Recent times have exacerbated an essential truth: The only constant is change. For most of us, our normal environments and modes of operation have been completely upended — personally and professionally, says Steven K. Howell from Journal of Accountancy.
A highly infectious virus quickly spread across the world, and we still have difficulty drawing managerial conclusions; it has been difficult to see through the fog of unclear guidance from health organizations and sketchy data. Our nation has also been gripped by social unrest; difficult and necessary conversations are taking place around dinner tables and in conference rooms. These are trying and unprecedented times.
In the midst of this pandemic and social upheaval, the economy has been a story unto itself. The stock market suffered earlier in the year — at one point dropping into the fastest bear market in history. We reached unemployment levels not seen since the Great Depression. Even with federal money via the Paycheck Protection Program (PPP) and other stimulus programs, small businesses are stretched as thin as they have been since the Great Recession.
With everything happening in the world, it’s incredibly difficult to manage others when it feels like a full-time job to just survive the day yourself. Many practitioners can attest to the difficulty, and reward, of managing through times of crisis. In my own experience, leadership was only made possible by simultaneously taking care of myself in that managing process.
From a practice management perspective, there are traditionally two sides to managing through an economic downturn. First and foremost, you have to manage your downside risks and stabilize by hopefully maintaining employment levels, remaining solvent, and protecting revenue where possible. The second step is preparing the firm for an eventual recovery. I believe in adding a third element, personal growth, into this crisis leadership paradigm.
The crisis management process can be enhanced by coupling it to two things not discussed often enough in practice management spaces: personal development and mental health. To be an effective leader you must be honest with yourself and be comfortable with vulnerability. Many of us have experienced the joy that comes from seeing the harvest of the work of our hands, and have experienced the pain when some seeds fail to take root. The goal is to apply that elemental humanity to management in order to create more sustainable operations in a crisis — for yourself and your organization.
In my own work, I have found three key practice leadership principles that coincide well with specific components of mental health and personal transformation.
Strategic positioning and cognitive reframing
A firm’s strategic position is the fount from which all other decision-making flows. The elemental questions of why and how are asked and answered here. An organization’s strategic arc defines its identity and is the template for how it handles the challenges it faces.
As consistent as your strategic position needs to be, it’s important that strategy be a reflection of values and a set of cumulative decisions that are adaptable. Holding firm in a tempest is critical, but don’t allow yourself to be anchored down when the sea calms and tides rise.
How we view the storms frames the way we make decisions, sometimes not for the better. Cognitive reframing is a deliberate process of identifying and changing the way we view emotions, events, and circumstances. It is the mental technique that allows us in the midst of a world turned upside down and beset by challenges to see past the problems before us, to the opportunity that lies therein.
Cognitive reframing is a long-standing leadership principle, even if it’s not always phrased as such. Management expert Peter Drucker, in his famous essay, “What Makes an Effective Executive,” says it well: “Problem-solving does not produce results, it prevents damage. Exploiting opportunities produces results.”
Our brains are wired to make snap decisions to avoid pain in the short term, often to the detriment of the long term. A subset of the behavioral economics field is dedicated to this mental model, known as “hyperbolic discounting.” Without being able to see opportunity and remain emotionally grounded, we often make decisions that prevent our future selves from being where we want to be. Put another way, avoiding short-term pain sometimes inhibits long-term gain.
The tectonic shifts happening in the world and in the marketplace may make us feel like we must white-knuckle and hold on for dear life, but maybe it’s a gentle offering of opportunity. Perhaps it’s offering a chance to evolve with the changing world rather than just survive in spite of it. The clients we serve, and their needs and wants, are developing as the world keeps turning. Your strategic position must be able to adapt to these massive trends.
It requires courage to ask difficult questions when what we all really want is a sense of security and stability in times of change. By allowing yourself to reframe your circumstances, you are much more likely to honestly assess strengths and weaknesses and, in turn, see a clearer path forward that makes your strategic position all the more secure.
Reconnecting with the essentials
Much like how those who suffer from anxiety are taught to reconnect with the breath to find centeredness, I have found that reconnecting with the essentials of your practice is a useful tool for managing through crises. In meditation, we focus on the breath; you don’t take it for granted, trying to experience it for the first time.
