tom hood: when your mindset is your biggest problem | gear up for growth

investing in learning and development is essential for retaining and attracting staff. developing a curriculum that includes both technical and success skills can help firms address the current talent shortage and prepare their employees for higher-value roles. 

“we’re going to see automation making a big impact on our staff in the near term,” says tom hood, cpa, cgma, citp, executive vice president of business engagement and growth, aicpa, appearing on gear up for growth, a hosted by jean caragher, president, capstone marketing, and powered by 卡塔尔世界杯常规比赛时间.

“identify the critical competencies you need for each practice area in your firm,” says hood. “then, as tax gets automated, for example, your tax people are going to have to move up the value chain into planning. that’s a natural progression. another example is the fastest-growing practice area, client advisory services, or cas, and that’s going to be more automated. so, the emphasis is on those higher-level consulting skills like collaboration, curiosity, strategic and critical thinking.”

“you want to make sure that your cpas are doing the level of work that’s the highest and best use of their capabilities,” adds hood.

other highlights include:

• the first step for a cpa firm to create a learning culture.
• how to use your people in the right roles.
• the role learning can play in finding and keeping staff.
• why storytelling is an increasingly important skill for accountants.
• who is the best person within a firm to lead a learning initiative?

more about tom hood

tom hood is a visionary and influential leader in the accounting profession, with over 24 years of experience as the ceo of the maryland association of cpas and the founder of the business learning institute. he is now the evp of business engagement and growth at the association of international certified professional accountants, the world’s largest accounting and finance organization.as a cpa, cgma, and citp, tom has a unique perspective on the future of accounting and finance and how to help professionals thrive in a rapidly changing environment. he is passionate about empowering and inspiring others to embrace change, leverage technology, and develop new skills and mindsets. he is also a prolific author, speaker, and social media influencer, with over 730,000 followers on linkedin, twitter, and other platforms. he has been recognized as one of the most influential people in accounting by accounting today and as one of the first thought leaders inducted into the accounting hall of fame by cpa practice advisor.

transcript
(transcripts are made available as soon as possible. they are not fully edited for grammar or spelling.)

jean: hello, and thank you for joining us for “gear up for growth,” our podcast powered by 卡塔尔世界杯常规比赛时间. i’m jean caragher, president of capstone marketing, and your host. this episode is focused on the challenges of talent and learning for today’s small cpa firms. our guest is tom hood, executive vice president of business engagement and growth at the aicpa and the ceo and founder of business learning institute.

you may also know that tom served as the president and ceo of the maryland association of cpas for 24 years. tom is consistently named one of the top 100 most influential people in accounting by “accounting today.” in 2023, he tied for the third-most influential person in accounting by the top 100 most influential people in accounting. tom, welcome to “gear up for growth.”

tom: jean, it’s great to be here, and i love the title, the whole idea of “gearing up for growth,” because i think this is a special moment for our profession and for cpa firms.

jean: yes. and its intention is not just about firms getting bigger, but having smart growth, strategic growth, and also paying attention to profitability, and niching and people and rightsizing client bases, and all of those things. so, over the course of various episodes, we’re gonna be covering a lot of ground like that.

jean: so, let’s start off. just tell us a little bit about your current role at the aicpa.

tom: so, my current role is, i would say… well, the title says a lot, business engagement and growth. so, my job is really to be in the market, and i’m responsible for the americas. so that’s north, south, and central america. although u.s. is our primary focus, secondary, canada. and then my primary is for corporate accounting. so, finance and accounting in the corporate arena, which is my old background. i was a cfo in business and industry before i moved to the macpa and then before getting here.

so, my job is to stimulate the cgma, chartered global management accountant in the americas. that’s the number one piece. but i also have a continuing role from the business learning institute, which aicpa acquired from maryland. and then that part is still active, doing some strategic planning, keynoting for a lot of firms, firm associations. so, i still got a hand in the firm marketplace, so that’s why this episode was of interest to me as well.

jean: right. absolutely. so, you talk about someone who has had a lot of exposure to many, many, many cpa firms, it is tom hood. tom, i’ve seen that you have written that one of your passions is to inspire others to develop new skills and mindsets. tell us how that came about.

tom: so, it’s interesting. i call this the best research we ever did at aicpa and cima that nobody read. so, we actually had research that was done actually right before i joined the association, which was right around almost the end of the pandemic. so, i’ve been here now three years. and this paper was called “finance transformation: the human perspective.” so, it was done with kpmg and our aicpa cema team over in the uk. and research was done obviously ahead of the pandemic, but it got released in march of 2020. so, imagine…

jean: perfect timing.

