5 Tips on Voluntary Mergers from the Chartered Professional Accountants Canada (CPA)

During undergrad, I took a few film theory and criticism courses to balance out my business curriculum. In my Introduction to Film Course, the professor said that once you study film you will never look at one the same way because you know how it was made. This is true of any profession; you see things differently because of your knowledge and experience. 

This insight comes into play when I am reading business articles. I can't help underline the actions that enable or hinder change. For example, I read an article in The Globe and Mail this week about the merger of the three major accounting bodies - Chartered Accountants (CAs), Certified Management Accountants (CMAs) and Certified General Accountants (CGAs) - into a unified Chartered Professional Accountants Canada (CPAs) association.

The merger makes sense. Traditional differences among these designations and the work that is done by its members are less pronounced than in the past and the benefits of a single accounting body - a larger organization and stronger voice on accounting practices, better career opportunities and cost savings, etc. - are many.

Conversely, there have been concerns from some members including the loss of current designations, terms of membership and having a minority say on how the new organization will be run (CAs represent 46 percent of the combined 185,000 membership). 

In 2012, after a year of negotiations, the national CGA organization withdrew from talks, but rejoined them last year after provincial GCA organizations started their separate negotiations to join the other groups. This week, final approvals were completed.

Here are the actions I underlined that helped enable the merger:

• Creating a future identity that is different, better and more compelling - An ad campaign was created and launched to build awareness of the new CPA designation and create a "strong and positive impression of the organization.

• Differentiating a past failed merger - In 2004, the CA and CMA organizations attempted to merge. Differences between the past and current merger have been clearly stated to avoid the "we tried this before and failed" objection.

• Retaining what members value from their current organizations - Existing members will use the new CPA designation followed by their current designation (e.g., CPA, CA). In 10 years, members will have the option to drop their current designation.

• Securing and communicating a quick win - A new educational process has been created incorporating the best features of the three current systems, demonstrating benefit from the merger and demonstrating contributions from the separate bodies.
• Acknowledging that there is still a lot of work to be done - Expectations are being managed that there will be a long transition process and not everything is defined. This avoids the "You said we were one organization, but what about this difference" objection.

"The professionals are turning pro" is the new CPA organization's tag line. How they manage change is one way they are living it.

Phil

The art of seeing things for the first time

 When I was seven, my family moved to a house on a ravine. The valley presented endless opportunities to explore the forests and fields that surrounded the slow and winding Humber River; Nature was our backyard.

Now, we live five minutes away from similar surroundings. The creek and trees look the same. Even the smells are the same.

Sam and Charlie

When our boys were small, we would go on hikes along the riverbed, seeing how far we could go before we were stopped by the terrain. This would be where we would have a snack break and discuss the interesting things we had seen and challenges we had overcome. Everything was important.

Charlie

Charlie, now almost 16, recently has taken a renewed interest in exploring the river. This week, he asked if I wanted to join him on his trek to see how far he could go. 

I jumped at the chance to spend time with him and retrace the steps we had laid many years ago. 

What surprised me was Charlie's fascination with everything - fossils, rock paths across the water, plastic bottles, even a steep rock face that he felt needed to be climbed. Everything was still important.

I noticed Charlie was approaching the hike differently than me. He was experiencing things as if he was seeing them for the first time, present in the moment, taking things in and adapting his course based on what he saw. I was focused on finding the easiest path.

Before long, I found myself taking on Charlie's behaviours. I too broadened my line of sight. I was present, active and engrossed in the moment. It felt great to be alive.

If Charlie hadn't been with me, I wouldn't have walked across the riverbed, swung on tree branches, got entangled in thorn bushes or climbed steep cliffs. I would have had an easy walk along the shortest route to my destination. 

How many times in our lives do we process a task instead of experiencing it? Completion is the goal and taking the easiest approach is the best way to achieve it. What do we miss along the way and how does that affect our outcomes?

I am meeting a new client on Monday. My line of sight will be broadened by everything they see and where they are going. Everything will be important.

Phil

GM's Assessment of Its Mishandled Ignition Switch Recalls: What About the Leaders?

Last week, GM announced the findings of an independent, company-sponsored probe into its failure to address defective parts that resulted in 13 deaths over 11 years. The technical problem was an ignition switch that could move to accessory positions while driving, causing the power to be cut and power steering, power brakes and airbags to stop working. The managerial problem was that no one fixed it.

The writers of the report principally blamed GM's culture for enabling this tragedy. 

