Leveraging Tech and Advisory to Build the Firm of the Future with Donny Shimamoto

Donny Shimamoto, CEO of IntraPrise TechKnowlogies, is a thought leader in public accounting who is transforming the industry through his focus on technology, people, and culture. On Episode 22 of CPA Life, Donny talks to John Randolph about how firms can address the staffing crisis through demand management, outsourcing, and automation. He also shares the results of surveys conducted by his Center for Accounting Transformation on what makes firms successful, and the importance of advisory services over compliance work. Donny also touches on how AI will impact accounting, advising firms to leverage it to enhance their work, rather than replace it, and to be skeptical in its implementation.

Transcript:

Welcome to another episode of CPA Life podcast where we spend time talking to firm leaders and industry insiders that are going against the grain to change an industry that really has been stuck with a “we’ve always done it that way” mindset for far too long. And I’m excited about today’s show, because we’re joined by Donny Shimamoto, who is not only a firm leader, but he’s also been recognized as one of the top 25 thought leaders in public accounting. Donny, welcome to the show today.

Thanks, John. I’m honored that you asked me to come on.

We’re excited about unpacking a lot of things. But for those of you that may not know who Donny is, Donny, can you give us a little bit of a snapshot of who you are, where you’ve come from, where you are today in your career journey?

Sure. So I always describe myself as a non traditional CPA. I started in audit, both financial and IT audit, got pulled into the consulting side at PwC. And that bigger picture wasn’t for me, my passion is what small and midsize businesses, which is who we work with, which includes CPA firms. So we do have clients that are CPA firms as well. But what we do now is really drive business transformation. So not just digital transformation, but full business transformation. And we often act as an extension of a company’s management, and we bring in the technology, we bring in business process improvement, and then we bring in business practices changes. And then what I think of all of those is kind of different innovations, and then we balance that innovation with risk management—so bringing in technology is going to introduce cybersecurity risks, cybersecurity risks could manifest as a privacy risk and a data breach and potential reputational risks. Cybersecurity could also move over into ransomware, which will bring in business continuity and disaster recovery. And actually, with everything that’s been going on recently, there’s a lot of other disasters other than cyber disasters.

Yep.

So we work in the broader sense of beyond just the tech side. Another good example of stuff that we look at is like hybrid work or remote work, where there’s definitely a tech element to that. But the other side of that is looking at the way that you manage and lead people, and it also works into culture. So a lot of people think of me as kind of a triple threat, because I have both the accounting and it backgrounds, as well as the HR, organizational development, all of that kind of in my wheelhouse merging all that together again, into transformation.

I want to touch on something just real quick, because I’ve listened to another couple of other podcasts that you’ve been on and read a lot of stuff that you’ve written. And one of the things that I want to kind of drive home a little bit with people because it’s something that I’ve talked a lot about, is the importance of niching in your business. And so many times people think about niching as strictly just an industry focus or something along those lines. But you guys are niched in what you do, but it’s not necessarily industry, correct?

Correct. I always talk about us as a horizontal focus rather than a vertical focus. Because what we do is we’re very, very focused on transformation as a whole. But because of that, we don’t work with a single vertical, we do tend to work more with services, which includes nonprofits, and again, kind of CPA firms, law firms. But we’ve done work in retail, we’ve done work in automotive, manufacturing. Part of the reason for that is because we do work in innovation, a lot of what we’re looking at is what are the patterns, or what are the techniques that we’re seeing in other industries, and how do we take that and adapt that into a different industry? So we’re working very much at the big picture at more of a—I was gonna say strategic level, but I actually don’t like to say that because if you work with a lot of large consulting firms, they’ll give you the strategy, but then they won’t tell you how to execute. And one of our big differentiators is that we’re actually there with the execution.

So you know, from a CPA firm standpoint, a lot of firms will work with their clients on a tax strategy or a tax plan, but they don’t actually help the clients finish getting through, and then it’s the end of the year and you’re like, you didn’t do anything we talked about! That’s the piece that I think differentiates us we actually work with them, at least on a quarterly basis. A lot of clients will contract with us on a monthly basis to ensure they’re on plan to help everything move forward, including overseeing implementations.

