Great leaders develop successors. Where is your firm's intelligence? Is it in the partner group? Is it in your staff? Or is it in both your staff and partner group?The answer is a significant indicator of your firm's destiny.

If you can honestly say that it's in both, your firm likely has economic value, and the partners are entitled to reasonable deferred compensation and a buyout. If your firm has not developed successors - and many have not - its value is probably diminishing.

Depending upon the age of your partners, it may not be too late to change, and this article provides a few suggestions on how you can increase the value of your firm through succession planning combined with a training/learning culture.


Too often, a firm's intelligence is locked away in its partner group, especially within smaller firms. Knowledge is often viewed as power, and as a result is not leveraged to the extent that it should be. If this is the case in your firm, your systems, processes and culture may need to improve if you desire to compete, maintain profit levels and increase value.

While this doesn't have to be an either/or situation, many firms choose to maximize current profits, but don't make the necessary investments in planning, people and processes. Systems, processes and culture evolve around information, knowledge, experience and wisdom. The speed, leverage and scale at which your firm can transfer its intelligence are determined by the quality of its training/learning program.

If intelligence is locked in the partner group, it is difficult to grow, and the value of the firm may decrease as partners approach retirement. This is an issue in the profession. According to the American Institute of CPAs, 75 percent of its current members are over 50 years old.


Many firms fail at strategic and succession planning. While some conduct what they call an annual retreat, they often leave with great ideas but don't hold anyone accountable. Even more alarming is the number of firms that don't share their plans with managers and staff. We recommend these exercises:

* Preparation of a succession worksheet specifying the projected years at which partners will retire and how many future owners are required to accommodate firm growth.

* Partners over age 50 should prepare a one-page succession plan with objectives, measurements of success, initiatives, due dates and assignments, as appropriate. Review and update this plan at least annually until retirement.

Because many partners have not planned adequately, they often push out normal retirement. This may also be attributed to the short supply of quality people, as well as financial considerations. Another consideration is that people in general are living longer, and many simply don't want to retire at age 65. Retirement can be phased if properly planned.

Many deferred compensation plans put into place 10 or more years ago are being tested by market conditions. This is another reason we are seeing an increase in mergers. It may take care of one or more senior partners, but will the merged firm be able to provide the same type of retirement to other partners 10 to 20 years down the road? Mergers usually occur for one of three reasons: lack of leadership, lack of funded retirement and lack of technology.

A longer-term plan involves planning, people and processes, with technology as the accelerator. Retaining and attracting quality people doesn't just happen. It requires a training/learning culture, a forward-thinking attitude and action.


A training/learning culture is a two-way street that bolsters the intelligence quotient of the entire firm, enabling it to appreciate in value. Unfortunately, firms often talk about training, but fail to invest the necessary resources to ensure success.

If partners are too busy to train or lack the confidence to transfer knowledge and wisdom, training programs typically fall short. In fact, partners' attitudes toward training are the best predictors of its success. It is often viewed as only continuing professional education, but that is no longer the case.

Technology is the accelerator for growth, but some overlook it as the answer to succession and the transfer of intelligence. It has opened incredible doors for some, while causing a crisis in personal confidence in others. We all know people with poor technology skills, and have probably heard some of them boast about how they don't even care. What these people are really expressing is fear and lack of confidence.


Confidence with technology is critical when it comes to education in today's workplace. Firms that require partners to be teachers rather than just problem solvers will be dominant in the 21st Century. Think about the characteristics of your best teachers. They are likely to be prepared; energized and motivated; straightforward; good communicators; interactive with students; confident, yet open to learning themselves; and possessed of high expectations.

Consider how many of your partners have those characteristics. Do you look for these characteristics when you hire? Do your partners fly solo, or do they work as a team? These are important questions, and should not be ignored if you sincerely want to improve your firm.

If your firm desires to improve its training and learning, here are several suggestions that can have a positive impact:

1. Develop a training needs assessment based upon a desirable body of knowledge for each job description in your firm.

2. Hire a professional learning coordinator to administer the training/learning program.

3. Implement a two-way mentoring program between partners and staff.

4. Hold people accountable, especially partners.

5. Define your firm's standards, processes and procedures. You will be surprised at the inefficiencies in most firms. The "old way" is not necessarily the best and most profitable way. Start by reviewing your tax return preparation, financial statement preparation, and billing and collection processes.

Shifting to a training/learning culture is not easy, and generally meets with resistance from those who promote mediocrity. It won't take long to identify the weak links. Those who most need training are often the ones who ignore opportunities for it. Implementing a curriculum for employees and holding each one accountable will result in a significant upswing in overall performance. Don't be afraid to terminate those who don't comply with the firm culture, even if they are partners!

In conclusion, if your firm's intelligence is located only within a partner group closing in on retirement, training and succession issues must be addressed. Your actions now will determine the firm's ability to retain and attract people, as well as the value of deferred compensation and ownership buyouts.

Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.

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