• Lack of accountability ‒ one cited example was the "GM salute": a crossing of arms and pointing at others. The employees responsible for making the fixes, including engineering, legal and cross-functional committees, operated in silos and failed to set timetables or demand action 
• Lack of urgency ‒ this behaviour is known internally as the "GM nod": everyone agrees to a proposed plan of action, then leaves the room and does nothing"
• Poor judgement ‒ the original switch failed to meet GM specifications, but was approved for production. Decisions were not assigned owners, therefore they weren't made and no consequences were levied
• Avoidance of raising Issues to leaders ‒ consumer complaints or internal reviews were not raised to the highest levels of leader. There are many references to employees failing to disclose critical pieces of information about the defect
• Conflicting leadership priorities ‒ teams had differing views on competing mandates ‒ "cost is everything" and "cost is irrelevant when safety is an issue" 

Mary Barra Addressing the Recall Probe

Mary Barra, Chief Executive, communicated the investigation findings to all employees via video conference. She announced that 15 people had been fired for incompetence and negligence and 5 more had been disciplined because of their inaction. A new safety head had been hired into a more senior role than his predecessor and a new "Speak Up for Safety" program was being launched to encourage early reporting of safety issues.

Most of Mary's comments focus on GM's culture that enabled the shortfalls: "Fixing this is going to take more than getting rid of some people and moving boxes around on the org chart. This is going to require culture change and an ongoing vigilance." Fair enough, but what does this mean? How will the leaders that have prospered in the current culture create a dramatically different one?

Here are my recommendations for GM leaders:

1. Don't "put this behind you"; make it part of your new culture. Weave this tragic story into company lore and build ways of working to avoid it happening again.  For example, ensure that new employee orientations include your lessons learned. Share how this has profoundly changed your thinking and behaviour. This failure is part of your culture and will be a source of strength when you can articulate what you have become because of it. Follow Mary's lead:  "I want to keep this painful experience permanently in our collective memories. I don't want to forget what happened because I ‒ and know you ‒ never want this to happen again. This will take conscious actions."
2. Modify your rewards system to encourage new behaviours and leave behind old ones, especially for senior leaders ‒ they must demonstrate that they support the new culture and are prepared to benefit or lose because of it
3. Work on accountability first. Nothing will change without people at all levels feeling responsible for outcomes
4. Document examples of the new empowered culture and share them across the organization
5. Invite external experts and the press to evaluate your progress. Highlight and address setback. There will be setbacks

The most important recommendation is for leaders to acknowledge that they own GM's culture and they created the old one through their actions and behaviours.

The report could have said that leaders take full accountability for the failure to recall dangerous cars. It would have been an excellent example of the new culture they are charged with creating.

Phil

What My Dentist Taught Me About Conviction

I have been spending a lot of time with dentists lately. I started getting sharp pains in an upper-right molar. Every time I drank something hot or cold a sharp lightening bolt would shoot up into my brain - not good. 

Dr. Janet Tamo

I called my dentist, Dr. Janet Tamo, to make an appointment. I was in her chair within twenty-four hours. Before I left, I had endodontic (tooth nerves) and periodontic (gum) consultations within the week.

Janet became my dentist in the early 80s when she opened her practice. It has been great seeing her career soar, including teaching dentistry at University of Toronto, being an industry spokesperson,championing new dentistry technologies and procedures, and being awarded "Best Dentist" in 2010 and 2011. I recommended her to all Cadbury expats. "She is the best," I proudly proclaimed.   

On Monday, after four root canals, I revisited Janet to begin the crown-making process. This is my fourth crown so I knew the drill. 

This time was different. After reviewing my x-rays, Janet said, "We need to look at another tooth." After a quick call to my new endodontist, she said, "Phil, we also need to put a crown on the tooth in front of the one we are replacing". 

My initial thoughts were short-term. I can't afford to spend any more time on my teeth. I said, "Do we have to?" My dentist explained that the suspect tooth was almost all filling (I had a sweet tooth as a kid) and was not strong. She also reasoned that it was badly discoloured and my new tooth would have to be matched to this one or it would look fake. A crown was the only good option. 

What struck me was Janet's conviction that this option was unequivocally in my best interest. Based on her experience, the facts and a good understanding of my needs, there was one best path forward. 

Dentistry and management consulting are similar in this regard; the goal is to help your clients achieve their goals. Conviction is required to avoid clients missing opportunities or make mistakes that have happened before. Clients aren't always receptive to advice, especially if it is contrary to their beliefs. It takes conviction to influence them based on knowledge or skill that the client may not have.

My next root canal is on Thursday. I know it's my best option, which is a sign of excellent dentistry, and consultancy.

Phil