Demands for providing strategic advice and guidance are rising requirements for management accountants in the digital age. You need to become commercially minded problem-solvers who handle ambiguity and speak the language of your business fluently. You also need better commercial and social skills to collaborate effectively with colleagues from diverse disciplines and external stakeholders. So how can reading corporate stories help?
When Airmic published the Roads to Ruin report investigating the origins and impact of over 20 major corporate crises, including those of Coca-Cola, BP and Société Générale, it identified seven key risk areas, which needed to be incorporated into the risk management process. These included the greater awareness of risks arising from excessive complexity.
Another report, Enterprise Governance - getting the balance right, identified four key governance factors underlying corporate problems and four strategic issues that made the difference between success and failure. Fifteen years later, these are still relevant. The factors included choice and clarity of strategy, strategic execution and ability to respond effectively to fast-moving market conditions. What these reports had tapped into was the value of deepening business understanding through corporate case studies – a well-known aspect of management courses where examples like the failure of Kodak to leverage its knowledge of digital photography are pored over to draw out lessons for the future.
Put simply, the more you understand organisations and their environment, the better you can contribute to strategic discussions. You’ll have a better understanding of what information is needed to support decision-making and you can draw on what you’ve learned to critically evaluate proposals. You will have better awareness of the risks and opportunities involved.
It’s essential that you have a clear purpose and systematic “active learning” approach to get the most from reading other corporations’ stories, but make it fun.
Here are my tips for an easy start:
Read in a structured way.
- The best place to start is with your own organisation – don’t just focus on its current position and current strategy. Understand your organisation’s history, in particular, any major events or seminal moments – both good and bad.
- Then expand by looking at other organisations in the same industry and/or geographical sector.
- Broaden your reading even further by focusing on companies and/or sectors that could potentially disrupt your industry.
- You might want to focus on a theme and look for examples of international expansion or digital transformation.
- Try reading the trade press in a completely unfamiliar sector to gain a new perspective.
- You don’t just have to read. Ask friends or family to explain how their industry works.
Analyse and reflect on what you learn.
<The best way to do this is to question the material, for example:
- What is the business model? You can use the CGMA Business Model Framework to understand how value is created within its industry ecosystem.
- Compare and contrast with other examples. Are there any recurring themes?
- Is it possible to pull out insights on the organisation’s culture? How does this impact strategy and performance? To what extent does the organisation’s ownership structure make a difference, such as being family-owned?
- What were the reasons for success or failure?
- What’s the likely future for this organisation/industry?
- How can I apply these learnings to my own organisation and/or a particular decision?
By building your own virtual corporate library of stories, you are laying firm foundations for effective strategic business partnering. It will help you develop the questioning mindset that is essential for professional accountants.
Want to learn more about the evolving role of finance and the need for finance professionals to create value through effective partnering?
Check out the Re-inventing Finance for a Digital World white paper and our other extensive CGMA Future of Finance resources.
You can also use the updated CGMA Competency Framework. It’s designed to help management accountants, finance professionals and their employers understand the knowledge and skills needed for both current and desired roles. It also includes “business skills” as a key component to reflect that the future for accountants lies in being effective strategic partners who create value for their organisations.