tom: i think i was the only goofball in the world that read the research. and it was brilliant, but that’s the point, right? not many people read it. after reading it and having listened to a whole bunch of these large corporate cfos. we’ve got a group of about 50 of these big corporate cfos who are from, you know, brands like coca-cola, nike, bp, you know, stanley black & decker, you name it. and that group was struggling with digital transformation, upskilling their people. and then i looked at this paper, and the paper said 89% of finance transformation, this goes for any transformation in accounting, by the way, is about people.

now, that might not surprise you, although i’ve been guilty of not thinking that way all the time. but when it boiled it down, it effectively said mindset and skill set equals that 89%. and that blew me away, jean, because i used to think, throw the toolset in, which is technology, and that will force the transformation, right? adopt the new system, and then that kinda creates enough chaos that then moves everybody to that new thing. that’s not true anymore.

and so, what this paper talked about was 39% of transformation success is mindset alone. a growth mindset being focused on the future, right, and being resilient in the face of change. that’s number one. and then skill sets, and there’s, like, two different buckets of that, starts to add up to the rest of it, with another 70% about leadership.

but the skills, by the way, none of them are hard skills. they’re all soft skills, which i hate that word. we call them success skills or power skills, but it’s those skills like collaboration, being curious, right, strategic and critical thinking, a lot of the same skills that ultimately, we had developed under the business learning institute that’s now over inside our aicpa. and now those are the biggest… we call them the money skills. so that 89%, so you start to say, if you’re a leader and you wanna tip your odds, you wanna start with getting their mindset right and then beginning to upskill before you finish or move heavy into the transformation.

jean: because we know how everyone loves change and just mixing things up a lot, right? people really embrace that.

tom: exactly. so, i mean, it’s funny, we were talking to this one big global company, and i’m on the phone with head of transformation, a couple of their finance people. and listen, what’s interesting about this is this applies to all-size companies and organizations and firms. any firm about to add a new practice element or take on a merger or any of those kind of transformation ideas should be thinking about these key concepts, right? so, what they said is they said, “you know, we’ve been on this transformation journey, and it felt like we were out in the ocean on a ship, and a big wave came overboard and knocked us all overboard. and now, we’re bobbing around in the ocean in life jackets, and wave after wave of transformation is washing over us.” that’s how they described how they felt.

and so, that’s when it hit me between that paper and that research, and then one of my favorite quotes comes from this guy named jon kabat-zinn, who’s a philosopher, who says, “you can’t stop the waves, but you can learn how to surf.” and so, that’s become our mantra for our profession, that’s in a major part of change. and now, you know, if you look at covid, covid accelerated most of the trends by five years. e-commerce accelerated by 10 years during covid, right? that’s documented.

now you’re looking at genai, and i think that’s another five-year accelerant. so, if you think about just those two events, in the course of four years, we’ve fast-forwarded, like, 10 years into the future. and i think we’re all feeling that, right? that’s why we all feel like we’re crazy, and we don’t know, you know, what side’s up anymore.

jean: right. and at the same time, for years and years, practitioners would say, “no. we need people in the office. we can’t have too many people working at home.” and son of a gun, a pandemic comes and poof, everybody grabs their work computer, and off they go and they work from home, and some of them still are. so, it’s nothing like a pandemic, like, to prove to ourselves that we can make these big changes if we wanted.

tom: we were a lot better than we thought, right? exactly. i think that’s true. and we’re seeing these finance teams, these large corporates, none of them are going back. not in any permanent way. they’re going back with, i call it, purpose in the office. but that’s what we’re starting to see, which will tie into some of the things you wanna talk about from a learning standpoint. but that’s the big thing that’s going on right now, is this idea of helping firms and companies through these transformation journeys.

jean: right. right. so, in my research for our discussion today, i revisited the cpa vision project and cpa horizons 2025, which seems like, you know, we’re in space, and learning was a very important component to those survey results. in fact, you know, cpe and learning was a top core value. so, cpes have been known to value their education and enhancing their skills. and you’ve already mentioned the word already one time, soft skills. we’ve been talking about developing soft skills, or interpersonal skills, for decades. so, i think i may already know the answer to this, but i’m gonna ask it anyway. so, is this conversation now about these soft skills and interpersonal skills, is it being taken more seriously today than it has in the past?

tom: oh, absolutely. a whole lot more seriously. in fact, like, it’s showing up. well, it showed up in that research about those skills, right, collaboration. almost every group i’ve talked to, whether it be a firm, small, midsize firm, large firm, corporate, midsize corporate, when i say, what are the top three issues? obviously, talent is always in there. interestingly enough, more and more, transformation is in the top three, right, of some sort. and then, without a doubt, need for new skills comes up in the top five. and then that translates to what skills are you looking for, and, inevitably, they give us the skills that we’ve been talking about for years in the business, all the stuff that came literally out of the vision project in 1999, jean.

