During extensive research for the HBR Leadership Handbook, they discovered that the best leaders with the most outsize impact almost always deploy these six classic, fundamental practices:
- uniting people around an exciting, aspirational vision;
- building a strategy for achieving the vision by making choices about what to do and what not to do;
- attracting and developing the best possible talent to implement the strategy;
- relentlessly focusing on results in the context of the strategy;
- creating ongoing innovation that will help reinvent the vision and strategy; and
- “leading yourself”: knowing and growing yourself so that you can most effectively lead others and carry out these practices.
While the leadership development industry is thriving, they found, in its fundamentals, leadership has not changed over the years. It is still about mobilizing people in an organization around common goals to achieve impact, at scale.
Read the article: The Fundamentals of Leadership Still Haven’t Changed.
“Steady as she goes” is something you might have heard growing up. We don’t hear the term used much any longer. Steady as she goes is an order for a helmsman to keep a ship’s current course.
I think it also applies to CPA firm leadership. During my many years inside a CPA firm and consulting with many other CPA firms, I have seen many interesting styles of leadership from managing partners.
Some managing partners are dictators, benevolent dictators, collaborators, delegators, know-it-alls, consensus builders, and even radicals. Some are very strong and some are wimps.
When it is time to appoint a new managing partner, beware of inconsistency and go with steady and dependable. I remember one firm that had a choice of two partners to take the role of managing partner as the current managing partner moved into retirement.
One was a great rainmaker, very involved in the community and great at client service. He was always quick to take action; however, he could be described as hot and cold. You never knew which personality you would be dealing with on any given day.
The other candidate had similar positive characteristics but he was steady, consistent and dependable. He was always easy to talk to and sought out feedback from everyone in the firm. He was confident but careful. He demonstrated the same demeanor day in and day out.
I guess you know which one was selected to be the firm’s next managing partner.
I don’t know how to put this in a softer way but, way too many CPA partners think they know it all.
I don’t mean to be harsh or disrespectful. Experienced CPA partners do know a lot. They have spent years developing their technical skills. Many have become true experts in a specific niche or discipline. Often, they discount their vast knowledge by not charging fees that are appropriate for their exceptional expertise.
However, when you mention Emotional Intelligence (EQ), they are in the dark. In working with many partner groups over the years, I have found that usually, but not always, the managing partner demonstrates more traits of EQ than the other partners. That is probably why the managing partner was elected managing partner.
Emotional Intelligence is a term created by two researchers – Peter Salavoy and John Mayer – and popularized by Daniel Goleman in his 1996 book of the same name.
Some define it as the ability to:
- Recognize, understand and manage our own emotions
- Recognize, understand and influence the emotions of others
This means being aware that emotions can drive our behavior and impact people (positively and negatively), and learning how to manage those emotions – both our own and others – especially when we are under pressure.
According to TalentSmart, 90% of top performers have high EQ. EQ is responsible for 58% of your job performance and people with high EQ make $29,000 more annually than their low EQ counterparts. Maybe it is time to provide some EQ education and training to all your staff.
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?”
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!
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?
If you are struggling with staff retention and other human resources issues, maybe it is time to be more proactive and listen to your own people. Many successful and progressive CPA firm have established a Staff Advisory Board or a Team Advisory Council.
The advisory board is formed to assist the CEO or Managing Partner in leading the firm to future success. It can be defined as a group of employees who meet on a consistent basis to provide support and constructive feedback to firm leadership.
A common structure is to have team members serve for a specified term. In some firms, they are elected by the entire staff and in other firms they are appointed because of their mature perspective and past performance. The members should represent all levels within the firm and the size of the group should be kept relatively small.
In some firms, it has become a very sought-after and prestigious role. The advantage for the members is that they have the opportunity to work directly with the firm CEO on important topics for the firm. They get to know the leader on a more personal basis and have the opportunity to better understand firm operations.
A staff advisory board, comprised of engaged and knowledgeable members can be a real asset when deciding upon HR issues or possible changes to employee benefits.
It is important for the managing partner to meet with the group on a regular basis. Once a month is a common practice but it should not be any less than quarterly. Most importantly, the managing partner and other firm leaders must be willing to listen to the feedback and take action based upon some of the feedback that is received.
Some larger firms even have sub-committees under the advisory board banner. One to focus on salary/benefits, one for morale and maybe one for performance feedback.