As Jim Rohn once said, “We generally change ourselves for one of two reasons: inspiration or desperation.”
As I work with CPA firms around the country, I am finding that the BIG topic of change has been ignored, delayed or swept under the rug. It seems many partner groups are thinking, “If we procrastinate about these ideas and initiatives, maybe we won’t have to change after all.” Not true. In fact, it is a much bigger topic than working on “the firm” and making it better.
The bigger issue is, if you want your firm to change, you have to change yourself. If you want your firm to become better – a top-notch, well-known, progressive firm, then you, as an individual, have to change. You have to become better, a top-notch, well-known, progressive professional. Keeping up-to-date isn’t good enough, you must commit to personal, stretch goals.
If you are the managing partner, you should hold all of your partners accountable for reading inspirational self-development books and working harder on their own self-development goals.
Among CPA firm partners, we often belabor the topic of partner compensation. What I would like partners to ask themselves is, “What am I becoming?” and not, “What am I getting?”
To prepare your firm for the future, you need to focus on people, technology and culture. Better people, technology and culture will not ever happen if firm leaders are not preparing themselves for the future.
If you wait too long, it will no longer be an issue of finding the inspiration to change, it will become an issue of desperation because your competition and the business world have changed and moved on without you.
Many young accountants working in public accounting have a strong desire to work their way up the ladder and become a partner someday.
There are a few problems with this scenario. First of all, “someday” is not nearly descriptive enough for young accountants just beginning their career.
Most non-partner accountants have no clue what they have to do to become a partner nor what they must do once they become a partner. Even worse, many current partners in accounting firm really don’t have a clear understanding of what is expected of them, even if they have been a partner for years.
You have heard it and read it many times, people entering the profession of public accounting want to know what their career path looks like, beginning on day one. They want to know what the next level, and all the levels after that, look like and how long does it take at each level.
I have observed that many firms have realized they need to document the career path process at their firm for their new hires. But, what about the current partner group?
I remember, several years ago, listening to Sam Allred of Upstream Academy describe a few things that CPA firm partners need to do:
Give up The Right to Remain Silent – When you become a partner, you must speak up at THE meeting (the partner meeting). It is not acceptable to nod your head and then go door-to-door after the meeting talking to the other partners. Not speaking up, in the proper forum, creates artificial harmony.
Keep an Open Mind – I relate this one to the 7 Habits, “seek first to understand and then be understood.”
You Give Up the Right to Make All Decisions – Sole-practitioners have this right. When you make the decision to be part of A FIRM, you give up that right.
Learn to Make the Proper Commitment – Saying/thinking, “I will stay out of the way” is not making commitment. It’s a case of “grudging compliance” vs. “spirited commitment.”
Willingness to Get Outside Your Comfort Zone – You cannot stand still. Becoming partner doesn’t mean you “made it” and now you can coast.
You Become a Leader for Change, Not an Anchor – You are helping row the boat, not sitting in the back and throwing out anchors when something doesn’t go your way.
Most CPA’s are pretty effective and accomplished in the strategic planning process. We invest the time and money in a retreat, we focus on the future, get lots of ideas on the table, agree on objectives and goals for the next year, commit to an action plan and sincerely want to move the firm forward. But what happens to all of the good intentions after we leave the retreat? How many of us really make significant changes; really accomplish the objectives and goals? Unfortunately, not too many.
While we may be effective in the planning process, most of us struggle (or fail altogether) with the implementation of the strategic plan. We just don’t seem to be able to get it done and next year’s action plan may wind up looking a lot like this year. The entire strategic planning process literally lives or dies on how well we implement.
We all know the drill. We go back to the office, the to-do list is still there, the emails are piled up, the phone rings and we’re back to doing what we do – serving clients. That’s what we enjoy and we tell ourselves that we’ll get around to the “retreat stuff” when things slow down a little bit. Subconsciously, we’re also thinking that these strategic initiatives involve change and we all know that change is uncomfortable.
There are several common realities and paradigms in firms, including those in the preceding paragraph, that stand in the way of successfully implementing our strategy. They exist in most firms and our implementation plan should be designed to overcome them. Although these are not all-inclusive, if you address them you will significantly improve your odds for success. They include:
- “There are just too many things that we are working on to get it all done.” A common mistake is to come out of a retreat with a long laundry list of action items. We are doomed to fail if there are more than three or four strategic objectives that we are committing to. Remember the key word is “strategic” and that means they are significant to the firm.
