By Dr.Nurmazilah Dato’ Mahzan, CEO, Malaysian Institute of Accountants (MIA)
COVID-19 and the imposition of the Movement Control Order (MCO) and Conditional Movement Control Order (CMCO) from 18 March to 9 June 2020 over five phases have not only been a mega stress test for our healthcare infrastructure, economy and society, but similarly a gigantic stress test for businesses and the accountancy profession.
While the Movement Control Order (MCO) has been a systemic shock, it has also revealed the weaknesses and gaps that must be overcome for economies and societies to become more resilient and sustainable in the future. And, in order to become more resilient, we need to be more agile and adaptable, able to go with the flow and cushion the blows.
Where the profession is concerned, MIA advocates embracing the following strategies as the gateway to resilience and agility, based both on our direct experience as a regulator and a Professional Accountancy Organisation (PAO) as well as our ongoing stakeholder engagement:
Need for Effective and Data-driven Scenario Planning
In times of crisis, it is most important for any organisation to assess the risks and opportunities, and this must be done continuously given the current uncertainties. When there are uncertainties, scenario planning has tremendous utility as a tool to guide action plans and invoke the business continuity plan.
As MIA staunchly advocates data analytics and data-driven decision-making, scenario planning must be backed by data and discussion to cut through the miasma of uncertainty and ambiguity. A reasonable reforecast for 2020 will centre on business continuity, survival and rebuilding of reserves; growth targets will take a backseat until 2021.
To help the profession and businesses to leverage on data and enhance scenario planning, MIA recently organised a webinar on Data-Driven Decision-making, the first of many to come. There are two sides to every crisis – opportunity and challenge. The COVID-19 crisis presents a window of opportunity for finance and accounting professionals to learn how to make informed and timely data-backed decisions that can optimise operations, business models and business continuity, and that can help us become more agile and resilient in this economic downturn.
Need for Effective Crisis Management and Strong Leadership
I also encourage accountants to be guided by the wisdom of Nancy Koehn, the James E. Robison Chair of Business Administration at Harvard Business School, a historian and specialist in crisis management who has been speaking and writing extensively on “leaders who are forged in crisis.” According to Nancy, leaders are not born or nurtured, but made, and crises are the crucibles that forge outstanding leaders, men and women.
In her recent sharing on “how to lead courageously during a crisis”, Nancy outlined what she referred to as “some rules for the road”:
1. Get comfortable with extraordinary ambiguities and uncertainties.
2. As there is no GPS or directional navigation system for this unprecedented crisis, you have to be comfortable with “navigating point to point.” Be able to pivot and switch directions as you recognise mistakes and learn and experiment.
3. Get comfortable with rapid-fire experimentation. As there are no rulebooks, we have to be more creative and willing to keep looking for solutions.
In the process of experimentation and problem-solving, we must keep on learning in order to build up our agility, resilience and ability to pivot. For example, MIA has pivoted by developing more virtual learning programmes to inspire members and keep them motivated throughout this crisis. Our webinars on current topics such as the implications of COVID-19 on taxation, IFRS and business continuity and crisis leadership have received tremendous response.
4. Communicate regularly with a routine, whether through townhalls, fireside chats or virtual meetings. During these sessions, frame the crisis and what’s at stake with “brutal honesty” — clarity and openness on the challenges being faced by your organisation, your team and your people as well as the resources and qualities available to battle and endure. This helps dial down fears to a manageable level.
At the same time, be optimistic and steer away from the least probably worst-case scenarios. Leaders should take the tone of inspiring “credible hope” – that by working collaboratively together, we can marshal the resources and determination to work through these challenges and emerge stronger and more resilient. Addressing people’s fears is also critical to avoid paralysing panic and fears that disrupt efforts to experiment tirelessly and find solutions.
I can attest personally to the effectiveness of constant communication. To keep the profession and members informed of the true state of affairs and to calm the situation, MIA has revved up its communications efforts and we are working around the clock, even on weekends and public holidays, to keep members up to date.
For the members’ and stakeholders’ benefit, the Institute has created a page on “COVID-19 Resources for MIA Members and Other Stakeholders” as well as the new MIA Telegram Broadcast (Official) channel, in addition to MIA’s other communications and social media platforms.