So it’s not just a strategy piece, it’s a tactical piece of how we’re going to put it into play, we’re going to put a game plan together, but we’re gonna sit there and be in the game with you. And make sure that we execute this properly.

Yeah, and we call it the transformation roadmap. So we’re like, tell us where you want to be three to five years from now, based on that we identify all the different projects—tech projects, process projects, people projects—that have to be done. And we work with clients to prioritize that and create what we call the transformation roadmap, which is really year to year, sometimes quarter to quarter, these are the things that you need to do. And as we go through each one, here are the vendors that you need to consider, you know, some of its tech vendors, some of its consulting, sometimes it’s just training. So we’ll kind of help them get through that whole thing and keep them in alignment. And most importantly, hold them accountable to making the change happen.

And we all need somebody in our corner that’s doing that, don’t we?

Today we’re gonna focus on another hat that you wear as I think the title is “Inspiration Architect,” for the Center of Accounting Transformation. Tell our listeners a little bit about that.

Yeah, that’s actually been an exciting development for us. And it comes back to this whole concept of how not just the strategy—or I often like to say not just the why, but the how. And so the reason we started the Center for Accounting Transformation—right now, it is an extension of our firm. But the reason we started this was to really focus on the accounting profession. So the Center is really looking to work with other accountants, other accounting firms, as well as people in finance departments, to help drive the transformation of the profession, to lead everyone else that we’re working with. So if it’s a firm, help lead your clients, if it’s the finance department, help lead the other executives, through transformation. So you’re still hearing us work in our kind of horizontal focus, right? Our specialty there. But what we realize is that by ourselves, we can only affect so much. And what we want to do is to find all the others who believe this is a big pie, there’s more than enough for all of us, which there definitely is—you can read all the time, everyone talks about staffing issues. That’s because there’s not enough work for all of us. We don’t have enough people to do all the work we have, I should say.

Right.

And so everyone that believes in that, we’re like, we figured, hey, we need to figure out a way one, to get people to understand this is what’s possible, and then two, give them the education around, hey, this is how you can actually help your clients through that. And whether your clients are external clients as a firm or internal clients as a finance department, that’s kind of where my role as the Inspiration Architect, then is to figure out like, what ideas do we need people exposed to what practices do we need people exposed to, and the Architect part is, what I do is I work with other subject matter experts, other instructors, other speakers, and actually also the vendors to come up with, here’s what it looks like when you’re trying to build this competency, or you’re trying to understand this topic. And what we allow people to do to the Center is one, just get an understanding what does this mean? And then two, if they feel like, Oh, this is something I think I can do, then we try to bring them the courses as well as the coaching around, hey, let’s get you able to actually do it, because you can do it for your clients. Or if not, here are the people that do it.

So it’s kind of what we do as well, right? Here are the people that do it. And these are ones we’ve already vetted. So you know that you can trust them. They’re following the big picture and the methodology that we’ve outlined.

I like that. And I want to dig into, you know, a couple of things while we’re talking today. One is a survey that you guys have been doing, for a few months now, that is centered around the staffing crisis that the industry is facing right now. And the other piece of that survey has been focused on advisory services. Let’s talk a little bit about those two things and pick which one you want to start with first, it doesn’t matter—either advisory or the staffing crisis.

Let’s start with the staffing because I think that’s the one that’s that, you know, everyone’s top of mind for that. And with staffing, the genesis of the staffing survey, we actually weren’t even planning to do that research this year. But the whole discussion around the 150 hours and everything else that’s going on, just kind of brought that and said, hey, you know what, we really need to do this. Because what I was struggling with was I was seeing a lot of people cite anecdotal evidence, but I wasn’t seeing any actual data that said, this is what we’re missing. And everyone is talking about accountants in general, but they’re not saying what level or type of accountant where it actually is needed.

