Today, we’re going to head for the “Good/Timeless” quadrant, and draw some advice that actually doesn’t come from where you think it does.
In 1859, Charles Darwin published the first edition of his Origin of Species. And if you remember one thing from Darwin, it’s the phrase “survival of the fittest.” But Darwin didn’t actually introduce that phrase. It was fellow biologist Herbert Spencer who, after reading Darwin, introduced it in his own 1864 work, Principles of Biology. (So now you’ve got that useless piece of trivia lodged in your brain.)
So, you thought “survival of the fittest” was Darwin. Here’s something else you might not have known. You thought “fittest” meant “strongest.” And yes, strong is good. But “fittest” actually means “better adapted for the immediate, local environment.”
So what does survival of the fittest mean for you as a tax business owner? It’s not how strong you are that’s going to determine how successful you are in the coming years. It’s about how adapted you are, for your immediate, local environment. And that environment means change.
We’ve talked before about how technology is changing this business. It used to be that technology could help you do your work more efficiently. But now, technology is about to start doing your work for you.
You may think you’re strong now. You may be strong as we head into the 2019 tax season. And that’s great. But your environment changes with every season. If you’re hoping to retire, in 5, 10, or 15 years, you can’t just count on coasting to the finish the same way you’ve operated for the last few years. The world is changing, and the world won’t hesitate to leave you behind. Sorry not sorry.
You already know how I think you should adapt to the new environment. Move your focus away from recording your clients’ history through commodity accounting and tax prep work. Move that focus towards planning and advisory work. Move away from the work that machines can do and concentrate on work that takes advantage of your role as a trusted advisor.
Capitalism is a cycle of creation and destruction. A hundred years ago, Sears was king of the hill. You could literally order an entire house from Sears. That’s right, they would send a boxcar to your local siding containing a kit with all the parts, right down to the nails, and you could turn it into a house. (Can you imagine what the instructions would look like if IKEA did that today?) Hell, you could even order heroin from Sears. That’s right, send them $1.50, and they would send you a syringe, two needles, and two vials of Bayer heroin.
Now, of course, Sears is bankrupt. Amazon is king of the hill, and Amazon’s founder Jeff Bezos and his wife are the richest couple in the world. (For now.) And even after the divorce is final, they’ll still be in pretty good shape.
But . . . it’s a good bet that 100 years from now, Amazon will have faded. It might not be around at all. Maybe by then we’ll have those jetpacks and flying cars we’ve all been waiting for.
But back to the near future — in a few years some aspects of running a tax business will still be the same. The debits and credits will have to match up. The balance sheets will still have to balance. But everything else will be different. That’s reality, whether you’re ready for it or not. How adaptable will you be to that fact of your immediate, local environment? If you’re adaptable, and willing to change with your environment, you’ll be just fine. But if you try and resist change — which you really can’t do anyway — you’ll make your business and your life a lot harder than they have to be. And you’ll fall behind those of your peers who accept the inevitability of change and adapt to the new environment more successfully than you.
Truly the only constant is change. Don’t hide from it — take stock of your business and the road ahead, and be ready for what’s next.