- We all know that each of the action items need to be owned by someone and that there needs to be a completion date. Make sure that the champion is an individual and not a group or committee or more than one person. It is much more difficult if not impossible to hold a group accountable. And, make sure that the due dates are reasonable (not overly optimistic).
- Does the champion who owns an action item or strategy have the time to accomplish it, especially if it is significant? Or, do we just expect that person to get it done on top of their existing client and firm responsibilities? If this is a strategic priority, we must enable them to be successful and that means creating the time to accomplish it.
- Don’t be a lone ranger. The champion needs to get other people involved. If it is a sizeable initiative and important to the firm, build a task force to accomplish it. Make sure you bring some of your young people into the process. The millennials want to be “a part of it” in your firm.
- Is the action item a significant part of the individual partner’s goals for the year? Further, make sure that the individual goals of the entire partner group are aligned with the firm’s goals and strategies for the year. If you don’t set partner goals, that process should be an action item out of your next retreat!
- Is it nice if we accomplish the action items or is it mission critical? Does it have any influence on a partner’s compensation whether they achieve it or not? Many firms set the expectation and may even include it in a partner’s goals but the compensation system is not aligned. Accountability should include compensation.
- Keep the strategic initiatives from the retreat alive and “top of mind”. Make sure that a status report is a lead agenda topic for every partner meeting. Share the strategic initiatives with the team right after the retreat. You’ll be more likely to get something done if others are watching.
- Someone should own the overall implementation process and that is your managing partner. He or she should be the person driving the process and holding the rest of the partner group accountable to achieving the action plan. That doesn’t mean that the managing partner and/or firm administrator should wind up with the all of the action items on their plates.
- If you utilize an outside facilitator for your retreat, ask that they build into the process some follow up with the firm after the retreat. It can be as little as a couple of phone calls to check in and see how you are doing. We are all better if there is accountability. Your managing partner can provide that to the partner group but the facilitator can fill a similar role for your managing partner.
Make sure that your investment in strategic planning pays dividends for the firm. Your post retreat implementation plan may be the missing piece and the key to success. Don’t leave it to chance and don’t leave the retreat without it.
Inside every accounting firm there is a naysayer. It’s the person who denies, refuses, opposes, or is skeptical or cynical about almost everything. It is the person who says, “we can’t do that.” Maybe your firm has more than one of these types. They always seem to see the glass half empty.
In progressive, well-managed firms, firms with strong, rich cultures, you will find people having conversations about the firm that are positive. Conversations that move the firm forward.
In these firms with positive cultures, when someone whines and says, “Nothing good is happening here,” someone else will often say, “Oh, what about the additional holiday they added last year?” or “Didn’t you just get assigned to one of the firm’s top five clients?” Negativity is diplomatically discouraged. And, if something truly negative is happening, management deals with it immediately.
Sometimes there are negative conversations and even less-than-tasteful jokes about some of the firm’s clients. Of course, you also discourage these kinds of comments. However, be aware and be realistic. Do some of your clients need to go elsewhere?
In firms that get it, you will find people who are keeping the vision alive. The vision lives in the conversations inside the firm. These positive conversations about the firm and the firm’s clients will help the firm grow and prosper.
Promote your positive culture by hosting a lunch & learn and ask your team members to identify positive things about your firm. Discuss them and then enlist your team in talking more about the positives on a daily basis.
Also, do the same exercise focusing on negatives at another lunch and learn session. Once the negatives are aired, select one or two and promise the team that management will address them.
One of the most enlightening activities I experience as I facilitate a partner retreat, assist a firm with strategic planning or with merger conversations is dinner the night before the meeting.
Almost every time, the partner group is relaxed and looking forward to the task ahead. They really seem to enjoy having dinner with each other, rehashing old stories about their early years, about the time they made a big mistake, the time three of them got lost driving to a client location, and so on.
They laugh with each other and tease each other. They tell me so many good things about their firm and their careers. Often, during this casual, conversational dinner they bring some great ideas to the surface. What if we tried this? What if we did that?