i mean, the thing that i love about that, it’s so funny that you referenced both of those documents because i was doing some homework and comparing, like, how did we do? because the vision project was 1999 looking out to 2011. so, i did that as a volunteer. that was my first day on the job in the maryland association of cpas. i was signing up for that project. and then the second version of that was a horizons project. so, in 2011, when the vision project, like, completed, so to speak, we picked it up again and said, “what’s on the horizon?” so, we looked out to 2025, which, by the way, is one more year away.

so, i took those two reports, and i basically took the accounting today’s top 100 firms report and i looked at that through the lens of those two reports, what our grassroots, thousands of cpas came together and said, “this is what we want the future. we think the future should look like based on all the trends.” and inevitably, the accounting today report for the top 100 would say, “we were spot on as a profession. we actually fairly well predict…” again, we’d probably get a b+ for having the foresight to really think about that. and those skills all came from that report. the difference is the profession didn’t adopt those skills until recently.

jean: right. okay. that is kind of what i was getting at, you know, because there’s a lot of talk about some of these things, but not a whole lot of execution on it.

tom: yes. you’re exactly right. so, it’s interesting how, right now, both… and we always saw, for the most part, the corporate finance world, business, and industry, if we call them that, cpas who are working in the corporate side, needed those skills more often than the folks in the firms. because the partners generally got those skills through the school of hard knocks and their own experience. so, it wasn’t something they, you know, spent a lot of time investing in. but now, we’re starting to see where everyone is saying even the younger people need to have those skills at an earlier and earlier start in their careers. and so, that’s where you see all that stuff play out.

jean: right. right. now, you know, i’m quoting all these studies. so, i wanna drill down a little bit to how this relates to finding staff and retaining staff because we know that… it’s appropriate to call this a staffing crisis. you know, i’m not aware of any firm that has…

tom: oh, no question.

jean: …the amount of people that they need to be able to do the work that they have. and pcps, their top issues, it was always those two things at the top, really regardless of the size of your firm, except sole practitioners. can you talk to what role learning can play to overcome finding and keeping staff?

tom: oh, i mean, it plays both a prominent role from that standpoint. it’s also one of the easiest things you can do to do two things, right? shift their mindset and keep them, retention. if you invest in your people, the retention statistics go up dramatically. and so, we don’t always think about that. and then another angle is if you’re systematically developing your people.

so often, what we talk about is when we go into a firm or a company, we try to help them build a curriculum that helps people progress in the areas that they need progression in. and, you know, the technical part is a given. i gotta do auditing or tax, or cash work, whatever that part is. but it’s the success skills that you wrap on top of. we call it a t-shaped professional. those are what we would call the power or money skills that you need to have, right?

and i can at least describe what those look like, but let’s talk about the benefit from a retention standpoint. retention stats go up dramatically when you’re investing in your people, right? so, then you’ve got them staying. then you’ve got firms who would say, “well, if i invest in them, they’ll leave.” and the corollary to that is, well, what happens if you don’t invest them, and they stay?

jean: right. exactly. right. because i know learning also plays a role when accountants are looking for a firm to work for and deciding if they wanna stay within that firm. so, all this is coming together, kind of in a package.

tom: correct. that’s exactly right. and relative to the talent shortage, clearly, there’s two things, right? first of all, is making sure you’re utilizing the people in the right roles. so, there are roles that we’ve seen firms adopt, for instance, project managers. how many cpas on staff are acting as project managers for a lot of these things? and if you brought someone in from the outside, that project management expertise, and shared them across the practice area, they can handle a lot of that core project stuff so that your talent can do the things that are most valuable and billable to a client for. so that’s an example.

you also have lower-end jobs like clerical and bookkeeping type stuff in a caps practice, but that could be brought in to support your higher… so, you wanna make sure that your cpas are doing the level of work that’s the highest and best use of their capabilities, right, and then see if you can… so, if you can’t go out and hire more cpas, which is what everybody’s trying to do, what if you kinda subdivided some of those roles and then got those positions in from other areas, if you will, not purely accounting or cpa-oriented, and had them supplement those job categories?

jean: right. right. that’s a fantastic point because that also keeps the staff, at whatever level, challenged in the work that they’re doing and not thinking, “i’ve been doing the same job for three years, and i’m really tired of doing what i’m doing,” and they wanna be doing something at a higher level.

