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Ep. 56: Peter Margaritas - Storytelling in the Foreign Language of Accounting
March 23, 2020 | 21 Minutes
Peter Margaritis, CPA, CSP, is a keynote speaker, improv virtuoso, podcaster, and the author of “Improv Is No Joke: Using Improvisation to Create Positive Results in Leadership and in Life” and “Taking The Numb Out of Numbers: Explaining and Presenting Financial Information with Confidence and Clarity.” In this episode of Count Me In, Peter talks about why FASB needs to make changes to better enable accountants to speak the 'foreign language'. He explains how that idea and storytelling relates to 'taking the numb out of numbers', a reference to his recent book. Peter has a Master’s Degree in Accountancy from Case Western Reserve University and he is a licensed, non-practicing, CPA in Ohio. Peter has worked for companies such as Price Waterhouse, C&S National Bank, Ohio Dominican University, and Victoria Secret Catalogue, (not as a model). Peter has earned the highest credential of Certified Speaking Professional (CSP) from the National Speakers Association and he is one of only 12 CSPs & CPAs in the Association. Peter is a past chairman of the Ohio Society of CPAs executive board and a former delegate to the AICPA governing council. He talks about his public accounting experience and how the role has shifted to require new skills in today's accounting world. Want to know why accounting standards need to change? Interested in hearing how to make numbers less numbing? This is a highly engaging episode that covers it all. Download and listen now!
Peter's website: www.petermargaritis.com
Peter's books (Both books can be found on Amazon in paperback and Kindle. Improv Is No Joke can be found on Audible)"
Peter's books (Both books can be found on Amazon in paperback and Kindle. Improv Is No Joke can be found on Audible)"
Change Your Mindset Podcast (Can be found on Apple Podcasts, C-Suite Radio, Spotify, iHeartRadio, and many other podcast platforms)
- Apple Podcasts: https://podcasts.apple.com/us/podcast/change-your-mindset/id1127514117
- C-Suite Radio: https://c-suitenetwork.com/radio/shows/change-your-mindset/
- Spotify: https://open.spotify.com/show/5EXc70lxp3g6SWXBab596y
- iHeartRadio: https://www.iheart.com/podcast/256-change-your-mindset-30921543/
FULL EPISODE TRANSCRIPT
We are back for another episode of Count Me In. I'm your host, Adam Larson, and we are now up to our 56 episode of the series. For today's discussion, we are going to hear Peter Margaritas, the accidental accountant. Talk to Mitch about the value of storytelling and accounting. Peter is an engaging storyteller himself. So we will cookie jump over to hear his perspective now.
Thanks for joining us today Peter. And as I was just kind of mentioning to you, I've done a little poking around, a little background checking here and I came across, the accidental accountant. So I'm wondering if you can kick that off and, you know, tell us a little bit about what that means.
Oh, what that means was I didn't get into this profession until I was 30 years old. I'm Greek, I'm a Greek American. I really should be in a restaurant versus being a CPA. And I grew up in a very good Gary us environment, worked in many restaurants, were very customer focused. And when I got into the accounting profession, I understood it. I loved it. I'm not kind that does it very well. And actually in one of my reviews from my employer before I even sat down, she said, how in the heck did you ever become a CPA? The CPA can get all the way down to this detail. I'd only get you about three quarters of the way. You're an accidental accountant. And I thanked her for that. That was the nicest thing she had said. And so I, I've actually taken that and it's registered trademark and is, I'm doing business as the accidental accountants.
That's great. So as I'm going through this and I come across some of your other work here and I saw an article that you put out there, I believe it was accounting today. And, my next question is really about the profession in general and, and how has data and technology really changed the accounting industry in your opinion? The article was written about whether or not gap is really in touch with today's economy. So how does that all piece together?
I think by the 1900's I mean we really talking about data analytics or even in the 20s now we're so data-driven and analytics-driven and, but if you sit and think about what accounting standards when they're written and when FASBI is proposing them primarily for publicly held entities, especially very large publicly held entities and they do feel tested and they get these luxury organizations to be part of part of it. But a lot of companies out there use gap statements because it's required of them to use gap statements. And they're much smaller entities. I mean the complexity of a gap, the revenue, the new revenue recognition standard, which is principles based now rules-based, there's over 700 pages. The convocation has over 10,000 pages. So what we're trying, and it seems like we're always trying to catch up, and think about back when the derivatives and during the Enron years and we were trying to write standards, what was it? Fin 46 and Fin46R then, there were SPEs, now they're VIE's we were writing them. We felt like we were, yeah, four or five years behind. We looking at today, you know, the SAS applications, you know, business software applications are being delivered on demand via the cloud and some of the metrics that are important within these organizations as recurring revenue, you know, churn rate, the number of subscribers which are crucial to their business. There's no way fashion is not addressed any of these things. So there's, I've, I've always felt that there always has been somewhat of a, gap, lack of a better term between, you know, what we're writing and where the U S economy is going. And we've, it's gotten so complex that counselors can even describe to the clients. And when I say clients, I mean both internal and external CFOs, you know, in the, in that group to their clients, what the purpose behind it. What we're doing, how do we apply it? It's very, very complex.