And so with that, what we’re doing is part of the survey is tell us what you’re looking for. Are you planning to hire because we want to understand what is the need? Is the need for entry level? Because there’s a lot of talk about the entry level. But is the need really for entry level? Or is it for mid level? Or is it for senior level? Like where are we actually missing people? And then within that we’re actually looking also at the different disciplines. Are we missing auditors? Are we missing tax people? Are we missing financial planners? Like, what are we missing? So we’ve gotten a lot more granular to try and quantify what is the need.

The second thing that we do in this survey is we’re trying to help people understand the different tactics that are possible. And so we actually have 19 different tactics to address staffing.

Wow.

Sorry, not tactics—strategies. 19 different strategies to address staffing, and they’re in four major categories. So the first category is kind of traditional hiring, which we think is what everyone is trying to do and saying, I can’t find enough staff. The second one that we look at is external hiring. So offshoring, even onshore outsourcing, gig workers. These are the type of strategy we’re saying, hey, have you looked at doing these strategies? We, in the last year, year and a half, have seen the highest number of inquiries around offshoring that we’ve ever seen in our entire time working with firms. So we know that that’s a strategy that people are using, but there’s still not everyone using it, we still talk to a lot of firms that said, I don’t know if we’re going to be able to do that.

The third strategy we’re looking at is the use of technology. So are you actually leveraging all the automation tools that are out there, most of them are already in place. I know we’re gonna talk about artificial intelligence later, that’s a whole nother ball of wax and different game. But that is one of the technology strategies itself as well. And the fourth thing that we’re looking at is demand reduction. And so this is one you mentioned vertical, that’s part of the main reduction, has the firm chosen a vertical, and then gotten rid of the clients that don’t fit in that vertical or verticals that they’re choosing to work with? Or is the firm calling clients? Are they actually looking and going, Hey, here’s our ABCD clients, right? And which ones are we getting rid of, the C or D type of clients. Part of that might be they are not a fit, they might be a great profitable client, but they don’t fit in the vertical and therefore they shouldn’t be potentially not retained. So we’re what we’re trying to do is through that, here, here’s all the strategies have you actually thought about these. So there’s actually a learning element that we incorporate into all of our surveys for the person taking it.

I don’t know how much data you guys have gotten and if you had a chance to look at some of the stuff. But one of the things that’s really been interesting to me from the side of the desk of a recruiter, anytime a client reaches out to us that we’ve never worked with before—and we’re pretty niched in our vertical, we work strictly with locally owned CPA firms. That’s it. One of the questions that I’ll always ask, because inevitably, it’s, you know, I’m down two, three, four, five, six people, whatever the number is, but they’re always short staffed. We really try to focus on working with firms where work-life balance isn’t something that’s just cool to talk about in an interview, and then you get in the job, and all that changes overnight kind of thing. We want to work with firms where leadership truly embraces an environment where people have a quality of life outside of the office, as well as inside of the office.

So one of the questions that I always ask clients that we’ve never worked with before, is we’re talking about capacity. We’re talking about short staff. We’re talking about people being overworked. And I’ll ask them, “How much business have you walked away from or turned down in the last 12 to 24 months because of what we’re talking about?” And it blows my mind, Donnie, how many of them say, zero, none, we don’t walk away from business. I don’t get that. I don’t understand that. And it kind of plays into, you know, what you’re talking about, from a demand standpoint, and figuring out who your client is. And, and that’s one of the things that I’ve talked to a lot of potential clients about is, this is one of the most amazing times in this industry. I don’t want to say you can pick and choose who you work with, but you can begin to raise the bar on what you expect from your customers. Would you agree with that?

What we think is you can pick and choose who you work with. Our firm does that all the time, and we are a firm that has zero overtime. We don’t build overtime into our scheduling. We don’t expect it from our staff. We do keep time, so I can actually show you that our overtime is probably about 1%. Sometimes you gotta go when we’re having an issue. It’s like, hey, we all got to jump in and help get through this and it causes kind of a bump, but usually we see it kind of trail itself out. So if you look at the year, it’s probably close to zero, if not 1%.

