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DEVELOPING COMMUNICATION COMPETENCE: FROM SCHOOL TO CFO

It’s never too late to acquire or improve your communication skills, but accountants who enter the job market with strong skills have an advantage. Whether you are looking to advance your own career, are responsible for training junior accountants, or are generally invested in the next generation of management accountants, this chapter will help you understand the importance of having and promoting excellent listening, speaking and writing skills. To understand the extent to which communication is a required skill set in management accounting today, you need only look at the online job listings for accounting positions at every level. The following is a sampling of recent listings and job requirements that can be found online on any given day:

• Staff accountant for a leading communications company: ‘Strong written, verbal and interpersonal skills; must be able to communicate ideas and issues effectively and concisely to all levels of management, internal and external auditors and outside contacts.’

• Senior corporate accountant, large multinational, publicly traded company: ‘Candidates must have excellent communication skills (oral and written), the ability to interact with all levels of management through the organisation, and the initiative to get the job done.’

• Finance manager, international textbook distributer and retailer: ‘Excellent communication and persuasion skills.’

• Corporate treasurer, builder and developer: ‘...solid organisational, interpersonal and communication skills.’

From the day they start their first job with a corporation or small business, management accountants put their communication skills to use. As they advance in an organisation to positions with greater responsibility, they will have to develop the communication skills required at each level of the corporate ladder. Communication becomes increasingly complex at higher levels, but it is based on elementary communication principles: attentive listening and clear speech and writing. These skills will be discussed in depth in the next chapter.

COMMUNICATION COMPETENCIES

Wherever you are on your career path, honing your communication skills can help you advance to where you want to go next. Take advantage of any resources your school or company offers to improve communication skills. Box 2-1 is a sampling of the communication competencies or skills required of management accountants and others in an organisation. The chart is intended simply to provide a general idea of such competencies. Some companies or education programmes may have more comprehensive and detailed skills standards.

Box 2-1: A Sampling of Required Communication Competencies at Different Levels in an Organisation

* ‘Core Competencies from CPA Vision Project Final Report,’ AICPA www.aicpa.org/research/cpahorizons2025/cpavisionproject/pages/cpavisionproject.aspx
† Ibid.

Companies expect management accountants to have strong listening, speaking and writing skills because they will be working with people across the company and at different levels in the organisation. Look back at the job listing for a communications company staff accountant at the beginning of this chapter. It states ‘strong written, verbal and interpersonal skills; must be able to communicate ideas and issues effectively and concisely to all levels of management.’ Sarah Vaudrain, a business analyst with Teknor Apex in Pawtucket, Rhode Island, echoes that listing when outlining her job responsibilities in interview 3 in appendix A: ‘I am part of the business team, working with different departments and managers, talking to people all over the company...’ The ability to communicate with different audiences is especially critical for senior executives. Developing and practising that skill early can only help you on your career path.

How, then, do management accountants progress from the entry level communication skills listed in box 2-1 to the higher level skills of an executive? Most management accountants already have some level of skill when they start with a company as the result of studying communication in school, whether as part of accounting classes or in business communication classes, and from working in public accounting, as many management accountants do before joining a corporation or business. Additionally, more companies are instituting programmes to help management accountants learn a company’s businesses and develop communication and other skills. Management accountants should also take the initiative to learn on their own, especially if the company does not provide specific training in communications.

Some ways you can learn new communication skills independently include

• reading the business and financial press, online news sites and other sources to increase your knowledge of business generally.

• learning about the industries in which your company and its clients and customers operate and seeing what’s being written about your company.

• observing how business publications and online news sites write about complex subjects and issues in clear, concise language that their diverse audiences can understand.

• learning from people in your company who are considered excellent speakers and writers and your peers, by asking them to provide feedback about your speaking and writing and doing the same for them.

• practising your listening skills every time you are engaged in a conversation or listening to a presentation.

• writing a plan for improving your communication skills, perhaps using a class you have taken or books or articles you have read as guides. With a plan, you are an active learner with specific goals and benchmarks to measure your progress.

The next section examines how management accountants develop their communication skills in school and continue to improve them in the corporate world. Most graduates go into public accounting, and some later switch to corporate accounting. In the process, they learn to adapt the communication skills developed in public accounting to a corporation or small business setting. Communication skills are portable. If management accountants have a foundation of strong listening, speaking and writing, they can apply those skills to any type of job anywhere.

COMMUNICATION IN UNIVERSITY ACCOUNTING PROGRAMMES

The process of developing the communication skills to work as a management accountant begins in school. In many universities and colleges that have accounting programmes, business communication is interwoven with accounting instruction. For example, at the National University of Singapore, business communication is one of fifteen core classes students are required to take. At some schools, such as Johnson & Wales University in Providence, Rhode Island, students take a communication class offered by the English department. (See interview 4 in appendix A with Donna Viens, an assistant professor and chair of the university’s Accountancy and Finance department.)

