The CPA Consultants’ Alliance (CPACA), a group of thought leaders working together to further leadership within the CPA profession, met recently to identify and discuss the most pressing leadership challenges facing the CPA profession and identify solutions to address these challenges. Following the meeting, CPACA members were asked to identify the single most significant leadership issue they feel firms face today and to offer a solution or recommendation to address that challenge. Their answers follow:
Angie Grissom, The Rainmaker Companies, www.therainmakercompanies.com
Accounting firms should re-define team member expectations and career plans and begin to look at managing people in a new way. Recruiting, retention and succession are serious issues in the accounting industry and this points to a need to do things differently in regard to people.
Firms need to take cues from other industries and see where success is coming from. Companies that are the most attractive to work for have made the decision to redefine what the entire experience is for their staff. Creating an environment where people with different skill sets and gifts can thrive will result in more innovative and successful firms.
Carrie Steffen, The Whetstone Group, www.thewhetstonegroup.com
Based on current CPA firm demographics, it’s no surprise that succession continues to be among the biggest issues facing firms in the coming years.
One of the interesting things about succession is that there is no singular solution. It’s not a project. My greatest revelation recently is that as firm leaders are thinking about every single aspect of their business, it is imperative that they look at each issue through that succession lens. They must ask themselves, “How does this (growth, recruiting, technology, training, client service, workflow, etc.) effort align with our plans for transition? What do we still need to address?” Firms that are not taking a holistic approach in examining how each initiative supports their ability to transition the firm to the next generation risk not doing so in the way they would like.
Dustin Hostetler, Flowtivity, www.flowtivity.com
Over the next 5 to 10 years, one of the most pressing issues facing our profession will be in the area of talent management. More specifically, how to attract, retain and manage an increasingly remote and geographically-diverse workforce. The war for talent is just starting.
Firms will have to adopt new and innovative approaches to find the right people and manage those people. Perhaps most importantly, find ways to maximize utilization of their skill-sets in an environment where firm needs and roles will be changing at an increasingly faster rate. This will require unique models of collaboration in the industry – from avenues such as outsourcing, talent-sharing and remote employees to name a few. Ultimately, success will be determined by the ability to optimally manage a “flexible capacity” model of talent and work within a firm. Firms management should begin to understand what this means as an important first step in the next year or two.
Geni Whitehouse, Even a Nerd Can be Heard, www.evenanerd.com
Rather than spending so much of our time and energy trying to fix the cost side of our business equations, we need to start focusing on the value side of the equation. As accountants, what can we do to better serve our clients? What needs do they have that we can address? Through outreach, education and improved communication with our clients, we can become proactive advisors who really make a difference in the lives of our clients. We need to hire differently, train constantly, and harness technology not for the benefit of our own internal processes, but to better serve our clients.
Without a focus on value and an emphasis on improved service, clear insights and regular communication, our firms and our profession run the risk of becoming irrelevant. There are plenty of unregulated, unlicensed service providers who would be happy to meet the needs of the clients who aren’t being fully served by us.
Jennifer Wilson, ConvergenceCoaching, LLC, www.convergencecoaching.com
The most significant issue facing firms today is the inability or unwillingness of firm leaders to face and then implement the critical changes that must be made to their overall vision, strategy and methods for leading and engaging the Millennial generation. Young people today expect a collaborative, communicative leadership style, direct access to “big leaders,” to shape firm strategy, flexible, anytime, anywhere work programs, diversity and tolerance and they need transparency and openness to trust their employers.
As a firm leader, welcome these bright young up-and-comers into leadership and management meetings much earlier, invest in development programs to help them grow rapidly and change the way you communicate to be far more inclusive, open and collaborative. This sometimes means asking those who are unwilling to change or those who block the way of these young people to step aside to make room for more “Millennial magnet” leaders and managers to lead your firm’s key functions. Your firm’s future depends on your ability to attract, cultivate and make use of the potential this new generation offers – and you won’t get there without substantial cultural and programmatic change.
Mary Bennett, ML Bennett Consulting, LLC, www.mlbennettconsulting.com
Succession planning is the single biggest leadership issue facing the profession today. Attracting and developing enough talent to support firm growth and sustainability is a crisis in the profession. Ensuring viable exit strategies for the unprecedented numbers of retiring leaders leaving the profession in the next ten years is a supreme challenge for which many firms are not actively preparing.
Firms should immediately begin an annual succession planning process if you do not have one. If you do have a process, ensure it includes the following: Accurate forecasts of all relevant variables such as desired growth, anticipated retirements, attrition, etc. A creative and honest dialogue to assess how the competencies of your partners and leaders will need to change to deal with changes in the marketplace. A comprehensive process to understand the status of all of your highest potential talent. A methodology to forecast how the top talent will progress. Action plans to deal with all gaps. Accountability.
Rick Solomon, Thriving Firm, www.thrivingfirm.com
While the profession recognizes the value and importance of continuously developing firm leaders, there are far too many who don’t take action. This critical leadership issue results from erroneous assumptions and beliefs held by firm leaders that keep them stuck. For example, the belief that leadership development is not cost-effective, or the assumption that leaders will naturally emerge because “that’s what I did.” Or perhaps “we’re just too busy for that now.” There’s a long list of assumptions and beliefs that justify not investing in leadership development.
