits you best; your skills and expectations in the long-term. Nonetheless, this all requires emotional competency and self-knowledge. And like any skill, it’s a muscle you need to constantly train in order to remain competitive. It’s not good enough to assume that these developments will occur passively. Like software, your psychology and self-knowledge require active updates. As an accountant, you receive a great deal of knowledge from multiple sources. Ultimately, your main skill is a sense of judgement. What’s the reason for this information? What’s the motive of the source? How do I read between the lines to create the best possible business outcomes?

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As professionals, self-knowledge is our defence mechanism. It’s the very root of survival, drawing on past experiences to determine how we can make better decisions in the present. Our belief systems are central to the protection of ourselves and our stakeholders. And in a fast-moving, digital world it’s more important than ever to keep this awareness present at all times. Even a faulty click can seriously cost a firm, both reputationally and financially. Therefore, at the heart of the entire theme is the concept of trust. It is, after all, one of the basest of animal traits. And it’s the refinement of that evolutionary instinct that reinforces one’s ability to survive the shifting, digital landscape of the accountancy workplace. There are undoubtedly circumstances under which humans prefer dealing with humans, rather than technology. It doesn’t matter which industry you observe, the same is true. In many instances, a customer is prepared to pay a premium for a product or service which is inherently human; something handmade, which could not be provided to the same standard of quality as a machine working alone. At the centre of this is whether or not we can entirely trust the automated technology we increasingly work alongside. Once again, self-knowledge determines the extent to which we give technology the benefit of the doubt. How do you interrogate the facts at an appropriate level? It’s only by evolving these traits of critical analysis, in combination with an understanding of one’s emotions and motivations to act a certain way, that will give you the edge in a fast changing digital world, and the ability to operate symbiotically with the changing infrastructure and processes.

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Empathy The Golden Rule

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Emotional sensitivity is the compass leading to new opportunities.

ou know it yourself. It’s something so fundamentally human, it’s easy to forget we’re doing it. In many ways it’s a need, one required to function correctly in our professional and personal lives. In fact, it’s only when describing fringe psychologies that the importance of human empathy really comes to the fore. It’s fundamental to the very fabric of society. Unquestionably, at present, it’s an ability that we hold exclusively over machines. Sure, you can program a computer to ‘feel’. Great advances have been made in the palliative care sector, to produce machines that cast the illusion of empathic sensitivity. But this is ‘specific AI’ to that field. From a general business perspective, it’s untapped territory, making it a critical advantage as we enter a more machineoriented workplace. And when you get under the skin of the issue, it’s clear to see that such qualities in a company’s staff, regardless of seniority, directly benefits the firm and secures its future success. It’s not just about how you manage your clients. It’s also about company culture and it’s one of those issues which can really affect the bottom-line.

As we age, the belief that we can sense how others are feeling without any verbal signals improves consistently. And it stands to reason. When you were a child, it’s highly likely you only cared about your own demands. You had a much lower EQ. The world around you, according to you, was tailored to meet your needs and rarely would the needs of others come into play. Your ability to empathise improved with age, as you learned that in order to get what you want, you also have to cater to others. And really, that’s how business works. A good salesperson has a strong degree of empathy; they seek to achieve the outcomes of their client, rather

than focusing on their own commercial gain. Only in doing so will they achieve success. And the same principles are true in the accountancy sector. To an extent, we’re all salespeople in the workplace. Whether it’s selling a new idea, supplier or strategic agenda, we need to understand the motivations and feelings of others in order to achieve those aims. In essence, what you’re managing is your sense of compassion. To what extent can you put yourself someone else’s shoes, no matter who they are and where they sit in the business, in order to maximise the relationship and create value. Of course, when training accountants, one of key learnings is the ability to tailor your communications to a specific audience. The media industry works like this every day, as per the expression “give the reader what they want”. Target your communications effectively, and you’ll sell more of whatever it is you’re selling. It sounds intuitive, but like many other elements of your personality, it requires training to stay at an executive level. It’s the stuff of success, the knack of influencing decisions by understanding who it is you’re addressing, and why they are likely to follow your particular course of action. It’s a subtle art. Try to overdo it and you’ll fail. Your audience is sensitive and can easily detect insincerity. But get it right, through a process of understanding and genuine engagement, and the rewards are there. It’s about trusting your own intuition to respond correctly in a particular set of circumstances. Take self-employed members of your business. It may even be yourself as you read this. Self-employed workers in the accountancy sector rank highly when it comes to this sense of empathy and compassion. These individuals