Some of the business schools and accounting programmes at large universities, such as Texas A&M University, have faculty members who teach business communication. (See interview 5 in appendix A with James J. Benjamin, head of the Accounting department at the Mays Business School of Texas A&M University.) Box 2-2 outlines a sample accounting programme from Seneca College in Toronto, Ontario, that emphasises communication in the curriculum.

Box 2-2: Sample Accounting Curriculum

Source: www.senecac.on.ca/fulltime/IAF.html

CAREER PATHS IN ACCOUNTING

After graduation, an accountant’s career can head in many directions. Figure 2-1 outlines the general career path of an accountant in a company. In individual companies, the career path may include additional steps or otherwise differ from the ones shown in the figure and discussed in the sections that follow.

Figure 2-1: Corporate Accounting Career Paths

Appendix B examines further the career tracks in figure 2-1. Figure 2-1 assumes the end goal of your career is to become CFO of an organisation. Your career goals may be different. Perhaps you eventually want to own an accounting firm or work in government. For most management accountants, however, their career path leads to the CFO position. After graduation, the majority of management accountants begin working in one of three areas: public accounting, management accounting, or financial accounting. These specialties are discussed in more detail in the sections that follow.

Public Accounting

A large percentage of accounting graduates join public accounting firms. On the job, they learn about business development and marketing and selling through training, learning from experienced professionals, working on teams, and assisting with client engagements. The ‘Big Four’ international accounting firms have structured leadership development programmes and online training courses. Some training programmes include instruction on improving writing, speaking, and presentation skills. To be eligible for promotion to senior levels in a firm, employees must demonstrate an ability to develop and bring in business, and they must have strong communication skills.

One example of a company that has a programme to help employees develop communication and other skills is Teknor Apex Company, a diversified material science company. This company has a finance academy, whose mission is to facilitate the sharing of ideas, skills and knowledge amongst employees across areas of specialty. (See interview 1 in appendix A with Teknor CFO Jim Morrison.)

At some point in their careers, accountants may leave public accounting to work for corporations and businesses. Although they have not previously worked for a company, the corporate world is not entirely new to them. In public accounting, they helped to provide services to corporate clients. They are knowledgeable about business and industry from their work for clients. Lastly, they have practical experience in communicating with clients.

Chris Papa, executive vice president and CFO of Post Properties, a leading developer and operator of upscale multifamily communities, made the transition in 2003, when he joined the company as CFO. Before that, he was an audit partner at BDO Seidman, LLP, CFO of Plast-O-Matic Valves, Inc., and an audit partner at Arthur Andersen, LLP, where he spent ten years.

To ease his transition from public accountant to CFO of Post, Papa focused on creating and strengthening relationships. He met one-on-one with key executives and met others in the company at meetings. He also began building relationships with representatives of the company’s key lenders and bankers, ratings agencies, and other key constituencies. ‘It helped that I already knew some of these people from my prior experience in public accounting,’ Papa said. ‘It also helped that I had a broad background in business from having worked closely with executive management and boards of my public accounting clients, firms, investment bankers and other organisations.’ (See interview 6 in appendix A with Papa.)

Management Accounting

Although most accounting graduates join public accounting firms, some go directly into management accounting, usually by joining corporations (although some work for small businesses). Management accountants do not have the same early exposure to business development and marketing and sales as their peers in public accounting. However, they do have the opportunity to start learning about the company or business from the day they first walk through the door. And they can learn about the company’s industry, as well as its customers or clients.

As discussed in chapter 1, management accounting has historically been a reporting function: Accountants compiled, reviewed, analysed and reported historical financial information about a company. Although management accountants still carry out these traditional tasks, advanced key responsibilities include cost accounting, a company’s general accounting and assisting the company with budgeting, including operating, capital and cash budgets. However, the scope of work and responsibilities of management accountants have expanded well beyond financial reporting to meet the needs of the modern corporation. Management accountants are serving as business partners in organisations, providing senior executives and company managers with the information and guidance to develop strategic plans, set business goals, and consult on value-creating activities.

More companies are giving management accountants exposure to the commercial side of the business by having them work with and assist business line leaders and employees in different departments or operations of a company. Exposure to the business beyond numbers on paper helps accountants expand their knowledge of the business and build relationships within the organisation.