That ability to see things with fresh eyes is what many refer to as beginner’s mind. Sometimes referred to as shoshin in the Zen Buddhist tradition, beginner’s mind is about letting go of preconceived notions and preexisting patterns of thought. Often our minds are weighed down by so much of what is, that we lose the ability to see the possibilities that may lie ahead.
Re-approaching the routine aspects of your practice with a fresh mind allows you to explore them with curiosity again. It’s likely there are countless aspects of your business you have taken for granted for some time now; perhaps client demographics, strategic partnerships, client on-boarding procedures, and even tech stacks could benefit from improvements that can only come from a new perspective.
Many believe that approaching routine elements of your practice with an openness to change is unnecessarily chaotic and would undo institutional knowledge. On the contrary, allowing yourself to see things for the first time again, rather than undoing your experience, actually accentuates your accumulated knowledge by letting you be unburdened by it. Beginner’s mind is a trained skill; it requires discipline to bring renewal and order, not chaos, in your approach to change.
Accounting is a profession rife with opportunities for improvement. Whether you manage a tax practice or perform internal control testing, the consistent changes in technology and the growing need to be both more technical and more human-centered requires us to continually reexamine our ways of operating. To paraphrase a famous Zen saying, in the mind of the experts there are few possibilities, but in the beginner’s mind there are many.
Manage with emotional intelligence
In all likelihood, your most valuable assets are your employees and team members. When times are good, and the camaraderie within the practice is high, your shared success binds you together. When clouds start to form, relationships become more tenuous and tension begins to mount. In seasons of internal pressure and economic instability, the instinct is for people to look over their shoulder more, to question other people’s motives, and become more interested in showing their individual value rather than collective strengths — it is a natural reaction built into our evolutionary process. Even if one team member begins taking that attitude, a likely domino effect will ensue, and what may have been a smooth operation is fraught with interpersonal complication.
Building trust and team connectedness is a long-term process. Moments of great heroism and clarity in a crisis do build rapport and trust, but the real work of developing commitment comes from the minutiae of everyday interactions. Relationships are built over time, and cultivating a shared purpose and inter-team reliance requires ongoing tending.
Acclaimed author and journalist Daniel Goleman notes in his work that almost all successful executives, despite myriad other variables and unique characteristics, often share a similar strength: emotional intelligence. He breaks down emotional intelligence into five key facets: self-awareness, self-regulation, motivation, empathy, and social skills. Studies show that high emotional intelligence boosts your own, and your team’s, overall performance because of the collective goals it inspires.
With the world being as it is, this is a difficult season for managers and for employees. Pressure is high for most Americans across many avenues of life. Between the virus, the economy, and social unrest, it’s likely your team members feel burdens and anxieties that you cannot see. Be gracious and understanding — how you treat them in these moments will in many ways define how much trust they place in the organization going forward. When waves rock the boat, fear may be contagious, but so too is compassion.
Emotional intelligence, to be effective in its best forms, requires you to be in touch with your own inner world. Being able to show empathy to yourself in times of stress makes it easier for you to show it to others. Emotional intelligence will also help you share deeper connections with the people in your life; deep and lasting relationships, predicated on trust and understanding, are a critical part of a healthy existence.
Pride in resilience
It is not easy to look beyond the confines of immediate circumstances; our brains are hardwired to often do the opposite. However, being able to do so can provide the space to process situations appropriately, allowing us to clearly see the world around us for what it is. Rather than getting caught in your limbic system’s dance of fight or flight, give yourself the chance to be grounded and make wise decisions for yourself, your practice, and the people who depend on you.
I encourage you to see this season of uncertainty as an opportunity to take pride in the resilience of your organization and our profession, and in yourself. Times like these remind us to find gratitude for what is, while we are planning and moving our practices forward into tomorrow.
—Steven K. Howell, CPA, MBA, is a partner at Continuum Capital Advisory, a tax and personal financial planning firm in Rock Hill, S.C. To comment on this article or to suggest an idea for another article, contact Ken Tysiac, the JofA’s editorial director, at Kenneth.Tysiac@aicpa-cima.com.