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operate in a highly entrepreneurial way, so responding to non-verbal signals from clients is critical. As with the SelfKnowledge section of this paper, it’s about generating trust, and through trust comes value. With a lack of formal procedure, they must respond to all available signals in order to achieve the client’s outcomes client. From the moment they walk through he door, striking the right tone according to the workplace environment is key. This is something that machines can’t do. Yet. There are semantic algorithms being built that can respond to particular audience types in real-time, but to do this with the lightness of touch required in reality is still very much a human ability, and one which is critical to an increasingly automated workplace. Likewise, those working on a permanent basis in large organisations must take on the perspectives of a wide group of stakeholders. Irrespective of seniority, having the emotional competence to lead; to understand one’s priorities in relation to others, is of fundamental significance. As described in the Executive Summary, it’s a ‘growth mindset’. One’s sense of empathy, and the willingness to improve that sense, equates to one’s levels of influence. As an accountant drives multiple, complex stakeholder interactions in the new digital age, reinforcing these types of positive feedback loops, and avoiding the negative ones, is a priority. Ultimately, emotional sensitivity is the compass leading to new opportunities. At a human level, demonstrating warmth and understanding, and recognising the fears and motivations of others, is how you win trust. It’s how you find new business, keep your staff, and maintain a healthy outlook which supersedes the ubiquitous digital agenda within our profession.  

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Influence

The Art of Persuasion

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Strong leadership and negotiation means using the whole toolbox.

hen we think of making persuasive arguments, it’s often the use of rationality; facts and figures, which leads us to success. And of course, these factors have a part to play. But less common by far is the emotional factor, your use of EQ. The question is, are you undermining your influence by inadequately recognising the potential of emotions and associated factors? In the accountancy sector, many influencing styles harness rationality. After all, it’s a numbers game and a deeply analytical one at that. But, in not using emotive elements, are you leaving ‘value on the table’? Today, there’s no shortage of rationality. In a digital world, we’re surrounded by data. Whatever the metric, you can trace it, package it and pull it apart, and there’s no shortage of tools to help. And it’s true that data is an excellent, objective point from which to frame a question. Did X lead to Y? Sure, and I’ll prove it. Yet at the highest levels of influence, you still need to drive an emotional response from the parties involved. It’s not enough to deliver raw data without making it human. The notion of ‘death by PowerPoint’ speaks to exactly this phenomena; an inadequate framing of the agenda in a sufficiently human way. Today, sports journalism is already written by machines. A lot of the data within these texts is formulaic, but machines are getting better at giving the impression of emotion, based on preset parameters. The same goes for music, art and even poetry. Indeed, for the last 10 years computer programs have come into existence that make it very difficult to determine if a seemingly subjective piece has any sense of ‘self’ at all. What’s more, the machines are improving at an astounding rate. And their prevalence is only going to increase across all aspects of our culture. Their impact will be vast.

As accountants, we’ll be interacting with them a lot more, and they have the potential to influence elements of our profession beyond aspects of calculation and analytics. Therefore, it will become increasingly important for the professional accountant to essentially act as a gobetween, an enabler for these types of computer-human interactions. In effect, accountants will become translators. They will need to manage how these interactions occur and are consequently interpreted. And getting this right will be paramount, influencing stakeholders in the correct way to ensure the intended outcomes occur. It appears that within the next-generation digital workplace, accountancy will need to shift the emphasis of power from harder, more fact-fuelled influencing styles to softer, more emotive ones. With the introduction of more advanced AI, hierarchies of control are set to be somewhat flattened, and those with the ‘growth mindset’ to adapt and improve will find themselves using increasingly novel ways to challenge the status quo. Leveraging your human qualities in the face of extremely efficient machines and data-analysis software will be one way to achieve this, the ability to put forward an alternative point of view in order to drive emotional engagement. The accountant will be required to inspire, rather than simply calculate. We will be asked to act as the interface for a new wave of computing, humanising data in order to achieve highly specific aims. And if this sounds like a tall order, it’s not just freshly trained graduates that will carry this expectation. All levels of management, if the intention is to continue within the industry, will be required to build resilience. So, high on the agenda is the ‘growth mindset’ which allows us to build the

