Partner accountability is at once a concrete objective, grounded in performance reviews and compensation models, and a delicate process of personal appraisals and constant follow-through. We turned to experts on the subject for advice on melding the personal and pragmatic into an immediate firm strategy: August Aquila, CEO of Aquila Global Advisors, who specializes in compensation and partnership issues; Sandra Wiley, COO, shareholder and management planning consultant at Boomer Consulting; and Jennifer Wilson, co-founder and partner of national leadership and marketing consulting firm ConvergenceCoaching.

 

How would you define partner accountability in accounting firms?

Wilson: We like to call accountability "count-on-ability" -- and I'd define partner accountability as the ability that others in the firm have to count on a partner to deliver his or her agreed-upon contribution to the firm's performance each year.

Aquila: Accountability is fulfilling a commitment or promise that an individual makes. Accountability in an accounting firm means the same thing. In other words, does the partner do what they say they will do? For example, Partner A tells his other partners that he will get his time in promptly. Week after week, month after month, Partner A fails to accomplish this goal. What happens is that the other partners begin to lose trust in Partner A.

Wiley: Partner accountability is first and foremost setting expectations for each partner based on their best contribution and value to the firm. Once expectations have been set and agreement has been reached, the next step is holding consistent and focused meetings where performance is discussed and corrections are made, if necessary. There must be a tie between the expectations, the actual performance and the reward.

Aquila: Personal accountability and trust go hand in hand. When accountability and trust decline in a firm, then in-fighting begins, profits decline, there's redundancy, slower decision-making, and ultimately the firm may implode or the leadership is removed.

 

Is partner accountability a big problem across the profession, and are firms aware of it?

Aquila: Firms are acutely aware of this problem and have tried to do things to manage the issue, none of which work, including either micro-managing or threatening partners with less pay or equity.

Wilson: I think accountability is a problem in many organizations. Firm leaders are very aware of it, and some staff are, too.

 

Do you see any trends regarding the root cause?

Wiley: Most people do not naturally gravitate to conversations that could result in hurting someone's feelings or causing strife, particularly at the ownership level. The idea of setting goals, holding

yourself and your partners accountable to those goals, and ultimately giving or taking away compensation based on performance is a very uncomfortable position for firm leaders.

Wilson: There are many things that cause a lack of accountability, including lack of clarity (in writing) about what is expected in terms of specific results from each partner. What does each partner own and what will they deliver in the coming year?

Many firms are missing a consistent "return and report" mechanism to check in on the status of deliverables and results with partners, as they do not feel they "work for a specific person" or no one makes the time to meet with partners to check their "homework" on an interim basis. Because of this, performance doesn't happen, and by the time this is discovered or understood, it is often too far gone to resolve.

Aquila: The biggest roadblock that I see is the unwillingness of firm leaders to do something about the issue because the culture of un-accountability has become the overriding culture of the firm. The next biggest problem is that there is no structure or process in place for the firm to follow.

Wilson: There is a lack of consistent performance feedback in firms. According to IPA, only 42 percent of firms surveyed have upward feedback systems, and 62 percent have written partner performance appraisals (but that number drops to well under 40 percent of firms under $10 million). Without consistent performance feedback, it is difficult to expect partners to improve or get better.

Most firms do not make a clear tie between rewards and specific results. Because people are not clear what their reward (or consequences) will be for performing (or not), they do not feel motivated to meet specific objectives.

Wiley: The other predicament we are in today that has not been dealt with in the past is the amount of leaders that are preparing for retirement. Many of these "elder statesmen and women" have never been held to specific performance standards, and they are simply looking for their payout at the end of a long career. As firms move to more partner accountability, every partner has to make changes in behavior, and that does not include only the younger partners.

 

What are the biggest roadblocks firms encounter in holding partners accountable?

Wiley: There are two major issues. First is the lack of creativity and realism when it comes to setting the goals and expectations at the partner level. The trend in the past has been a "one size fits all" approach. Today we know that a more balanced and broad approach, where we capitalize on each individual's strengths, will net a better result for the firm. However, that takes more work and communication, and many are unwilling to put the time into that process. Second is the lack of truth-telling within this group. I am not talking about a lack of integrity -- [it's] simply an inability to have tough conversations with your fellow partners in the firm.

Wilson: The psychological roadblocks include conflict aversion as a typical CPA firm cultural attribute (so issues are ignored or avoided) and a culture of "nice" that makes it uncool to raise issues of partner performance.

Wiley: It could be a feeling of not wanting to hurt others, and it could be a feeling that if you say something about someone else's performance that would open the door for them to point the finger back at you and give you some harsh feedback, also.

Aquila: You will never get 100 percent accountability from everyone in the firm. That is just not possible. However, we can get 85 to 90 percent. First, determine the trust level in your firm. This can be done through an online questionnaire prepared by your management advisor. Second, it is up to the leadership in the firm to model the proper behavior. If leaders are not accountable, no one else in the firm will be accountable.

 

Where should firms start addressing these accountability problems?

Aquila: Part of the accountability puzzle is performance management and goal-setting. If partners do not know what they need to do to help the firm succeed, then they don't know what they are accountable for.

Wiley: Start with developing goals and expectations for each partner using a balanced approach that drives overall firm long-term objectives. This starts with a strategic plan and then goals for each partner in the areas of growth.

Wilson: Define partner roles and goals in writing, very specifically, every year.

Aquila: Firms need to create a motivating vision that will encourage people to work together toward a common goal, as well as partner standards. What does it mean to be a partner in your firm? What are the expectations? Are they written down? These are the so-called hygiene factors that every partner needs to model.

Wiley: Once the expectations are clear, then quarterly meetings with the managing partner to ensure compliance are essential.

Wilson: Establish quarterly reporting to the MP or department head with each and every partner. Conduct annual performance feedback for all partners - no exceptions.

Aquila: Firms should identify or develop shared values. The values tell everyone in the firm what is acceptable behavior. If accountability is a value, how does the firm exhibit it? What are the specific behaviors for your firm that show a person is being accountable? Once you have the values identified and defined, and behaviors outlined, you can then begin to measure how well each partner is living the shared values.

Wilson: Teach conflict management, straight talk and how to deliver performance feedback to every partner and develop a culture of "get better," where we are all clear that we can continually improve, and where learning areas where you can get better is valued -- not a "ding" against you -- and those who do get better are most revered and respected.

 

What are some practical strategies firms can implement in the near term?

Wiley: The first step is developing the overall strategic plan for the firm using an outside facilitator to challenge the partners to a higher level of thinking. Develop expectations and goals based on the Balanced Scorecard [strategic planning and management system] approach, and connect the Balanced Scorecard with the overall compensation model in the firm.

Wilson: Use template role descriptions for different kinds of partner roles, goal-setting worksheets, and performance-appraisal templates. [ConvergenceCoaching has] our Straight Talk Your Way to Success e-book that we also encourage firms to read.

Wiley: Invest in a performance management system like Halogen, SuccessFactors or viDesktop. Automate as much of the process as possible. Then, schedule quarterly accountability meetings with the managing partner, and the managing partner with his or her executive committee.

Aquila: Create a performance-based compensation plan. If you don't reward those partners who perform better than others, then nothing will change in the firm. The compensation plan is the final element in developing a culture of accountability. In the plan, you want to reward for production, but you also want to reward those partners who are building for the future. Think of the latter as R&D. Production and R&D are needed for the long-term growth and survival of the firm.

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