CPA INSIDER

6 leadership mistakes to avoid

These errors are leaving too many firms behind the change curve.
By Jennifer Wilson

Lead, follow, or get out of the way.

You likely have come across that saying before. Do you know where it comes from? Some people believe Gen. George S. Patton said it (he didn't, but he reportedly said something similar). Others have reported that Thomas Paine came up with it (not true). It was used as the title for a 1981 biography about Ted Turner, but most people have never heard of that book.

Whatever its origin, "lead, follow, or get out of the way" has been running through my mind a lot lately—in meetings with clients, discussions with fellow consultants, and when listening to next-generation leaders assessing our profession. I've thought about it so much that it feels like the basis for an important message that established CPA leaders need to hear. And that message is this:

"Critical change is everywhere! Either lead your firm through it, follow the change ideas of others, or step aside."

I cannot remember a time when there were so many imperative changes happening at once in our profession. Today, inside your organization, you face pressure to drive change in at least five areas:

  • Talent: Changes include addressing demographic shifts, impending retirements, different generational motivators, the need for more inclusion and diversity of thought and experience, the challenge to develop your people at a faster pace, the move to continuous, more efficient feedback systems, the need to identify and develop advisory talent earlier, the move to "relax" the work environment, and shifts in recruiting strategies and technologies, to name just a few.
  • Technology: This area is so huge we can't list everything, but consider these "big 3" areas: (1) technologies to improve service delivery efficiency (scan and auto-populate for tax, data extraction technologies for audit); (2) smarter technologies to manage firm functions (CRM, remote access technologies to support a mobile and remote workforce, enhanced social applications); and (3) technology consulting support for clients (cybersecurity, service organization control (SOC) reports, ERP support, ERM, etc.).
  • Client experience: Firms are starting to develop smarter internal data to serve clients on a more customized basis, using technology, data analytics, and more dedicated resources focused on "client touch." The goal is to provide clients with the right service at the right time. And firms are recognizing that they can't serve next-generation clients the way they serve the current ones. Virtual services, cloud platforms, and digital media are examples of changes that fit here.
  • Product/service mix: The move to mitigate any threats to compliance (mainly due to technology) by building up your firm's advisory services, building more value into your compliance offerings, and delivering new value through a wide range of consulting offerings.
  • Business model: This refers to many things, including the following:
    • The trend of moving to a truly flexible work environment where employers don't care about the time or place work is completed.
    • The shift toward more packaged service offerings priced strategically and not by the hour.
    • Changes to partner compensation to build a high-performance, results-focused leadership team.
    • Shifts in deferred compensation programs to ensure the long-term sustainability of the firm.

That's a lot to deal with, so the first step in addressing these issues is recognizing that you cannot tackle all of these changes at once. You need to choose no more than two or three initially and work on those, adding to your initiatives as you progress. Perhaps your firm is already embracing change in some of these areas. If you're on the path and your firm has two or three major change initiatives from this list underway, great work!

Unfortunately, I encounter firms every day that are woefully behind the change curve because they are making one or more of the six fundamental leadership mistakes. To avoid their fate, leaders in your firm need to ensure they are not:

  • Uninformed: In too many firms, partners are unable to make or prioritize the list of critical changes outlined above because they aren't attending conferences, reading trade publications, or following trends as closely as they should.
  • Mired in politics: Leadership teams have no energy or capacity to compete externally because they are too busy with infighting, factions, internal politics, triangulation, and other emotional overhead that causes them to compete internally.
  • Too bureaucratic: Partner groups or service line leaders take too long to decide on a change. They debate and over-analyze instead of driving change. They have involved too many partners for too long, including making the huge mistake of deferring to leaders who won't be with the firm in five years. Stop focusing on producing a perfect plan agreed to by 100% of the leaders. It is more important to be nimble, adaptive, and progressive.
  • Too nice: Too many leaders can't make the tough decisions necessary to stop doing something so the firm can start doing something else. This includes being unwilling to make difficult personnel decisions to put the right people in the right spots so that change can succeed and the firm can progress. Stop waiting until everyone agrees so that no one feels uncomfortable or "left out."
  • Too selfish: Too many partners are unwilling to invest in the future because they want to keep earning at levels beyond their wildest dreams until retirement, when the firm can start making real investments for change. Many of these same leaders are unwilling to adapt or change because it would take too much personal effort or allow someone else to be the "new expert" in something.
  • Lacking the skills to manage this kind of change: Some leaders simply don't know where to start or how to manage the changes needed. These leaders lack the gifts needed to take the firm to the next stage of growth and address these dynamic market forces we're facing.

These are not necessarily terminal conditions, but they cannot persist if you're going to succeed, which leads me back to my original message. To ensure your firm's long-range success (or prepare your firm to be attractive for buyout), you need to do one of the following:

  • Lead: Have your partner group read this column and speak honestly about any of these leadership mistakes in your group. Commit to change behavior. If you don't know how, engage an outside expert to help. Then, identify two to three change initiatives from my list (or your own) and implement them in an unstoppable manner. Gather the right group of change-ready leaders. Be relentless. Make it happen!
  • Follow: Stop resisting change in your firm. Stop complaining. Set aside selfish interests and do what's best for the greater good. Encourage those who work for you to participate in whatever change your leaders are driving. Remove any drag you've been bringing to the process and allow the firm's change initiatives to succeed.
  • Get out of the way: Talk to your firm's leader or executive committee about your inability or unwillingness to make the changes needed. Discuss options for operating outside the change (without inhibiting it) or make plans to transition out of your current role, if you are in a key leadership position. This may also include planning to transition out of the practice altogether.

When you don't lead or follow, you resist. And resistance reduces firm profitability and sustainability!

Are you going to lead, follow, or get out of the way? Decide now so your firm can be the dynamic, market-ready, competitive place that next-generation talent and clients deserve.

Jennifer Wilson is a partner and co-founder of ConvergenceCoaching LLC, a leadership and marketing consulting and coaching firm that helps leaders achieve success. Learn more about the company and its services at convergencecoaching.com.

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