Bill Reeb
  Dom Cingoranelli   Michaelle Cameron
Bill Reeb   Dom Cingoranelli   Michaelle Cameron
Developing your skills and your team: Key steps in succession planning
To build a sustainable business, savvy managers must develop themselves and those around them.

May 17, 2012
by Bill Reeb, CPA/CITP, Dom Cingoranelli, CPA, and Michaelle Cameron, Ph.D.

A management gene does not exist; management is a learned skill. Any CPA firm owner or manager can improve his or her abilities in key areas. CPAs must model appropriate behavior and skills if they expect to develop them in their people, and for people to be able to model the appropriate behavior, they often need to first take a hard look at their perceived behavior. For those who wish to better understand their management blind spots, as well as identify opportunities for personal growth, we recommend a confidential statistical validation of skills through instruments like a 360 degree feedback survey. A variety of such instruments are available, such as our QuadLead instrument for CPAs, otherwise known as the Succession Institute Managerial Leadership Assessment. These instruments measure skills in a number of areas, such as decision making, leadership, delegation, performance feedback, and interpersonal skills.

By choosing one or two areas to work on at a time, managers can readily make incremental improvements in their behaviors. By adopting an incremental approach, managers can make changes without a lot of disruption to their organization or themselves. Another way to look at this is that it is very difficult to be effective at managing others if you are not aware of yourself, your actions, and how you are perceived. Awareness is the first step in learning how to better manage yourself.

In addition to the broad, managerial skills assessments, CPAs can use a variety of special purpose assessments to help increase their effectiveness. For example, one such assessment is the Situational Leadership suite of tools created by the Center for Leadership Studies to help executives learn how to properly delegate. For CPAs who wish to learn how to become more effective delegators, supervisors, and developers of people, the tools are available; CPAs just need to avail themselves of them.

Another area of improvement is often the most overlooked for small firms. It is the idea of specialization. We are not referring to service specialization, such as personal financial planning, business valuation, and so on; rather, we are talking about roles and responsibilities.

For example, a solo practitioner has to do everything, from being the partner in charge of client relationships to serving in the capacity of technical partner, doing the manager-level work, and fulfilling the duties of the staff and firm administration (acting as the ultimate hunter). Often, as firms grow and additional people are hired, the hunter just keeps on hunting, hoping that everyone else will catch on and pull their share of the load. Although this approach works, it becomes less effective with each additional hire. To make the firm better, faster, and stronger, the hunter should first redefine his or her roles and responsibilities and then do so for everyone else. Each time another person is added, more specialized roles should emerge. So, rather than trying to teach everyone to do everything, all employees can become more effective more quickly by focusing on a constantly narrowing set of duties.

For example, take the role of a partner. You would think this role would be the first one defined in every firm. Actually, our experience is that it is the last. In most firms, partner usually means “I now can get away with doing almost anything I want.”

Manage the performance of your subordinates

Part of developing subordinates involves managing their performance. This means that a CPA firm owner helps employees set goals and achieve them. It also means that he or she holds the staff accountable for results. Savvy CPAs use employees’ mistakes as tools for learning and development. They encourage people to take measured risks to improve themselves, the organization, and their people. At the same time, they do not tolerate inertia or excuses.

Performance management requires CPA firm owners to delegate to their managers and provide appropriate direction, support, and follow-up to them. In turn, the managers need to be able to appropriately delegate to their direct reports. An owner or manager can help improve subordinates’ performance by routinely meeting with them individually to discuss progress toward goals and ways to remove barriers to goal achievement. To do this effectively, the owner or manager must have a system to monitor subordinates’ goals and commitments.

This also means the owners or managers have to treat the job of developing people seriously, which is as important as doing any technical work. In the professional service business, people are our inventory (their skills comprise the collective intellectual capital of the firm that helps differentiate it from the competitors). The more quality inventory a firm has to sell, the more profitable the organization and the higher the client service.

Developing quality inventory (skilled people) doesn’t happen without a concerted effort and a firm culture focused on the importance of making those people around you better, faster, and stronger (which means a significant amount of partners’, managers’, and senior executives’ time is spent training, teaching, and coaching the people who report to them).

As we stated before, a management gene does not exist. This is all very learnable, and if the owners and managers of many small to midsized firms devoted time to building the firm’s intellectual capital by working on these skills, they would benefit from them immensely.

Develop the management skills of your subordinates

GE, which is known for its ability to produce quality management teams, conducts extensive in-house management training for its people. Senior executives play a key role in those training sessions. Certainly, CPA firms don’t have anything close to the resources of GE, but much can be done very inexpensively to continually improve the management skills of their subordinates. We all have three basic resources: money, time, and skill. Your most scarce resource will drive how you put together your training and development programs. If money is your most scarce resource (which is the case for most small firms), then your programs will have to be put together by (1) allocating time for key people to focus on quality and constant internal training and (2) developing better on-the-job training by letting your more inexperienced people shadow employees who are proficient in their work.

Even this isn’t enough if the people who are supposed to be passing on the knowledge are not rewarded for the development of those around them. One of the common messages we tell partners, managers, and senior executives in CPA firms is “If the only person you can develop is yourself, you’re not worth nearly as much to this organization as someone who can develop those around them.” In other words, a person who can make others better, faster, and stronger creates leverage for their firm and, therefore, should be the first in line for promotions and financial rewards. We need to be supporting a culture that values those people who make others better. In most CPA firms, the value system in place is built around those people who can personally produce, which tends to put a huge priority on cranking out more work versus cranking out better inventory (more highly skilled personnel).

This is an excerpt from Securing the Future: Building a Succession Plan for Your Firm. You can purchase the publication at CPA2Biz.com.

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