Sharpening Our Vision:

Exploration of the AAA's Possible Future Roles

AAA Annual MeetingMonday, August 5, 2013

Anaheim CA

Thanks to the Broad Participation

• Mike Diamond – past president and volunteer leader• The Board• Council• Task Forces

Agenda• Our path

– Overview of the changes facing higher education– Overview of our process– Insights from Council– The time is right: One-Time Opportunities

• The journey: Task force reports• Where we are – and where we’re going• Feedback? Questions? Insights?

Overview

Mike DiamondPast President of the AAA

University of Southern California

Why are we’re doing this?

Two key elements as relates to higher education

– Technology– Business model disruption

The challenge: a rapidly changing educational environment ripe for

“disruptive innovation”

Technological Forces

“Technology is doing to education what it’s done to countless other industries: disrupting it.”-- Victor Hu, Goldman Sachs

Stanford U. President John Hennessy on online

education: “There’s a tsunami coming.”

…a Technology is changing the way our students learn…and courses are delivered

Bain/Sterling white paper conclusion

“Higher education in the United States is at a tipping point. In its time of need, the leaders of our colleges and universities have a tremendous opportunity to reshape and reinvent an industry…”– The Financially Sustainable University, July 2012

Source: www.thesustainableuniversity.com

Business Model Disruption

Christensen, et al Disrupting College (simplified)

VALUE PROPOSITION

PROCESSESPROFIT FORMULA

RESOURCES

From Society’s Perspective

Their Tuition The Value of their Degrees

From the University’s Perspective:Their profit model

Their Costs

Tuition IncomePublic Funding

+ +><

Headline: July 23, 2012 US Higher Education at ‘Tipping Point’ with One-Third of Schools Financially Unstable

“The data is clear: A growing percentage [currently about 1/3] of our colleges and universities are in real financial trouble.”– The Financially Sustainable University, July

2012 Source: www.thesustainableuniversity.com

Reducing University Costs?

• Inefficiency is part of it – but not all– Economies of scale?– Increasing volume?

• To manage means reducing complexity

• Changing the model means changing the value proposition– MOOCs, for example

Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012

Raising Tuition?

• Increasing the real price decreases access

• Decreasing access reduces opportunity – bad for society

• Increasing the real price is causing rapid growth in student loans

• We are in trouble with tuition!

Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012

VALUE PROPOSITION: CHALLENGE FOR HIGHER EDUCATION

• We’re facing complaints• Growing demand for

demonstrable outcomes– Government spending scrutiny– Students and families concerns with

increasing tuition• We must increase value

– What we teach: Move beyond algorithms

– How we teach: Use emerging, proven techniques

Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012

INNOVATION IN PROCESSES

• Competency-based education– Defined by panels of experts– When you display the

competency, you earn the credit– Changes time to degree– Enables transfers, comparisons– Western Governors University– Bologna Process

Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012Photo by EarthLED and used under the Creative Commons license. Photo is available here:http://www.flickr.com/photos/62324368@N06/5927652703/sizes/z/in/photolist-a2NLCF-9FUj2C-9FUu6f-9FRkyB-9FUxfu-9FRxZc-dDYcwN-9YGXqC-9YGYSA-9YGXAj-9YE5ix-9YGXjY-9YE3Ye-9YE3TP-9YGY9w-9YE4yr-9YGYGE-9YGYdG-9YGXRS-9YGY4m-9YGYuq-9YGX7w-9YE54x-9YGXZf-9FVhV9-9FRnEx-9FUAfj-9FUwjf-9FRDTP-9FV3G7-agwPPw-9FSnS4-9FUrpL-9FRqei-9FUKfq-9FUQtW-9FRG2H-bMhmjx-bynDeN-bynE8b-9LDaw1-99jY9H-agwPPs-w1PKK-8HFjm6-9FRR2P-9aCWV1-4Uqv85-5K827n-5qxWLQ-c55YEj/

BUSINESS MODEL DISRUPTORS

• NUMEROUS POTENTIAL NEW “UNIVERSITIES”– MOOCS

• Available everywhere• Low cost, quality courses “taught” by

famous faculty• A huge disruptor

– Corporate universities– Publishers and media companies– Companies and foundations using open

source materialsSource: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012Photo by EarthLED and used under the Creative Commons license. Photo is available here:http://www.flickr.com/photos/62324368@N06/5927652703/sizes/z/in/photolist-a2NLCF-9FUj2C-9FUu6f-9FRkyB-9FUxfu-9FRxZc-dDYcwN-9YGXqC-9YGYSA-9YGXAj-9YE5ix-9YGXjY-9YE3Ye-9YE3TP-9YGY9w-9YE4yr-9YGYGE-9YGYdG-9YGXRS-9YGY4m-9YGYuq-9YGX7w-9YE54x-9YGXZf-9FVhV9-9FRnEx-9FUAfj-9FUwjf-9FRDTP-9FV3G7-agwPPw-9FSnS4-9FUrpL-9FRqei-9FUKfq-9FUQtW-9FRG2H-bMhmjx-bynDeN-bynE8b-9LDaw1-99jY9H-agwPPs-w1PKK-8HFjm6-9FRR2P-9aCWV1-4Uqv85-5K827n-5qxWLQ-c55YEj/

