This blog is the first in a five part series adapted from the AICPA White Paper, Becoming the Firm of the Future, which is available here.
This blog has been about encouragement and development, but sometimes we need to talk about the challenges we are facing, too. And I’ve got a real issue in my world, many of us do: developing other leaders.
In the accounting profession, succession projections are outright scary and our profession’s leadership development mindset, which is too frequently boasted as “sink or swim” or “figure it out,” is killing us. Together, the numbers and the mindset have created a leadership void that literally threatens our ability to remain relevant.
For those unfamiliar, the numbers are staggering as an estimated 40% to 70% of today’s CPAs – by and large Baby Boomers – will be retiring or eligible for retirement in the next 10 years. We could anticipate many of these Baby Boomer CPAs will work well past retirement age, yet it might be just as likely that many successful Baby Boomer CPAs will retire early. There are incentives in most larger firms to begin drawing their unfunded vested deferred compensation. (It’s easy to overlook or downplay the lucrative opportunities for these successful, knowledgeable leaders outside the profession—which includes in our client’s offices.) As we look at the current landscape of significant change facing our profession, I predict we will see a significant trend of early retirements in our Top 500 firms. Since we have significantly fewer Gen X CPAs to fill all of these succession gaps, it requires that our Millennials step into leadership roles much faster. With anticipated growth rates of 15 to 20% for the accounting profession during the next five years, our expanding leadership void, due to inadequate leadership development priorities, under developed capabilities and sporadic planning, becomes threatening to our future relevance.
It may make us feel better as leaders to know we are not alone, although this certainly doesn’t make our challenge any easier. Deloitte’s 2015 Global Human Capital Trends report confirms that leadership is one of the most pressing challenges, now for three years in a row. It was the most pressing issue in the 2014 report and very close to first again (second) in the 2015 report. Of the organizations participating, only 6% believe their leadership pipeline is ready. Our reality is that our profession’s pipeline is not ready either, and our leadership void is exacerbated by our past sins of sporadic and narrowly applied leadership development.
We can significantly close this leadership void in a number of ways that will lead to our continued growth and relevance for our clients. Things to consider which might make a difference in a firm’s leadership void, regardless of your industry:
- Leadership training and skill building that starts in year one, with an individualized strategic plan for development each year. We can not leave anyone to chance.
- Tone at the top and consistent communication that prioritizes leadership development for everyone in the firm.
- Calendars that consistently prioritize time for leadership development. Can we really afford for leadership development to be delayed for the latest crisis again? There are always good reasons to postpone this “soft” training. We have a bigger crisis on our hands now. Our future relevance is at risk.
- Developing and promoting cultures that allow young leaders to make mistakes, learn from them, and continue to grow. Our pursuit of mastery at all levels slows our ability to grow people quickly. Does our present culture really say it’s okay to try and fail?
- Implementing continuous, timely feedback. For most of us, this requires significant investment in skill building for all leadership. Our present ability to proactively guide, mentor and coach young leaders is not adequate for the challenge. Too many of our partners and managers not only struggle with this knowledge and related skills, but they are often borderline destructive in their feedback or lack thereof.
- Access to professional coaching at all levels will accelerate development, reduce possible direct supervisor bias, as well as increase retention of potential leaders
- Cross generational coaching could provide insights and development that will accelerate the leadership pipeline and help identify where present practices limit leadership growth
- Consider ways to add leverage within your firm so there’s capacity (time) to learn versus a present culture that prioritizes utilization and the chargeable hour
- Consider performance management systems that become more continuous and move away from a rating or bell curve. Focus on results and the conversations that make people better leaders. What would that look like in your firm?
- Provide internships internally for existing team members to learn new things and experience new opportunities for growth
Yes, we have a significant and expanding leadership void in public accounting that is daunting when you consider the numbers and our “sink or swim” mindset for leadership development. It is also an opportunity to grow exponentially as we proactively develop our team members to lead us forward. The possibilities are exciting and rewarding if we own our void and begin to bridge it together with new ways of leading.