We also have a hard time walking away from clients because we’ll have clients come in—in fact, we’re going through this right now where we just onboarded two clients, one that was a previous client that came back and said, hey, we really loved working with you guys, and we just lost one of our people can you can you help fill in on an interim and within two weeks, they were like, you know what not an interim, let’s just make this permanent, let’s figure this out. So we’ve had that situation come up.

And the other one was another client, that’s it was just currently in stress, for lack of a different way to say it. And the work that they’re asking us to do was so perfect of a fit for what we’re doing, and it matches our strategy for where we want to be, that we consciously made the decision, we’re going to fit them in.

So but I think that’s what it needs to be, it needs to be very intentional, and it needs to not just be, well, let’s just get the additional revenue, let’s just get the additional revenue. Is this a strategic fit? Is this something where there really is not someone else, and that’s one of the other things we look at when we accept work, is there not someone else that we can point them to? And then we have raised the bar, we require retainers upfront, at least 50% retainer upfront for any type of work that we do. Clients where there’s a lot of ongoing work, we actually require a monthly retainer from those clients.

So you guys are in that situation where like I said, you do pick and choose who you work with. I don’t think that there’s anything wrong with that. And I think that the sooner that more firm owners begin to understand that, the easier life is going to be, I think there’s a perception that I’m leaving, if I do this, I leave money on the table. But the reality is, I don’t think that what you potentially can assign a dollar to and say, I’m walking away from $250,000 in billing, what are you getting in return from the value with your employees with their time with their contentment in the job, the quality of work that they’re putting out? Those things are all going to incrementally go up.

Completely, completely. In fact, just yesterday was interesting. This was actually at a client’s company, but I was talking to one of their junior staff who was leaving, and he was telling me, I said, well, why are you leaving? He said “Well, you know, I get these calls at all different times, and even when I’m on PTO, and I mean, he loved working”—loves, I should say, because he’s still there, “working for that client.” And he was like, he’s like, “But this is interfering too much with my personal life.” And I said, “Have you raised this before?” “No, I’ve never really talked about it.” And so I told him, I’m pretty sure if we raise this up to your management that they will actually address that.

And I had to talk with their management last night because I said he I met with him, it’s obvious concerns, I think this is what we should do, which is both management and us created some agreements on like, okay, this is the way we’re going to position, what’s happening with this person, which is going to get them the freedom from getting those calls. And it’s both, it’s accountability on that person, because he needs to not take the calls. And on the other side, the people that are making the calls that we’re correcting and monitoring that they are not violating the service level agreement, which is what’s driving that call.

So it’s yes, it’s, you need to look at it from the staff side, because they’re going to otherwise I’m going to knock on wood, because I think he said at the beginning of conversation, he wasn’t going to stay at the conversation. He said, actually, you’ve tipped the scales back, I think I’m gonna stay, so good, sleep on it, make sure it’s the right decision for you. We’re hoping to hear from him today. But you know, that’s the type of thing you’re it’s you’re forcing an employee to choose between work, maybe clients and people that I love working with, and a personal life, because you the owner wants more revenue, yet, that should not be a choice. And it’s not revenue period, it’s more revenue, do you really need more revenue, right?

I talked to a firm owner, I guess it was sometime last year. Tim Petrie, who’s a managing partner with a firm in Ohio by the name of HD Davis, and we were talking about when is enough enough, as a firm leader? And his comment really stuck with me. He said, I believe enough is enough, when what you’re trying to get more of begins to affect the lives of the people that are delivering for you. And I completely agree with that.

Hmm!

You bring up an interesting topic talking about this young guy and the conversation that you had with him because one of the one of the things that I always go back to is, well also add this one of the things that I enjoyed about looking at a lot of the stuff that you’ve done over the last year that I was reading through, I’m a little bit of a data geek. I love numbers. I want to understand if somebody’s saying something, tell me why they’re saying it, give me the data that’s associated with it, so that we can then begin to affect change, and make some decisions on where to go and what to do.