BUSINESS MODEL DISRUPTORS

• Accreditation makes entry difficult – for now

• Lack of some input requirements• Competency-based outcomes OK

now for accreditation• Likely to be more institutions

accredited on outcomes soon – offering essentially free degrees

Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012Photo by EarthLED and used under the Creative Commons license. Photo is available here:http://www.flickr.com/photos/62324368@N06/5927652703/sizes/z/in/photolist-a2NLCF-9FUj2C-9FUu6f-9FRkyB-9FUxfu-9FRxZc-dDYcwN-9YGXqC-9YGYSA-9YGXAj-9YE5ix-9YGXjY-9YE3Ye-9YE3TP-9YGY9w-9YE4yr-9YGYGE-9YGYdG-9YGXRS-9YGY4m-9YGYuq-9YGX7w-9YE54x-9YGXZf-9FVhV9-9FRnEx-9FUAfj-9FUwjf-9FRDTP-9FV3G7-agwPPw-9FSnS4-9FUrpL-9FRqei-9FUKfq-9FUQtW-9FRG2H-bMhmjx-bynDeN-bynE8b-9LDaw1-99jY9H-agwPPs-w1PKK-8HFjm6-9FRR2P-9aCWV1-4Uqv85-5K827n-5qxWLQ-c55YEj/

CONCLUSIONS

• The business model is changing• Change will not effect all institutions equally• Professional associations that represent those

institutions, their faculties, and their graduates will need to move in ways that reflect that evolution

Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012

Why are we doing it now?

• Higher education in the midst of disruptive innovation

• AAA-specific opportunities– Board commitment– New council structure– One time financial opportunity– Commitment to fulfill our mission “To further

the discipline and profession of accounting through education, research and service.”

How are we doing it?

Our Mission: reevaluated – and we recommitted to it!

Our timeline: Major events in 2012-2013

Nov 2012

– Council Kick

off

January 6, 2013 – Task Force

Meeting

March 16 – Council meeting: received input from Council on

top suggested initiatives

April 17 - Council Webinar Meeting:

Follow up

May 15 -

Initiatives

Refined

May 21-23 – Board

Strategic Retreat

August 5 –

Panel session at the Annual Meeting

November –

Finalized project,

approved by the Board

With many, many conference calls and work sessions!

Insights from Council

Pat PoliChair of Council, AAA

Fairfield University

The time is right - Insights from the Finance Committee

Steve MoehrleVP of Finance - Elect, AAA

University of Missouri – St. Louis

Thanks to strategic decisions and a great community…

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CIIA

JETA

JLTR

JIAR

API

JMAR

BRIA

JIS

JATA

AJPT

Horizons

Issues

TAR

Journals and pages published by the AAA

pagesjo

urn

als

When we faced challenges… we found opportunities• IPTF 1: Recognized the strategic role of “expanding knowledge”• IPTF 2: Recognized the strategic importance of our capabilities to

manage partners• The AAA successfully negotiated with EBSCO

• So we have a (likely) one-time opportunity to increase revenues– Continue operations– Protect a conservative “rainy day” fund– Make strategic investments to insure a strong future, even if publications

change radically

How should we think about the publications revenues?

Uses of Publications Revenues

Current Model"Rainy Day""Rainy Day"

• Revenues used to fund our current model– Approximately $2MM

historically built into the budget

– Budgets usually targeted to be net neutral

– Require these funds to continue with the current business model

Presented at the Finance Committee budget meeting,February, 2013

How to think about the additional revenues?

Uses of Publications Revenues

Current Model"Rainy Day"In-vest-ment

• We are in a time that is – Exciting

• New models• New types of IP• New audiences

– Unpredictable• Range of revenue models

• Thoughtful balancing of– Investments for the future– Preparation for a potential

“Rainy day”

??

Presented at the Finance Committee budget meeting,February, 2013

Recommendations for 2013-14• Support a task force to explore

organizational/structural alternatives– Focus on capabilities needed to be

• Member value producing• Agile• Efficient• Strategic• Sustainable

– Recognized this would likely require• Professional support• Face-to-face meetings

– Budgeted for the task force

The journey –Task force reports

Expanding Knowledge and Idea Development

Steve KaplanCouncil Representative, AAA

Arizona State University

Our Task Force Members• Christine Botoson, University of Utah, Co-Chair, • Steve Kaplan, Arizona State University, Co-Chair,• Bonnie Klamm, North Dakota State University, • Ranjani Krishnan, Michigan State University, • Elaine Mauldin, University of Missouri – Columbia, and • Steve Sutton, University of Central Florida

Our Timeline

Informing and Influencing Policy & Practice

Hughlene BurtonChair-elect of Council, AAA

University of North Carolina at Charlotte

MODEL: Span of Influence

National

Global

AAA

Public AccountingBig 4

Regional FirmsSmaller Firms

University AdministratorsDeans

ProvostsPresidents

RegulatorsFASBGASBIASB

NASBAState Societies

Corporate AccountingIMA

Controllers, CFO’s

Faculty Members

Practice Members

Department Memberships?

