Elon Musk and Steve Jobs, via an article on Inc., both have an important message for leaders and it certainly applies to all of us working, as leaders, in the CPA profession.
“I think it’s very important to have a feedback loop, where you’re constantly thinking about what you’ve done and how you could be doing it better. I think that’s the single best piece of advice — constantly think about how you could be doing things better and questioning yourself.”
Musk believes good leaders seek feedback even if it is not what they want to hear. Negative and constructive feedback will stretch you to learn new things and consider better options.
“It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”
Some CPA partners seem to actually fear feedback from their team. Some have even shared that they really don’t care what the team thinks of them. Continually asking your team and your clients for feedback should be a habit. Just ask, “How am I doing? Is there something you need from me that you are not getting?”
As you manage your accounting practice, sometimes your attention gets diverted to things that might not be as important as others.
Of course, you worry about hiring and retention, partner performance, marketing/sales, facilities and the general reputation of the firm. Lots of time and energy are expended on short-term activities. Maybe it is time to escape the day-to-day and think about what might be good for the firm long-term. When have you really contemplated profitability and the long-term future of your firm?
Profitability is not just about partner salaries. If you are profitable, it enables you to fund future growth of the firm, attract and retain the most talented professionals, explore new services, offer the best technology to your staff and clients, and so on.
If you are not as profitable as you would like, you could simply give up and sell or merge your firm into another firm. Or, you could get larger by growing organically or by being on the acquisition side of a merger.
Many firms are merging as a way to achieve more rapid growth. It helps increase market share and, sometimes, eliminates competition. It also provides more resources to be able to produce products and services to meet the demands of a wider client base.
Keep in mind, a merger is a professional marriage and you need to know your future partner. Take time to look at a merger from all sides and be sure that both sides understand how a combined firm will operate. Involve an experienced outside facilitator. Give me a call if you want to simply discuss your specific situation.
The managing partner is faced with many challenges. It is a juggling act, trying to keep a group of partners happy and continually push them out of their comfort zone.
You are now facing major changes in the profession and it is your job to pull the wagon of change up a steep hill. You are the leader and it is your responsibility to lead. Sure, you want to be loved and respected but forcing change and being loved usually does not go hand-in-hand inside a growing firm.
Certainly, you need to listen to your partners and discuss major changes. What I often observe is that the listening to partners and discussing can go on for months and even years!
As a leader, you need to take action and force change. It might not make you the most popular partner but you were given the role of leader, so lead.
Once you have all the input from the partners and the staff, make the decision, a decision that is in the best long-term interest of the firm. Always make your decisions based on “the good of the firm.” Never let individual interests over-shadow what is best for the long-term prosperity of the firm, as a whole.
Some new ideas result in failure. Take the blame and move on to other challenges. If the new idea is a great success, give credit to all those who helped make it possible.
As managing partner, daily you are walking a tightrope. Work on your balance!
The traditional way a CPA firm finds and uses a management consultant is to ask around and find out the names of consultants that other firms are using or have used. Or, you might identify someone you have heard speak at a management conference then hire them to facilitate your partner retreat.
The firm has budgeted a certain amount for the retreat facilitation and after the retreat, the consultant moves on to other engagements and the firm often does not want to spend the money to have them do follow-up work or assist with implementation and accountability
Find a consultant that you think fits your firm, based on size, service lines, people needs, partner problems, etc. You find these people by hearing them speak but also by assessing them in relation to their writings, use of social media, and ability to keep pace with current trends in business.
Initially, they will facilitate your retreat or conduct a planning day or two with your partners or management leaders. Then they attend your monthly partner meetings or executive committee meetings (60 to 90 minutes per month via Skype or another virtual resource) to continually contribute and to hold you accountable. The firm budgets an amount for the 2-day planning session and another amount for the 12-month on-going involvement.
Result: You have a much better shot at actually getting things done, at moving your firm ahead, at recruiting and retaining top talent and developing a culture within your firm of continual change and improvement. That’s the culture the new workforce wants to experience.
Who does the hiring at your firm? In CPA firms, at least in those under fifty people, the recruiting and hiring activities are usually assigned to one particular partner.
Other partners and staff might be involved in various activities and interviews but usually one partner takes the lead. Sometimes, it is an experienced manager who leads these efforts.
I have observed that in many firms, this person has been playing a key role in recruiting for many years. They personally visit the college campus and conduct the formal interviews during the fall recruiting season. Sometimes they draft a manager or senior, who is an alumnus of that institution to accompany them and share the interviewing duties.
This leader also attends campus job fairs and “meet the firms” events. They may also be visible at accounting fraternity events and meetings. They work closely with the firm administrator in organizing many activities that are part of the recruiting efforts. Finally, they probably make the key decision in who receives an offer and who does not.
I want to suggest that you consider replacing this individual with another key person at the firm. I also think it is a good practice to only allow this recruiting leader to be in the role for no more than five years.
Why? Because people tend to hire people just like them. Of course, they do this without even realizing it. Studies have shown us that employers seek out candidates who are not only competent but also culturally similar to themselves.
You need a variety of skill-sets and personalities to build a successful firm. The most successful firms have programs in place to promote diversity within their firm. So, when it comes to a leader for your recruiting efforts – mix it up every so often.
Have you wondered how long the partnership, ownership model for public accounting firms will continue? I have. If you are at all in tune with the changing workforce, this topic must have crossed your mind.
Baby Boomer partners came of age in a different environment. If they worked long and hard they had a good chance of becoming a partner. Most did not even have to prove themselves as significant rainmakers. It was mostly about technical expertise and work ethic. You just had to prove that you were willing to work 60, 70 or more hours per week and that your work was accurate.
