CLEARLY THE ACCOUNTING PROFESSION plays a vital role in our economy by providing information about the financial performance of organisations and the scrutiny to ensure that what is reported and forecast financially is a true and accurate reflection.
Furthermore I have tremendous respect for how the profession is organised. It is an incredibly disciplined and well regulated profession and the world is definitely a better place for accountants!
So what’s the problem? Well the fundamental issue I have experienced is that accountants are too risk averse when involved in making commercial decisions.
Their training teaches them to look for risk rather than opportunity and perhaps those who choose a career in accountancy do so because they are more at ease dealing with certainty. They are more comfortable looking at costs than sales and it seems accountants deal mostly in precedent and what is known and guard against trying new things and breaking moulds.
To grow businesses and economies you need to take risk. Ask any successful entrepreneur and he or she will tell you that what they achieved has come as a result of taking calculated and sometimes uncalculated risk. Now clearly we need to guard against recklessness but nonetheless I believe that the strong representation of those with accounting backgrounds running major organisations in the UK has had a restraining affect on British enterprise.
There are a high proportion of accountants in leadership roles and I can see a connection between this and the inability of companies to respond to new opportunities. Someone in new product development within a major British organisation once said to me “Go to the FD with one great idea and he will give you 10 reasons why it won’t work”.
Britain is one of the most innovative countries in the world. We have invented many of the things which have transformed the world in the 21st century from the jet engine to the silicon chip and the world wide web. However, it has been others who have been quicker to recognise their potential and exploit them.
Another factor which I believe restrains entrepreneurial expression in our country is the failure to take fully into account the importance of instinct. I have found from running businesses that when making key decisions it is sometimes more important to consider how you feel about something rather than what you know about it.
I believe that training as an accountant discourages our innate faculty to form opinions and make decisions based on intuition.
True innovation and originality can only be achieved through stepping into the unknown and sometimes doing things which instinctively feel right but are logically wrong.
How many accountants would have launched a transatlantic airline in the 1980s with the dominance of BA at that time on that route and a history of others who had tried and failed?
John Maxted is an entrepreneur who founded Digby Morgan (acquired by Randstad in 2011). He is the author of the chapter about Frederick Herzberg, pioneer of job enrichment, in Business Gurus (Crimson publishing)
HMRC breaches client confidentiality; and partner profits fall at EY. These stories and more discussed in Friday Afternoon Live
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Six new partners have been revealed by top ten firm Mazars
KPMG has announced the appointment of David Campbell as partner within its Enterprise practice.