Some of us consultants lovingly call this event “the 3-hour dinner” because it goes on for a really long time (and we have been traveling and are tired). That being said, I would NOT change it – it is quality time for the group and for the facilitator.
I highly recommend that partner groups schedule group dinners every quarter or at least twice a year. Just the partners – no spouses, no managers – maybe include partners-in-training. Don’t have an agenda – just relax, enjoy dinner (maybe a little wine) and some great conversations might occur. This would be even more important if you have more than one office location.
I recently read an article via Accounting Today titled, “Make your firm great again: Raise the bar for new partner admissions” by Dom Esposito.
I agree with Esposito on two points: Growing a successful firm begins with the quality of the partner group. And, too many firms choose partners because of needs as opposed to qualifications.
Back in the late 1990s and the early 2000s, accounting firms made many partners because of the then, war for talent. The partners were afraid that some great technical managers might leave the firm for greener pastures, so they brought them into the partnership.
During the recession that hit in 2008, many firms recognized the weak links in the partner and manager ranks and downsized accordingly. However, I would guess that the majority of local accounting firms have never actually fired a partner.
Of course, being technically competent is the foundation of being a CPA and for becoming a partner in a firm. But, there is so much more needed if you really want your firm to become one of the leading firms in your market.
During the partner selection process, ask yourself:
- Are they technically competent?
- Can they continually bring in a stream of new business to the firm?
We are now in a renewed and serious quest for top talent. Retention is a big issue right now at many firms. Be careful as you consider making new partners.
At my firm, we used a two-year partner-in-training program. It was well-documented and gave the current partners and the partner candidates time to assess each other, as partners.
Be sure your firm has a thorough process for admitting new partners. Most firms continue to be too top heavy.
It’s that time of year again. You and your team members are beginning to dread the time when you have to deal with certain clients. In the CPA profession, we call them D-level clients.
Maybe some of the following descriptions might apply to those clients you dread:
- Fred, the owner of XYZ Excavating, is always last minute when it comes to providing you information to complete his tax return.
- Betty, the owner of ABC Resort On The Lake, is rude, always complaining, requesting you to do some task but doesn’t want to pay for it. She thinks everything she asks is part of the tax preparation service you provide.
- Barney is the pompous, solo-attorney (and old friend of one of your partners) who walks on the edge of actually harassing your female staff members.
- Ted is the owner of three fast food franchise stores and has to be continually hounded to pay your invoices.
These are “D” level clients and need to be outplaced. In our busy world, time is so valuable and these clients waste your time. Take steps to finally get rid of clients that no longer fit your ideal client profile.
For years, I have heard partner groups discuss these types of clients. Some even designed a process to out-place them. Then, these same partners never followed through.
Times are changing and I am hearing more and more stories from managing partners that their firm is actually eliminating D-level clients from their client list. It makes their staff very happy.
Develop criteria for identifying D-level clients and then carry out the task. Of course, it should be done in a professional manner but don’t procrastinate once the decision is made.
Your winter interns will be arriving soon. I hope that you have attracted some bright, eager beginners. Many of the most successful firms now hire from their pool of interns. Monitor their progress and be sure to make offers to the best ones immediately after the internship ends.
In the accounting profession, CPA firms have been trying to implement unique and creative ways to attract talent for many years. The game is becoming more and more competitive.
Many unique tactics are being used as companies, big and small, try to differentiate themselves in the eyes of talented business students.
CPA firms need to keep pace and develop ways to up their game. Here are some examples via Fortune – The crazy things companies are doing to recruit business school students.
–At recruiting events, General Mills offers students goggles to see a virtual reality tour of the company’s Minnesota campus. The recruits can see everything from the company gym to the executive offices.
–Goldman Sachs is using Snapchat to recruit college students.
–PwC is offering to pay back student loans for its junior employees. (Your firm could do this. The amount would be up to you.)
–General Motors recently parked cars on the campus of Michigan’s Ross School of Business and invited students to take a test drive. Of course, they brought Camaros and Corvettes.
–On Indiana University’s Kelley School of Business campus PwC furnished an ice cream truck. On the University of Michigan campus, they provided a coffee truck (free coffee anytime for all students).