5. First and last, take care of yourself. Leaders need to be healthy in order to be available for their people. Be kind to yourself and others as crises can be debilitating for morale and health, whether mental, psychological and physical. We need to conserve our energy for the long haul, as this is shaping up to be a multi-chapter crisis and we have a long way to go. Remembering that each chain is only as strong as its weakest link, we need to cultivate collective strength in order to weather these unprecedented challenges and emerge stronger, “forged in crisis.”
Implement Effective Remote Work Solutions
To be productive during the crisis, it has been essential to implement an effective work from home (WFH) culture. Due to the MCO, all MIA staff have been working from home since 18 March 2020, supported by technology and digital tools.
A healthy WFH culture also depends on continuous engagement and two-way communication, both top-down and bottom-up. At MIA, management works very hard to put people first and ensure their wellbeing. As exhorted by Nancy and other leadership experts, we hold weekly division meetings, regular staff meetings and high-level townhalls to ensure that all our staff are kept in the loop and on the same page, in order to ground their fears. Managers review KPIs and progress with staff, while staff are tasked to turn in a job sheet, which not only help tracks performance on the Institute’s targets but serves as a record for work appraisal.
Technology is a Must-Have, not a Nice-to-Have
Technology is essential to WFH success, and MIA believes that COVID-19 measures for social distancing and remote work can be a further driver for technology adoption and digital transformation, which we have championed since 2016 and strengthened through our Digital Technology Blueprint launched in 2018.
Those firms and accountants that have transitioned to digital technology earlier on are continuing to work seamlessly throughout the MCO, subject to clients’ digital preparedness. Key solutions that support WFH include the use of cloud-based applications and data storage, VPNs (virtual private networks) for enhanced security, and virtual meeting software such as Microsoft Teams for meetings and team projects.
Going ahead, MIA is also emphasising strongly on data analytics, as stated earlier. Inculcating a data-driven culture among accountants will help them make the best resource allocation decisions, which ultimately will support business sustainability and our overarching vision of sustainable nation- building.
Accountants Must Help Others Achieve Resilience
This is the time for professional accountants, especially SMPs, to be relevant and add value by stepping up and providing services geared to business continuity and survival, especially for vulnerable small and medium enterprises (SMEs). This links back to giving everybody a role and purpose, and emphasising how everybody can play a role to support the broader community with compassion and empathy.
SMPs’ expertise is particularly needed to advise affected SMEs lacking resources in finance on how to gain access to the government’s stimulus package measures or the necessary financial advisory to obtain funding assistance from financial institutions and other agencies.
Address Compliance Challenges
One of the challenges faced by members who are audit practitioners during this period is the impact of COVID-19 on risk assessment, audit procedures and the audit report.
Other than being in constant engagement with the respective Ministries and regulators to advocate for the audit and accountancy profession, the Institute has been working on a very tight schedule to have a quick turnaround of announcements and circulars to inform members regarding extension of reporting deadlines by relevant regulators and other matters impacted by the COVID-19 outbreak.
For example, the Institute has worked overtime to produce a set of frequently asked questions (FAQs) to assist auditors with the impact of COVID-19 on auditing.
MIA is also in the process of launching e-confirm.my, the Industry-wide Electronic Bank Confirmation Platform in Malaysia which MIA is spearheading to help audit firms to expedite bank confirmations and enhance the audit process.
These are broad stroke strategies and best practice examples; organisations and leaders must identify and craft the strategies that work best in their own context. The overarching message here is one of agility and resilience – we have to be adaptable, prescient, responsive and able to pivot our business models to remain relevant and sustainable in good times and in bad times.
By pivoting our own model to leverage on digital and virtual platforms and strengthen our strategic collaboration with our members and stakeholders, MIA intends to uphold our purpose of sustainable nation-building, in this time of crisis and beyond.
This is the expanded version of an article that first appeared in AFA Connect, the strategic communications platform for the regional profession. To read the original version and other perspectives on COVID-19 by accountancy leaders in ASEAN, please visit http://www.afa-accountants.org/files/AFA%20Connect%2005%20-%20April%202020%20(A5)%20-%20FINAL.pdf.