“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.
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.
We are seeing a transition right now. More and more firms are finally making the switch from the long-time, baby boomer managing partner to a younger, less experienced managing partner.
It is a very difficult time for both of the people involved, and the firm, in general.
The outgoing MP struggles with relevancy and a long list of other important decisions about what to do with their remaining working years. But don’t ignore the challenges being faced by the new guy/gal.
One thing to remember is, as the managing partner of a growing, profitable firm, it is important to always be thinking of how you are spending your time.
One dilemma the new managing partner faces is how much time to continue to spend on client work and how much time do they really need to devote to actually managing the firm.
The MP should definitely keep a reasonable amount of client service work. How much varies. Much of this decision relates to the size of the firm.
Smaller firms require less management time and the MP should utilize a qualified office manager. Midsize and larger firms, of course, should have a professional firm administrator or COO who handles all administration and daily operations so that the managing partner can focus on coaching the other partners, being the community face and voice of the firm, and bringing new business to the firm.
For all firm partners, it is important to always focus on the important work. For line partners that means client relationships, nurturing team members and bringing new business to the firm.
Partners should not be doing manager work. Managers should not be doing senior and staff work. And, seniors and staff should not be looking for work.
When I am coaching managing partners, I often go to some of the lessons I learned from David Maister. If you don’t know of David Maister, I urge you to visit his website and read his bio and some of his articles.
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 is the author of the bestselling books:
- Managing the Professional Service Firm (1993),
- True Professionalism (1997),
- The Trusted Advisor (2000),
- Practice What You Preach (2001),
- First Among Equals (2002),
- Strategy and the Fat Smoker (2008).
At my firm, we gave True Professionalism to every new accounting graduate and asked them to read the first two chapters right away and the rest at their leisure.
Maister would often talk about, “What do you want to be famous for? What’s going to make you distinctive?” He had a great story about how he was asked that question when he was a new professor at Harvard. Of course, he was stumped at first but his mentor asked him to think about it and respond in a few days. He more or less blundered into professional service firms and the rest is history.
As you work with your partners, to coach them to more success, try asking them what they want to be famous for.
Here are some David Maister examples:
What Do You Want To Be Famous For?
(What’s going to make you distinctive?)
Intellectual thought leader in a particular service area
Superior client counseling skills
Special abilities in practice development
Special ability to work with certain types of clients (such as, entrepreneurs, high net worth individuals, etc.)
Superior ability to transfer skills to others
Although many firms are doing a good job with transitioning long-time partners into retirement, a large number of firms are still dealing with top heaviness. These firms have continually brought people into the partner ranks because they are good technicians or because the older partners did not want to lose a manager who had many close relationships with a significant number of clients.
Firms also have a history of promoting people to manager just because they don’t want to lose them. What eventually happens is that the firm becomes top heavy. There are way too many partners and managers and too few staff.
Then a common scenario evolves where partners are doing manager work, managers are doing staff work and staff are looking for work.
Because the firm is top heavy, younger accountants, with great potential, get discouraged and leave the firm. Headhunters are calling them regularly and it is very easy to get a great deal at another firm in your market.
Read my full article on how to begin the journey in prioritizing and tackling the top heaviness inside your firm.