More on Culture in CPA Firms

Source: Possibilities for CPA Firm Leaders, the Blog of Rita Keller

Following are excerpts from a blog entry on July 28, 2008, which are reprinted with permission.

A firm’s culture will be influenced to a modest extent by the sheer force of personality coming from the person on the stage. But, culture is influenced more substantively through decisions that person—and “partners” throughout the firm—make, which then shape behaviors, which subsequently become part of “how things are done here.”

But your firm’s culture isn’t set in stone. It isn’t ever “done.” The way that you will affect it most is through the strategic and organizational choices you make or facilitate every Monday morning.

In professional service firms, these choices are particularly challenging, because firm leaders lack the positional power and authority of their peers in traditional corporations.

Leadership Without Control

Leaders are often asked to take responsibility for activities over which they lack direct control. Nowhere is this more evident than in professional service firms. Unlike their peers in traditional corporate structures, they lack the positional power to enforce their decisions—even at the chief executive level.

Leadership is critical to a firm’s success precisely because of the inherent characteristics of the PSF business model. Without strong leadership, the necessary diffusion of power throughout a firm can paralyze decision-making and undermine alignment. It is a delicate balance of power between a firm’s leaders and the partners they serve.

The PSF leader starts with a different hand of cards. His peers have ownership in the firm. So unlike the senior executives in a corporation, who defer to their bosses’ judgment, these peers believe they have the right to question, debate, and even oppose initiatives with which they disagree and often do so. These dynamics ensure that the CEOs role in the PSFs decision-making is both constrained and complex.

From Possibilities for CPA Firm Leaders, July 24, 2008, the Blog of Rita Keller, shareholder of Brady Ware, a nationally known regional CPA firm. Rita is also a nationally known consultant, speaker and author on CPA firm management. Visit http://cpamanagement.blogspot.com/.

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