*CPA Firms Suck at Succession Planning
Source: The Marc Rosenberg Blog
The following includes excerpts, reproduced with permission, from a blog entry by Marc Rosenberg.
Why do only 20 percent of all CPA firms make it to the second generation?
In short, firms suck at succession planning. Partners often lack effective mentoring skills. There's very little accountability for mentoring. Partners fail to give mentoring the same high-level focus as they give their client activities. Firms have inadequate leadership development and mentoring programs. And partners' affluence makes them feel that failure at leadership development will not jeopardize their livelihood.
Tim Christen, the highly respected MP of Baker Tilly and incoming chairman of the AICPA, says it well: “The most important thing you can do for your own success is make the people below you successful.” Here's what I suggest:
- Make it crystal clear what it takes to make partner. Keep the bar high. Use the non-equity partner position as a partner-in-training program. Non-equity partners should not automatically get promoted to equity.
- Create a firmwide leadership development program that provides young staff with the training to become future leaders.
- Train mentors (not just partners) how to mentor.
- Evaluate partners not only on classic production metrics, but also on the extent that people advanced in the firm under their tutelage. Partners cannot “opt out” of this.
- The partner compensation system must provide incentive for success at helping staff advance. You get what you measure.
- Partner accountability (other than compensation) for developing people.
For the complete entry, read “We've Seen the Enemy and the Enemy is Us.”
From The Marc Rosenberg Blog, February 15, 2016, blog.rosenbergassoc.com.