Warning to Managing Partners

[IMGCAP(1)]Many of us have had that visit to the doctor when we are told that if we don’t make some changes in our lifestyle, the consequences will be significant.

Those of us who are lucky get that warning in time to make changes and avoid the significant consequences. As we start a new year and busy season, I am here to give managing partners their wake-up call. If you don’t stop doing your job the way you have been, there will be important consequences!

I am not talking about your health—only your doctor and tarot card reader can do that. I am talking about your future and the future of your firm. If you don’t change the way you operate—despite all of the success you have generated—no one will want to succeed you!

Managing partners do not tend to look forward to their exit, but they all realize that they will need and want to step down at some point. The best transition is a well-crafted one with proper mentoring and lead-time.

What will happen when the candidates with the right business skills say, “No thank you”? The risk of the “no thank you” is very high as the role of managing partner is defined today and will become even more significant if there isn’t some powerful change.

Remember your audience of potential successors: the bright young people who are committed to work/life balance; the e-mail and possibly Facebook/Twitter generation; the folks who don’t come close to logging the kind of hours you and your contemporaries still do; the people who thrive on problem solving and diverse points of contact; the crew that enjoys playing the modern-day accountant; and the individuals who are motivated by more than just compensation. The younger potential successors view the current job description of managing partner as a turn-off, and contemporaries don’t want the aggravation and challenge, just the glory.

As every successful managing partner knows, there is a solution for everything—some are bold and some are simple. This one falls into the bold arena. It is time to change the way you operate so that leadership of your firm can be viewed as an attractive goal. Your rising stars won’t be comfortable if they are told they can change the way the position is handled; they want proof that the change is already accepted.

Here are some examples of the kinds of changes that will make a difference. Managing partners have become accustomed to controlling and managing extensive detail, and while they make many decisions, the details tend to be the consuming nature of their position and create an image that does not highlight the decision-maker role. You must actively delegate the detail processing to your administrative team.

Change their job descriptions, and if need be, change the players or upgrade them so you have the confidence in their ability to process the details. Require reports on issues from your team prepared in a format that allows you to review a summary at the top, just as you did when you ran an engagement. As a matter of fact, you need to take a few pages out of the old engagement management checklist and use them routinely to run the firm.

All of the members of the team—department heads, niche leaders, executive committee members and principals—need to know and believe that your role is to set the tone, review performance and make decisions. You are not to be running the firm. That is their job.

Typically it is the manager and/or senior who runs an engagement; never the partner. So, too, with running the firm—that is not the managing partner’s job. This is a major change, yes, but it is critical to the future of your firm. As with any major initiative, communication within the firm is important, including who is impacted, the benefits, and the timeline for achievement.

In tandem with these shifts, it would be helpful to even change the title of managing partner/director or principal (which have that detail management stigma) to one that brings the attraction of decision making and possibly problem solving. Titles such as chairperson, chief executive, or partner-in-charge of business operations should be considered.

You must also increase your level of client contact and client service hours. The candidates in waiting enjoy the diversity of working with different clients and thrive on the consultative and advisory function that they deliver to a variety of clients.

The next leader of your firm needs to know that serving clients and serving the firm as the chief executive are compatible functions. The current model of leadership is built around the managing partner having one client or one dominant client, namely the firm. The next generation is stimulated by multiple relationships and has a view that if they wanted one client, they would go into private industry.

Furthermore, it is likely that the next generation will view firm leadership as just one chapter in their lives and not be prepared to make it as long of a career as it has been for modern-day managing partners. In order for folks to be comfortable that they can make this a chapter, they need to continue to be involved with clients so they can return to them when they complete their leadership service.

You are the role model and it is vitally important that you present the role as something that can be done, so you must creatively get yourself back into the client service process, even if it means that your time is not charged during the transition.

The concept of one individual looming so large and having so much ground to cover will not be a positive motivation to assume firm leadership. The responsibility of leadership will be viewed as an honor and another of the many challenges that motivate the potential successors to succeed.

Your mission is to create a new reality: one where you spend less time than you have in the past; where decision making is the primary focus; where management of the business functions is disbursed to people who are detail experts; and where teamwork is a routine approach to firm priorities.

The regimen I have outlined is only a beginning. As your doctor would say, let’s get started and then we will add some more, but if you don’t get started…

Ira S. Rosenbloom, CPA, is the chief operating executive of Optimum Strategies LLC, a consulting firm focused on helping accounting firms implement successful business development and practice management programs.