So we’re constantly running real quick surveys, they just may be 7, 10 day surveys. Sometimes they’re a little bit longer. We work with a firm that does a lot of that for us. Three years ago, we sent out a survey, we got 583 responses back. It was one simple question to people that either currently worked for a CPA firm or worked for one in the last two years. And the question was, if you are currently looking for a position today, or if you were looking in the last two years, would you apply to a position publicized by another CPA firm? 83% of the people said they would not apply to that job.

Wow.

83%. So 8 out of the 10 qualified people, we’ll just call it 80. 8 out of the 10 qualified people in the marketplace, whether they’re looking for a job or not, technically to qualify, they said they would not apply to that position.

I take that a step farther. And one of the metrics we keep internally in our organization is how many people do we talk to, that very quickly in the conversation, they say, I hate what I do, I hate where I do it, get me out of public accounting. And it’s about 75 to 80% of the people that we talk to. The difference is with our firms that all we do is public accounting, so we don’t have anywhere else to put somebody. So we tend to dig into that discussion. Why are you saying that? What do you not like? What’s driving you up a wall? And what we constantly hear are a lot of the things that this young man talked about, you know, work-life balance, integrating into my life and stealing time, I don’t get to see my family, you know, all the things that you statistically and you know, stereotypically hear in public accounting why people want to leave.

We then ask people, you know, well, you’ve been there two years, three years, four years, five years, six years, whatever it is. You obviously have enjoyed something about that job, what is it that you enjoy? And they’ll talk about the things that people typically love about public accounting—the variety of the work I do, the ability to make an impact in an organization and business. You know, the fact that tomorrow doesn’t look like today, and today doesn’t look like yesterday. All the things that you stereotypically hear from people. You know, we’ll say to them, it doesn’t sound like you hate what you do. It sounds like you hate where you do it.

Yeah. Yeah.

And if we could find a place that gives you the things that you love and enjoy, but takes away the things that are stealing your joy, would you at least be open to hearing about it? And most of those people say absolutely, I’d love to hear about it. The challenge is that most people assume that “I worked for Big Four firm, I worked for a top 100 national firm, and this is what I was treated like. So therefore every firm is like this, every firm is.” And I think that that’s part of what’s driving the perception of a staffing shortage. I mean, I think stereotypically, we have to agree that there is a shortage of numbers, because there’s fewer people graduating. I get that. But I think that part of what’s driving that is there’s a misperception of the people in the space that this is how I was treated, therefore every firm is going to treat me like that. And I know that, you know you working with CPA firms, you see that there are firms out there that that is not the case at all.

Completely. Completely. That is why we’re starting to focus a lot of our work now on what I call people tech. And this is the technology that is—it’s not your payroll system, it’s not your HR system—these are people related technologies that help with organization, it’s a little bit of workflow, but not really, there’s like goal setting. Weekly check ins so that people can have a pulse without having to have a conversation necessarily. And the reason I say that, even though the conversation is very important, sometimes people are willing to say stuff in a survey that they’re not willing to say like face to face. And so like we utilize it internally, where there’s a pulse check in if I see some and I have one on ones with all of my staff. So and by the way, these are all like business practices changes, as I mentioned, the innovations that we’re looking at the way that you manage has to change.