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emotional competencies in order to unlock these novel skillsets. You’re being more empathetic. You’re tailoring your communications. You’re leveraging your emotional sensitivity and awareness as a critical tool of influence and engagement, in a sector which has traditionally been perceived as highly objective and discrete with the levels of subjectivity. It’s becoming clear that balancing these traits in order to achieve specific outcomes, in tandem with more advanced technologies, is the calling of the modern accountant. And specifically, it’s the art of finding information between the cracks; being selective in such a way that honours your ethical framework, in a world saturated with ways in which to hide amongst the data, while simultaneously remaining persuasive at all levels of the business. The profession has moved beyond the purely rational. Beyond the logical. You’re being asked to improvise. In essence, the key criteria is adaptation. Being able to respond dynamically to new information and deliver it to key stakeholders in such a way that is seamless, human and effective. New skills are being called for. It’s no longer enough to have a degree in accountancy. The stratification of the industry is calling for software-developers, big-data analysts, historians and client managers, and amongst this complex mix of individuals, the necessity is for all parties involved to have at least some grounding in stakeholder relationship management. In order to lead in this space, one needs to be able to argue well and negotiate a point, and that means using the whole toolbox of skills at your disposal. A combination of curiosity, insight, verbal and written rhetoric and an understanding of how each part fits together is now a basic requirement. As the technology improves, it’s the core aspects of your human ability to influence which will be called upon, as well as your objective rationality as a traditional accountant.

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Resilience Future-proof or Fail

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Are you ready for change? Because the world won’t wait.

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othing is so painful to the human mind as a great and sudden change”, wrote Mary Shelley in her 1818 work of classical literature, Frankenstein. And just over 200 years later the new prometheus of artificial intelligence and machine learning, much like the threat of electrically powered mass-production in Shelley’s day, is set to change the modern workplace so dramatically that building resilience is key to your survival. We are now beginning to experience a new chapter in human history, ‘The Fourth Industrial Revolution’, yet unlike the previous revolutions that brought mechanisation, electrification, digitisation and automation, this new era is moving at an exponential rather than linear rate. No sooner have we equipped ourselves for one technological advancement, another takes its place. And it’s not just accountancy, every sector is seeing upheaval in terms of production, management and governance. As accountants, we must prepare and the way in which we will achieve this is through a process of ‘change-readiness’, not only having the empathy to deal with technology related job-losses, but also to maintain a growth mindset to help overcome that fear of change. First and foremost, in order to build resilience, it’s important to maintain the energy to overcome failure. Indeed, it’s a fundamental aspect within a ‘growth mindset’, the emotional endurance required to deal with change. By understanding this, the entire gamut of resilience-based tactics become available to you. When you are confronted with a challenge in the fast-changing workplace, rather than becoming de-energised it is vital that you feed on the adversity; absorb the change and find ways in which you can use it to your advantage.

Of course, conceptually speaking, dealing with change is not new for professional accountants. But because we regularly operate in digital environments, this accelerates and heightens the pace of change, creating a type of positive feedback loop. In essence, leveraging this feedback rather than being saturated by it is the core differentiator between adapting successfully or being overwhelmed. Like so many aspects of life, being able to recognise and control one’s emotions and state-of-mind under a particular set of circumstances is crucial to generating a positive outcome. It would be easy to become distressed every time something doesn’t go our way, so as professionals we must learn to harness that trait to our advantage. The ability to manage stress, in uncertain and fast-changing situations, is what sets apart leaders and highperformers apart from those that tend to operate at a lower level. On a biological basis, it’s the stress hormone cortisol that has a large part to play, with CEOs and other top-flight executives actually having the ability to train themselves to manage this hormone. Are these people biologically special, that is to say do they have some physical prerequisite that allows them to function in this way? No, but what they do exhibit is the common ‘growth mindset’ to manage change and build resilience to changing environmental conditions. Maintaining curiosity and seeing change as an opportunity rather than a threat is fundamental to this ability, and in the evolving accountancy workplace more critical a skill than ever. No-one is fundamentally better or worse at this than anyone else. Your colleagues, across all levels of the business, are dealing with the

