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An external shock, like COVID-19, can naturally bring discomfort as we try to navigate our way through the new uncertainties woven into daily life. This pandemic is changing how we live, interact, work, and socialize. And, it’s all happening at not only an unbelievable rate of change but likely for a long time.
We need to adapt to this type of external shock, as humans and organizations. Yet with difficulties, there is also space for opportunities and innovation. I have been especially reflecting on some of the opportunities, strategies, and approaches that might exist for professional accountancy organizations (PAOs) in Latin America in the current and post-COVID environments.
For all types of organizations, including PAOs, we can anticipate a number of scenarios and impacts.
- Embracing a leadership role
- Boost e-learning opportunities;
- Highlight the profession’s and your PAO’s relevance when advising and engaging with the government and regulators;
- Communicate daily with members and the business community by sharing the latest information on governmental regulations that deal with COVID-19 impacts.
Organizations that pursue this approach will strengthen their growth and market share, brand recognition, and loyalty of members far beyond this current crisis.
- Maintaining the status quo
- Provide limited services and waiting it out to go “back to normal”.
These are PAOs with mandatory membership, limited e-learning offerings, and are not fully prepared to pivot to work virtually and continue their services. These organizations will need to subsequently defend their value and find their competitive position amongst innovators that have popped up.
- Caught in the traditional way of operating, with financial viability relying heavily on in-person training.
These organizations will offer very few value-add services, experience a significant decline in revenue, and may even need to reduce staff numbers. These organizations will seek to fast-track to normal operations but should be prepared to completely rethink their value proposition amongst potential new players in the market.
Based on the available information, which changes daily, there are different timelines for the duration of our current operating situation. The predictions say that a “fast” recovery—less than six months— will depend on effective testing, mitigation, and corresponding economic incentives. However, the long-term impact might include bankruptcies and high unemployment rates. Moreover, there is some talk that the behavioral changes we have in place now, can potentially become the new norm.
- Limited in-person gatherings and events: government officials may limit gatherings until the pandemic is declining. Aside from mandated limits, there are expectations that people’s behaviors will shift. For PAOs, this might be a portion of your members will hesitate to attend a large training activity, council, or other activity with more than 20-30 participants. This will directly impact PAOs that rely extensively on in-person events to deliver its value proposition and one or two annual conferences to generate revenue.
- Travel restrictions: there will likely be both international and national travel restrictions with increased health checks. This trend will impact PAOs’ activities, not only from a training standpoint but also from a governance and operations perspective. Most PAOs’ technical committees are comprised of volunteers that are used to in-person meetings. PAOs will need to develop processes to work virtually, including board of directors’ meetings and support to its national offices, not just for now but for the long-term.
- Protecting vulnerable populations: until a permanent solution is found, such as a vaccine or therapeutic cure, interactions that involve older citizens and anyone that might have underlying health conditions, will likely be quite limited. This is a sustainability issue for PAOs in Latin America given the general trend in aging memberships. Organizations with voluntary membership in the region have historically struggled to attract younger generations to their organizations. PAOs will need to re-evaluate and re-innovate their strategies to diversify membership, open volunteer opportunities on committees, and target activities to younger professionals.
- Working remotely: The first response of organizations has been ensuring their teams have the proper equipment to work remotely. Now, most PAOs are trying to work under the “new normal” effectively and keep staff motivated while working from home. We have heard from some PAOs that have taken the opportunity to understand their teams' barriers and, subsequently, introduced flexible work time for individuals that also need to homeschool their children.
It is important that PAOs engage their employees and constituents to solve problems that matter. Simple questions can go a long way: how and where can we deliver service to our members? What activities do PAOs need to stop or adjust? What will drive growth in the organization? Why are these problems critical?
To understand the challenges PAOs face from this shock, we have been working tirelessly to provide support and knowledge sharing to our members. This includes IFAC’s dedicated web page with essential resources, guidance, and advice. In addition, IFAC has connected with our member organizations to facilitate sharing online continuing professional development (CPD) resources with those PAOs that may be finding it challenging to transition to online CPD: Online CPD Services for PAOs.
IFAC has also organized regional forums where our members have shared their main impacts and strategies to ensure business continuity. These regional forums have resulted in increased collaboration and mentoring between PAOs to support each other during this time. IFAC staff have also published guidance, including on the financial reporting implications of COVID-19. The International Auditing and Assurance Standards Board and International Public Sector Accounting Standards Board have also developed guidance resources center.
We have seen in previous crises that innovative organizations that take time to invest in bettering their companies and thrive in the long run. It is imperative for PAOs to explore the problems they can help solve now and a year from now. The new normal will bring new ways of operating for PAOs, particularly in Latin America, and the speed and willingness to recognize these issues and make plans to adapt will be a key element of success.