Woodrow Wilson once stated, "I not only use all the brains that I have, but all that I can borrow."
In today's economy, firms are faced with many difficult decisions regarding talent management, but the mindset about developing people is extremely important from a strategic perspective. Too often firms get caught in the tactical decisions of balancing capacity with demand for services. While this is an important decision, it often can be economically damaging for the long term.
Many firms have had to make staffing cuts in the past two years and are now looking to do more with fewer resources. Increased regulation in health care and employment laws only increase the burden on the firm. Therefore, most firms are not anxious to hire more people. So how are firms going to do more with less and remain profitable?
There are two basic strategies I see prevalent in firms on a global basis. The first is the mindset of a multiplier leader and the second is the leveraging of technology.
In Liz Wiseman's new book, Multipliers: How the Best Leaders Make Everyone Smarter, she states that research has proven that multiplier leaders get two times more production than diminishing leaders. She defines a diminishing leader as someone who is more focused on their own genius than on developing the genius of others. Multipliers are genius-makers, where everyone around them gets smarter. By genius, she is referring to innovation, productivity and the collective intelligence of the team.
In the past I have referred to rugged individuals as opposed to team players. The tendency in tough economic times is to go back to what made you successful, and many partners became successful by starting as rugged individuals who relied primarily on their own intelligence and hard work, including extremely long hours. That approach will only take you so far, and then you must leverage multiple talents in order to grow to the next level. Some people are happy at the rugged individual level, but most have advanced to a higher level.
Many things have changed in addition to the economy. The body of knowledge required to meet client requirements has increased beyond the areas of tax and accounting. Today, clients want real-time management information, not financial statements and audit reports issued months after the close of a fiscal year. Most in our profession would agree that it requires a team with unique abilities to meet client expectations in today's environment.
Your question should be: How can we do more with less and double our production with the same resources? According to Wiseman - and I agree - the answer is more in mindset than mindshare. Every firm desires to hire intelligence. What the firm does with people after hiring determines whether they increase or decrease in value.
Experience is different from value. It is common to have people with several years of experience whose value in today's market is not as high as what they are being paid. Great firms ensure that A players become A+, yet many firms allow their A players to diminish to B. This happens by loss of engagement in their work and lack of training to advance to the next level. When this happens, the firm becomes known as a place where your career dies, rather than grows. It becomes a spiraling effect, either up or down. The firm gets smarter or less relevant (dumber, for a lack of a better term).
ADDERS AND DIMINISHERS
Multiplier leaders become talent magnets. Wiseman refers to leaders at the other end of the spectrum as "adders" and "diminishers." Adders tend to believe that you can only increase productivity by adding resources. They are eager to load up on resources, but many people are unused and capacity is wasted. Diminishing leaders often create the environment of people being overworked and underutilized. They tend to build empires and are often proud of the fact that they have more people in their division or office than their peers. This creates unnecessary politics and ownership issues, while limiting the growth and profitability of the firm.
This strikes home in the accounting profession, as most partners and staff will tell you they are overworked. Current firm metrics also tell us that resources were underutilized, as firms were less than 50 percent billable in 2009. The question rapidly becomes: Are they doing the right tasks and adding value? The rugged individual will immediately say that the firm needs to get rid of administrative and non-billable people. But many of these people are adding value to the client - the firm just isn't billing for it.
I believe the economic model of the accounting profession is outdated, due to the fact that a broad base of talent is needed in order to deliver value to the clients and the amount of time spent is no longer relevant with regard to value. Only charging for hours worked by accountants does not make sense. We are in a results-based economy, not an effort-based one.
This moves us beyond just value billing. It requires management and accountability at all levels within the firm. Accountability starts at the top. Sadly, I have had managing partners tell me they just don't have the energy to hold their partners accountable. This is in direct contrast to top-performing firms, which spend a great deal of time thinking, planning and holding partners accountable to the firm's strategic plan. One of the biggest challenges is for partners to realize that, by allowing themselves to be managed, they will make more and be able to focus on their own unique abilities.
Wiseman is quick to point out that most leaders are somewhere on the continuum from a diminishing to a multiplier leader, and it is easy for people to fall back to diminishing thinking. She encourages you to think of someone you have worked for who is a diminisher and someone who is a multiplier leader. What was your effort working for each type of leader? Were you more engaged in your work for the multiplier? Did you grow faster personally and professionally working for the multiplier? This is where mindset is more important than mindshare. She also states that most diminishers don't realize the restrictive impact they have upon others, as they have grown up being praised for their intelligence and hard work.
MAXIMIZING POTENTIAL
According to Wiseman, multiplier leaders are not just "feel-good" managers. They look at people and find their unique abilities and utilize them to their potential. They expect a lot and hold people accountable. They have a great sense of humor and don't take themselves too seriously. Multipliers connect people with opportunities that allow them to operate at their highest potential. By doing five things they get two times the capability as diminishers. The characteristics of a multiplier leader are that they:
1. Attract and optimize talent;
2. Require people's best thinking;
3. Extend challenges;
4. Debate decisions; and,
5. Instill accountability.
You should ask yourself the following questions:
Am I a multiplier or a diminisher?
Do we have people who we are blocking or impeding others?
Who is blocking the firm's success due to their own vision being different from that of the firm?
These are difficult questions to address, as they often require difficult conversations. In most firms, the tendency is to avoid difficult conversations (lack of accountability). Improved communications, training and multiplier leadership can overcome these obstacles.
Multiplier leaders should think about how their firms can move up the value chain from transactional recorder to management advisor. This requires new thinking about client relationships. It also requires the packaging, naming and pricing of services to meet the growing demand of small businesses.
The model of the past is becoming less relevant, and those multiplier leaders who know how to get two times the performance out of their employees, and how to leverage technology, will transform the industry. The challenge is to be an industry transformer and move to the emerging growth industry. The accounting profession is not exempt.
This is about change management, and the tendency is to resist change, especially if you are comfortable in your current position. The good news is that diminishers can become multipliers if they change their thinking. You must change your thinking in order to change your behavior. Change your behavior and you can produce positive results. Those who are also resisting the changes that are going on in technology are limiting their future relevance and importance in the value chain.
IT-savvy business leaders are demanding more and getting it. You should do the same.