As business development became more and more important, many firms found that they had too many non-business getting partners and the sales aspect of the firm rested on the shoulders of a few, sometimes just one partner.
The current public accounting workforce desires a more balanced lifestyle. They question the process of becoming a partner and wonder if it is all too political. Is it all about who you know and not what you know?
All of this came to mind because of a very interesting post by Caleb Newquist on Going Concern titled, To Partner or Not to Partner, That is the Senior Manager’s Question.
Newquist explores the role of the CPA Senior Manager. Some senior managers share the fact they wonder if they really want to be a partner in a public accounting firm. They also see through the ploy of the non-equity partner, or Director, role as a mere parking lot for people who will never be a partner.
Read the article and see if any of it applies to your own firm.
As the firm leader, you have many very important responsibilities. Sometimes you do what is easiest and sometimes you do what you like the best.
For example, you really need to focus on guiding the firm to a better workflow process but, a client calls with an interesting project and you take it on yourself rather than delegating. Putting client work first is an easy-out for many partners and especially managing partners. It’s something you know, understand and enjoy.
Almost daily, you feel pulled in too many directions and it’s not just your office life, it includes your home life, too. You are faced with:
- Exercising for personal health
- Home responsibilities, like yard work
- Hobbies, because you enjoy them (like golf)
- Taking on the duties of assistant coach for your son’s soccer team
- Giving attention to those scores of emails in your inbox
- Returning phone calls from clients
- Filling out that performance review questionnaire on a staff person
- Scheduling mentoring meetings
- Conducting goal sessions with the other partners
- Meeting with the firm administrator to handle operational questions
- Meeting with the technology director about security issues
- Review work on client engagements
- Checking firm production for the previous day (or week)
- This list could go on and on……
First of all, you are not alone. Most of your partners and staff feel the same way!
Just remember, you don’t have to do everything yourself. Help is there, if you ask. Delegate as much as possible to your firm administrator (practice manager). Allow the staff to take on more difficult client assignments. It will help them stretch and grow.
There is an old saying, doing ten things half way is not the same as doing two things as best as you can. Make thoughtful choices and never forget, it is okay to simply say, “No”.
I have occasionally heard the phrase, “I Led Three Lives.” I never realized where it originated so I Googled it. It was a TV series that aired during the 1950s about a spy.
The managing partner of a CPA firm lives three lives. Two lives in their professional life and, of course, their personal life.
Their two professional lives are comprised of the outside-the-firm life and the inside-the-firm life.
The managing partner is the face and voice of the firm. The MP represents the firm in the business community and in the civic/charitable community. The MP speaks on behalf of the firm in media relations and as part of the Chamber of Commerce or other business related organizations. The MP often serves on several outside Boards of Directors and may even be active, on behalf of the firm, on social media.
Of course, all partners in the firm should also be leading two lives at the firm – inside and outside, just like the MP/CEO, but maybe not quite as high-profile.
I often observe that while some client service partners fill a prominent role inside the firm, they rarely venture outside to be visible in the business community or on social media. Yes, they do interact with clients but rarely generate new business themselves.
It is a partner’s responsibility to generate new business. If this is something you are not comfortable with, make it a goal for 2018 to be more involved in the business community. Take it a step at a time. Maybe you can begin by accompanying a rainmaker to an event or join with your other partners and their spouses to support a local charitable event or banquet.
Don’t forget that third life – your personal life with friends and family. Too many partners work too many hours. I have often heard a partner confess, “Work is my life.” When partners show workaholic tendencies it discourages younger accountants from ever wanting to be a partner in your firm and often they leave to join a competitor.
CPA firms are committed to training. You (firm owners) have invested significant dollars in the training of your new hires, especially new college graduates. You send them to different levels of tax and audit training during their first few years in public accounting. They become very skilled at working through a client engagement.
Something that is often ignored in those first few years is just as important and, in later years, even more important – the skills that comprise emotional intelligence.
Daniel Goleman, an American psychologist, helped popularize emotional intelligence (EQ). It is comprised of five core skills:
- Social Skills
Emotional intelligence is simply the ability to manage your own emotions and those of the people you manage. Many experienced CPAs have missed out on this type of training.
If you partners are not bringing in new business nor very good at developing younger accountants, it’s time for some investment in EQ training.
A leader who possesses a high level of EQ has complete trust of her staff, listens to her team, is easy to talk to, and always makes careful, informed decisions.
Throughout my managing partner career, I read a lot of books and articles by David Maister. I also heard him speak many times over the years. His comments, almost always, hit home with me.
Until his retirement in 2009, David Maister was widely acknowledged as one of the world’s leading authorities on the management of professional service firms (such as law, accounting, and consulting firms, and companies providing engineering, advertising and executive search services).
For three decades, he advised the top firms in these professions, around the world, covering all strategic and managerial issues.
He often talked about a topic that has stayed with me. I have also been involved in this issue many times during my consulting and retreat facilitation activities:
Why do accountants in public accounting continue to work with clients they dislike…. even dread?
Maister learned from a survey of professionals around the world, that they enjoy their work 20 to 30 percent of the time, and can tolerate the rest. The report also found that professionals like the clients they work for and find the clients’ sector interesting about 30 to 40 percent of the time. Again, the rest is acceptable.
Maister’s (and my) question for you is: If you don’t love what you do or those you do it for, why would you want to go out and get more of it?
Some CPAs will honestly tell you that they continue to put up with clients they do not like because those clients are willing to pay. So, they are doing it for the money.
If you didn’t have to spend so much time on these unlikeable clients and doing work you hate, you would have much more time to work with likeable clients doing work that is challenging and interesting. It would be fun!
Isn’t it time, as a partner group, to commit to reviewing the firm’s complete client list and out-place about 20% of your clients? Then, do it again next year?