What exponential change means to CPAs and finance professionals

Have you heard about the invention of the chess board and the law of exponentials? As the story goes, back to ancient Persia, an Indian emperor was showed the game of chess by its inventor. The emperor was so impressed by the game that he offered a reward of the inventor’s choosing.

The inventor, being a mathematician, asked that one grain of rice be placed on the first square and that it be doubled on each subsequent square for all 64 squares. By the 32nd square, there were 4 billion grains of rice, or the equivalent of a few acres of production. But when they reach the 62nd square, the number soared to more than 4 billion times larger than the entire first half of the chessboard. They estimated that this would have been a pile of rice greater than the size of Mount Everest. Thus the familiar “hockey stick” pattern representing geometric progressions.

Welcome to the second half of the chessboard! This is the big-deal phase, as our friend and strategic partner, Daniel Burrus, says. In our case, instead of rice grains, we’re talking about the first transistors in integrated circuits that Gordon Moore noticed doubling every year in 1965, establishing Moore’s Law.

Today, that exponential pace includes processing power, bandwidth, and storage, giving rise to quantum computing, the Internet of Things, IBM Watson, Alpha Go, Alexa, Siri, artificial intelligence, blockchain, and Big Data. Everyday, we see new breakthroughs in science, engineering, health, and even accounting.

Let me give you two real life examples.

In just 18 months, we have seen artificial intelligence in auditing move from the Watson-KPMG deal to deployment at a small CPA firm in southern Maryland with MindBridge AI.

Then, I was at the Sage Summit conference in Atlanta where a 20-something developed a chatbot to fight parking tickets for free a year ago. Today, he has more than 1,000 chatbots all over the world automating legal filings, including divorce, incorporation, disputes, and other filings. Think about it: From the Big Four to a local CPA firm and from one parking ticket chatbot to 1,000 applications in a little more than a year!

What does this mean to you?

It means you have to learn how to adapt and thrive in this “new normal” — a world of accelerating, exponential change. We call this being anticipatory; future-ready, or aware, predictable and adaptable of emerging trends.

  1. Aware means learning how to look for the “weak signals of disruptive change” before they hit you. That also means continuous monitoring at least quarterly. If blockchain is not impacting you today, in three months it may be moving fast.
  2. Predictive is about thinking about the predictable problems you will face if you ignore the hard trends of technology or demographics or regulations. What happens if you choose the status quo and your competitors begin to move faster?
  3. Adaptive is about becoming an “opportunity manager,” learning how to identify the opportunities in these trends to provide new forms of value and transform your business inside and out.

The biggest factor in your success will be your mindset and the mindset of your people. Do you think the best days are ahead of you, or are you stuck in the past? Are you willing to try new things, or are you too busy with the day-to-day to invest in the future?

Two final thoughts: Don’t underestimate the size, speed, and scope of these changes, and don’t miss the big opportunities that are present in these hard trends. As Dan Burrus said in his post about Anticipatory Accounting and Finance:

“... an even greater opportunity —in effect, to reinvent accounting by learning how to add strategic foresight to the numbers, become more anticipatory, and accurately leverage the dynamic of change.”

Learn how to be an anticipatory CPA with the Anticipatory Organization: Accounting and Finance Edition for individuals and organizations.

Visit our BLI Future Ready Portal (in partnership with IBM’s Cognitive Learning initiative) https://bdu.blifutureready.org

More Resources:

How companies & professional organizations must collaborate to build the future workforce


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