How a firm deals with an underperforming partner defines the strength of its management. Well-managed firms deal with it in a professional manner, rather than ignoring the problem.
In today's environment, some firms accept low performance because of the shortage of qualified personnel. I believe that is exactly the wrong way to approach this issue.
In some cases, firm management is at fault, or there is a lack of management at the partner level. Let's start by reviewing how performance should be evaluated and managed.
THE COMPLETE PICTURE
Most partners equate performance with financials, because they know how to measure and value these kinds of results. Yet this is only one of four key areas upon which firms should focus when evaluating performance.
Three other critical components of performance are:
* Client interaction and satisfaction;
* Internal processes; and,
* Learning and growth.
The best scenario is when partners commit to being managed and work toward a shared vision and common goals.
Healthy leadership, management skills and a strategic plan are vital to making this a reality. The result is a team atmosphere that promotes excellence while enlivening the firm's culture. The worst-case scenario is when partners do not align, and work merely as individuals who share overhead. Bottom line: Underperforming partners promote mediocrity, which is cancerous to a firm's culture.
MORE THAN MONEY
Some firms look only at specific financial metrics, rather than the big picture, when evaluating performance. Charge hours and book of business are often seen as badges of honor. I believe in the importance of financial results, but expecting people to work unreasonable hours and sacrifice work/life balance are significant reasons the accounting profession faces a shortage of quality people.
It is not unusual to hear partners refer to other partners as underperforming. When I ask them to define how a partner is underperforming, they often make statements like, "She is the last one to come in and the first one to leave at night. She doesn't bring in any new business."
In response I ask, "Is this underperformance, or do these people simply have different value systems?" Generations X and Y do not see the world in the same way that the Builder and Boomer generations do. They don't want to focus only on work.
UNIQUE ABILITIES = GREAT TEAMS
Great teams are comprised of people with different, unique abilities who complement one another. Yes, we need frontstage rainmakers, but a growing firm also needs backstage production personnel.
Breakdowns in performance often relate directly to a firm's compensation system. Great teams will always out-perform a group of stars that focus only upon themselves. The risk when hiring is to bring aboard "Mini-Mes," rather than people with unique abilities that fit their job descriptions.
Most partners do not have job descriptions, and many do not focus on their strengths or unique abilities. Some estimates indicate that partners spend less than 15 percent of their time on tasks that match their unique abilities.
In order to do so, they must be willing to delegate and be part of a team comprised of individuals with unique abilities (both front and backstage). Skills other than just accounting must be valued if a firm wishes to adequately leverage its resources.
CHANGE FOR THE GOOD
The performance problem can be solved, but partners must make the difficult decision to allow themselves to be managed and focus on the following:
* Alignment with a shared vision (the firm's strategic plan);
* Defining expectations in advance (through personal 90-day game plans);
* Accountability with honest reviews; and,
* Communication (including regular management meetings).
Yes, this takes time, and some managing partners attempt to focus on both the firm and its clients. In those cases, clients generally get top priority. That partners want to focus on client service is great, but firm management must focus on the firm and its employees (especially partners).
Documented expectations and regular accountability reviews make it apparent whether an underperforming partner is serious about improving. If not, they should be counseled out as quickly and with as little disruption as possible. Outside parties can often reduce the stress and pain for both the firm and the partner.
And while you are thinking about performance, consider changing your compensation system to reflect genuine performance. Doing so will go a long way in building a shared-vision firm.
Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
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