also: the job description in 14 points.
by marc rosenberg
the role of the managing partner
i always tell new clients that i’m “one firm smarter than the last firm i worked with.” that’s because i learn something from each firm i work with, one of the great joys of my 20-year consulting career. i’ve worked with many of the most talented, accomplished managing partners in the u.s. and canada and meticulously observed their style. no two managing partners are the same. each brings a unique style or attribute to the table.
more: why management is the #1 key to the firm’s success | herding cats: advice for managing partners
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as a result of these observations, i’ve pieced together the optimal job description for a managing partner, posted below. though i first put this together 10-15 years ago, i fine-tune it every year as times change and differences in managing partner duties are observed.
no managing partner has this exact job description because it is an amalgamation of the best job descriptions i’ve seen. i always counsel firms that the jd that follows is a good start for preparing their own document. but it’s important to carve out a document that fits the intricacies, style and focus of your own firm.
managing partner job description
1. provides leadership. has the ability to convince partners and staff to believe almost anything with a mix of charm, bravado, appeasement and persistence. gets people to follow.
2. acts as the firm’s chief executive officer. assembles and manages a team of pics and high-level administrative professionals, thus enabling the managing partner to focus on the big picture while avoiding the trap of getting involved in everything.
3. is the firm’s visionary, always thinking about the firm’s direction and future and what needs to be done. decides what kind of firm we are going to build. innovates and keeps the firm relevant. challenges the status quo. is the firm’s champion for strategic planning, especially implementation. gets all personnel to live and breathe the firm’s core values. stresses long-term vs. short-term thinking.
4. is a master communicator. is transparent in communications to create trust. the face of the firm. manages expectations.
5. focuses the firm on growth. managing partners don’t need to be rainmakers, but they must play a major role in coordinating the firm’s overall marketing efforts to make sure enough business development activity takes place continually to produce revenue growth.
6. pursues mergers and acquisitions. today’s cpa firm market produces a continual, ample stream of acquisition opportunities. some of them are easy to find, but most fly under the radar. it’s the managing partner’s job to continually identify merger opportunities because in recent years, growth through acquisitions has been a big source of new revenue for cpa firms.
7. creates a cultural environment that helps the firm attract, retain and develop people. plays a major, continuing role in making the firm a great place to work. deals with human relations at all levels. is continually involved and visible in people issues.
8. deals with partner issues of all kinds, including partner relations, teamwork, conflict resolution, coaching and mentoring (of partners). often includes partner performance appraisals. the managing partner understands that “as the partners go, so goes the firm.”
9. holds a strong leadership role in the firm’s partner compensation system, by either chairing a compensation committee or allocating partner income alone. this includes designing a system that is performance-based and rewards partners for doing what the firm needs them to do.
10. establishes a means of partner accountability. deals with partners who have the attitude “there isn’t a rule invented in this firm that i can’t break.” imposes methods of attaining accountability such as goal setting, counseling, performance appraisals and monitoring performance year-round.
11. takes responsibility for achieving the firm’s profitability goals, both short- and long-term, and constantly monitors progress toward those targets.
12. gets decisions made promptly.
13. addresses succession planning issues on a continual basis. this includes making sure that the firm has effective programs in place to continually develop new leaders and transition client and management duties in an orderly manner.
14. enforces the partner agreement. keeps it relevant to the firm’s size and current governance best practices.
expanding on the managing partner job description
the duties in the managing partner job description are largely self-explanatory. but some embellishments will help convey their depth, substance and nuances.
leadership. there is an aspect of leadership that defies wordsmithing and is hard to describe fully.
don’t confuse charisma with leadership, although there certainly is overlap. i’ve had the privilege of knowing many great managing partners. a few are charismatic, but the vast majority manage with quiet calm and determination, relying on inspired standards, not charisma, to motivate (as jim collins puts it in “good to great”).
a big part of leadership is leadership by example. bill clinton said, “people are always more impressed by the power of example than an example of power.” (i know what you’re thinking.)
the managing partner’s team. accountants, perhaps more than most professionals, have an affinity for detail and thoroughness. the nature of our work requires it. it can be difficult to move from being a detail person to an overseer who prefers delegating to doing. kind of like a great basketball point guard who thinks “pass” first and “shoot” second. this is a big transition for new managing partners.
the managing partner is constantly exposed to issues that arise daily in the firm. none of these issues is unimportant, but the managing partner doesn’t need to address every one of them personally. it’s virtually impossible to maintain a “big picture” attitude when there are a myriad of small administrative issues to resolve. these delegable issues are often urgent. examples:
- why did wip increase 20 percent this month?
- the malpractice insurance premium just increased 30 percent.
- a glitch in the tax prep software is crippling the firm.
