Succession Planning and the Value of the Firm

Source: Accounting Today

L. Gary Boomer, of Boomer Consulting in Manhattan, Kansas, says successors should be identified among not only the partner group but among staff as well. Only in learning organizations can successors be developed.

Boomer says firms don’t invest heavily enough in training and that they should:

• Begin training with a description of the skills and knowledge needed for the job.
• Begin a mentoring program.
• Review firm processes—begin with procedures related to tax returns and financial statements, and to billings and collections. Identify inefficiencies inherent in doing things the way they have always been done.

In too many firms, especially smaller firms, knowledge is hoarded by the partner group. Firms often do not communicate their strategic plans with staff. Here is what should be done:

• Prepare a schedule of projected partner retirement dates and the number of future partners needed to provide for growth of the firm.
• Each partner over 50 should create a one-page succession plan that is updated every year.

Partners do not transmit knowledge because they do not have confidence in staff. This attitude is a major roadblock to success. Training is more than CPE. Successful firms are those that demand that partners teach.

From Accounting Today, March 19, 2007, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809. For the complete article, click on the following link: www.webcpa.com/current_issue.cfm?pub=ato, then select Intelligent Succession in the March 19, 2007, issue.