What is the "New Normal" and what does it take to lead in turbulent times. This special presentation to the 2010 CCH User Conference explores the lates ttrends and issues and what it means to lead in the "new normal" The presentation covers the six major trends faci

1. Leadership in the New Normal 1 CCH User Conference - 2010 November 9, 2010 Orlando, Florida Presented by: Tom Hood, CPA.CITP CEO Maryland Association of CPAs Business Learning Institute

2. What is the # 1 reason leaders (and their organizations) fail? 2

3. The recession is over? Many of our CPAs are continuing to see rough seas ahead 3

4. CPAs and businesses are feeling overwhelmed by the rapid and turbulent pace of change

5. You would like to be ahead of the waves instead of being crushed by them

6. Today we will show you how you can survive and even thrive these waves of change Photo: Pratt’s surfing page

7. Our agenda What do we see? Economy Regulations & Standards Globalization Technology Workforce & demographics What does it mean to lead in turbulent times?

8. Ever feel like you need an evacuation route? “But a time of turbulence is also one of great opportunity for those who can understand, accept and exploit the new realities. It is above all a time of opportunity for leadership.” - Peter Drucker, Managing in Turbulent Times

9. A useful framework for dealing with change – strategic thinking using our i2a – Insights to Action System Making sense of a changing & complex world What possibilities do we see? What does it mean to us? What direction should we go? Who do we need to inspire to help us get there? How is the world changing?

10. Report from the future…

11. Re-Set, Re-Think, Re-Imagine Anticipation of a very large business model change amidst rapid change – Steve King There are two recessions – the obvious one and the not so obvious, the end of the industrial age where perfecting the model was the key. The new model will be completely different. – Seth Godin #4 Rethinking the Business Model (25) from AICPA MFG

12. The Economy

13. Where have the jobs gone – 8,000,000 down Source: Small Business Labs blog – Fidelity.com

14. Are we in the “Loch Ness Monster” Economy? “Characterized by a series of dips superimposed on a slow underlying economy thru 2020” - Business Redefined by Ernst & Young

15. Regulations & Standards

16. The Federal Issues FTC Red Flags rule – privacy & identity theft Tax Preparer Registration & PTIN issue Patient Protection Act & 1099’s Sub S. Employment Tax Issue H.R.5297 - Small Business Jobs and Credit Act of 2010

17. Massive legislation in a very short time Dodd-Frank Wall Street Reform & Consumer Financial Protection Act Patient Protection Act Small Business Tax Relief Act

18. A useful framework to understand the CPA profession The CPA profession is part of the bigger infrastructure that supports the US free market system. Like the pipes under urban streets, it is often invisible until it breaks.

19. The (infra) Structure of the CPA Profession State Boards of Accountancy issue licenses and regulate CPAs

20. Recent example – The Dodd – Frank Wall Street Reform and Consumer Financial Protection Act of 2010 Crisis hits news HR 4173 Bureau of Consumer Financial Protection 848 pages! 533 regulations 60 studies 94 reports

22. 47 states passed legislation in three (3) years

23. Maryland enacted it in 2008MI RI CT *PA IA NE OH NV NJ UT IN IL DE CO WV CA VA KS AK MO KY MD NC DC TN AZ OK NM AR SC AL MS *GA TX LA FL CPA Mobility Enacted 46 PR CPA Mobility Enacted Only for Other Mobility States – GA, PA, MA Awaiting Governor Signature - 1 * GU U.S. VIRGIN ISLANDS In Process CPA Mobility Legislation Pending - 2 21

24. It’s 7:00 am at a town hall meeting in Aberdeen when the AICPA alert comes in…

25. More than 100 MACPA members call our senators and we defeat the amendment!

27. Modified provision to audit broker-dealers (PCAOB)

28. Exempted CPAs from CFPA registration due to existing licensing and oversight

29. Stopped excessive liability exposure for auditors (aiding & abetting)

31. Another way to look at standards & oversight Public Company Private Company Int’l Company Financial Reporting Audit /Attest Performance Standards Code of Conduct State Oversight & Enforcement of CPA License CPA Licensure

32. Six Ways Convergence is happening FASB – IASB Convergence Project SEC IFRS – The Long and winding roadmap Private Company Standards AICPA Auditing Standards Board ASB Clarity project AICPA Professional Ethics Executive Committee – convergence Green / Sustainability reporting

33. Globalization As the globe shrinks, opportunities grow for CPAs

34. 5 Forces of Globalization Growth of consumers in emerging economies Technologies that empower consumers & communities Increase in labor productivity in developed markets Shift of economic activity between and within regions Increasingly global markets for labor & talent

35. Growth is projected to come from overseas for the next five years while the US remains flat

37. 25% of small practices had international clients

39. Are you on Facebook?

40. It’s the power of the network

41. Social media = social capitalreal world examples 8,181 Views Auckland, NZ 15 mins

43. The IRS is on Twitter are you?

44. The AICPA is on Twitter are you?

45. CCH is on social media

46. Workforce & Demographics

47. 25% Of your high potential employees will leave as soon as they can!

