Threshold Concepts: Changing the Way We Develop Talent

I had the opportunity to attend an academic workshop this week at St. Mary's University.  I'm beginning to stereotype the differences between those in the business world and those in academia, and I now believe it all boils down to- the business world tries to oversimplify theoretical concepts; whereas, academia tends to over-complicate them.    The tenured participants in the workshop were so articulate and spoke with such elegance, poise, and intelligence.  I needed extra coffee just to keep up with the conversation.  I say this is in the most respectful way and I'm glad to have the opportunity to spend time working in both worlds. The workshop was a refreshing change from the industry forums where everyone is selling a "solution."

But before I digress too much further, the topic of the workshop was Threshold Concepts (delivered by Shannon Murray of the University of Prince Edward Island who was excellent by the way).  I liked the workshop because it got me thinking, and maybe I can get you thinking as well.

Let me first try to explain what a Threshold Concept is.  A Threshold Concept is a fundamental concept within a disciple, which might be akin to a portal in that once the concept is understood, the learner's eyes are opened to a whole different way of thinking and viewing related subject matter.

That explanation might not be good enough, so let me try explaining it a second way so that we are clear.  We have all experienced an "Ah-ha" moment in lives, which unleashed a whole new level of understanding.  Some may refer to a moment such as this perhaps as a light switch being turned on in their mind on or when a light bulb goes off in their head.  Well, a Threshold Concept is simply the tipping point that triggered that to happen and once turned on, enabled you to thrive and prosper in your field of interest.

A group of the accounting faculty were in attendance and we were trying to identify what the Threshold Concepts were for accounting.  Some of the examples we came up with (in 15 minutes) were:

1. Credits must equal debits.  Easy to remember, brutally hard for students and aspiring professionals to implement.  Just ask a student in Advanced Accounting doing consolidation accounting.
2. Assets must equal liabilities plus equity.  Few people truly appreciate what the balance sheet tells you.  This statement is every bit as important as the income statement or cash flow statement. If you don't agree, you haven't got it yet.
3. Financial statements convey decision relevant information.  Who knew that all these dozens of pages of numbers and disclosures actually help diverse users make assessments and ultimately decisions.
4. Different users can look at the same transaction differently, for example: the accountant looks at the transaction in the context of GAAP, the taxman looks at the transaction from the perspective of the tax code, the analyst generally doesn't care unless it's a cash transaction. One transaction, many different ways to look at it- accounting theory in a nutshell.

What makes these sorts of concepts more than just required learning is that once you understand a Threshold Concept, you are able to discover any new knowledge, acquire understanding, and execute application on your own accord.  So for instance, if you understand that debits must equal credits, you know that it's not good enough to just be able to come up with one side of the entry, you need to consider both sides equally and you never again lose sight of the double entry nature of bookkeeping.

I'll pause for a second to let that idea think in.

What this idea implies is that if we- as educators, leaders, mentors, coaches, managers, parents, etc.- can shed light on the relevant Threshold Concepts for our "learners," we can make a much bigger impact than we might otherwise.  Many of us try to throw every little thing we know about a subject at our "students" and hope that as much as possible is sinking in. We know very well it isn't.

I'll pause again (mainly for dramatic effect).

So what do you do with this idea?  Perhaps this could be a Threshold moment for you as well.

Well first, you need to identify what the relevant Threshold Concepts are for your subject matter.  If it's something like golf, maybe it's keep your head still.  If it's risk management, perhaps it's the COSO cube. If it's physics, perhaps it's E=MC^2.  I'm just throwing out random examples, I'm sure my business background is over simplifying these disciplines, but hopefully you get the idea.

Secondly, you need to tailor your development approach to encourage deep understanding of the Threshold Concept.  During the workshop, the faculty in the room had dozens of excellent ideas on ways to reinforce these concepts.  I use a lot of videos, war stories, and current topics to show my students how what they are learning gets applied in the real world, and this approach seems to resonate with my audience.

A even better example came from a geology professor at the workshop.  He told us about how he takes his new students each semester out onto the football field to explain the concept of "deep time".  One student would stand on the goal line and he would represent prehistoric time, another student stood a few first downs up the field representing the dinosaur age, and so on and so forth all the way up the other end-zone representing modern history, where many students end up standing. When they were done, students were left with a very visual and memorable understanding of the concept of deep time, which enabled them to look at the subject matter of geology from an entirely different point of view.

I really like Shannon's quote, "if a student can Google the answer, you don't need to teach it."  I think this broadly applies to not only academic learning, but professional development, work place training, coaching, parenting, and so many other ways in which we learn.  Anything you want to know is online somewhere, but unless you have base comprehension, then acquiring incremental knowledge is challenging, if not futile.

Because I'm mainly interested in developing finance excellence, I'd be interested in knowing what you think the Threshold Concepts are for becoming a CFO.  Are the finance Threshold Concepts you now have any different than what you already learned a way back in university?  Were there any really excellent activities that prepared you for taking on that responsibility or did you just evolve to the CFO position?