Other StakeholdersSoftware firms

Advisory Services

Overview of BIG Idea

• Develop a AAA Center for Education, Research and Thought Leadership– Sponsor joint conferences between AAA sections and practitioner and

policy making groups

BIG IDEA – Develop aAAA Center for Education, Research and Thought

Leadership

• Value Proposition– Currently there is no single place for someone from

practice or policy makers or for AAA members to find information relating to academic research or educational materials. This center would promote many of the ideas provided by the individual groups inside the AAA. By establishing a center to birth, nurture and house the ideas, the center can begin from a modest base and grow in whatever direction the challenge that lie ahead direct us.

BIG IDEA – AAA Center for Education, Research and Thought Leadership

• Some examples of things this Center could do– Joint Conferences with Practice and Policy

Makers– Repository of Online Educational Resources

(OER) –– Think Tank focused on practice / professional

challenges– BIG DATA and Qualitative Analysis

Promote Joint Conferences

• Value Proposition– Currently there are few opportunities for faculty

and practicing accountants to interact. As a result, there are concerns that our research isn’t relevant because faculty don’t know enough about current issues in practice; and practicing accountants don’t have access to (or visibility of) current research to inform their efforts.

Promote Joint Conferences

• Benefits– This would allow AAA members to partner with practice to do

research and hold discussions that would be a benefit to both policy and practice. This is also a way that we could partner with practice globally as well. Many of the practice and policy organizations are global/international. We could have different themes for these conferences. Also could partner with some of our AAA section journals to have publication outlets for some of the papers/research from these conferences that could be disseminated to a wider audience than can attend the conferences. This would also help with one of our other proposals to focus more academic research on relevant practical issues for policy and practice.

– Suggestion for first conference – BIG DATA

BIG DATA and Qualitative Analysis

• Value Proposition– This is one of the biggest problems facing the

accounting profession today. Society faces problems with accounting for health care, federal budgets, etc. Many of these problems relate to BIG DATA and how to analyze these large and cumbersome systems. This would be a great place for the AAA to get involved in some important societal questions and make an impact on practice and policy makers.

Repository of Online Educational Resources

• Value Proposition– These would be short topical video segments

available to AAA/Practice for use in class or by practitioners in their training. Created from practice and educational point of view. Could have global reach to many users. Free for AAA members, with some cost to others.

Promoting Effective LearningandAdvancing Faculty Careers

Julie Smith DavidChief Innovation Officer, AAA

Promoting Effective Learning

Reward and

celebrate

accomplish-

ments

Doctoral student

New faculty

Newly tenured

Senior scholar

Close to

retiring

Emeritus

Acknowledge a wide range of contributions

Help faculty learn about

future capabilities

Support

faculty

through

career

services

Realize faculty growth at all stages

#2 Educating the MembershipKnowledge is Power!

sample rec’s

• Accounting Faculty of the Future Panels – Annual meeting– Midyear and regional

meetings

• Centers for Research Databases and/or Centers for Faculty Development and Teaching Excellence

• Member/institutional empowerment

Where we are – and where we’re headed

Julie Smith DavidChief Innovation Officer, AAA

Reflections on SoV!

concentrated voice

policy recommendations

“Go To” organization

balanced member:staff roles

efficiency

impact

sustainability

continuity

integration

external engagement

value to members, segments, andthe accounting academy as a whole

two-way communications with external entities

increasing the size of the pie

decentralization overload

faculty development

leverage

sharing

leaders

reimagining our core

concerned with practice

research

teaching

How to flesh out the idea?• Develop the initiatives from the SoV

recommendations• Professional assistance• Engage our members

– sharpeningourvision.com – Section and region meetings– Webinars– Accounting Education News updates

• Establish two new task forces

Continuing through

A. Strategic Initiatives Task Force– Focus on strategic

initiatives • Especially “Big Ideas”• Potentially creating a

“Center” (or some other new structure for new initiatives)

– Chair: Christine Botosan (AAA president-elect)

– Staff Liaison: Julie Smith David

– Seek professional assistance

B. Strategic Organization Task Force – Recognized by the Finance

Committee and Board– Focus on changes to enable

transformation• Eliminate roadblocks• Work with segments

– Examples• Make all journals

available to members• Webinars

– Chair: Stacy Kovar (former VP Finance)

– Staff Liaison: Dave Frazier (Interim CFO)

SoV Task Force: Chaired by Karen Pincus (Past President)

Feedback?

Questions?

Mike DiamondPast President of the AAA

University of Southern California