Great Partners make Great Firms
What does it take to rise to the position of partner in an accounting firm? While the criteria vary from firm to firm, I believe it is an interesting and generally difficult question for firms to answer. I have asked existing partners to list what they require in a new partner and they tend to come up with a list of skills and criteria for which many of them probably would not qualify. Most managing partners readily admit that too many partners were made partners for the wrong reasons over the past 20 years. The most common answer is: "we were afraid he or she would leave." Is this a good reason to make someone a partner? I believe it is not a valid reason and many firms are now paying the price in their inability to attract and retain quality people.
Example of criteria that firms often list when pushed to think about it are:
- Team player
- Ability to sell business
- Ability to manage business
- Motivate people
- Technical skills
- Critical thinker
- Communicator
- Self motivated
- Passion
- Focus
- Competitive
While this list is interesting, I think it is more relevant today given the shortage of employees and the extreme competition for quality staff, to evaluate and refine the criteria. Without great partners firms will have difficulty attracting and retaining quality personnel. In fact, many firms that say they can't find quality personnel or their existing staff are not qualified to succeed the current partners need only to look at the existing partners for their demise. Great leaders develop their successors as well as other people.
In today's environment the following six characteristics make great partners and leaders that quality personnel will be attracted to.
- Commitment to a big vision and growth. Without growth, it is impossible to attract and retain quality people. Once people start to think about retirement, they start to shut down psychologically. There must be a true belief that the future is bigger than the past.
- Willingness to delegate both authority and responsibility. A great partner is responsible for managing people and resources, not just managing a personal book of business and clients. Without leverage firms simply become sole proprietors sharing overhead. Long-term this does not work and the firm generally declines.
- Respect, value and appreciate people for their unique abilities and contribution to the team. Not all people have accounting skills as their unique ability and not all jobs in accounting firms require accounting skills. The firms who hire professional management, human resources, technology, legal and engineering skills in addition to accounting can offer unique processes that avoid commoditization and fee pressure.
- Continually update personal skills (technical, technology and people) for greater productivity and leverage. Personal growth provides a great role model as well as provides increased opportunities for others. It also provides excitement and avoids burnout. It is easy for partners to get content and comfortable. A training and learning culture will reduce this risk and identify those who do not buy into the culture.
- Commitment to training and learning culture where everyone in the firm learns and teaches. Partners should be rewarded for attracting and retaining employees, not just for working on client jobs. Working on the business has higher value than working in the business.
- Consistently offers employees new challenges, growth and rewards. Quality employees do not want one year of experience ten times over the next ten years. They want new and exciting engagements. This is another reason sourcing remedial work like sorting and indexing information in a clients tax file allows employees to move to higher value jobs such as planning and strategy. Firms must continue to grow in order to be viable employers.
How do the partners in your firm rate on these six criteria? If the answer is anything but "great" you may have disclosed the primary reason your firm is having difficulty attracting and retaining quality people. If you have trouble relating, think about your best clients, their leadership and employees. Do your best clients with the best employees adhere to these six characteristics?
Some firms are looking for a buyout or merger to correct partner problems and provide growth. This seldom happens; when it does, partners without these characteristics are generally terminated or demoted.
There are several steps that a firm can take in order to assist partners in developing these skills; however, the partners must have the right attitude in order to be successful. The skills that helped you make partner, may not be the skills necessary in today's environment. The market, technology and labor supply have all changed the rules of the game. The following steps will help most partners become better partners.
- Develop a shared vision and strategic plan and communicate it to everyone in the firm.
- Determine their unique abilities utilizing tools such as the Kolbe Index and consultation.
- Assist them in developing a unique ability team.
- Provide them with leadership training and coaching.
- Hold them accountable through quarterly game plans and honest evaluations.
- Change your partner compensation plan to a balanced scorecard approach focusing on the development of others, processes, and client satisfaction as well as financial measurements.
Great leaders always vote for growth. They also believe in balance and continual personal growth. These are the type of people that attract and retain quality people. It can be a spiral of growth or decline. The choice is yours.