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same issues so take credence in the fact that you are in no way at a disadvantage. However, the growth mindset and building emotional resilience to change is a skill that must be nurtured. Instead of succumbing to a negative feedback loop of uncertainty, finding formal learning environments such as group or private training sessions can help, as can sharing knowledge with your colleagues. It’s in the interest of your business at large, in addition to your professional development, that you undertake the challenge of responding quickly to new information. Conferring with specialists will become more important than ever, as we move into a world governed by self-optimising tools and infrastructure. What’s clear is that, as an accountant, you need to be ready for change; the world won’t sit around and wait. The rapid scaling of new technologies is already affecting large swathes of the sector and this pattern is likely to become more intense as we move into the future. The speed of this change has the potential to completely alter entire business models, with cloud technologies creating huge change; particularly for small-medium sized practices as services become more modular and affordable. Maintaining the emotional competency to deal with technical changes is the defining factor between success and failure. You need to be able to redefine your identity, and not be rigid in what you believe you can and cannot do. You must engage constructively with the change, rather than resisting it. Be open to learning from your customers and suppliers alike, and share with your business partners in order to build company-wide resilience to a shifting, digital landscape.

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Learning

The Path to Self-Improvement

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The difference between knowing and understanding is critical.

ne of the most wonderful aspects of the human brain is its flexibility and ability to process new information, and then use it to create fresh meaning. In many ways, that’s the definition of intelligence. But of course, in terms of information, there’s a lot more available to us today that there was 100 years ago. Even 50 years ago, we consumed the equivalent of one newspaper a day. 20 years later, you were seeing a 500% increase on that consumption. And today? Well, estimates vary, but the average business leader could be consuming as much as 100 newspapers worth of information on a daily basis. And unlike machines which can be built to scale according to demand, we rely on evolution, which has natural limits set on the pace of adaptability. From an evolutionary perspective, we have in-built filters that allow us to pick out the most crucial elements of information; discard the superfluous and keep those that may affect better outcomes, like our survival. Yet what’s more, we like to learn. The majority of people feel good about themselves when learning, which on a business-level is also good for company culture and morale. Ultimately, a well-trained workforce is a happy and emotionally resilient one, and maintaining that curiosity in a digital age is of the utmost importance. What seems apparent is that the more senior you are, the harder it is to learn and the more stressful the process becomes. When we are young, our brains are at their most pliable, or plastic to use the neuroscientific terminology. However, as we age, that ability diminishes by default, so we must remain active in the sphere of learning in order to maintain our capacity to learn. In short, if you stay curious, you’ll fare better and be more resilient to a changing digital workplace. That’s not to

say that being less senior is a free-pass, it’s just that you’re more likely to already be equipped with many of the digital skills required to adapt to the demands of the accountancy workplace. That said, many features of building out your EQ appear to benefit from deeper and longer experience, so what you may have in technical skill you may lack in emotional competency, if you’re earlier on in your career. What’s true across the board however, is that in a digital age, both emotional and technical skills need to be mastered on a continuous basis. Irrespective of one’s age, what’s universally accepted is that learning is not a purely analytical pursuit, inasmuch as it is an emotional one. It’s easy to say “I’m not a technical person, so I can’t achieve a certain outcome” whereas, it’s actually that willingness to engage, to overcome the fear of learning something new that’s half the battle. As individuals, we’re not inherently good at one thing or another. We just happen to gravitate towards activities in which we feel confident and it’s that trait that leads to specialisation in a certain field. However, as mentioned in the Self-Knowledge section, while speciality is good, in the context of a new, digital workplace you need to operate as a generalist too; to function at a professional level outside of your comfort zone. Maintaining the ‘growth mindset’, despite becoming more difficult over time, is at the heart of the learning experience. And in the same way as social-media tribes create echochambers of information and cognition, as an accountant it’s important to avoid cognitive echo-chambers if you intend to self-improve. The accountancy sector faces the challenge of creating an environment of open, genuinely informed debate in a world awash with new tools and