So I guess, you know, what I'm curious about really is, aside from the complexities, aside from being behind the times, essentially, what challenges is this really causing for today's accountants? And how are these standards, you know, really hurting the performance of today's accountant.
I'll share a story with you. As soon after that article came out, I had a partner firm contacted me here in the central Ohio area and she said, I love your article and as you shared the story with me that their firm was doing a after hours gathering, CPE kind of gathering and they invited all the community and local banks in the area into this thing. And basically they were talking to the banks to see if they would start accepting the AICPA SME model for standards versus US gap because of the complexity. Yeah. I'm a former banker and I, bankers don't really understand the complexity that we're dealing with and when we're trying to, like my buddy who is still in banking when rev, rec, and leasing was coming out, he contacted me, he goes, so you guys just make standards to keep your jobs to be irrelevant to, is this like full employment? Now? What, why not? But perception and reality are so different. And when we try to communicate these standards to our clients within the organization, like consolidations vie's, there's thousands and thousands, hundreds of pages out there on this topic. And when we're just data dumping information, Oh, we're doing this, put it in sleep. Well we need to learn how to well well I asked my audiences is well a question like how many of you speak a foreign language? And I mean a few hands, you know, French, Spanish, Japanese. I said, let me reword that question. How many speak the foreign language of business call accounting? And they all start laughing and I went, it is a foreign language to the sales department, to human resources, to every part of the organization. Other than accounting and finance. Have you ever tried to explain anything to a sales, our HR person, whomever, can you listen to yourself? You're speaking in the foreign language of accounting, we have to become better translators of this language into plain English. And I think that's our biggest challenge is recognizing that we speak a foreign language too. It's important. Why are we giving this information? So management investors, clients can make decisions, but if they don't understand us, are they really making the right decisions? It just comes down to the way we communicate and we're not known to be the best. We're the stereotype of being introverted, you know, very technical, very geeky and nerdish whatever. We have to break that stereotype. We have to bring value, we have to show value in what we do. And the only way we can do that as we can articulate the value that we bring, what we're doing for our clients, our customers are our organization.
Yeah, that's a really interesting point because even myself going through school, all these accounting classes, all the professors are telling us that accounting is the language of business, right? Everybody needs to understand accounting to understand business. But when you kind of put it that way, it's the language of business that only those within the function really understand. And we had to, it's a unique perspective to consider. But you know, along the same lines of what you were kind of just talking about with communication, what else do accountants really need to know today? You know, what should they be learning today as they continue, their education and polishing their skills for today's industry?
When I talked to CPAs and especially those who were just coming out of school, I get this question, especially in those States that have the 150 hours, what should I take? And that extra 30 hours, whatever, public speaking, presentation skills, you know, communication, effective writing, business writing. Our biggest challenge, I mean right now artificial intelligence, blockchain is doing the number crunching for us. The bots are able to reconcile accounts within a matter of moments. We've got a, what's the word I'm looking for? Artificial intelligence. Watson, who we dump a GL into Watson and spits out, well, here's your high risk areas. You need to go take a look at this. So we're not digging deep into the bowels of an organization looking through boxes and boxes of stuff or looking through, you know, digital information. We're getting pointed in the right direction. So if I was coming out of college today, Oh, when, when I'm asked to speak to college, students, those, we call them soft skills, you know, but would you agree with me on this one? We may call them soft, but they're pretty hard to master. Absolutely. And they just don't come over night. There's some folks who, I used to be that guy quite honestly. Cause I've, I've taught Academy at the college level and I mimicked what I saw and how to teach. And I turned into an anesthesiologist cause I was putting people to sleep. So I said there's gotta be a better way, teach this. And I had the PowerPoint slides with it, like a billion bullets up there, the kajillion words and just a big data dump. And the more I began to transform that and too storytelling, using examples, you know, kind of be more realistic in the approach. My student for waking up the, it became engaged in the class and evaluations I would get, he took a boring subject and made it fun.
Oh, what were some of the, activities or different topics that you weaved into? You know, making this a little bit more engaging because even communication itself, it's difficult to teach. And you know, you said the soft skills are really hard. So what was it that really got through to the students?
