In my last blog, People Development: More Important Than Business Development, I referred to the importance of having a formal “path” for aspiring partners to follow as they seek admission to the partnership. Based on considerable observation of the firms we help to achieve success, it is clear that many have not outlined this path to partner. In fact, according to the 2011 Inside Public Accounting Benchmarking Report, only 60% of all respondents reported having stated requirements for partnership. And for smaller firms below $10 million in revenue, less than half reported having a path to partner. Why is this? I have arrived at three key reasons:
- Some current partners don’t realize or understand the importance or need for a path to partner
- While some recognize the need for a path to partner, they don’t understand what is required to have an effective one
- Finally, there are many who recognize the need for a clear path to partner, but who are fearful or unwilling to provide one
Since the first two reasons for a missing path to partner are less complicated, I will briefly address them before turning my attention to those who are fearful or unwilling.
Is a “path to partner” really important? According to the AICPA PCPS Top Talent Survey, 69% of top talent said their firms did not have a partner track or they did not know if their firm had one. Developing your firm’s partner track is essential to long term sustainability from both a retention and succession standpoint. Both the retention and succession risks are real. Younger CPAs with talent can find employment anywhere or start their own practices with many retirees willing to transition their clients. Providing a clear path to partner can provide your firm with a competitive advantage over those who chose not to take on this challenge. Bottom line: Your people need a roadmap to know what’s possible, what’s expected and when.
What does an effective path to partner look like? It starts by defining the key skills, experiences, and behaviors expected of your current partners. After all, you can’t provide guidance to your firm’s potential future partners without a clearly defined “picture” of what a partner should look like. These required partner skills, experiences and behaviors must be detailed for all performance levels in your firm, including required learning at each level of progression, and goal setting to move from one phase to another. A clear path to partner also includes a timeline for progression through it, partner capital requirements, and details on partner compensation. To be most effective, each rising star or high potential employee should also be assigned a “mentor” who is willing to take “ownership” and be accountable for their development.
So now that you know that a path to partner is wanted by your people and you have a sense of what an effective path to partner looks like, why do many still have fear and an unwillingness to provide one? The thing about fear is that it often causes us to get “stuck” on only one side of the thought process. Instead, we should take a more balance approach and look at both sides of an issue that concerns us.
With that in mind, allow me to suggest three reasons for the apparent “dread” around providing a path to partner, along with a more hopeful “flip side”:
- Fear of exposure – The current partners are not performing at the level expected for new partners and don’t want to make this evident by providing clear expectations in their path to partner documents, opening themselves up for scrutiny
Hopeful flipside – No one wants to look bad, rather we all have self-interest in looking good. So it’s understandable that current partners might fear having their underperformance exposed. However, worse than being exposed for underperformance is losing the trust of your people. Trusted leaders lead by acknowledging their need to get better and demonstrating their leadership in doing so. Instead of dread, be hopeful about the possibilities of lifting the overall level of individual and firm performance, growing your firm, making room for new partners, and providing future sustainability by documenting partner expectations, living up to them and motivating up-and-comers to do the same
- Fear of falling short – The current partners are afraid of making commitments by providing a path to future partners and not being able to follow through on them
Hopeful flipside – No one wants to make commitments and fail to keep them, however, laying out the path to partner simply provides a foundation for the growth and development of your people, not a guarantee of partnership. In the absence of straight talk about something important like admission to the partnership, your people will make things up. Things like, “you don’t need to or want to make any new partners, you don’t care about them, or that there is no future for them at your firm.” Is it somehow better to leave your people in the dark, uncertain of your plans for them and allow them to potentially come to negative conclusions that place their retention in peril?
- Fear of being pushed out – The current partners fear that by providing better guidance to aspiring partners, they will be overtaken and pushed out before they are ready to retire
Hopeful flipside – While your fear of being retired earlier than you’d like is understandable, what about your fear of coming to retirement and having no one capable to replace you, no one to care for your clients and sustain the firm into the future, no one to be your legacy? And as importantly, no one to pay for your retirement?
According to the Merriam-Webster dictionary, to lead is “to guide on the way especially by going in advance.” Leaders lead. They show the way for the next generation. There are only three available choices to current partners: lead others, follow others, or stand in the way of others. The worst choice is to stand in the way. The best choice is to show the way by providing a clear path to partner.
We will continue to help our clients succeed by developing and nurturing their future leaders. In the meantime, if you have any ideas or experiences to share on this subject, please post them so others can benefit.