Home Community 10 lessons to prepare your firm for the future

10 lessons to prepare your firm for the future

170
0

Most of the organizational processes that are connected to leadership and management were invented and created in the early years of the 20th century by people that were born in the 19th century, says Accounting Today.

In the current competitive environment, where change is the new normal, the ability of any accounting firm to continue and lead in the market lies in the ability to be creative and innovative — invent and reinvent itself. To do so, the senior partner and the partners must build a winning and hard-to-copy culture, which is the most important competitive advantage in the 21st century.

The culture should be based on positive relationships and trust, with a sense of a higher purpose at the heart of it, a culture in which creativity and innovation are the job of every partner, leader and employee, where partners and leaders invest time and effort to help their team members develop their personal value proposition. In such a firm, leaders and employees feel empowered and significant, and as a result, they come to work every day full of passion and enthusiasm to do their best for their clients.

Without a doubt, firms that don’t fully realize the importance of such a culture or ignore it will face stormy seas and troublesome realities.

Here are 10 lessons I have learned in the past 10 years while supporting senior partners in the journey of preparing their firms for the future:

1. Treat this process as your number one priority and be prepared to go all the way to the end.

Only senior partners who are profoundly convinced that building the firm of tomorrow is a matter of life and death for the organization and their number one priority will be able to lead a successful process. Much of the success in preparing their firm for the future lies in their own ability to lead with confidence, to convey the right messages explicitly and implicitly, and of course, to lead by example; be a role model and inspire their teams. Senior partners must take full ownership and lead this process from within. Acting as the leader of this process and evangelizing it is one of the tasks that senior partners should not delegate to anybody else.

The biggest mistake senior partners can make is asking the HR partner, an external consultant or any other partner to lead the process. Or, even worse, to ignore the need to strategically prepare their firm to the future, because they are afraid that someone will remove them and leave it to the next senior partner.

2. Become a lifelong learner and invest time to truly understand how the future of work and the future of accounting firms are going to look.

Senior partners need to let go of the mindset of “best practices” (i.e., “this is how we do things here”). They need to fully understand how technology and regulation are going to influence their business models, how the gig economy is going to shape the firm’s ability to provide a winning value proposition to its clients, and how to build a tailor-make reward system that makes people want to be part of building the firm of the future. Having a full understanding of the future of the workplace will enable senior partners, on the one hand, to identify obstacles and rapidly remove them, and on the other hand, to make smart decisions with confidence and act upon them quickly.

The biggest mistake senior partners can make at this stage is to jump into the process without understanding enough about the future of their profession or their workplace, and without understanding what makes a successful change management process in the new era of the workplace. Their understanding is crucial for their decision-making process and the confidence they will convey.

3. Become an effective CFO and CPO – take care of both the future and the present.

One of the biggest challenges of any senior partner today is to divide the firm’s resources, people and money between the need of the present and the needs of the future. As CFOs (in the meaning of Chief Future Operators), senior partners must make sure they invest enough resources in preparing their firm for sustainable success in the next years, that they invest enough in new technology that is sure to influence their business model, upskill their workforce and build a winning culture. On the other hand, to be effective CPOs (Chief Present Operators), senior partners must make sure that partners, leaders and employees are able to execute and provide high-quality work and a winning value proposition to their clients. To find the right balance between the future and the present is not an easy task, especially when any investment in the future influences the yearly partners’ remuneration.

The biggest mistake senior partners can make in this area is to have a short-sighted view, to look at their profit and conclude that everything is under control and nothing dramatic is changing. As a result, they refrain from investing enough in the future of the firm, counting on new regulations to continue and bring profits to the firm. They might even start to invest in creating the firm of tomorrow, but stop the process when they don’t have good quarterly figures.

4. Explain it over and over: For permanent change to occur, make partners and leaders see the need for preparing the firm for the future and understanding what is in it for them.

While establishing the case for change and discussing external and internal challenges, in every interaction with partners and leaders, senior partners need to make sure they talk about the benefits of the process for them personally. It’s not a secret that accounting firms are very challenging organizations to lead. In her book “Leading Professionals: Power, Politics and Prima Donnas,” Laura Empson states that the process of leading any professional firm is about building consensus: “Without the cooperation of senior professionals, leaders of professional organizations will struggle to get anything done and may find themselves marginalized and removed.” The most important point is to make partners, leaders and employees realize why this process is good for them personally, so they will be willing to be open and to change their mindset and behavior. It’s important to understand that our brain is going to be open to changes and new learning processes, “specifically when it determines, by its own standards, that change would be good for it!”

The biggest mistake senior partners can make at this stage is to ignore this psychological aspect of the process and to try to lead by talking about the strategy, action plan and KPIs.

5. Try to create a process that is coherent as much as possible.

Most partners, leaders and employees today are overwhelmed by their workload and the complexity of the new reality. On the one hand, building the firm of tomorrow is more art than science, but on the other hand partners, leaders and employees need clarity. It’s important to choose an adequate transformational model that conveys your organizational story, the skills of the future, a winning culture and a winning client value proposition. Make sure everybody understands the model, the milestones and the KPIs. Make them understand in what ways this process will influence their everyday life. Create an authentic sense of urgency in order to keep it going.

