A recent Harvard Business Review blog asserted that Peter Drucker, the leading management thinker of the 20th century, knew something about 2020. He had observed that western society, and the institutions within, experience a “sharp transformation” every 100 years. He noted that these transformations can take some time – say maybe 50 years.
Having just returned from an AICPA meeting in Boston, I reflected on the topics presented – the agenda – and it struck me that evidence of “transformation” was found throughout the program. And it was found at the lunches, dinners and receptions as participants talked about their personal environments. The CPA Exam. Big data. Audit Quality. Disruptive innovation. Changes leading to transformation.
It seems that we hear the word transformation more and more. It’s become a trendy thing for a consultant to say. But be aware sometimes it’s simply change that’s happening, not truly transformation. So there’s a difference? Certainly. Change is incremental. Kind of “around the edges.” It might be a tweak to professional standards for example. It could well be the treatment of goodwill on a financial statement. Transformation is more “radical.” It’s more all encompassing. It changes fundamentals.
So, we are in that period of transformation that Peter Drucker talked about. Along the way, there’s been change and a lot of it. But in the final analysis, we’ll recognize that much of what we’ve been experiencing has been a small part of a larger transformation.
This transformation is being driven by technology, which drives business processes which can dive complexity and velocity of change.
There isn’t (or should I say won’t) be a single result of the transformation we’re experiencing. To a degree we may not even recognize the transformation when it’s complete. What does that mean? Transformations historically cause human beings to “forget” about what it was like. Transformations get to the core of what we do, how we do it and why. When the transformation is complete, society can’t imagine doing it the old way.
This transformative period will result in a new reporting model for business. Integrated reporting or something like it. New ways to learn based on competency (and outcome) rather than hours or grades (outputs). Organizational charts may cease to exist and perhaps also the traditional business model that thrived on that historic structure. Global business practices will be the norm and we won’t be able to conceive of a work force that wasn’t ethnically and culturally diverse.
Transformation is rarely planned and never “easy.” But it is the natural order of things. Progress. Evolution. And the end of the day, the transformation results in a better world.