Yes, we have a human capital dilemma. Yes, the next biggest concern for CPA firms is succession planning. As you consider these issues, which of the following statements most closely matches your beliefs about your firm’s succession?* My firm does not have enough quality players on the bench to ensure success in the future.

* Our young professionals are not as capable as “my generation” (their predecessors).

* Our next-generation leaders cannot lead the firm and/or bring in sustainable new business to buy out those who want to retire.

* Our only secure continuity plan is to merge or sell.

* All of the above.

Our collective experience tells us that your bench is stronger than your current management may be willing to admit. But there are two issues at play, and both must be addressed to confront your human capital dilemma and design a strategic succession plan.

1. Generational arrogance. This occurs when your firm’s leaders believe that no one — especially someone younger — can do it as well or better than they did. “Well,” you scoff, “I have 30 years of experience!”

In too many cases, 30 years of experience is really just one year of experience repeated 30 times. It’s true that experience is valuable. But to compete in the future, your firm must also be agile in its thinking, leverage technology, and innovate.

And 30 years experience can kill all three.

The truth is that next-generation leaders look an awful lot like your current leaders did ... when they were younger.

2. Poor leadership development. Our experience suggests that local and regional CPA firms have plenty of talent. It’s just lying dormant. CPA firms have enough high-potential young people (managers, senior managers and entry-level partners) to ensure continuity. What’s missing are opportunities for them to lead. We’re not talking about leading a client engagement. We’re talking about tasking them with serious, mission-critical issues that the firm must address to face its future.


In 2006, The Reznick Group participated in a Next Generation Company survey to determine their employees’ levels of engagement. The firm’s results were mixed, and leaders wondered what they could do to make their firm an even better place to work.

At this point, the firm’s leaders made an enlightened decision — they invited their emerging leaders to tackle the challenge of the survey results. And tackle it they did.

Leveraging technologies like videoconferencing and Basecamp, some 80 up-and-comers prioritized the areas that they wanted to focus on, and self-organized into study teams that tackled six key issues: alleviating Saturdays, client evaluation, telecommuting, social impact, alternative schedules, and performance management.

They presented their solutions — including the financial impacts to the firm — to the partners at a June meeting. By the time you read this article, five of the six solutions will be on their way to implementation.

Ken Baggett, Reznick’s managing partner, summarized his partners’ feelings: “If we had any doubt about our firm’s future leaders, we can put those doubts to rest. These emerging leaders have shown that they have what it takes to tackle issues that are critical to the firm.”


If you want to organize a study team of your firm’s future leaders, and find out how much bench strength you really have, then you should:

* Match your emerging leaders with a set of key issues, and allow them to choose the ones they want to work on.

* Assign or elect a team facilitator for each study group.

* Set timelines, and provide a framework for how you’d like to see the solutions presented, e.g., SWOT (strength/weakness/opportunities/threats) analysis, business case, etc.

* Enable the team with technology to help them collaborate online.

* Have teams elect spokespeople, who will present their findings to the firm’s leaders.

* Make sure leaders commit to keeping an open mind and fairly considering all recommendations.

* Within a day to a week, provide a response to each solution, whether it’s to implement the solution, ask for more information, or put off the solution — with the reason why.

One thing is certain: You should not travel down this road to create an insight into next-generation issues unless firm management plans to do something with the results.

Nothing is more counterproductive than asking your people to offer their thoughts, opinions and solutions to problems if you only put them in a drawer and hope nobody asks about them until after you have retired. We were both in attendance at the Reznick meeting to observe the firm’s leadership as all partners embraced this strategy of change.

The empowerment of those involved was obvious. The inclusion of all who were represented and the willingness of the firm’s partners to respond to the process demonstrated a huge commitment and trust that has led to the overwhelmingly positive response and results exhibited by the strategy employed.

What became evident to us was the ability of the participant group to demonstrate their leadership skill sets. While we do not necessarily believe that the same results can be demonstrated at all firms, we do believe that the initiative brought to light the “undervaluation” of talent. What is important to demonstrate is that most firms undervalue the leadership skill sets of the firm’s “bench.” Firms need to open their eyes to the assumption of a positive bench strength, which is often overlooked because of faulty beliefs that, “No one could be as good as we were.”

We challenge firm leadership to test your young people, challenge them to rise to various occasions, be they technical or business development. Invite your future leaders to learn from you, watch how you lead and take greater responsibility.

We have long believed and, as consultants to the profession, recognized that the development of future leaders is a 50-50 contract. Not only is the “bench” comprised of our leaders of tomorrow, responsible for their own development, but you, the firm, and the partners also share in that responsibility.

Future leaders don’t simply show up at your firm with a sign on them that says “high-potential leader.” The great firms all employ various initiatives similar to Reznick’s to ensure that the high-potential leaders emerge. Formal mentoring programs, executive coaching and “base camp” are just a few strategies.

We have long implored partners to take young people out into the field on sales and marketing calls, to networking meetings and, yes, to high-level client meetings. We must let these young hopefuls see how the “proven masters” do it.

There are numerous leadership programs that young people can attend and literature that can be recommended, but there’s no substitute for watching successful partners meet the public and clients, or address internal issues. Involve your high-potential candidates early in the game, and give them the opportunities to excel. You cannot worry about the fear of investing in developing great leaders only to watch them leave and employ your investment elsewhere.

If you avoid investing in their development, they will leave. Offer them training in leadership skills, presentation skills and marketing skills, and more often than not, that investment will pay off.

Jay N. Nisberg is a consultant to the CPA community. Reach him at (203) 743-2567 or Rebecca Ryan owns Next Generation Consulting, and blogs about these challenges at

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access