We must recognize and eliminate the unexamined assumptions and beliefs that stop us from developing and implementing an effective, ongoing leadership program. The simple truth is that personal growth is at the heart of professional development. Leadership skills can be developed, and they are critical to enhancing client relationships and building firm value. Wise firm leaders know that leadership development is a smart investment, with both an immediate impact on firm culture and attracting and retaining top talent, and the long term benefits of firm growth and continuity.
Rita Keller, Keller Advisors, LLC, www.ritakeller.com
M&A is such a major focus for firms large and small. Consultants specifically focused on M&A are telling us that what we have predicted for several years is coming true. That prediction is that the acquiring firms are becoming more selective in their search for candidates to merge-in or acquire. There are so many more firms counting on being pursued than there are pursuers. Acquiring firms want to attract winning firms; not dysfunctional firms. My fear is that many practitioners will be shocked when they find out that larger firms do not want them. They are ignoring important issues because they feel they will be “bought out” and the issues will no longer be their problem.
Whether you want to pass your firm along to people already inside the firm or not, you need to build a firm that is sustainable. Open up the lines of communication, become more transparent, enhance mentoring and sponsorship, develop a flexible, collaborative culture. I urge firms to honestly identify your dysfunctions, address them and become a winning firm that not only attracts and retains clients but also attracts and retains people.
Roman Kepczyk, Xcentric, www.xcentric.com
The biggest leadership issue we see is the inability of some partners to lead the charge on implementing proven technologies, even though there are successful adoptions all around them. This is often exacerbated by analysis paralysis delaying the decision, inadequate training during and after implementation, expecting IT personnel to lead the charge, and partial adoption allowing firm members to fall back on old processes. All of these items negatively impact successful firm advancement and can be minimized with stronger leadership driving the firm forward.
Once firm leaders make a decision to adopt a new process or technology, they need to communicate the benefits to the firm, the transition process employees will go through (specifically training), and the timeline so people know what to expect. They need to get onboard with using the new tools, share successes and best practices, and ensure that personnel are aware of the resources available to anyone that may be struggling. Leading the firm towards improvements is one of the primary responsibilities of firm owners and can be optimized by continuous communication.
Sandra Wiley, Boomer Consulting, Inc., www.boomer.com
Leadership is about taking the spotlight off of yourself and inspiring the next generation of leaders to use their brilliance to continue building the profession. Current leaders have built a foundation for emerging leaders to capitalize on. The issue we have to recognize is to get out of our own way!
As a current leader in your firm, look at the tasks and responsibilities you have and make a conscious decision to educate, delegate and give an emerging leader the opportunity to step up to a new responsibility level. Protect the profession and your firm by inspiring the next generation.
Sarah Johnson Dobek, Inovautus Consulting, www.inovautus.com
Two key issues we see impacting growth are lack of expectations around follow-through for growth and gatekeepers that are preventing cross-selling or the advancement of specialization.
Measurement is a critical area firms should be focused on to help address this challenge. Firms that are measuring are better able to monitor the right behaviors that allow them to hold people accountable, facilitate specialization and identify more opportunities to cross-sell.
Tamera Loerzel, ConvergenceCoaching, LLC, www.convergencecoaching.com
While firm leaders continue to focus on succession planning and leadership development, they should also ensure that they have a sound strategy to grow the top line so that they can progress people in their careers and bring new partners to the table. Growth strategies can – and should – include a combination of organic and inorganic growth, developing new service or industry niches, finding ways to increase value by engaging clients for additional services and raising fees. Regardless of the firm’s growth strategy, it’s essential that all firm leaders are unified on growth and measured for their contributions, which will produce real results and motivate and inspire your team, too!
Terry Putney, Transition Advisors, LLC, www.transitionadvisors.com
It is clear that the most critical issue the profession as a whole is facing is succession of firm leaders. The vast majority of firms 1) will experience substantial turnover in their senior leadership team in the next 5 to 7 years, 2) don’t know who will take over for those leaders, and 3) aren’t confident they have the bench strength to carry on independently. Although every situation is unique, a common problem is not allowing enough time to install successors within the firm and conduct a proper transition. An orderly process can take five or more years to execute and too many firms don’t have that much time left.
The issues to address run the gamut from recruiting the right people (those that have long term potential, not just filling a short term need), leadership development programs, clear and constant communication between the firm’s current leadership team and those that will assume that role in the future, making sure the financial arrangement for admitting new owners and buyout out transitioning owners creates a lucrative opportunity for all involved, and executing a transition plan that makes the day a senior leader walks out the door into a non-event.
For More Information
The top challenges the consultants identified in the areas of communication, learning and employee engagement continue to center on the themes of the group’s The CPACA 2012 Whitepaper: Communication Drives New Possibilities. For more information on The CPACA, to subscribe to their blog or attend one of their jointly hosted web seminars, visit their website at http://cpaconsultantsalliance.com/.