Preparing New Leaders Starts with Succession Planning
What does it take to be a leader in your organization? Every accounting firm should be able to answer that question. And, more importantly, the answer should be known to future leaders so they clearly understand what they have to do to advance, especially when senior partners start to retire.
It may seem like a no-brainer, but the 2012 PCPS Succession Survey for multi-owner firms reveals that only 15 percent of firms have a leadership training plan in place. Couple that with the fact that the number one perceived challenge to succession planning is that senior partners lack confidence in those moving up the ranks, and you have a major roadblock to a firm’s health, longevity and ultimate survival.
The answer to this problem is a well-thought out and accessible leadership training plan. Leadership training plans go beyond attendance at a single conference and include additional training, support and exposure to a larger professional and civic community. Continuing education is certainly an integral component of training and should be part of every leadership training plan; however, the firm also needs to have in place a systematic approach to creating opportunities for future partners to work with senior partners to exercise and develop their skills. The benefit is two-fold: retiring partners can observe their smart, capable staff at work, and the next generation of owners gets a chance to hone leadership skills necessary to run a firm.
My colleague, Donna Salter, senior manager―young member initiatives, manages the AICPA’s Leadership Academy, which just graduated its fourth class. Donna says there are two things senior partners can do to help new accountants become leaders in their profession:
- Engage with up-and-coming partners. Including emerging CPAs in the firm’s strategic planning process and development of its mission, vision, goals and objectives creates ownership and connection. If the next generation of leaders at your firm feels needed and significant to the firm’s success, they will perform better. Better performance will create confidence all around.
- Give stretch assignments. Allowing a junior partner to take the lead in a client engagement or provide feedback and input helps develop strategic thinking and reputation, not just within the firm, but with the client as well. And maintaining clients is a critical element of any succession plan.
Today, 71 percent of multi-partner firms don’t have written formal requirements for new owners. Without a specific plan in place, it’s difficult for young partners to find their way. Retiring baby boomers may not realize the degree of generational differences between themselves and their younger counterparts—Millennials need a roadmap (which can be part of the succession plan) that includes learning as a component for getting them to the next level.
Including a roadmap in your firm’s leadership training plan will help both ends of the spectrum: newer accountants will know what they need to do, and senior partners can use it as a gauge to determine how ready the next generation is to take over the firm. When the gap between these two groups closes, succession gets a whole lot easier.
Want to learn more about how you can get the next generation of leaders up and running at your firm? The AICPA has a number of resources that can help.
- The Young CPA Network is a community of new CPAs and aspiring accounting leaders, providing career tips, information on professional issues, networking opportunities, The Edge Newsletter and the annual EDGE Conference.
- The AICPA Emerging Partner Training Forum helps firms identify, develop and prepare new partners for responsibility and leadership.
- The Succession Planning Resource Center is home to the free 2012 PCPS Succession Survey commentary for sole proprietors and multi-owner firms and offers PCPS member firms the resources they need to make their practices succession-ready.
What’s your firm doing to get the next generation of CPAs ready for leadership?
Mark Koziel, CPA, CGMA, Vice President, Firm Services & Global Alliances, American Institute of CPAs.
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