Insider: Rick Telberg
Fads or Trends? Choose Right and Choose Success

By: Rick Telberg

June 15, 2000 (SmartPros) — Distinguishing between passing fads and lasting trends can spell the difference between life and death in this business. Dan Sautner has spent a lifetime making the right calls. In 1982 he was the second person at Canada's Clarkson Gordon, now Ernst & Young, to use an Apple II on audits. The experience convinced him that the economics of the profession were about to change profoundly and he set out with a partner to create what is today the 300-unit chain of Padgett accounting shops.

Here's Sautner's thinking on fads vs. trends, drawn from a comprehensive and thoughtful analysis he has performed for the National Association of Tax Practitioners:

Fad No. 1: Tax simplification. The hoopla for tax reform has faded with a booming economy. But, Sautner says, "the pain of the customer -- the taxpayer -- rests with the IRS." Sautner gives Commissioner Charles Rossotti high marks for reforming the Internal Revenue Service, which will ease the pressure on Congress to institute a massive overhaul.



Fad No. 2: Consolidation. After an initial spurt, the wave of acquisitions has slowed considerably. The easy pickin's are gone. But grassroots mergers among like-minded independents may surge. "The past three and next seven years will see the greatest number of retirements in our profession," Sautner says. And the new buyers may increasingly turn out to be refugees from the corporate world.

Fad No. 3: Dot-coms. The mindless rush to put up a Web site that is little more than a hard-to-read firm brochure are over. "This is not to say that the Internet will fade," Sautner cautions, or that organizations will not have sites. I am merely saying that the dot.com is only a tool to somewhere else and not the end product."

Now, the trends:

Trend No. 1: Connectivity. From cell phones to Palm Pilots, he notes, "we are connected in every part of our life." This puts new pressures on practitioners to respond faster, even preemptively, to client issues and concerns. Geography no longer matters. "Location, location, location" as a business mantra is fast being replaced by "information, information, information." But the headaches of hardware and software maintenance and upgrades will now be alleviated by rented software -- always updated, and delivered via the Net with round-the-clock service. If it sounds like the old service bureau, you too are giving away your age.

Trend No. 2: Education. Professionals understand the value of knowledge. But much professional knowledge is quickly becoming obsolete. Instead of a lifelong education constructed of building blocks, professionals must learn to un-learn, or forget, what they've been taught and replace it with new knowledge -- a difficult and disorienting task. At the same time, clients are demanding deeper knowledge into special areas. Take taxes, for example. "In the past, it was enough to know the law," Sautner says. "Now we are expected to know the legal cases, the history of the law and the political ramifications of the law, and whether the law will change and what is driving this change."

Trend No. 3: Lifestyle. All the stakeholders in our lives and in our work -- family, friends, employees, vendors, clients -- are seeking a new spiritual balance. "There is an ongoing push to prevent business activities from taking over our lives," Sautner notes. Today, he says, "attending your child's sports event seems more a badge of honor than working a 90-hour week."