Holding CPA Firm Leaders Accountable
With revenues down, profits squeezed, staff restless and clients demanding value as never before, top leaders at the nation's accounting firms are ratcheting up performance standards for themselves, each other and staff members. How does your organization rate? Send comments here.
September 16, 2010
Making partner in an accounting firm is not what it used to be.
Traditionally, becoming a partner in a CPA firm meant the end of a long, hard slog of grunt work and extended hours. But in today's competitive environment, making partner is only the beginning of a new chapter of risks and challenges. And the work isn't getting any easier.
Today's top CPA firm leaders are looking for new ways of building successful, enduring organizations. According to accounting firm management consultant August Aquila, the culture of collegiality that gave way to a culture of entitlement is giving way to a new culture of performance and accountability.
"The lack of accountability can have a real impact on a firm's profits," Aquila says. And with today's shortage of high-level talent, new pressures to produce value for clients, and a white-knuckled squeeze on profits, holding leaders accountable has rarely been more critical to survival and success.
"But accountability is hard to implement," Aquila says, leading firms to make some common mistakes, like turning it into a checklist, or simply logging more information about evermore-minute activities.
"Instead," he says, "accountability must permeate the entire culture of an organization" to be truly transformational. It must affect the way a firm is governed and managed, how the firm structures policies and systems, allocates and accounts for resources and how it engages stakeholders.
Aquila begins with seven critical building blocks to creating a new culture of accountability. The list can also be used as a quick diagnostic tool for your own organization.
See how well you and your organization score:
1. Strategic Leadership: Do we have a clear, compelling and realistic mission and vision? Are our decisions based on achieving our mission and vision? Do we ensure that we have the right capacity (human, financial, infrastructure) to effectively implement new services and activities?
2. Performance Culture: Do we regularly and rigorously evaluate the right measures? Do we take prompt and corrective action in response to the performance information? Do we reduce barriers to higher levels of performance? Do we generate new and better ways of doing things and approach challenges creatively?
3. Clearly Defined Authority and Responsibility: Are the responsibilities and authority of each stakeholder clearly stated and understood throughout the organization? How well defined are partner roles and responsibilities? Do we set expectations and tie compensation to performance?
4. Embedded Core Values: Are we driven by a set of core values? Will we turn down work if we would have to break or bend a core value? Do we annually evaluate owners and staff on living the core values? Is compensation tied to living the core values?
5. Transparency: Do others clearly feel — by the things we do — that we really have their best interests in mind? Is the information we provide clear, consistent, truthful, relevant and thorough? Do we disseminate the right information to the appropriate stakeholders?
6. Shared Ownership: Do we do what we say we are going to do? Have each of our staffers bought into what they have clearly and specifically promised to achieve? Are all owners and staff members recognized and held responsible for achieving what they said they would accomplish?
7. Engaged Owners: Does our engagement of critical stakeholders inspire passion and motivate commitment to the organization?
If your firm can answer most of the questions affirmatively, then Congratulations. You're already operating in a culture of accountability that drives high performance.
If not, then you know what you need to do. Accountability starts here and now.
COMMENT: What do you see as the key to accountability? Send comments here.
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Rick Telberg is president and chief executive of Bay Street Group LLC, advisors in marketing, management and strategy.