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information. Avoiding what might be termed ‘cognitive tribalism’, the filterbubbles you learn about in the press and across a range of professional literature, is key. Much of this will draw on your skill as an accountant, to leverage the rational judgement so central to our profession; reading between the lines of information without being trapped by its familiar flavour. Technology has a particular knack of grouping information in such a way as to drive thematic pattern formation, so it’s important to be aware of these tropes. You should not expect to passively benefit from all of the information to which you are exposed. One must actively pick out the information that is being presented in a workplace saturated with it, and in using a ‘growth mindset’, challenge all of the information with which you come into contact. In the digital age, irrespective of your seniority, you will have to learn new things to keep up with accountancy. Like every other high-level profession such as law, medicine and engineering, complacency is not an option if you want to survive. And it appears that bolstering your EQ is central to this process; maintaining the attitude to learn and being critical of the information you acquire. In effect, by starting with your EQ, you can catalyse other learning experiences, so it’s important to improve those aspects of your personality; resilience to failure, perseverance and sustained application to new tasks in order to succeed. As the workplace becomes more automated, and the accountancy software we use more ‘intelligent’, adapting your ways of learning is not a competency, in reality it’s tantamount to your survival in the profession. By creating structured and non-structured ways of learning, either through formal training or private research, you can build the resilience required to thrive throughout this new, industrial revolution.

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Training

Looking After No. 2

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Want a bigger piece of the pie? Share your knowledge with others.

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f you were to draw a biological analogy, training would would be the life-blood of any business. Without it, the whole system fails. What training allows for is a company to remain competitive, to ensure its workforce operates at the cutting-edge of their respective industry. And this is no more true than in the accountancy sector. Due to the highly technical nature of the business, professional accountants have always been required to keep up. This is nothing new. But as established in the Learning section, the requirements have begun to shift dramatically and with great pace. AI, data-analytics and blockchain technology are set to imminently disrupt the industry. Unlocking potential now requires new methodologies and it is the responsibility of all levels of a practice, no matter how large, to ensure these needs are met. With increased demands for flexible working, clear career progression and early leadership opportunities, employees are now demanding more; and this inevitably includes proper workplace training. If you want to attract the best talent, you need to provide the whole package. In an increasingly fragmented digital world, only the very best qualifications allow your teams to stand out from the crowd and give us, as individuals, the resilience we need in a fact-paced, automated and digital future.

Based on our research project ”Professional Accountants - the future (2016)”, ACCA spoke to thousands of employers around the world. The emerging theme was one of uncertainty and consequently, the demand for a different class of accounting professional and practice became apparent. At the heart of this is technical excellence. Without it, no accountancy practice can survive. What’s required are individuals that go beyond forward-thinking, to combine deep emotional and

ethical competencies with a level of technical understanding and innovation. It’s no mean feat, but at ACCA our experience has led to an understanding of what it takes to produce these types of individuals. With emotional intelligence, or EQ, forming just one aspect of the smart, creative, digital, visionary, experienced, technical and ethical competencies, ACCA and it’s evolving qualification has in many ways redefined what it means to be an accountant in the modern world. The breadth and depth of requirements in 2019 and beyond has changed significantly from the past. No longer is it enough to simply learn. As seniority levels rise, and responsibilities increase, there is an expectation that you will teach others how things are done. Those who are new to the industry will exchange more state-of-the-art technical knowledge with their seniors, and amongst their peers, while those with more experience will be expected to adapt and share in a way never before witnessed. In order to remain competitive, it’s become more important than ever to share knowledge at all levels of a business. If you want a bigger piece of the pie, it’s no longer about maintaining exclusivity to build your edge. No, today and in the future, the ability to train others and share your knowledge across the whole, more stratified hierarchy will become necessary. Survival has become a group experience and if you don’t engage at a fundamental level, you’ll be left out in the cold. The notion of ‘transferrable skills’ isn’t just a feature of the individual anymore, it’s now a process. A call-to-action. And your emotional competency is a powerful component in the process of value transfer, as described in each section so far. You need to understand

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how you learn. How you influence. How you translate the non-human to the human, because inevitably we will need to respond to the digital sphere as a direct colleague in the future, not just as a tool. To an extent, you might describe it as a mass-hybridisation of the accountancy sector. Each of us will have our specialities, but for our wider advancement as an industry, we will be expected to create a tissue of experience that can be accessed by all. The global drivers of change are regulation, governance, digital technologies, strategic vision and globalisation, and without an understanding of all of these components to a greater or lesser extent, your capacity to function as an accountant will be called into question. We are now entering a golden age in the industry. But to access it, we must support one another. Demonstrating compassion for our colleagues, at whatever stage of their career, is a must-have. And it doesn’t matter if you’re a large institution, or a small to medium-sized practice (SMP), the rules of engagement are the same. Historically, it may have seemed a luxury to show a level of emotional engagement within a resource-strained environment. Today, however, it’s a priority. And part of that emotional capacity is to put the training of your peers and staff much higher on the agenda. New technologies will increasingly make the workplace seem like a very task-oriented and impersonal place, so any help we can provide as individuals to those around us will make all the difference. As a sector, correct training and better, more seamless ways of distributing that knowledge will make us better than the sum of our parts. By placing humanity and compassion at the centre of our digital businesses, we will relieve pressures and increase efficiencies across the board.