I am not a PhD, so I've got a masters and accounting and an undergrad, a bachelor's administration, and that's the administration as well as concentration in HR and in the classroom, and I worked for Pricewaterhouse. I've worked for Victoria's Secret catalog, I've worked for Gapping Direct. I was able to take those stories that I saw, that I learned that I, that I was working with at the time and be able to create an analogy, be able to create some type of metaphor or be able to share that story to demonstrate what I was doing from the technical side. It's a, it's almost like a talk because of the Ted talk. They start off with the story and then back it up with the data story data. But we as, and I say we accountants, engineers, architects, we'd like to start off with the data and maybe not even get to a story and just by doing that, we're not engaging our audience. Our brains are wired for stories, not just a massive data dump like given the dissertation. So when I do this presentation that I wrote about at the university of of Nebraska in Omaha, I've started, I always start off with the story. I asked the audience to close their eyes and imagine themselves given a financial presentation and the audience is looking at them, not their cell phone. They're not doing that conference prayer where they've got their cell phone in their hands and their heads are bowed down. They're fixated on you having this conversation now almost hanging on every word. Can you imagine that happening? Ask him to open her eyes and I go, most people shake their head now that's said it can, and I shared another story with them. Let's get to work. And that's the key word there. It takes work and you're changing up something completely. So you gotta be able to accept some risk here and failure. Cause when you first started off doing this, you will make mistakes and that's fine because you learn from those mistakes. But it is a scary mind field per se because we've, I've never done this before, but a lot of folks who I speak to in the profession, they go, but we need, I need to know how to do this because I'm tired of the deer in the headlights look from my clients, from the sales department. I want to be valued. I want to be perceived with that, with that value that I have with this knowledge that I have. And I can't do it just by a massive data dump. Speaking in foreign language of accounting.
So not all of us are, you know, in academia and teaching accounting students. But you know, obviously there are ways to translate this message and apply it on our job. So you know, what elements of public accounting in general do you think really need to change and what can our listeners do? What can the accounting and finance professionals here do to help advance that initiative?
So the most important thing, and I'll write this in my book, taking an amount of numbers, the first thing that we need to do is recognize this is not about me, this is about my audience. How well do you know your audience? We come in to a meeting, we come into a presentation, we come into some proposal, we're looking at it from our perspective. We need to change that mindset. We need to flip that around. What, what's the, what's the audience's pain point? What's my client's pain point and determine what that pain point is and then provide them with the solution to that pain point. But not coming in and going here. This is what I have for you. And they don't need that. They don't want that. We tend to, and I do a lot of customization in my programs. I speak to the four language of Academy, but you know something, I don't really speak the foreign language of construction accounting or civil engineering accounting. And I did a half day workshop for the construction finance management association and it was about a nine month process working with one their instructional designers. And I had to learn not to the depth and breadth that everybody in that room had. What I needed to learn construction accounting I needed to learn, but the key words that they use, the acronyms that they use, same thing with civil engineering. So I could've come in and just brought my canned presentation and you know, I've been fine. Not really because it's not relatable to those because they look at the world differently than retail. So keeping us think about that audience, what do they need, what can I give them and how can I give it to them in a manner that is... Have them think like Abraham Lincoln less is more. Lincoln wrote the Gettysburg address in 272 words. The gentleman who spoke before him, gentleman named Edward Everett, former secretary of state, spoke for two hours. Nobody knows Ed. We used to have to memorize the Gettysburg address in school. Less is more and that goes to their, how they design their PowerPoint slides, less words and a picture, last words and, and you're having a, you're not doing a presentation, you're having a conversation with that audience. So when we put less on, on a PowerPoint slide and we're not reading from the PowerPoint side, w which we should never do, we should look at that PowerPoint site in two ways. One, that's a note card. It's going to jar my memory, what I want to speak about. And two, we want to make it easier on the audience. We wanted to design it in a way that's easy on their brains. And we do that by the left hemisphere of the brain controls the right side of the body. The right hemisphere of the brain controls the left side of the body. So in designing a PowerPoint slide, you want to put the picture on the left part of the slide to connect with the right hemisphere of the brain and the taxed on the right side connect left hemisphere of the brain. This is proven and brain science is a book called brain rules by John Medina that he's a neuroscience researcher who wrote a book that even I can understand about the brain and there's so much work when into how the brain function, how the brain operates in certain situations, we need to give that brain not overworking because they won't understand. But when we do a data dump and we've got 700 pages of a Rev Rec and convocations over 10 that's a lot of data. We had to find a way of using less data and provide more stories for our audience to understand. So FASB.
So that's a really good example. And you know, you've kind of led us all the way through this conversation. We kicked things off starting in the 19 hundreds with accounting and even talked a little bit about the data and the two thousands but I usually wrap up episodes by asking our guests if they have any predictions as what the future of accounting holds. So, you know, we've certainly shifted gears here and we're talking a lot about storytelling. What do you envision the role of the accountant being or how is the role going to change even more in the future of the industry?
I don't believe I think number crunching is over. I went with artificial intelligence to the way technology is just rapidly changing. We have to adapt to it. So if I don't have to question numbers, if I don't have to use a 10 key and if I don't really have to even use Excel, but the information has been placed in my lap, now I have to be able to, I still have to be technically sound and analyze it, but then I have to communicate it more to internal stakeholders, external stakeholders, decision makers. And I have to be able to communicate it in a manner that is persuasive, in order for us to get, in order for us to have that person take that information and use it properly.
This has been Count Me In, IMA's podcast providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.