So we’re bringing a lot of these into our clients so that people can look at things a different way and can make it smoother and you know, get rid of some of this friction that might be occurring under the cover, like giving people a way to say or share something. A lot of what you’re saying too, I think is why we’re doing part of the second survey that we’re doing, which is the advisory services. So within the advisory services survey, what we’re looking at there is the level of compliance work that a firm does compared to the level of advisory work that a firm does. And part of our underlying concept in there is that people who work at advisory focused firms are probably more satisfied with their work because they’re actually getting to work more with the clients rather than just doing something and throwing a work product over the wall, right? So we have that in there as well as a workload. So what’s your workload look like? And what we’re expecting to probably see is compliance work focused firms, higher workload, advisory focused firms, lower workload. So which may help to actually quantify some of what you’re saying where it’s like, well, what kind of firm were you at? Were you at a compliance focused firm? If that’s the case, you want to shift to an advisory focused firm because you’ll get a lot more satisfaction out of the work that you’re doing. You get more of that client side interaction, right? Which to me when I talked to a lot of accountants that are like, why did you get into this, I like helping people, I really want to help people have that security, I want them to have that peace of mind that I’m not gonna get audited, I’m not gonna get audited by the IRS, like, that’s the kind of stuff that we help them do. And so that’s the advisory side of the work. That’s not the compliance side of the work.

Yep. And so many times people, because you have to start there in your career, for the most part, the way that the model is set up today, I think it grinds, for lack of a better way to put it, it just grinds the joy out of them. Because they assume that is it.

There was a young man I was talking to about a year ago, two years ago, who was with a Big Four firm, he had been with them for two years. And the conversation started with, get me out, I hate what I do. And we started talking about what he enjoyed about what he did and what he liked about what he did. And, you know, I asked him, you know, would you stay if there was a firm that wasn’t like that? And he said, no, I don’t know if a firm exists like that. And he and I had been talking for about three or four months, and emailing each other back and forth, had a couple of conversations. So there was a little bit of a relationship there. And I knew that he had gotten married in the last year. And I knew that he was expecting his first child, which was driving a lot of his desire to get out.

And so I asked him, I said, I have a question for you, the lady that you’re married t—ois she the only girl that you’ve ever dated in your whole life? And he said no. Okay, so there were other girls in your life? Yes. And I said, did any of those girls rip your heart out and leave you brokenhearted somewhere along the way, whether it was at 14 or 24? He was like, oh, yeah, absolutely. And I said, okay, but you didn’t swear off girls at that point, you didn’t swear that you would never date another girl, because one treated you like that. And he started laughing. He said, I see where you’re going with this. I said, not every firm is like that. Not every organization is like that. There are opportunities, and there are firms out there that will give you the things that bring you joy. And I think that what you’re talking about in some of those surveys are a way to get people to understand there are opportunities out there. Have you guys looked at any of the data that’s coming in at all?

We haven’t looked at those two yet. We’re still waiting to finish getting them. But I can, one of the underlying concepts that we’ve that we have in both surveys is this concept of firm success. What makes a firm successful? I can tell you from the initial analysis that we’ve done with that, the number one thing that we’re seeing is adoption of technology. The number two thing that we’re seeing is that there’s a focus on people and people development. And the number three thing that we’re currently seeing is essentially a good strong, firm culture. So those are the things that we’re looking at and going okay, this is really what we need to build upon.

So great segue into a little bit of a discussion about technology and AI, which also dovetails into the staffing component, as well as a little bit of the advisory. Let’s talk a little bit about you know, your work, your experience and how you see AI coming into the public accounting space.

I think the first thing that—this, my gut reaction to this is now always like, there’s so much hype, it’s actually driving me crazy. I actually started declining opportunities to speak on this because it’s so overhyped, and we have to spend so much time deconstructing myths, that I’m just tired of talking about it.

Having said that, I think the reality is, this is not going to put any accountants out of work.

Thank you.

We already know there’s more than enough work than accountants. So what really this should do is, for example, help solve the staffing crisis. Firms need to look at and adopt the technology. And it’s not just artificial intelligence, artificial intelligence is going to do some, but when you look at what artificial intelligence it’s doing, it’s not doing the stuff that all of us, especially as CPAs are doing.

Yep.

So start exploring and letting figuring out where can I leverage technology, whether it’s regular technology, or whether it’s AI, to get rid of some of that lower level work, that data entry, right? The entry level staff, the even basic analysis that you start to get into data analytics, like those are the things that we’re looking at.