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Ethics

Corporate Individual Responsibility

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Taking the high-ground isn’t always the easiest. But it is the most profitable.

ith great power comes great responsibility. It’s an expression that gets bandied about, but almost nowhere is it more true than in accountancy. As professionals, we’re the gatekeepers. Every day, the checks and balances of a complex global economy pass over our desks and in doing so, we are expected maintain the highest ethical standards; to operate within the most absolute of regulatory frameworks and to prevent financial misconduct on any kind. To do this, we rely on our training and intuition. We instinctively know right from wrong and as a consequence, our function as an organisation’s conscience holds great importance. Our personal ethics and professional beliefs become intrinsically linked over time, a set of core values that protect our stakeholders and ourselves. But what happens when new technology is introduced that disrupts the existing framework? What are the implications of these less-understood ambiguities? How to we structure our established will to ‘do the right thing’ when algorithmic decision-making and esoteric innovations like blockchain and digital ledger technology (DLT) allow for gaps in the traditional approach? These are existential questions at the very heart of our profession and it’s through the management of our emotions that we can find a guiding light. On a practical level, there is a control dimension to accountancy roles. Processes, systems, strategies; it’s easy to be creative with the tools that are available today. But tomorrow presents new challenges, not least of which are aspects like the setting of boundaries, and maintaining a quality of life in an ‘always-on’ environment. And one defining factor of this phenomena is increased automation, which removes

to an extent the ethical responsibility we hold in the profession. These novel software systems get fed with data and then we are expected to maintain the same level of objectivity about their actions as we ever would. According to the International Ethics Standards Board for Accountants (IESBA), this represents one of the most fundamental risks to accountant ethics. Take the simple example of a recruitment algorithm that optimises based on previously successful candidates. Efficient. Yet, if the data fed to the algorithm does not represent nontraditional profiles, then instantly we have a glaring issue for the equality agenda. With the efficiency that new technology provides, it is important to draw on our self-knowledge and constantly question it though the lens of our ethical judgement and beliefs. When does the final decision sit with a machine, and when does that machine require the oversight of a finance professional? It’s a delicate equilibrium, particularly given that you will be expected to balance these decisions with your commercial, business acumen. At what point do you do what’s profitable, at the expense of the right thing, yet due to the inherent detachment of the technology, justify to yourself that it isn’t your problem anymore? It’s a tough job. And this is where your emotional competency comes into play. The confidence to influence high-level executives to follow ethical protocol and see beyond the binary choices of ‘we can or cannot do this’, or rather, how do we frame our decisions in terms of longterm, sustainable gain instead of a quick win? The answer here is through our emotional competency. Of course, with so much automation and technological complexity, it’s easy to argue pure ignorance. In some cases, to the detriment of one’s credibility, that may actually be the case: “I didn’t know

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that’s how it worked, so I can’t be held responsible for this outcome”. No, the responsibility of a modern accountant is to maintain the ‘growth mindset’ that will ensure a flexible understanding of the systems under our control. It’s not enough to take everything on face value, and be purely objective in the face of such objective technology, which exists without any pre-coded moral function. A smart-contract will do what it is going to do, and though you might not necessarily understand how to code one; that is someone-else’s professional role, as the ethical arbiter of the technology, it is fundamental that you understand the outputs of those automated lines of code in order to make the correct business decisions. That is the new challenge faced by accountancy professionals around the world. We stand at the gates of a new, technological revolution, one that promises to provide insights and efficiencies many factors greater than currently in existence. The question facing our profession is, how do we learn to control this technology and hold it to the same standards of account as we have always done. How do we align our ethical principles with technology that knows none? What are the skills required for such a demanding task? The answer is that, through a process of self-knowledge, empathy, learning and influence, we can continue to make the right choices. Just because we can take a certain path does not mean we always should, and building the emotional competence to manage that fact, within a vastly accelerated digital world, is now one of the very elemental features of the modern accountancy profession. It will require grit and determination to maintain the ‘growth mindset’ required for this, but if you manage it, you will be part of a highlyadvanced movement into the future of the sector.

