Psychologist Robin Hogarth developed the concept of "wicked" learning environments and "kind" learning environments. I bring this up because it summarizes where our profession is going.
In a kind environment, the rules don't change, patterns tend to repeat themselves, and client interactions look the same day after day, year after year. Remember those days?
In a wicked learning environment, however, the rules are unclear, patterns don't repeat, feedback is inaccurate, human behavioral quirks are involved, and the work you do tomorrow may not be the same as the work you're doing today. Sound familiar?
Chess is an excellent example of a kind learning environment. The clearly defined rules have stayed the same for centuries. You get immediate feedback from your opponent based on the moves you make. So, the more you play, the better you understand the game and become a better player.
On the opposite end of the spectrum are wicked environments, in which information is hidden or convoluted, and feedback is delayed, inaccurate and infrequent. I'm sure you can relate if you've ever worked at (or with) a startup company.
Even well-established professional services firms are becoming increasingly wicked environments. How so?
- Is human behavior involved? Yes.
- Are things changing constantly? Yes.
- Are the rules of the firm always clear? No.
- Is the work consistent? No.
- Do patterns repeat? No.
- Is feedback unclear? Yes.
By the way, a wicked environment isn't necessarily bad. It helps if you understand the types of learning that are required to be successful in this kind of work environment.
As I explained in my articles about
I know how hard it is to change ingrained habits. That's why you have to go about it in a gradual manner.
Where you bring value
In a kind environment, you have clearly defined questions such as "What is 2+2?" And you have clearly defined answers to those questions, i.e., "4." The answer to the 2+2 question never varies. It's always 4.
The challenge for CPAs is that all the disruptors in our industry are handling these kinds of clearly defined questions and calculating the answers much faster than humans can. Machines are better equipped than humans to excel in kind environments, in which the patterns repeat and the rules don't change. That's because humans are getting better at programming machines doing that kind of straightforward work.
As intelligent humans, you and your team are paid to help clients make better financial decisions when the future is uncertain. (For more, see my recent article:
The good news is a lot of the routine work everyone complained about doing at your firm is more easily done by machines. That frees you up to help clients with more complex challenges and solutions. Why not look at all the new technologies on the market as being opportunities, rather than threats?
When used correctly, technology makes you better and more efficient at doing what you do best. But you will ultimately fail if you spend all your time trying to defend your old turf from the advances of technology.
I suggest leaning into change because we are bound to have another COVID-size catastrophe before we know it. Extreme outliers keep happening in an unpredictable world. We just don't know when the next one will happen or what it will be called. But it will disrupt everything. As Carl Richards, the renowned financial planner and sketch artist once said: "Risk is what's left over after you think you have thought of everything."
What's next?
The way you make decisions in the future is very different from how you made decisions in the past. It all comes down to understanding the how versus the why. For CPAs, the how is more and more likely to be handled by technology. It would help if you got better at the why.
That's why humans can no longer beat computers at chess. All the moves and decisions are defined. The good news is you are moving into an environment in which a large portion of your world will be unstable and wicked. Machines don't like unstable and wicked. Machines don't like "It depends." It's too messy. But that's where you need to leverage tech tools for your numbers, boxes and returns.
You can't possibly scan through the 77,000 pages of the U.S. Tax Code faster than ChatGPT can. Your brain is better used for building client relationships and helping clients make better decisions based on the back-office work machines are doing. Use all the great tools out there to manage the stable (kind) environment so you can focus on helping clients through the unstable (wicked) environment.
How is your firm adapting to change? I'd