- the firm just lost its third star staff person in two months.
i’m not suggesting that the managing partner be totally uninvolved in such issues. but at a minimum, a team of other senior personnel should research the issues, attempt to resolve them and develop alternative solutions for discussion with the managing partner.
managing partners can’t manage the big picture when they are stuck in the weeds. without an able team, the managing partner is doomed to fail.
vision. i’ve loved this albert einstein quote since the day i heard it because it captures the proper mindset of problem-solving: “the most important step in solving an issue is to ask the right questions.”
there is a lot to learn from that. two of my favorite examples:
“if i asked my customers what they wanted, they would have said a faster horse.” – henry ford. message: the managing partner must look beyond what people want because sometimes people don’t really know what they need. and if you ask partners what they want, the answer may be more self-serving than it should be.
“a leader takes people where they want to go. a great leader takes people where they don’t necessarily want to go, but ought to be.” – rosalynn carter. message: part of being a visionary is innovating, which requires risk-taking. firms and people need to adopt stretch goals, which aren’t impossible but require thinking outside the box and working smarter, not necessarily harder. jim collins in his book “built to last” calls these bhags: big hairy audacious goals.
one of managing partners’ main duties is to make sure they ask the right questions, always challenging the status quo with a close eye to the future. this isn’t easy to do with partners who are smart, aggressive, extremely busy and overly self-confident, especially when they earn big bucks and want to maintain the status quo. no one said the managing partner job was easy.
growth. management, of all possible success factors, is #1. growth has a good shot at being #2, perhaps tied with developing great people. growth is the lifeblood of a firm, the only way to avoid stagnation. show me a firm whose growth is flat, and i’ll show you a firm that is on the endangered species list. the managing partner must continually ensure that firm personnel are feverishly active in marketing and business development. without this activity, revenue growth will flatten and stagnation will set in.
mergers and acquisitions. the managing partner must always be searching for merger opportunities. every day, especially in larger markets, at least one firm passes the point of no return on staying independent. these merger candidates may not even realize yet that they are sellers, but managing partners who maintain constant contact with them position their firm to be first responders. for every 10 sellers that buyers talk to, they acquire only one. managing partners need to position themselves to be exposed to these 10 opportunities and then the next 10 and so on.
partner issues and accountability. partners may think they are immune to being managed to improve their performance, but effective managing partners don’t let this deter them. partners are just like staff: most have performance issues and resist accountability measures. they have plenty of room to improve. the managing partner must have the strength of character and the resolve to deal with partner issues. here’s a great quote i recently came across from the highly regarded nba coach doc rivers that states eloquently how managing partners should be looking at their partners:
- average players want to be left alone.
- good players want to be coached.
- great players want to be told the truth.
the managing partner’s impact on partner compensation. one day, during the managing partner’s routine review of each partner’s accounts receivable, she discovers that partner a has been neglecting collections. she walks over to partner a’s office to adjust his attitude. before she utters one word, partner a says, “i know why you’re here. my receivables have gotten too old. i have no excuse. i’ll get right on it tomorrow.” the managing partner thinks “wow, i’m good at this.” as she leaves partner a’s office, she says, “glad to hear it; let me know if you need any help.” as the managing partner turns her back on partner a, guess what finger of his hand flashes up. why? because partner a knows that the managing partner has no impact on his compensation.
unfortunately, many firms use partner compensation as their sole means of achieving partner accountability. much has been written about compensation’s impact on motivation and performance. the conclusion? compensation is often not as good a motivator as we think it is. this is particularly the case with cpa firm partners because their income is so high to begin with. partners will be upset about any decrease in their income, but the impact is lessened because their compensation is still high after the reduction.
message: managing partners shouldn’t rely solely on compensation to change partner behavior and performance. however, it is a weapon that needs to be in every managing partner’s arsenal because if used properly, compensation helps the managing partner manage partner performance.
succession planning. virtually 100 percent of cpa firm partners want to stay independent and avoid succumbing to the merger frenzy dominating the accounting industry. yet 80 percent of first-generation firms fail to move into the second. why? succession planning that sucks.
jack welch, the late, highly effective chair of general electric, famously said that his #1 criterion for evaluating the division presidents was not profits but the extent to which they developed great leaders under them. managing partners must work hard every day to ensure that the firm practices jack welch’s philosophy.
highly respected managing partners tell us how they do it
the content of my book is derived mostly from my personal consulting experience with over a thousand firms and the countless discussions i have had in the past 20 years with the most highly respected people in the cpa profession.
but some of you may still question why i am qualified to write a book on the role of being a managing partner if i have never personally been a managing partner. to address these skeptics, i obtained contributions from two dozen highly successful managing partners from across the country, mostly from firms with annual revenue of $7 million to $30 million.
the question posed: “what are the keys to being an effective managing partner? what are the most important parts of your job?
the vast majority of the responses fell into five categories:
- making the partners more effective.
- building a great staff.
- communicating.
- strategic planning.
- developing a successful management style.
let’s drill down on each.
managing partners tell us how they make the partners more effective.
- build a cohesive partner group. if the staff see the partners working together, they will work well in a team environment.
- help partners achieve their goals; mentor them. managing partners understand that the partners drive the firm.
- hold people accountable and make them feel good about it.
