I don’t know about you, but I did a “double-take” when I read the title to the recent blog published August 17th by my colleague, Michelle Baca, entitled, “Why Your Clients Shouldn’t Come First.” After all, isn’t our primary mission in the CPA profession to serve and add value to our clients? I mean, who in their right mind really believes that, “Customers Come Second?”
Back in 1987, while attending a conference for new tax managers, I listened to Ed Kangas, the managing partner for Touche Ross & Co. express his view that in the business of public accounting, there are two important groups: the firm’s clients and the firm’s people. And that as conflicts inevitably arise in serving the needs of these two important groups, those conflicts have to be resolved in favor of the firm’s people.
Kangas explained that having committed, motivated and talented people, serves not only to retain existing clients, but also to better attract new ones. On the other hand, the loss of the firm’s people brings increased the risk of also losing its clients. This “renaissance” idea about the importance of people to the CPA profession has developed and matured into widespread people practices, which have brought about more flexibility, better work / life balance, lower turnover and better retention. But while much progress has been made, I believe there remains a need for increased focus on the importance of people development.
Many CPA firms today have written or unwritten partner performance expectations, which in turn lay out a “path” for the firm’s aspiring partners to follow. One key requirement for admission to the partnership is often business development capability, typically demonstrated by an aspiring partner having a minimum client base consisting of new clients the aspiring partner has acquired on behalf of the firm, solely by his or her own efforts.
[It should be noted that in many cases, this business development expectation has not been met or is not presently being met by all of the current partners. This lack of “leadership by example” can result in discouragement, disillusionment and dropping out of the process for many aspiring partners.]
Personally, I am an advocate of requiring the firm’s current partners to transition a portion of their client base to new partners, allowing new partners to become skilled at their new roles by serving existing clients, while sharing the challenge of new business development with more mature, seasoned partners. And instead of the often insurmountable business development requirement for admission to partnership, I suggest an equally challenging, yet more important requirement: demonstrated people development capability.
Moving into a new role in the firm should require the aspiring partner to develop their successor(s), and to demonstrate capabilities in leadership, inspiration, motivation, patience and the dreaded “D-word” – delegation. Emphasizing people development as a threshold to partnership also addresses the “ripple effect” often caused when roles are changed, along with increasing the capability, commitment and “bench strength” of the firm’s next generation of “rising stars.” And by the way, since clients are people, too, people development skills often translate directly into business development skills.
Please don’t hear me for what I’m not saying. I’m not suggesting that business development and client service capabilities are not important to the current and future success of your firm, because they are. What I am saying (or trying to say) is that all partners should be able to develop their successors, to lead, inspire, and delegate, while business development should be more of a “team sport” that all partners play together. This doesn’t preclude some partners from ultimately becoming key rainmakers or key people developers in the firm, or from being recognized and compensated accordingly.
The words of successful business leader Harvey S. Firestone seem to sum it up well: “It is only as we develop others that we permanently succeed.”
We will continue to help our clients succeed by developing and nurturing their future leaders into capable people developers. In the meantime, if you have any ideas or experiences to share on the subject of People Development: More Important Than Business Development,” please post them so others can benefit.