–Land O’ Lakes brought their CEO to campus. It helps students see that they have access to leaders. (Take your partners to campus, not just younger alumni.)
Advice from career services directors:
This generation of students is seeking more connection with their potential employers and the missions of those companies. Today’s students want to be connected with the company’s mission and vision. Have you clearly defined the vision of your accounting firm? I find many firms have not. The partners are not united on where they are going.
The days of attracting top students by passing out cheap stuff – like post-it notes, water bottles, pens, backpacks, lip balm, etc. are over.
Whether you have a very large firm or a very small firm, how you spend your CPE (Continuing Professional Education) budget is something that takes thought and planning. It is a very important activity inside your firm.
Of course, you need to focus on developing the technical skills of your employees, especially the beginners. CPA firms focus on the various “level” training courses for their one, two and three-year team members. Staff level training is offered by state societies and other vendors and is a great benefit to those beginning their careers in public accounting.
After that initial investment, further expenditures for the benefit of staff seems to decline. Dollars are allocated on keeping up with audit and tax issues but not so much for supervisory, management and leadership training. Firms tend to procrastinate on these very important skills that could mean success for the firm in the future.
Many firms hand out titles without the education and training to back it up. In many cases, CPA firm managers have no clue how to manage. They were given the title because of technical expertise and longevity. Maybe a supervisor is encouraged to attend a one-day “supervisory” training course like the ones offered by vendors across the country, not specifically for the CPA profession. Often, it doesn’t go any further than that.
If you send some of your people to the well-known CPA leadership training courses, I urge you to seriously evaluate the effectiveness of the course. After your people complete a leadership course, monitor their progress. Initially, they are excited about the whole experience but does it last? Do they demonstrate the leadership skills they learned or did they attend leadership training just to promote their personal career?
As you prepare your CPE plan for the coming year, balance the technical with the career-enhancing skills and then monitor the performance of the individuals as they build on what they have learned.
Leadership in a CPA firm means being able to get diverse individuals to work together as a team to achieve a common goal. It means that your CPA team will out-perform the competition. To get there you must be generous with your CPE budget. It’s an investment in the future of your firm.
If you haven’t had a partner planning retreat this year, you are not alone. Many firms procrastinate when it comes to planning this annual session.
Often when I am talking with a managing partner about their upcoming retreat, they tell me, “We used to have them every year but we haven’t had a planning retreat for several years now.” It seems everyone is too busy or other firm initiatives or challenges have taken precedence. If you allow this to happen, partner communication will suffer greatly along with partner unity. It also leads to a culture of constantly putting out fires.
Even though it is late in the year, I urge you to schedule and conduct a partner planning retreat this year. There is still time to identify important issues and begin on an action plan even though November is quickly approaching.
More importantly, I urge you to plan ahead for next year – 2017. Here are some ideas, tips, and considerations for a successful retreat:
Identify dates in late April, May or June for your 2017 retreat. Make sure that every partner makes it a high priority on their calendar now. A retreat that happens earlier in the year allows time for the initiatives to be researched, outlined and completed before another year rolls around.
Contact a qualified CPA firm management consultant to facilitate the retreat and get the dates booked on their calendar (their calendars fill up fast after April 15).
Before the retreat contemplate, discuss and define the purpose of the retreat. If you get together every year just because you have always done it without a specific purpose in mind, time (and money) will be wasted.
Plan the agenda. It will be your roadmap for the retreat and prohibit people from getting “lost” along the way. The facilitator will usually survey your group or do telephone interviews to gain insight that will help you design the agenda.
Adopt a partner retreat commitment statement. This is a short list of rules and regulations governing retreat behavior. Some examples might be that all participants will set aside the uninterrupted time (mobile device activity only happens at breaks), participants will stay on topic, participants will not interrupt when someone else is speaking, etc.
Document the action steps. Focus on fewer initiatives and shorter timeframes. Change is happening so quickly in our profession. Accomplishing two or three things is more important than focusing on six or seven and accomplishing none.
Assign a champion for each initiative. Someone has to be responsible and take ownership. If everyone is responsible, nothing will happen.
The most important activity is not the actual retreat; it is the implementation of the agreed-upon initiatives.