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Culture

The World On Your Doorstep

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Success is critically defined by the ability to take on multiple perspectives.

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t’s no secret that the workplace is becoming increasingly decentralised. In just one lifetime, the concept of remote working has gone from being a bonafied rarity to the norm. For many in the working world the hustle and bustle of office life is far away. Modern businesses are coming to the conclusion that certain functions benefit from being spread out, particularly in the case of software and business development. In an ‘always-on’ world, maximising the value of a high-speed internet and cheaper access to travel has meant an increased variety of cultures and backgrounds. It’s not to say that the modern accountancy practice no longer recognises the osmosis of knowledge, and the rapport that occurs between colleagues when based in the same building. No, instead what is being advanced is a recognition of the competitive advantages to having a mix; a hybridisation, not only of the traditional workplace with a new, digitally distributed one, yet also in terms of staff who are able to bring with them a wealth of different perspectives which serve the greater good of the firm. The challenge presented by a wider pool of stakeholders in the digital age is that increased diversity presents a new bone of contention in our capacity to remain respectful, constructive and efficient. Undoubtedly, the fact that digital technologies have enabled wider, global interactions means dealing with a new set of emotional problems. What we have gained in terms of time-management through distributed teams, profitability through data-handling, and faster innovation through communication and access to research, we have also been required to balance with cultural differences, shifting interdepartmental priorities and fundamentally varying skillsets and personalities. Where we have increased efficiency, we have opened

the new issue of ‘cultural load’ and to gracefully navigate this territory requires we draw upon our EQ. For example, a finance team might be split between an in-house function in Europe and a sharedservice centre on the other side of the world. This has the capacity to increase disconnection in terms of how people respond to race, gender, orientation or other aspects which may be very normal in one culture, but not at all to the other. In many ways, it’s an exclusively modern problem. Conflicts can and will occur. Microaggressions undermine efficiency. Friction may or may not be intended, yet all the while company morale is damaged as individual senses of being valued and having common purpose are undermined. At the end of the day, this is bad for business. And it’s true that due to different degrees of ‘digital savvy’, often split between older and younger generations, there is a heightened volume of frustration and loss of patience, especially when the connection you have with your colleague or interlocutor is not as direct and shared an experience as it might once have been. So again, with our training in self-knowledge and empathy in mind, as well as our emotional capacity to build relationships through influence and knowledge-sharing, it is important to manifest your emotional competence into practical outcomes, which will smooth interactions and oil the cogs of your digital workplace. While it may seem secondary to the more analytical and objective parts of the accountancy business, it’s really just as important. And in addition to the technological divide, where those more familiar with digital tools and techniques may become frustrated with less confident users, and vice-versa. There’s even an element of ‘digital-culture’ at play. Take for example

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the office junior, who may share data with a peer of theirs on the client-side, and think nothing of it. Because the younger cohort has a fundamentally different relationship with technology to older users, and through no inherent fault of their own behave a certain way, these digital natives could be seen to undermine existing norms and practices and this inevitably creates tension and conflict. The diplomacy required by all parties to find common ground requires emotional competence and maturity to happen. We need to begin to understand that there may not be a single right or wrong answer, and that we must take on the perspectives of others in a much more dynamic way that ever before in order to handle this new way of working together. This is not to say that recognition of alternate views means backing down on your own self-knowledge and ethics. But what the process does require is the flexibility that a sense of empathy and compassion provides, in order to strike a balance that satisfies all parties to the most utilitarian extent. It is important that we embrace a wider range of perspectives in our digital age, as increasingly it will become important to the acquisition of new digital skills as new fields emerge and we respond to the existence of more advanced technologies, which are a learning curve for us all. Increased diversity in the workplace is proven to be profitable, but for it to work it requires that the individual take on multiple perspectives, and that we upgrade our emotional skills to deal with these new relationships. If the advent of AI and other digital technologies has taught us anything, it’s that our human capacity to relate seamlessly with colleagues is becoming more vital than ever, and we must avoid confining ourselves to the comfortable echo-chamber of our own experience.

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Governance All for One. One for All

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Hierarchies are being flattened. Decision-making is becoming distributed.

