How Not to Handle Succession Planning

Source: Accounting Office Management & Administration Report

CPA firms avoid succession planning because of fear—of funding retirement and of transitioning the work. But fear will not make the problems go away. Firms should avoid the following mistakes in succession planning:

• Treating succession planning as a one-time occurrence. It is not. It should be a continual process. As the firm changes, succession plans change.
• Delaying the process, which may force sale of the firm.
• Partners who do not have lives outside the firm, which makes their retirement more difficult.
• Failure to train the successors. It takes two to four years to train an incoming managing partner. It takes two years to complete transitioning clients to new partners. If you do not train your future leaders now, you will lose them.
• Failure to distinguish between support and commitment. The former is simply getting out of the way. The latter requires a proactive interest in creating something.
• Allowing partners to hang on to clients.
• Not developing a vision of the future and a plan to achieve it.
• Creating a succession plan without involving the successors.
• Not committing the plan to writing. There will be no accountability or ability to evaluate the progress of a non-written plan.

From Accounting Office Management & Administration Report, August 2007, p. 1. For subscription information contact Institute of Management & Administration, Inc., 3 Park Avenue, 30th Floor, New York, NY 10016-5902. One-year subscription $399. 212-244-0360, [email protected]. For the complete article, click here.