Where do babies come from? These were the first words of renowned economic journalist and author Tim Harford OBE in his keynote speech at AICPA & CIMA’s latest event Going Beyond Finance: Our chance to get it right.
Now, we all know that babies are not really delivered by storks – and yet, scientists found a statistically significant correlation between the number of babies and the number of storks. Surely, you would never get such a clear correlation by chance?
This is until you consider the scientists were studying the numbers on a country-by-country basis. As it turns out, bigger countries have higher populations of both humans and animals – the babies and the storks – so land area was skewing the analysis. Mr Harford’s point: you can prove anything with statistics.
We live in a world of fake news and misinformation. There is so much data to wade through on a daily basis that we can scarcely make heads or tails of it, and even when we can, the resulting analysis is often distrusted – and in this, data is exceptional. We do not say ‘I heard a politician lie with their words, therefore I will never believe words again’. And yet, this is exactly issue that those who work with data face every day: cynicism and disbelief.
That is where those in finance and accountancy roles can shine - helping businesses to identify the data that matters to them, so that they can make informed strategic decisions.
Data literate professionals are in-demand
Average salaries for finance and accounting professionals have increased by 10 per cent over the past year, according to Robert Half’s 2023 Salary Guide – and with their skill set it is easy to understand why.
Business leaders are recognising that the high standards expected of accountants mean that they are able to analyse data objectively, with integrity. It is not only business or financial data that they are working with; many finance and accounting roles have also come to encompass other areas of data analysis, such as sustainability reporting, for which the IFRS has recently introduced new reporting standards.
Read more about what the panellists at AICPA & CIMA’s event had to say about ESG and sustainability reporting here, or find out more about AICPA & CIMA’s Fundamentals of ESG certificate.
For this reason, management accountants are increasingly viewed as a trusted partner to senior leadership teams. People know that they will look at the data with the rigour required to establish a clear, unbiased view of the businesses’ situation, and provide the best guidance on how to proceed.
However, it is becoming increasingly difficult for businesses to find the talent they need. Nine in 10 (89%) CFOs are concerned about their company’s ability to attract skilled talent in the next 12 months, with 38 per cent reporting that a lack of career progression opportunities is one of the most significant barriers to hiring.
With that in mind, how can we ensure that both needs are met? In the 2023 Salary Guide, Robert Half’s experts recommend that businesses consider hiring at a lower level that offers candidates the opportunity to grow in-role, and add value to their organisation over time.
The Three Cs
So, businesses are desperate for talent who can provide them with the added value and guidance they need – but whether they hire in or grow the talent they need, many management accountants will still face challenges with cynicism, or find it difficult to bring the senior leadership team on board with their analysis.
In his keynote, Tim Harford highlighted three critical elements to make the world of data add up, overcoming cynicism and addressing bias: Calm, Context and Curiosity. These apply to all of us; how we understand and consider data helps us to form opinions, make decisions and ultimately make sense of the world around us. For accountants, being able to do this without bias and while taking colleagues along with us for the journey is crucial.
- Calm
When people notice facts and figures it is because they are emotionally engaging. We are human, and we have feelings, but being able to step away from your initial or ‘knee-jerk’ reaction allows analysis and rationality to creep in. Don’t let your feelings about a situation or a certain piece of information cloud your judgement. - Context
Data means nothing without context. If you don’t understand how it fits in to the overall picture or the specifics of the metrics it is impossible to interpret the data correctly. How much has the data shifted from before or in comparison to competitors, and how much does that correlate with external factors? It is important to consider everything before jumping to conclusions. - Curiosity
This is perhaps the most important element for taking the senior leadership team on the data journey. Mr Harford’s wonderful advice was ‘Don’t worry about the audience not understanding, worry about interesting them’ – that curiosity is what drives openness to different interpretations of data, and helps people view them as something to be embraced and processed, rather than a threat to the status quo.
These three things can help accountants to communicate more honestly and effectively, and become trusted partners within their organisations, who are relied upon to answer the questions that need answering.
Of course, it is not as simple as using these three factors to analyse and disseminate data effectively. Communication and trust must be underpinned by experience, rigorous data management and high-levels of scrutiny (on AI, as well as human analysis). With all these things in place, accountants can use data as a lens to help businesses understand the world and their place in it.
Many of Tim Harford’s views and ideas are included in his latest book, 'How to Make the World Add Up’ – a must read for those interested in stats, and how to be sceptical without being cynical.
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