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n many ways, this final part of your emotional intelligence update is directly associated with the cultural ideas referenced in the previous section. Governance, after all, is all about decision-making and hierarchies, and therefore in dealing with people is bound directly to the idea of how we manage these processes in the digital age. You may well have heard of ecologist Garrett Hardin’s 1968 theory on ’The Tragedy of the Commons’, which essentially highlights a social dilemma that occurs when groups have access to shared resources. Though this idea is primarily applied to the social sciences, sustainability and economics, there are fundamental parallels in the the world of digitally decentralised businesses, like the accountancy practices of 2019 and the future. Traditional, pre-digital governance structures in centralised offices, would have operated like an autocracy. The boss would direct the managers and the managers would direct the workers. It’s how it’s always worked historically, and though there have always been external client relationships at play, in general a firm would have sat under one roof, with a single set of rules governing the hierarchical structure and behaviour of its business. Today, that view is being challenged on an ever-increasing basis. In the new, hybridised, distributed workplace which in many ways reflects Hardin’s theory, nowadays we are automatically presented with issues where multiple stakeholders in a business have more flexible, open-access to company resources across a wider area. Though there will still be guidelines and layers of control in place, hierarchies are being flattened and decision-making is becoming more distributed. As mentioned, due to the matrix of new skills now required in a modern accountancy firm, individuals at all levels of seniority are having to make

sacrifices and become ever more dynamic, in order to deal with the emotional challenges of this new company structure. No longer does the didactic, top-down system of executive power deploy as it has done historically, and did even until recent times. There are now up to four distinct generations working within the same firm. It’s true to say that the younger cohort have a distinctly different skillset to their older counterparts, and that company culture is shifting to a more meritocratic basis; one that present opportunities and challenges of its own. Of course, that’s not to say that more senior, experienced professionals are losing their grasp. They have the contacts. Often, they hold the purse strings. Certainly, they have the experience. But what it does mean that those individuals are having to adapt their emotional competencies to adapt to the demands of the new way of working, and likewise new starters in the industry are redefining decision-making processes in a way that was previously unheard of. They need to use empathy and perspective-taking to understand where the priorities and challenges exist for more experienced colleagues, while respecting the skills of the latter. This requires bilateral emotional maturity. Everything is becoming more agile. Even the language of business is changing. Being directive and authoritarian in style is not likely to build the communication bridges needed. In order to react, one’s EQ and the fundamental traits of selfknowledge, empathy, training, learning and influence come to the fore. You need to change your style of business communication. As with the cultural side of the debate, because of shared-services in different geographies, professionals are now having to think about alternate power-structures in other parts of the world. How do my foreign partners work operate? What are

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their priorities? How do I engage with them? This is subtle work, traditionally the preserve of politicians and senior dignitaries. Today, a graduate fresh out of accountancy college is being asked to do the same. At all scales, from microenterprises to multi-nationals, operating in multiple geographical contexts, new business models are emerging, catalysed by access to new technology and infrastructure. In reality, progress and governance are one and the same. Without understanding the latter in a modern context, you cannot hope to take advantage of the former. Success is now defined by your ability, as an individual, to respond to the global economic framework with an emotional sensitivity that simultaneously accounts for all of these dynamics. It’s no longer about just being an accountant. You’re required to create an inclusive working culture. You’re required to think beyond the latest technologies and more towards mutual benefit on a social level. Quality of life and professional development is no longer a singular pursuit, but a common goal. It’s a shared experience. And in order to access this new model, you are required by default to build on the competencies outlined in this paper. Because the world won’t wait, and everything is moving so fast that if you don’t adapt, if you don’t evolve as an accountant, you’ll be left behind. But if you do, then the world is yours, and you will go on to define one of the most exciting phases of human history. So take your place at the table of progress, develop a mastery of your emotions and re-shape the accountancy industry as we move into the future!

About ACCA ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering businessrelevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. ACCA supports its 208,000 members and 503,000 students in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 104 offices and centres and more than 7,300 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence. ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com

9 Pathways to Harnessing Your Emotional Intelligence To discover our latest research visit our Professional Insights page: accaglobal.com/insights ACCA The Adelphi 1/11 John Adam Street London WC2N 6AU United Kingdom / +44 (0)20 7059 5000 / www.accaglobal.com