Baby Boomer managing partners, many of whom founded their firms, are retiring in droves. Some firms have no successor to the MP and merge up. Many others are electing younger, new MPs to replace their predecessors.
Many of the likely candidates for the MP have received signals from the incumbent MP, the other partners, or most likely both, that they are “the one.” So, before newbies accept the MP slot, here is some advice to prepare for the task that lies ahead. Read this carefully, because it will help you decide if you’re the right person for the job.
Free up your time. Reduce your client base to free up time to manage. But make sure your firm’s compensation system doesn’t cut your pay when your production metrics go down.
Decision-making. (a) Don’t take the job if you have to take a vote every time you want to do something, yet…(b) Have a small group of influential, level-headed partners whose judgment you trust, that you can run ideas by before going public, but (c) make it crystal clear to your partners that you are in charge and intend to be a crisp decision-maker.
Understand that leadership is worth more than your billing rate, management is worth your billing rate and administration is worth less than your billing rate.
Build a team. As the leader of your firm, you need to be a visionary, a deep thinker and spend plenty of face time with the troops. This will be impossible if you are burdened with details and admin tasks. That’s why you assemble a team.
CPA Firm Management & Governance is a must-read for partners who want to run their firm like a real business. The book addresses ►Best Practices for managing and structuring the leadership group, ►how decisions get made, ►voting, ►how the Board functions, ►the role and expectation of a partner, ►the Managing Partner, ►organization structures for various firm sizes, ►job descriptions of key management positions, ►partner accountability and other issues.
Impact partner performance. Understand that one of your most important duties is to coach the other partners, improve their performance and help them achieve their goals and expectations.
Keep your focus simple. Never lose sight of the two most important goals of the firm: to grow and make the firm a great place to work for staff while developing them as leaders.
Find mentors. They can be past MPs from your firm, successful MPs or experienced consultants.
Don’t live in a cocoon. Attend at least one major MAP conference a year and join a local/regional MP roundtable group. You cannot possible be smarter than the collective wisdom of dozens just like you.
Required reading. (a) David Maister’s Managing The Professional Service Firm, (b) Rosenberg’s Practice Management Books and (c) Accounting Today, IPA newsletter and Rick Telberg’s fabulous online CPA Trendlines.
Short-term and long-term balance. Never lose sight of balancing your MP duties between short term and long-term. Long term is another word for succession planning. Everything the firm does should be with an eye towards succession planning, especially developing people and laying the foundation for growth and profitability.