The other things to think about is to just keep this open mind around, what can it help me do? Because it’s not a question of whether you can do it or not. It’s a question of whether that’s the best place that your time is spent doing whatever it is. For example, I had one client and like, people don’t realize that the whole scanning technology now, it’s not just what we used to call OCR, it’s actually artificial intelligence reading receipts and handwriting and figuring out where’s the vendor’s name on the invoice like all of that’s artificial intelligence. So you don’t have to be at this ChatGPT craziness that doesn’t have controls around it right now. You can work with, again, the kind of established technologies, and still be leveraging AI to get rid of this bottom level stuff.

And then the second thing that especially CPAs need to realize is that there is an ethical concern with the use of AI. And there’s two different aspects to this. One is privacy. So keeping our clients’ data private, and making sure that you or your staff is not putting any private client data or anything that’s going to expose client confidentiality, that you’re not putting it into these public tools, these publicly accessible tools, because it gets pulled into the datasets there. So that’s one thing. But the other one, which is a little more insidious, is actually the threat to objectivity. And part of that comes, I was actually helping with some of this at the international level where we were working on the international ethics standards around the use of AI within accounting. And the biggest threat there, especially for practitioners at smaller firms, is the intimidation threat, that whatever the technology AI throws out at you, you’re going well, that’s gotta be it.

Right?

And that’s, some people take that, and you gotta treat AI kinda like the internet, when you go in to google something and something says something, do you take it as that’s it?

No.

No! Nobody does that. And you’ve got to do the same thing with AI, because it’s working with the data from the internet. So it’s the same potentially bad source from your search that’s going into this, that’s then getting spewed out.

So it’s really making sure that you’re understanding what is AI doing, how’s it coming up with the answer, and also, if you actually do leverage it, the best advice I always give people—use it as a starting point, let it help you get the paper started, get the report started, get the wording started. And then take that and make it better. And then put your judgment, put your expertise into it, customize it, personalize it for that client.

When we started talking about this, you know, you said, it’s not going to put you out of a job, it’s not going to take the job from you. There’s more than enough work there. I’ve had this conversation with several people over the last year since AI has started becoming you know, a bigger, bolder headline that we’re dealing with, you roll the clock back to late 90s, early 2000s in our industry, when CareerBuilder, Monster, and those platforms started coming up, there was this big concern that oh my gosh, we’re going to be out of a job.

And kind of like this situation, the conversation I had then and this conversation I have now on the AI side is people are always gonna want to exchange knowledge with other people. That’s never gonna go away. I mean, sure, McDonald’s can put an automated checkout attendant at their store, because I have no problem dropping $5 at a kiosk at McDonald’s and deal with a computer. I’ll roll with that. The flip side though, is when we start talking about my money, my livelihood, how to effectively run my business, talk to me about what’s right, what’s wrong, what’s legal, what’s not legal, I’m not going to, like you said, I’m not going to trust something that was generated off of a computer, any more than I trust everything that I see on Facebook or TikTok.

Completely, completely. And I draw that analogy to the medical field. Because, you know, ask yourself, how comfortable would you be if you had this robot doctor sitting in front of you saying, Tell me your symptoms. Okay, based upon your symptoms, I think this is your your disease. Here are your treatment options. This is the one I think is the best treatment option for you. Are you actually gonna believe?

No.

Most of us are not going to believe that, right? A doctor could sit in front of you and say exactly the same thing, and you’re gonna sit there and feel enthralled with the doctor and be like, okay, yeah, I understand, help me make this decision. So as humans, yes, and that is our role. This is why we’re doing this focus on advisory services, is like, get the compliance stuff automated. That is table stakes. That is the low value work. Advisory is the talking through things, the ideating, the creative problem solving, that says, okay, let’s figure out how you can get your goals, and there’s not just one path. Here’s all the possible paths. That’s why we do the transformation work we do. Tell us where you want to be. Here’s all your potential paths—tell us which path makes sense to you. You don’t know which one makes sense? Here’s the one that we recommend. Because everything you’ve told us that this is the path

And again, I would draw an analogy back to tax. Tax people do this all the time, because there’s more than one way to get someone to own a house or to put their kids through college. All kinds of different things.

