It doesn't matter where I go or who I'm with, I keep hearing the same song. Our next generation (Next Gen) leaders are restless. They want change, and they want it now. And the chorus they're hearing from the "establishment" is the same: "Change takes time—be patient," or worse, "You can make these changes when you're the leader in X years." But saying those things only highlights that established leaders don't get it. So the tension keeps building, and patience is wearing thin. That's why I'm writing this letter to my fellow established leaders. The message is simple. Make change happen fast or risk losing your next generation of leaders and owners.
The Next Gen has a very consistent list they mention when they speak of the changes they want to see. I tell existing firm leaders that this list has simple things on it and harder things, too. For some firms, the simple things are already happening, and they're talking about making the more challenging changes occur, too. But, in far too many other firms, they are still debating the simplest of changes, to the great disappointment of their future leaders.
So, you may be asking—what change do I make first? The first is the most important one. Form a Next Gen leadership group. Tell your young leaders that you know that the speed of change in your firm must accelerate and that you want to build a firm that they love and want to own in the future. Ask them to study and propose changes they'd like made and to present those changes—the what and the how—to your leadership team by a specific date. Then take the time to hear them out. And be careful not to discourage, argue with, or make their suggestions wrong. Seek to understand. When they share their ideas, spend most of your time discussing how to make their envisioned changes happen, not arguing over why they can't.
Then, be ready for a lot of big, small, and sometimes controversial ideas to come from them. Some to anticipate include:
- Moving to a Dress for Your Day policy for professional dress. This is the allowance of jeans any day of the week, provided you don't have client or other meetings where jeans would be inappropriate. For some firms, controlling the attire of their people is a big deal, and it is protected with passion and vigor. Give it up! It's the easiest thing to change! And the "big firms" have already given in on this one. Have the person responsible for your HR policies research Dress for Your Day programs and the recent changes made by public accounting firms including Grant Thornton, Crowe Horwath, and Baker Tilly. Initiate a pilot program as soon as you can pull it together. This, my friends, is an easy victory!
- Enhancing your firm's flexible work programs. This includes late start, early start, zero overtime, four-day work weeks, Fridays off in the summer, remote work, work from home, self-managed schedules, and more. There are many opportunities to improve the flexibility your people have related to their time and the place from which they work. You can read more about what firms are doing in this area by studying the results of our annual Anytime, Anywhere Work Survey.
- Bringing the Next Gen into everything. Involve them in strategic planning and management meetings, even if on a rotating basis, so that they can see how things work and present their ideas. Bring them along to client, prospect, and referral source meetings. Take a Next Gen leader to every conference and network or association meeting you attend. Have no more "established leader only" activities if you can help it!
- Investing in technology. If you don't already have one, form a Next Gen technology and process committee and let them loose on reengineering your firm's business processes. Have them prioritize the top five system, process, or technology changes they want to make—the what and the how—and then invest in their ideas and make these changes happen. This one should be easy because it is likely to increase efficiency and save money and time.
- Introducing new services and developing new specialties. Most Next Gen leaders are very interested in consulting services and ways to make compliance services more relevant and difference making for clients. Listen to their passions and interests. See how you can make longer-range plans to evolve your firms' product/service mix to include more consultative services and a better balance between traditional compliance and consulting.
- Changing your pricing practices. Pricing ahead. Pricing based on value (not time). Repricing low-realization clients. Getting paid what you're worth. The Next Gen has much higher pricing self-esteem than the establishment. Listen to their ideas. Give them the latitude to test their suggested pricing for services, pricing, and invoicing ahead, monthly billing for annuity clients, and more. The market is changing. The labor shortage is driving your costs up and the demand for your services up, too. Take the risk of letting your Next Gen pilot some new pricing programs, and see what you all can learn in the process.
- Shift your KPIs. Listen to Next Gen leaders' ideas for ways to measure their productivity and contribution. Be open to different goals and metrics. Avoid keeping things the same by measuring and paying for things the same way. For more on this topic, read my last two CPA Insider columns—"Want Your Merger to Work? Implement These 10 Ideas," May 2, 2016, and "Want to Make More Money? Focus on Revenue-Producing Behaviors," April 4, 2016.
- Removing human obstacles. Now we're getting into the more challenging changes. Your Next Gen leaders have opinions on people who are holding you back. Staff people not pulling their weight. Partners demanding "old school" processes (paper!) for their clients or not allowing staff to have client contact. Some firms tolerate bullies, inappropriate client behavior, and more. These people act as repellent to your future leaders. Manage them into better behavior, higher-level performance, and compliance with change—or manage them out of your firm. I know this seems harsh, but if your clients have people who are driving the value of their firm down and driving their best people away, what advice would you give them?
- Increasing transparency. Future leaders want to know how everything works. They need to study the business model, practice economics, and the way things fit together to help drive intelligent change and also make the business decision as to whether this asset of yours is one they'd like to own. Share as much as you can, as fast as you can. Where there are weak spots in your financial story, ask the Next Gen what they'd change to shore up those weaknesses. You'll be surprised how quickly young leaders can become part of your firm's solution—not your problem. You just need to share your challenges and invite their help. The days of sharing information on a "need to know basis" are over. Next Gen leaders will trust your transparency.
I've written reams about the talent shortage and the demand for bright, talented Next Gen leaders. The opportunities for young CPAs are almost endless—within public accounting or industry—as an employee, partner, or owner of their own firm. Daily, they must choose to leave or stay and build a career with your firm. For them to stay, your firm must be a place that inspires and excites them, where they are proud to work. For many, it must also be a place that they can see themselves actually owning one day. Is your firm one of those today?
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.