48. 5 Generations in the workforce Live First, Work Second Digital Natives

49. Workforce & Demographics – Are you ready for the shift change? These guys are retiring These are the new workers Shift Change ! These are making the purchasing decisions Facebook Generation Email Generation

50. Bright spot? 22% thru 2018 Top 10 Careers / Jobs Growth in demand for accounting & auditing according to BLS

52. Coach tomorrow’s leaders

54. Mastery

56. Accounting Firms Most Trusted Advisors Generally speaking, how believable do you normally find statements made by someone who works for one of these organizations or groups “Echo Boomers” (18-34) rated accounting firms highest– 74% Source: Harris Poll, May 18

57. CPAs most profitable small businesses

58. Top 10 Issues Facing CPAs 1. Economic Outlook 2. Tax 3. Business Operations 4. Implementation and Execution of Plans 5. New Business Development 6. Personal/Professional Development 7. Management and Leadership 8. Financial Regulatory Reform 9. Access to Financing and Credit 10 New Accounting Standards, IFRS Source: CPA Trendlines for AICPA Feb, 2010

59. Top Ten Issues for MFG Regulatory/Legislative (56) Private Company Leadership (47) Capital Markets Awareness / Recognition (34) Rethinking Business Model (25) Protect Audit/CPA Franchise (20) Risk Management (Audit efficiencies) (20) Leadership Development / Succession Planning (19) Global / International (Clients / IFRS / Branding) (17) Leveraging Technology & Social Media (17) MFG Issues specific forums / focus groups (8) 50

60. Grant Thornton report outlines 8 key areas for CFOs to focus on 1. Developing soft skills2. Understanding and applying international accounting standards3. Understanding complex accounting & auditing standards4. Adapting to an evolving regulatory framework 5. Addressing new external reporting needs6. Understanding ERP or IT systems & XBRL7. Employing quantitative risk management techniques8. Possessing specialized industry knowledge & company's non-financial business drivers

61. What is leadership and why is it important?

62. “You can’t stop the waves, but you can learn to surf” - Jon Kabat-Zinn Photo: Pratt’s surfing page

63. Leadership is DEAD Democratic Expertise Attention Diverse Source: Emmanuel Gobillot, Leadershift

64. Leadership is still about… Engagement Alignment Accountability Commitment “First I get all of my men facing the same direction.” - Napoleon

65. Leadership is still the same since “In Search of Excellence” in 1982 Soft is Hard Hard is Soft - Tom Peters “In Search of Excellence”

66. How is leadership changing? “What got you here won’t get you there.” – Emmanuel Gobillot - Leadershift

67. From: Command & Control To: Connect & Collaborate

68. Turbulent times require new skills and new thinking Source: Chief Learning Officer magazine

69. Five Qualities of Extraordinary Leaders LC Sight - Ability to see emerging patterns and shift perspective when necessary Insight - Ability to learn faster than the rate of change in your industry Create - Ability to think strategically and creatively to gain insights that create new opportunities Communicate - Ability to collaborate inside and outside your organization and to build and sustain social networks of people engaged in the work Inspire – Ability to mobilize support and engage others to join you in ACTION

70. Our research shows three major skills Individual & Organizational Strengths-based leadership Strategic thinking Network leadership

71. What are our high leverage opportunities? Making sense of a changing & complex world… What possibilities do we see? What does it mean to us? What direction should we go? How is the world changing? Who do we need to inspire to help us get there?

72. Another way to think about leadership in the new normal

73. The Tortoise was right Sometimes you have to go slow to go fast

74. Elvis was wrong! What we need is a little more conversation!

75. Strengths-Based Leadership Self-awareness in the moment Leadership based on positivity, that seeks to build on individual and organizational strengths and collaborates to continuously learn. It is constantly considering the context and asking powerful questions, learning, reflecting, and creating pathways to the future.

76. Wanted – people who can cross boundaries

78. Leadership = Multiplication 15 X – ROI strategy as process & alignment 8 X – Strengths 6 X – Trust & Engagement 3 X - Positivity

79. Does it really work?Four Examples Service Profit Chain AICPA Major Firms

80. Toolkit & Practice Create a Positive Work Environment Engage people through facilitation techniques Ask powerful questions Communicate to Inspire

81. Leadership defined The four most important words for organizations are, “what do you think?”- Tom Peters

82. The only question for leaders Have I made you feel stronger and more capable? Source: Emmanuel Gobillot - LeaderShift

83. Tom Hood, CPA.CITP CEO Maryland Association of CPAs Business Learning Institute (443) 632-2301 E-mail tom@macpa.org Web http://www.macpa.org Blog http://www.cpasuccess.com Connect – Protect - Achieve