Yep, absolutely. You know, we have a small restaurant—I live in a small town in East Texas—we have a restaurant here in town that about six months ago, talking about AI, they were having a tough time hiring people. So they ended up buying a robot that did their seating for them.

Hmm!

Well, that robot, you know, had a map of the layout of the restaurant. It knew, now there was someone at the hostess stand that gave it the, you know, put the menus on it, and then would tell it where to go, and it would take you there. But again, you go back to the personal aspect of this, how many times do you go into a restaurant, the hostess goes to see to somewhere and you go, “Oh, is that table available over there, I’d rather sit there.” You can’t do that with a robot that’s designed with AI to take you to that one table. So you’re right, there’s more than one way to get this done. And technology is not going to do that.

And I think about as we’re sitting here talking about this, one of the books I read last year was Cal Newport’s Deep Work. And in that book, what he talks about is the fact that there is this necessity for people to be able to quickly master hard, repetitive tasks, i.e. automate, because there’s going to be a set of people, or a role that is probably going to be outpaced by what you can do with technology. But from a knowledge worker standpoint, the ability to produce at an elite level, in terms of both quality and speed and people interaction, that’s never going to be taken away from a technology standpoint. I think that you guys have seen that countless times in what you’re doing.

Completely, completely. And the other way to think about it is everyone talks about getting into the state of flow. And I know all of us have experienced this, it’s where you’re so focused on whatever it is you’re working on, but everything’s just happening, because it’s just in your brain, it’s just connected into that. And what we don’t realize is that, when we’re doing that, we’re accessing like all of our past experiences, knowledge, and everything. Compared to AI only has whatever it has. And so when we’re in that state of flow, that’s where we’re really able to produce these spectacular results. And it’s integrating and pulling together all of these different pieces of of knowledge, experience, everything that we have to create whatever it is we’re creating. And that’s something I don’t think AI is ever going to get to that point, because it’s only working with the data that it has.

Exactly. I mean, they talk about how it can, you know, how it learns, and it becomes intuitive, but it doesn’t have the ability to think outside of the box, because we’re constantly defining what that box is.

Yes, yeah.

And they can operate within that box, but not really, you know, outside of that box. And Danny, I want to thank you for spending some time with us today, and really unpacking what it is that you guys are doing to provide the data and the analysis for people that are looking to build a more modern, focused CPA firm. If somebody is interested in participating in the survey, learning more about the services that you guys provide, or talking to you about the challenges that they’re facing in their firm, what is the best way to do any of those things?

I would say come visit us at the Center. So the Center’s website itself is www.improvetheworld.net. Because we believe that accountants are the way to help improve the world.

Absolutely.

You can check us out there, the surveys themselves are specifically available at improvetheworld.net/owntheunknown because we are trying to define the unknown. So its “Own the Unknown.” And we’ve got all of our research and other types of information available through that link.

Perfect.

And they can always email me Donny@intraprise.us, or I’m on LinkedIn all the time. And I actually share a lot of articles about AI and all these other trends that are occurring. So I welcome anyone to connect there.

I will second what you said, you definitely do share a lot. And it’s great data, great information. We’ll make sure to put the website links in the show notes so people can grab those as well. If you enjoyed what you heard today, I’d love it if you could give us a like, even leave a comment or better yet, subscribe to the podcast. Danny again, I want to thank you for being a part of the show today.

Thank you for having me! It was fun.

You’re more than welcome. For those of you that are listening: If you don’t want to miss any future episodes, subscribe, you’ll get emails, understand what’s coming up next, you’ll be able to hear what insiders like Donny and firm leaders are doing to create a better CPA Life. Until next time.

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Leveraging Tech and Advisory to Build the Firm of the Future with Donny Shimamoto

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