In recent years, I have noticed a growing interest in soft skills for accountants and those in the finance industry. As well as clients and hiring managers looking at experience, qualifications and professional knowledge, they are paying close attention to soft skills. Soft skills play a crucial role in the success of a team, and being able to think critically and draw insightful conclusions from data is highly valued. With every organisation now racing to become data-driven, finance professionals need to level up their analytical thinking like never before.
In this blog, I’ve taken a look at why analytical thinking is such an important soft skill to have, and how to develop the top five analytical skills in yourself or your team.
What is analytical thinking?
Analytical thinking is the ability to observe, research and draw insights from data and other information. It allows you to learn, problem-solve, and generate ideas.
There are seven steps involved in analytical thinking:
1. Identifying the topic or problem
2. Breaking it down
3. Gathering information
4. Analysing cause and effect relationships
5. Learning, developing solutions, or coming up with new ideas
6. Testing solutions or ideas
7. Assessing what worked or what you’ve learned
Analytical thinking usually involves trial and error–so while finance professionals may be stereotyped as risk-averse, you actually need the courage to risk failure. Great analytical thinkers can analyse a situation quickly and often work well with others to achieve goals.
Why does analytical thinking matter?
· Specialised financial roles like accountancy demand analytical skills.
· You can use them in almost any role or situation.
· They help you make better, more data-driven decisions.
· They make you better at your job–you’ll help your organisation achieve its goals and put yourself in line for promotion.
The top five analytical skills
1. Critical thinking
Critical thinking means taking the time to analyse and fully understand problems and facts, predict outcomes, and make logical decisions based on this information. Critical thinking for accountants includes gathering information from colleagues, asking questions, evaluating decisions based on facts, and spotting biases in your own reasoning. It enables you to analyse problems logically and come up with more objective solutions.
Finding and organising the information you need is the first step to solving any problem. Research can be as simple as talking to a more senior colleague, or it might involve an extensive online search, discerning reliable sources. Research also means discerning what information is valuable or necessary–if you’ve ever fallen down a google rabbit hole, you’ve experienced what happens when you miss that step.
3. Data analysis
This in-demand skill is about evaluating and interpreting large volumes of data, determining trends, and spotting relevant patterns. Accountants have been doing data analysis using spreadsheets and charts for decades, but now there’s a proliferation of new software in the mix, as well as a new demand for finance professionals to organise data into layperson-friendly forms through visualisations and storytelling. Data analysis often drives the best analytical thinking.
4. Creative thinking
Yes–accountancy is a creative profession. Just like an artist, you use creative thinking to see reality in a new light and generate new ideas and transformative insights. Creativity enables you to take a different approach to problems and find surprising solutions. Brainstorming is one form of creative thinking; lateral thinking–using an indirect approach rather than step-by-step logic–is another.
From identifying the cause of a problem to coming up with a solution, problem-solving demands all the analytical skills we’ve discussed so far–critical thinking, research, data analysis, and creative thinking, as well as the ability to collaborate with others or to choose the best solution on your own.
How to develop analytical thinking
Whether you’re looking to boost your own career or improve the performance of your team, these tips will help:
1. Identify current skills: Which analytical skills do you or your team already excel at? Which ones have room for improvement?
2. Use them: Get yourself or your team involved in projects that require analytical skills, like developing a new strategy or solving an organisation-wide problem.
3. Go back to school: Enroll yourself or your people in free or paid classes that support the development of analytical skills, such as online courses in data analytics or in softer skills like problem-solving.
4. Use books: Read, or encourage your team to read, professional development books that offer exercises and prompts to develop analytical thinking.
5. Leverage your professional network: Seek advice from people in your field with more knowledge and experience on a specific issue. Set up mentoring relationships for junior members of your team.
6. Research industry best practices: Knowing your stuff is a vital part of problem-solving, so make sure you or your team study industry-specific books, articles, journals, blogs, videos, and podcasts.
Speaking of which, keep checking this blog for more insights on the most in-demand soft skills for accountants!