{"id":105857,"date":"2022-12-17t20:22:16","date_gmt":"2022-12-18t01:22:16","guid":{"rendered":"\/\/www.g005e.com\/?p=105857"},"modified":"2024-08-07t23:10:05","modified_gmt":"2024-08-08t03:10:05","slug":"five-ways-to-put-success-into-succession-planning","status":"publish","type":"post","link":"\/\/www.g005e.com\/2022\/12\/17\/five-ways-to-put-success-into-succession-planning\/","title":{"rendered":"five ways to put success into succession planning"},"content":{"rendered":"

a robust mentoring program can be critical.<\/strong><\/p>\n

\"three<\/p>\n

by bill penczak<\/em><\/p>\n

legendary general electric ceo jack welch is reported to have lamented the choice he\u2019d made in his successor, choosing someone based on their personality and ability to navigate the politics of the position instead of someone who could successfully lead the company into a brighter future. welch was correct. today, ge is a shell of its former self because of its leadership choice.<\/p>\n

more: <\/b>o.d. lanier: stepping into advisory <\/a>| secret to success? a growth and abundance mindset<\/a> | future firm growth requires a mindshift<\/a> |the great resignation: five reasons accountants are quitting<\/a> | five global cpa leaders: four survival strategies<\/a> | planning for success in 2021<\/a> | do you have the guts to beat the covid crisis?<\/a>
\n\"goprocpa.com\"exclusively for pro members. <\/span><\/strong>log in here<\/a> or 2022世界杯足球排名 today<\/a>.<\/span><\/p><\/blockquote>\n

welch’s one gaping failure as an otherwise stellar executive started me thinking about the current state of baby boomer-led and owned cpa firms, and how many of them are likely to commit the succession errors of ge. or worse, do nothing at all in terms of creating and sustaining a cpa firm into its next iteration.<\/p>\n

as firms are giddy with the prospect of a new year and with covid in our rear-view mirrors, here are five considerations for generational succession of a middle market firm:<\/p>\n

<\/p>\n

    \n
  1. the founder(s) should set their exit plan and actually stick to it. <\/strong>a tax partner with whom i worked years ago often advised closely held business owners on their exit planning and lamented the fact that these clients always had \u201ca three-year plan\u201d that never changed over time.\u00a0 no one want to admit their professional mortality and contemplate a life of travel and afternoon golf after a long and successful career. the problem, however, is that the transition or succession process takes years, difficult business and personal decisions, and ultimately letting go.\u00a0 managing partners and line partners often can\u2019t accept those realities and postpone the inevitable to the detriment of their people, the firm, and themselves.\u00a0\u00a0 i had a very successful firm client who had a five-year succession plan with two-year transition periods for managing partner and department heads, which worked really well\u2014mostly because the firm\u2019s strict governance forced them to do so.\u00a0 the firm was able, over time, to transition from the founder to the next generation when the firm was $15 million, and then again to the next generation when the firm was three times that size, all with a minimum of disruption and angst.<\/li>\n
  2. start grooming the next generation sooner rather than later.<\/strong> no one is really prepared for their next promotion in a firm, or any other organization, for that matter.\u00a0 but the key is to get the right people on the bus, as jim collins wrote in good to great<\/em>.\u00a0\u00a0 start taking some of your rising stars to networking events and have them learn by trial and error.\u00a0 spend time with them on their aspirations and help them hone their strengths. there is a paucity of professionals who will rise to leadership positions in firms, and partners should do all they can to identify and cultivate those people\u2014or they are likely to leave for firms or client organizations that are more adroit about seeing their potential. highly effective firms have in place a mentoring program that is far more than annual reviews. they invest the time to cultivate and motivate their people, which sadly few firms are willing to do. i am reminded of a quote by advertising agency legend david ogilvy: if each of us hires people who are smaller than we are, we shall become a company of dwarfs. but if each of us hires people who are bigger than we are, we shall become a company of giants.<\/em><\/em><\/li>\n
  3. empower your rising stars with the freedom to fail. yes, fail.<\/strong>\u00a0 as i mentioned above, no one is truly ready for their next job\u2014you figure it out as you go along. allow your rising stars the ability to do things in ways that you wouldn\u2019t\u2014or couldn\u2019t.\u00a0 my brilliant wife cites the success of our two boys as functioning adults to the conscious decision to let the kids make mistakes when they were younger, as the consequences are lower, and in doing so, they develop the resilience to learn from their mistakes and the courage to take chances outside their comfort zones. helicopter parents, like micro-managing bosses, limit the ability for others to learn and develop on their own, and the consequences are that the partners wind up making all the decisions, becoming an impediment rather than an accelerant. one of my sub $10m firm clients transitioned managing partners a few years ago, and the former mp still attends partner meetings and the annual planning session. on the surface, it’s a bad idea. but he is masterful about not intruding on the authority of the new managing partner, asking questions rather than issuing proclamations and allowing the firm to benefit from his experience. he doesn\u2019t always agree with the outcomes of decisions made but has enough emotional quotient that he doesn\u2019t intrude on the new management team.<\/li>\n
  4. admit you don\u2019t have all the right answers.<\/strong> one of the mid-level managers in one of my firm clients was reticent to bring up a touchy issue with one of the partners.\u00a0 when i pressed him on why, his response was, \u201cbut she\u2019s a partner.\u201d firms or partners with that mentality are not cultivating the next generation. another firm with whom i work is very diverse, with many of their professional and support staff being first-generation americans. one partner (a first-generation citizen himself) told me that he is constantly amazed by the creative solutions brought to the table by their staff and managers, many of whom don\u2019t have preconceived notions. that firm allows for diverse thought and conversation, and they believe it empowers better decision-making and stronger professionals.my late father-in-law was an apollo astronaut who often told the story about the power of listening to young people, citing the instance in which the first moon landing\u2014apollo 11\u2014was almost aborted as the lunar module was about to touch down on the surface of the moon. as it turned out, the warning signals were a false read, and a 25-year-old computer scientist named jack garman determined the \u201c1202\u201d warning was indeed false, and the landing continued. if nasa can trust a 25-year-old to decide the fate of the first moon landing, why don\u2019t firms let their staff and senior staff provide input on ways to streamline the audit or tax processes?<\/li>\n<\/ol>\n
      \n
    1. the succession solution might not reside in your firm.<\/strong> firms that have neglected a long-term succession plan are typically left with two choices\u2014selling to a larger firm and allowing the partners to ride into the sunset (an easier but often not as mentally rewarding choice), or finding a like-minded firm with a leadership group that can preserve the firm\u2019s independence and autonomy. either because the partner group is younger and capable or because another firm has a stronger bench of tomorrow\u2019s leaders, merging with another firm with similar values is an option. such mergers can be lumpy. deciding who\u2019s in charge (by the way, a co-managing partner is a lousy idea), who will lead which departments and which time and billing system will survive are all just tip-of-the-iceberg decisions. and in these instances, the most important factor for a successful merger is culture, more so than the client mix, realization rates or service lines. the latter elements are addressable. mismatched cultures and values are not.<\/li>\n<\/ol>\n

      no one wants to confront their professional mortality. for many managing partners and line partners, their adult lives have been defined by their work in the profession, and it is often difficult to see beyond that into retirement. but your firm, its people and your family will benefit in the long run from a more measured approach to succession planning.<\/p>\n

       <\/p>\n","protected":false},"excerpt":{"rendered":"

      a robust mentoring program can be critical.<\/strong>
      \n      \"\"<\/a>
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