Allred Spells Out Five Key Issues Facing Your Firm And The Decisions Firm Leaders Must Make To...

Management Summit 2006

Staffing? Succession? Partner discord? Partner retirement? Regardless of the issue, the worst strategy for responding to the significant issues facing your firm is to hope they'll go away, says consultant Sam Allred of Helena, Mont.

Allred addressed five key issues

Key issue No. 1: Poor development of leaders. In the corporate world, leaders are identified early, trained and mentored for years, and prepared for eventual leadership responsibilities as their careers progress. It takes five to 10 years of preparation to effectively function in a leadership role. In many ways, accounting firms approach leadership development very differently than the corporate world does, Allred pointed out. For example, many partner groups haven't accepted leadership training as one of their primary responsibilities. "All owners should feel personally responsible for developing firm leaders. You can't delegate it. Partners not only need to accept this, but they must do it with enthusiasm, not grudging compliance," he said.

Spontaneous Retirement? Plan For Partners' Exits

Key issue No. 2: Casualness in retirement planning. Many firms fail to give adequate thought to the retirement of their senior partners and are unprepared when it's time for that partner to pass the torch. Allred urges firms to address the following retirement planning issues: the normal and early retirement ages; whether there's a mandatory retirement age and what it is; whether the retiring partner can remain an employee of the firm and how many years the retiring partner may work for the firm; the compensation process for the retiring partner; whether a partner relinquishes equity and decision-making rights upon retirement age; the notification period of the retiring partner; who is responsible for developing the written retirement plan; and internal and external communication about the partner's retirement. Retirement planning documents should include a written retirement plan, a partner transition policy, a client transition worksheet, a partner transition agreement, and a client transition plan.

Key issue No. 3: Lack of partner unity. "Too many firms have unity issues," Allred says. "You can't have a strong firm culture independent of partner unity. If you want to see a firm's culture, line up the partners against a wall. That's your culture." He gives four tips for developing partner unity: implement a confidential 360-degree annual partner evaluation to help identify your blind spots; adopt a repeatable process to address sensitive or unpleasant issues that nobody wants to address; hold a partner retreat where you develop a partner commitment statement that spells out what partners expect of and owe to each other; and make sure that partners know that they can't opt out of firm commitments and partner obligations - they can't treat them casually.

* Key issue No. 4: Casualness in recruitment. The war for talent is so intense that there's no room for mediocrity in recruitment, Allred pointed out. Have a written recruitment plan that details strategy and recruiting duties of staff at all levels. "You can't afford to adopt a strategy of hope when it comes to recruiting. Most firms don't have great processes in place that really help bring in the best and brightest employees. With some effort, every recruitment process could be improved substantially. It's vitally important that you take a 'leave nothing to chance' approach in hiring the very best people you can," Allred said.

* Key Issue No. 5: Casualness in staff retention. Nothing guarantees that a particular employee will stay with the firm, but leaving staff retention to chance increases the odds of any employee jumping ship. Develop processes that will help you stay informed about employees' career satisfaction levels. Shift training emphasis from CPE to a program designed to increase the skills of your people every month and that fosters a learning culture. Put key people on teams with managers and partners to help them increase their responsibilities earlier in their careers. Imagine what you'd do if a valued employee told you that he or she was leaving, then do it now.