- don’t get too far ahead of your partners. if you do, they won’t follow.
- be honest with the partners and have the crucial conversations that prevent issues from becoming confrontations.
- guide the partners to operate like a business, carrying out partner duties and performing partner-level work. get the partners to do what the firm needs them to do.
- partners who understand their role and are accountable will perform at a higher level and have a better chance of succeeding.
managing partners tell us how they build a great staff.
- focus heavily on people issues. keep the culture positive. be transparent. project excitement about the profession and the firm’s ability to thrive. be dedicated to the staff’s success.
- listen effectively to all levels of staff, ensuring that they see how much management values their thoughts.
- ensure that staff understand their career paths.
- be the staff’s biggest cheerleader.
- don’t disparage an entire generation simply because they see things differently. learn from them as you teach them.
- teach leadership in the firm. give staff training in soft skills.
- recruit effectively at the college level to make sure the right people get on the bus.
- make everyone feel good about doing their job. create engagement.
managing partners tell us how they enhance firmwide communications.
- transparency in communications engenders trust in the firm. it must come from the top.
- communicate even if the news is not good.
- communicate with major clients and staff; be the face of the organization.
- be able to say no to people and not have them walk away feeling mad.
- manage expectations.
managing partners tell us how they do strategic planning.
- think strategically. have vision. think long term, not short term.
- innovate and keep the firm relevant. challenge the status quo, even when the firm is successful.
- look into the future of where the profession is headed and address this with the firm’s future leaders.
- identify potential problems not yet on the radar.
- take risks and be ok with failure.
- convey the firm’s strategic vision, a great way to build consensus.
managing partners talk to us about developing their management styles.
- delegate responsibilities. avoid the trap of getting involved in every little thing.
- make decisions crisply.
- learn to make important decisions without knowing 100 percent of the facts or potential outcomes.
- have passion.
- lead by example. be the face of the firm and role model.
- be grateful, respectful and kind to all.
- be humble and have thick skin.
- take none of the glory and most of the blame.
- you can never talk about quality too much.
- be a servant leader.
other nuggets from our polling of managing partners.
- do succession planning.
- build a solid team that ensures the firm’s succession to future generations.
- deliberately develop the next generation by delegating responsibility and authority and celebrating experimentation and mistakes.
- seek out mergers and acquisitions.
- drive growth.
- guard the firm’s culture and reputation.
- continue doing client work so you can relate to your team’s needs and they can relate to you.
more advice from great managing partners
i have led a roundtable group for over 20 years composed of the managing partners of 75 percent of chicago’s largest local cpa firms. once a year, we bring in managing partners of large firms from across the country to share with our group how they manage their firms. the managing partners have been with large, highly reputable firms such as baker tilly, plante moran, whitley penn, bkd, honkamp krueger, hogan taylor and cohen & co.
the following are sage remarks made by these managing partners.
partner issues
“when we promote managers to partner, we try to move clients they worked on to their billing run.”
“if you’re not building, you shouldn’t be an equity partner.”
“transgressions of our core values are never tolerated. firms are better off having no core values than having core values that are not followed or enforced.”
growth
“business development is expected of our staff as part of their job and career path.”
“there is peer pressure among our partners to have plenty of business development opportunities on our plates.”
“a key to our profitability is specialization.”
“from a new staffer’s first day, he or she receives training in business development.”
partner compensation
“two things are never tolerated: abuse of staff or low-quality client work. these transgressions aren’t merely dealt with by lowering partners’ compensation. they are grounds for dismissal.”
“a big part of our compensation process is performance measurement. we look at each partner’s staff development result, critical thinking skills and how entrenched clients are with the firm. taking care of people is just as important as business development.”
mergers
“when we merge a firm in, we give goals to their partners for their role in making the merger a success.”
“we show prospective practices and their partners the major pain points we see with their firm. we do this early in the merger process so that neither firm wastes time on a merger that will never work.”
management
“i absolutely love working with our partners to help them succeed.”
“we are somewhat resistant to rules. we don’t tell our partners how to manage their business unless they are off track.”
“we feel our wealth management division is best run by a tax person.”
“you get what you measure. knowing this, you predetermine what is most important. things like:
- growth
- leadership
- mentoring staff; helping them advance
- formal, written goals
- upward evaluation of partners by staff
- a high new promoter score (a measure of client service excellence evidenced by client referrals).”
staff
“staff find their own mentors, and staff are mentored only if they want to be.”
“to advance and succeed at our firm, people need to demonstrate skills at developing people.”
“we believe that staff turnover and revenue growth operate in sync. aggressive growth will cause some turnover. staff turnover is a bit unavoidable even at the best firms.”
“if you’re serious about developing female partners, there must be a special program for them.”
succession planning
“we just lowered our mandatory retirement age to 62. if you want people to succeed you, opportunities for them must constantly be created.”
“we actually limit our partners from having too large a book of business because that would hinder their time and efforts in two more important areas: business development and helping staff learn and grow.”