The last six months or so has seen the rise and spectacular fall of Blognation. Much has been written about the ins and outs, the feud between BN operator Sam Sethi and Mike Arrington of TechCrunch. Even more has been made of the way Sam reportedly treated the people who came on board to help build the dream. I don't plan on revisiting that stuff because like everyone else, I only have a partial picture. Instead, I want to focus on the issue of reputation and why the profession needs to get serious about preserving and enhancing its tattered image.
The parallels between Blognation and Arthur Anderson are striking. In both cases, a few (or one) person(s) took desperate and ultimately foolish steps in an attempt to preserve something where the prospects of doing so were remote to nil. In the process, they made fatal mistakes that could only lead to one conclusion. Annhilation. In both cases, that last fateful step could have been avoided but arguably outside pressure proved too much. A very brief resume:
Arthur Andersen
- A handful of bent partners ordered the shredding of incriminating documents in the Enron affair.
- The SEC wanted blood and the remaining partners panicked.
- The global partnership disintegrated.
Blognation
- The man in charge repeatedly gave the impression that funding would be available but it never was. He was over optimistic and stated as fact positions that were under discussion but not inked.
- A confidential term sheet got into a competitors hands at a crucial moment in negotiations and any expectation of adequate funding evaporated.
- Senior management announced BNs shuttering.
Comparison
In the dying days of the BN debacle, I met with a number of the editors and it was thought the BN brand had value that could be used to preserve the BN identity. I said that the only equity lay in the people which, given the circumstances, had little if any externally viable value. I was proven right. Prior to Anderson's demise, it's goodwill value must have run billions of dollars. Once the wheels fell off, that nose dived to zero. In both cases, the speed at which the businesses imploded is startling.
Now what?
The only thing we truly have is our reputation. When that goes, we're finished. Reputation operates at both individual and collective levels but in our case it is more poignant because the reputation of the trade bodies is pivotal to our perceived market position and identity.
I've spent much of the last two years hammering at the Big Four in particular. I'm not alone. I've hammered at ICAEW - although in fairness, I should perhaps put some attention in the direction of ACCA and CiPFA. All of these oft times negative posts are designed to heighten awareness of the risks the profession faces by refusing to face up to matters of social responsibility in the widest sense. Blithely sitting on fee portfolios that deliver a comfortable living fails to take account of the reason 'we' enjoy our relative privileged position: trust - a significant component in the reputational equation.
Next steps
I believe 2008 will be a pivotal year. I am seeing pressure, especially on issues around CSR and GRC, coming from multiple directions. Alliances are being formed between what would otherwise be strange bedfellows in a bid to make CSR/GRC a reality. These have direct consequences for our two core activities: audit and tax planning.
If we as a profession fail to pay attention, we are going to find that the very foundations upon which we thought we stood, will be washed away from beneath us. Rather than improve our position, we will find it eroded.
We need to participate in these events, actively learn and discover what it is that clients will likely expect from us. We need to stop pretending that we're holding some torch of independence and rediscover what our real purpose in life is: serving stakeholder interests and not those of a tiny minority of fee setting corporate managers. We urgently need to train a new generation of professional technicians, not salesmen and women.
If we are to avoid what I see as a long term train wreck, then the profession needs to take its collective head out the sand, shake off the sloth of privilege and realize that in a world where the rest of the world has easy access to tools upon which reputation is both built and destroyed, it simply cannot continue to pretend the same rules don't apply to them.
Technorati Tags: big four, blognation, reputation
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