tom: oh, absolutely. so, one of the cfos who’s a member, a good friend of mine, she goes, “when we could get rid of the soul-sucking, mindless work that we have to do sometimes,” right? and she’s a cfo. so, the point is, i think automation is the other dynamic here, jean, that we’re gonna see making a big impact on our staff in the near term.

gartner is predicting frictionless finance within three to five years, meaning you won’t touch a transaction, right? transactions, whether it’s a check or it’s, you know, credit cards, all the different ways we’re transacting in our companies and firms will all be automatically put into the general ledger, coded properly, ready for reconciliation. will it be error-free? no. there’ll be some of that. but for the most part, there won’t be any real heavy data entry and even very few journal entries. you will be able to tie in bank reconciliations and all that kind of stuff automatically.

so that’s something we’ve been talking about it. i’ve been talking about it for 20 years when i was a cfo in the old days. it’s like i was dying for that moment. everybody kept promising. i think it’s close for once. we’re starting to see a lot of that happening, even in the small accounting packages. so that’s gonna take away a lot of that work and move people into a higher level.

jean: right. yeah. and i’m sure these are very encouraging words, you know, to our listeners because it is an opportunity to make a very smart shift in how accountants work and what they do, right? and, of course, frees up the time to do more of the advisory and consulting, which is something else that we’ve been talking about for decades and decades. and then some practitioners, “oh, we do that all the time.” and, no, they’re really not. this allows them to have the time to really truly go out there and use their brain power, which they have, you know, cpas are very smart people, and let them do more challenging things for themselves, right, and not just for other people.

tom: which was exactly what those grassroots… i mean, literally, i think if you look at horizons and vision projects, together, they were probably… well over 10,000 cpas participated in kind of all the polling and focus groups and things that were done to create the future, right? and if you look at that future, it was all about trusted advisers helping individuals and companies shape their future, right, combining insight with integrity, and then i had a couple of… but that was all about moving up the value chain in 1999 and then reinforced in 2011. so, we’re now on the brink of 2025, and we’re finally getting there, which is really exciting.

jean: right. it is very exciting. tom, what would be the first step for a cpa firm to create a learning culture? because i think it has to be in your dna.

tom: yeah. so, a first step would be to identify the critical competencies you need in your firm. so, each practice area, audit, tax, consulting, financial planning. that’s another, right, big one that… so as tax gets automated, your tax people are gonna have to move up the value chain into planning. that’s a natural progression, right? we’ve been talking about that at the aicpa for quite a while. and then obviously, the fastest-growing practice area is client advisory services, or cas, and that’s continuing in a big way. but that’s gonna be, again, more automated. so, the emphasis is on those higher-level consulting skills that you’re talking about. so those are what we call the t-shaped professionals.

so, i would say you’d wanna inventory your people and just say, “okay. how many people in different roles do we have?” and then you start to say, “what are some of the critical skills that will make the biggest difference to our clients and our staff.” and, literally, we’ve got a whole list of those skills, but i’ll give you the ones that are, like, the ones coming up all the time. this is the t-shaped professional.

so, obviously, you’ve got the deep technical knowledge that we all have in accounting and finance. obviously, understand the data and where that comes from, general ledger, all those kind of things. but then, on top of basically that vertical part of the t, is the crossbar. and the crossbars are what we call boundary-crossing competencies. these are the skills that allow you to communicate with clients and actually across your firm or even outside the firm with other disciplines, like their lawyer or their banker, or other parts of their advisory team that you’re a member of.

so those skills are things like, number one, strategic and critical thinking. that’s the biggest skill everybody says they need, regardless of what size of the company or firm. then i would say, second, gets to communication and storytelling, emphasis on storytelling, because we’re now interpreting those numbers, but making the numbers come alive so that non-finance people can understand what we’re talking about, right? and i always go back to the classic example of go try to explain depreciation to your client, right? it doesn’t translate well.

jean: it’s a riveting discussion. it’s like into-your-seat kinda stuff.

tom: yeah. exactly. so, i would say third is what we would call integration and collaboration. so, because it’s a team sport now, right, you’re gonna be collaborating inside the firm across different expertise areas, but externally with your client, their management team, again, bankers, lawyers, other experts that these clients might be using. and if you’re gonna be the quarterback, which we think you should be as a cpa, you’re gonna have to be able to collaborate and play well with that group and basically call the plays.

so those would be the top three, add to that, obviously, leadership, and we call it sense-making, how do i make sense of the crazy world that’s coming at us? that also has an idea of anticipation and serving evolving needs is the fifth one. so, if you put those five together, that creates that top of the t. and, literally, you would say, “what skills would help us the fastest?”