The biggest mistake senior partners can make in this context is to believe it is enough that they and their executive committee understand the process. If people don’t fully understand the process, they will be confused and eventually go back to their old habits.

6. Understand the concept of Organizational Mindset and determine what is the New Mindset you would like to create.

The concept of organizational mindset refers to “the way we do things around here.” Understanding how the organizational mindset influences partners’, leaders’ and employees’ behavior is the only way to make sustainable change happen. In fact, 70 percent of change management processes fail. That’s mainly because we tend to put more emphasis on processes and behavior without understanding that the organizational mindset drives behaviors, and that behaviors support those management practices that lead to organizational success or failure. In this process, senior partners need to determine the critical few mindset shifts they wish to make in order to drive the right behaviors and make the necessary changes.

The biggest mistake senior partners can make at this juncture is to try to lead a change of processes and behaviors in the firm without tracing issues back to the root cause of the behaviors that shapes them – the shared mindsets.

7. Support partners, leaders and employees in upskilling themselves with the skills of the future, which will make this journey possible for them.

It’s not a secret that most partners and leaders were promoted due to their professional and technical skills. The new era of the workplace caught most of them unprepared to deal successfully with the complexity of their roles. Senior partners need to have a deep understanding regarding the skills and competencies that their people will need to lead in the markets. Then they need to build a tailor-made training program, together with the professional people from learning and development. They can use the Five Lands Model, which was specifically created for accountants to support partners, leaders and employees in upskilling themselves, or any other model that is tailor-made to the skills needed by accountants to be successful. Most of the leaders and employees will need to develop a growth mindset and a new set of skills in order to be able to build the firm of tomorrow.

The mistake senior partners can make at this stage is to assume that all partners and leaders are very talented and intelligent and that they already have the set of skills required to build the firm of tomorrow. Moreover, even if they don’t possess those skills yet, they can still acquire them quickly and easily by themselves, in their free time.

8. Lead the process decisively, but build your dream team to support you and others in the process.

Senior partners must lead this process, but of course, they cannot do it alone. They should create their own dream team. A dream team is a small team of confidants and talented people (three to five of them) who understand “the way we are used to doing things here” doesn’t work anymore, and who share a common sense of urgency to build the firm of the future. It’s important to make sure these extremely talented players have the right values, mindset and skills, and the appetite to build the firm of the future and sustain a world-class company. Of course, it’s important to make sure that you and your dream team speak with one voice.

The biggest mistake senior partners can make at this stage is to try to lead such a process alone or while creating their dream team to make political choices and therefore building a team of people without the right values, mindset, and skills. Such a team will be the first obstacle to the process.

9. Be with your people at all times and use your emotional intelligence daily.

We are talking about one of the most exciting and challenging processes senior partners can lead during their term. Senior partners need to make sure they are wisely spending their time with their partners, leaders, and employees and support them on this journey. While being with their people, they need to use their interpersonal skills and empathy to win their hearts and minds and their buy-in. They need to pay attention to their own feelings and remember that “feelings are data,” which tell us how to behave and make good decisions. They need to make sure they regulate their emotions well enough and that they can count up to 10. They need to use their flexibility on a daily basis and make sure they know how to re-energize themselves and keep their passion.

The biggest mistake senior partners can make in this context is to think this process is about presentations, workshops and KPIs, without understanding that their own emotional intelligence and interaction with their people is the heart and soul of this process. Senior partners need to realize that emotional intelligence is one of the most important abilities in the fourth Industrial Revolution and use it daily in their work.

10. Make sure you and your people are taking care of yourselves physically, emotionally, mentally and spiritually.

The rate of change we are all facing now is not easy for any of us. Senior partners need to understand they don’t have the privilege of getting tired mentally, emotionally or physically. A tired senior partner means a tired top leadership team and, eventually, a tired organization. Without the energy of the senior partner, any organizational change will eventually die. It will be very challenging for a tired senior partner to inspire leaders and employees, build a winning culture, provide a winning value proposition for strategic clients, and deal effectively with all the obstacles on the way.

As no one, not even a great senior partner, is capable of running a marathon at sprint-speed, they need to proactively take care of themselves: get enough sleep, eat well, exercise and engage themselves in activities that contribute to their well-being and level of happiness. It’s not always easy for them to stop their activities and leave the office merely to care for themselves. Still, they must possess a deep realization that their level of energy has a tremendous effect on their organizational sustainability in an ever-changing reality. Moreover, senior partners need to make sure their firm’s partners, leaders and employees are doing the same.

The biggest mistake senior partners can make is to think that “these horses can run faster,” which means to put more and more assignments on the desk of everyone, including themselves, and believe there is no price for it. Exhausted partners, leaders and employees cannot be creative and innovative, maintain positive relationships, become lifelong learners, feel passion, and provide a winning and sustainable value proposition to their clients. They surely cannot build the firm of tomorrow. In the best case, they can survive, and in the worst case, they will eventually lose their value proposition and even damage the firm’s brand.