McCormick & Co., a manufacturer, marketer and distributor of seasoning mixes, condiments and other flavourful products, has a global competency model. It defines competencies such as leadership, business sense, handling complexity and communication that are common across the organisation. (See interview 2 with McCormick Senior Vice President Kenneth Kelly in appendix A.) Sarah Vaudrain started as a cost analyst at Teknor Apex Company. She was promoted to business analyst (financial analyst), her current position. She supports the company’s nylon division, which manufactures nylon compounds that have broad industrial and commercial applications. ‘I am part of the business team, working with different industries and managers, talking to people all over the company, and helping to investigate problems,’ she said. ‘I participate in monthly meetings with senior executives and others where we review the numbers and discuss how we can improve the business.’ (See interview 3 with Vaudrain in appendix A.)

Financial Accounting

While management accountants and internal auditors work mainly with company executives and managers, and provide information primarily for internal use, financial accountants deal mostly with stakeholders outside a company. They prepare the company’s balance sheet, income statement, statement of retained earnings, statement of cash flows, and other information for use by investors, creditors, stock analysts, government agencies, labour unions, consumers groups, the media and others. As shown in figure 2-1, the career path of a financial accountant is staff accountant, senior accountant, supervising financial analyst, finance manager, assistant treasurer, treasurer and CFO.

Of course, not every management accountant will become a CFO, and, for that matter, not every accountant may want to. But management accountants can find other opportunities in companies, for example, in specialised areas such as tax, internal audit or IT, and, as noted in the previous section, management accountants are starting to work all over companies and are advancing to senior positions in operations, human resources, IT and marketing.

RETAINING THE NEXT GENERATION OF MANAGEMENT ACCOUNTANTS

Instituting training programmes within your organisation to teach or refresh employees on skills like communication may serve two purposes. A huge challenge facing the accounting profession today is the preparation of the next generation of management accountants. If companies expect to recruit and retain talented management accountants and other employees, they will have to take the initiative in recognising, valuing and capturing the creative energies of employees, especially those of Generation Y (born 1981-2000) employees, who are now in the workforce. As baby boomers (born 1946-1964) continue to retire, more workers will be needed to replace them. Generation X (born 1965-1980) is too small to fill the gap, so the difference will have to be made up by the much larger Generation Y, also known as Millennials. Generation Y workers have a different employment philosophy than previous generations. Instead of fighting the challenges Gen Y workers introduce, companies may find that simple changes will accommodate the needs of this newest generation.

In a study of Generation Y, Deloitte said, ‘In the context of the workplace, they’ve been described as overly ambitious dreamers who don’t want to pay their dues and are only concerned about higher pay and more time off.’¹ Contrary to this perception, a Deloitte snapshot study found that while Gen Yers are fundamentally different from previous generations, they are future-oriented, opportunity-driven, and ready to contribute to the workforce. However, they are restless, preferring opportunities for advancement over job security. To tap into the potential of this generation of workers, employers may need to re-think some of their practises. Amongst other steps, employers must redesign performance management and rewards systems to encourage the rapid development of Gen Y talent and create new incentives for seasoned workers to act as mentors to young professionals.

Most important, companies must develop programmes to prepare Gen Y employees for future leadership positions. Career development and mentoring programmes will help to attract and retain Gen Y employees and guide them into leadership roles.² A Boston College report on Millenials in the workplace includes a variety of examples of how companies are successfully implementing programmes for the new generation of workers. These include providing opportunities to meet and work with company leaders, using social networks to foster local and global connections, and helping them develop and implement philanthropic and other projects that showcase their talents, engage their passion for meaningful work, and expand their networks. Mentoring and training programmes like these will help all workers develop the necessary competencies for advancement and create a strong generation of management accountants.

Many opportunities are available to improve your communication skills, and it is up to you to make the most of them. By reading this book, you have already taken the first step. The next chapter will discuss the fundamentals of listening, speaking and writing skills. The later chapters of this book will discuss how to specifically improve business communications, such as writing reports and making presentations. See the bibliography for more sources.

CHAPTER SUMMARY

• More schools are including business communication in their accounting programmes, and some have separate classes in communication.

• More companies are requiring job candidates to have excellent communication skills as a condition of employment.

• To advance in an organisation as a management accountant, you must have not only the requisite technical skills but also the necessary communication skills.

• More companies are training management accountants in the business side of their organisations and helping them to develop communication and other skills.

• You have many opportunities to develop your communication skills through schooling, company training programmes and other resources, as well as through learning on your own.

Endnotes

1 ‘Generation Y: Powerhouse of the Global Economy,’ Deloitte [website] www.deloitte.com/view/en_US/us/Services/consulting/human-capital/organization-and-talent/a90f49642dff0210VgnVCM100000ba42f00aRCRD.htm

2 Lauren Stiller Rikleen, ‘Creating Tomorrow’s Leaders: the Expanding Roles of Millennials in the Workplace,’ Boston College Center for Work & Family [website] www.bc.edu/content/dam/files/centers/cwf/pdf/BCCWF%20EBS-Millennials%20FINAL.pdf