for instance, if you’re presenting boring financial reporting information to your clients, storytelling might be where you start, right? how do i tell a good story with finance? and we’ve got programs to help you do that. helping them understand kind of this future and what does ai mean and all these other trends that we’ve got around technology, that’s another one. that would be both anticipation and strategic and critical thinking. so, you get the feel, like, how do you then take those and break it down and say, “what do i think the…?”

so you don’t have to build this gigantic curriculum. just start with top five or top three. what are the top three skills that would make a difference? let’s go find someone to get moving on that journey, we’re all interested in talking to you, and then figure out how do we start to make that happen, and then get them moving. a monthly program for your group would be the easiest place to start. cpe program by webcast, get a real good inspiring speaker a couple times a year. those are what we typically see in a firm that’s, you know, up to 100 people working on a program like that.

jean: so, tom, who do you see within the firms that’s leading that effort? and before we started recording it, we touched a little bit upon firms having learning directors or someone of a similar title. and our listeners, you know, may not have a person in that role in their firms. what would be your piece of advice for them?

tom: so, i’ve seen plenty that do a tremendous job by asking someone to volunteer. find one of your managers, for instance, manager level, make sure you’ve got a partner backing them up to give them what they need to do this. so, if there’s any hr people involved in your firm, you would have them connected to this initiative. i don’t know if they need to lead it. you get one of your practice areas and get a manager who’s excited about learning and who’s got that curiosity and yearns to do that, and have them start experimenting. reach out to us at the aicpa, the pcps group, or whatever, and then they can start to point you in the right direction. we’ve got a whole team of learning consultants that would help you figure that out.

so, then you just call the right experts and begin to say, “what do you have? what’s it look like?” and that’s where you can start. then what you do is get examples from other people. so, if you’re in a group of firms, find out what other firms are doing, and then start to share some of that stuff back, or you come to your professional association, and we help you. and then you get ideas, and you start to go, “well, let me expose that to my team and see what they like,” or expose that to the partner group. and then you begin that journey. but don’t try to build it all out and spend tons of money and time. just get started, right? say, “what’s the biggest need,” and run a program and then get feedback from everyone and start to test and learn, test and learn, right? and that’s how you build it.

jean: right. it sounds like any other initiative that you would wanna start in a cpa firm, right? it’s getting the motivated, you know, enthusiastic leader, right, and getting the buy-in and building it piece by piece.

tom: yes. now, in many firms, even smaller ones, they might have someone in there helping them with compliance, like licensure compliance. that often involves cpe reporting. so that’s the other place you could start, and that those folks are already familiar with what people are taking. so, if you’ve got any centralized records, then you can, like, get a look at what your folks are doing, and then you can start building on that as well. so, they would be looped into that process as well if you’re doing that.

jean: yep. that is a great point. now, i’ve just got two more questions and one you may have answered somewhat. if you were the managing partner of a cpa firm, a smaller firm, what would be your first priority related to talent and building a learning organization? is it the answer you’ve already provided about taking that inventory of skills, or might it be something else?

tom: i think i would be looking at the practice areas that are showing the most promise and looking at what those cpas in those practice areas need to keep that growing. so, i would wanna fuel the growth engine i have, at the same time by saying, “what does the groups that may not be growing, what would help them get to growth?” and, typically, it would have to do with new skills and learning. so, i would then try to investigate that as the second option. and at the same time, looking across the org for those key skills that i could start a monthly program on to help start building that whole momentum to a learning culture, which is ultimately what you need.

jean: right. absolutely. we could talk about this for the next two hours, but i have one bonus question for you, tom. what is your favorite pair of socks?

tom: favorite pair of socks. actually, let’s see.

jean: you’re not into socks?

tom: yeah, i understand. that’s thanks to my wife. so, i’d either have a boot gear or socks that happens on those… since we stopped wearing ties all the time, that became the next thing i would get from special occasions and at the men’s store. i think i have a pair of psycho bunny socks that is from a uk brand. i just love the whole… it’s got this crazy bunny with a weird-looking face, and they’re red with a couple other designs on them. but that’s probably my favorite go-to pair when i’m on the road.

jean: psycho bunny?

tom: correct.

jean: psycho bunny socks. okay. well, we’re gonna leave it there. i have been speaking to tom hood, executive vice president of engagement and growth at the aicpa. tom, thank you so much for your time today.

tom: jean, it’s been an honor as always, and i can’t wait to see what comes out next in your whole growth idea.

jean: wonderful. thank you for tuning in to “gear up for growth.” be sure to check us out next time when we focus on another topic crucial for accounting firms aiming for smart growth in today’s competitive landscape. i’ll see you then.