Creative accounting: not always a bad thing

Being creative is the new way to solve problems. By Tim Runacre, product development manager and David White, trainer, Reed Training.

Creativity and innovation are not the first things that spring to mind when you think of accountancy and the finance professions. Many people would place accountants firmly at the opposite end of the creative spectrum to marketing and media types. The term ‘creative accounting’ itself has rather negative connotations, often associated with semi-legal practices.

Creativity here, though, is not about massaging figures or attempting to make an organisation that’s been haemorrhaging cash appear a paragon of parsimony. This is about modern techniques for bringing creativity into the way you work, seeing things differently and spotting opportunities to improve your performance.

Feeling cynical?

But first you must want to be creative. Cynicism is understandable, and working creatively may be the last thing on your mind when it’s 10pm the evening before year-end and you’re still in the office. So why is it important? The need to inject creative thinking into the heart of public and private sector organisations was underlined by an article in Business Week from August 2005.

It said: 'Price, quality, and much of the left-brain, digitised analytical work associated with knowledge was once central to corporations. Increasingly, the new core competence is creativity – the right-brain stuff that smart companies are now harnessing to generate top-line growth. The game is changing. It isn't just about maths and science anymore. It's about creativity, imagination, and, above all, innovation.'

If employee creativity is so critical to organisational strategy, it follows that accountants – responsible for the health of the bottom-line – cannot afford to rest on traditional working methods.

Learning to think differently

As a provider of continuous professional development (CPD) in the UK, we are seeing increasing demand for creativity courses. These include ‘The art of being brilliant’ and ‘Leadership, innovation and enterprise skills’. Delegates attending these courses range from finance directors and managing directors to administrative and sales staff. More people at all levels are seeing the link between vocational creativity and effective performance. During the one- and two-day programmes they will learn not only about creativity, but also rapport-building, neurolinguistic programming (NLP) and how to deal with resistance.

Let’s look at some practical techniques.

Creative problem solving

Many problems need more than a simple logical approach. They can be hard to define and harder still to address. Creative thinking can often generate solutions and help to devise practical approaches to their implementation.

So what are the barriers that get in the way of creative thinking?

• act first, think later: we prefer action to thinking. Even if we set off in the wrong direction at least we believe we are getting somewhere
• comfort zone: we prefer to stay with ideas and solutions with which we feel comfortable
• fear of exposure: new ideas are risky and we may not relish the embarrassment that might result
• belief in a single solution: we assume there is one ‘best’ answer. This attitude can be prevalent in long-established organisations
• culture: we doubt that radical solutions will be accepted.

As well as your own mindset, barriers to creativity often emerge on a departmental or organisational level. Watch out for the ‘dummy task force’. This is a project group set up to develop creative ideas but without clear goals or mandate. It's a device frequently used by governments to avoid rather than stimulate action. Also beware of ‘rock-hard controls’ – however good the ideas are, approval procedures are so stiff that the idea will wither away or become shelved by bureaucracy.

Definition, then solution

An initial stage in liberating creativity is to separate the problem from the process used to solve it. Too often we set to work on the solution before assessing the real nature of the problem. Consider a two-stage approach:

• stage one – define the problem
• stage two – solve the problem.

It sounds simple, but the benefits of disassociating the problem from any preconceptions we have about it are often understated. For example, a credit controller may face an unacceptable level of debtor days and be asked to reduce them in line with budget. The easy answer might be to revert to historical trends, perhaps ringing late debtors using the same process as last year.

In fact the answer may lie elsewhere: the organisation may have increased its sales which in turn has resulted in more invoices being paid late. Other solutions might be to hire more staff to support the credit control function or offer customers incentives for early payment. Creative thinking can be about the concepts involved and not their mechanical manipulation.

How to think creatively

The following are a few of the most recognised forms of generating ideas. Try one or more of the techniques next time you are faced with a problem that has no obvious solution.

• brainstorming: provides a formal group setting that encourages interaction and the stimulation of ideas – without judgment. This method works most effectively in groups of six to 12 people, and aims to create a period of temporary insanity where no one’s ideas are denigrated
• mind-mapping: this mimics the way the brain works to create new patterns of thought, build links and emphasise key issues. Write the name of the topic you are addressing in the centre of a piece of paper, with associated words radiating outwards. It is useful to use images, symbols and codes throughout your mind-map, rather than just words
• bissociation: this technique involves the arbitrary linking of two concepts. The first concept is the one for which we are trying to find new ideas. The second can be chosen at random. We then deliberately try to find connections that provoke the creation of new ways of looking at the problem
• rule reversal: identify the obvious rules and deliberately break them. 3M inadvertently produced a glue that would not set.  The end result was the ubiquitous Post-It note
• metaphorical thinking: a variation on bissociation, this method involves creating new metaphors for the concept you are addressing. The aim is to avoid clichés and be stimulated by the connection. Unlike normal bissociation, the connection is not arbitrary but deliberate. Through simple metaphor we can stand back from the issue and see it more clearly.

Make it your New Year’s resolution to think creatively where possible. Remember that taking time away from your desk to arrive at innovative solutions to the problems you face can provide excellent returns.

Reed Training’s ‘Creative thinking and problem solving’ course is endorsed by CIMA Mastercourses for CPD purposes and runs regularly throughout the year. Tel: 0800 132 448.

December 2005