83rd Edition – September 6, 2020
To become good at anything you have to know how to apply basic principles. To become great at it, you have to know when to violate those principles.Garry Kasparov
AI and Auditing
For the past 5 years, we’ve been reading about how AI will eliminate positions in the accounting and finance professions. Auditing? Not so fast.
This week, The Wall Street Journal reported that outside auditors are struggling to verify physical inventories during this pandemic.
What would you do? Could you find a revolutionary way to conduct inventory counts other than relying on video meetings with client staff members?
Humans and Computers
The discussion above reminds me of Garry Kasparov’s 2017 gem, Deep Thinking where he touts not human vs. machine, but human and machine.
A couple of 20-somethings proved Garry’s convictions about AI in 2005 during a freestyle chess tournament where computers were allowed.
The two kids who won were not grandmasters nor supercomputers. Instead, they knew how to enter moves, know when to consult the software, and even when to ignore its advice.
AI will not replace us, it will make you and I better at what we do.
Project Management for Financial Professionals
If I were creating a finance and accounting curriculum for a major university, I’d require a course on project management using the doctrine of Basecamp’s thinking on getting work done.
Think about it, nearly everything we do falls under the scope of a project with a beginning, middle, and end. Some of these jobs take 2 hours, others 12 months.
My favorite insight (but there are many) from Shape Up by the people at Basecamp is a section entitled Fixed Time – Variable Scope where key points include:
- it’s the key to successfully defining and shipping projects
- when you have a deadline, you have to make important tradeoffs
- the ongoing tension between time, quality, and scope
- without variable scopes, fixing quality issues would be moot
Fixed time – variable scope needs to become fixated in our minds as we start critical finance projects.
A New and Growing Profession
One of my favorite insights from our interview with Ron Baker this week was his comment about pricing. According to Ron, pricing is now a profession, and it’s growing.
Ron goes on to say that pricing is a psychological, not a numerical exercise. That’s because, “Value at the end of the day is not a number, it’s a feeling.”
When you see the two words ‘financial fitness’ strung together, what do you think of? A healthy balance sheet created by a robust P&L with profitable cash flow?
How about financial leaders who are fit? There are two types of fit people – those who are and those who are not.
For those who are not, one of our gremlins preventing fitness is lack of time because we work too many hours.
When this man took on one of the most demanding positions in the world, he was up every morning at 5:30 for a brisk walk at 120 paces a minute. After walking, it was then on to swimming, then the rowing machines, then the weight machines, and finally 25 sit-ups.
He was known for saying, “A man in my position has a public duty to keep himself in good condition.”
My takeaway from this President wasn’t that Harry S. Truman was a fit man. It was that he made fitness a priority in spite of a grueling schedule each day.
On a side note, if you are looking for ways to read history which is far from being dry, add Upstairs at the White House by J.B. West (he’s not even a historian).
Thank You For Reading. Thank you for making this a successful newsletter.
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Always be learning.
Title photo by Jurg Vollmer.