When the Inmates Are Running the Asylum

Crazy doesn’t get better by adding more crazy.

By Dom Cingoranelli
Succession Institute

“We can’t really enforce this because we don’t want to risk having him (or her) quit.”

I can’t tell you how many times we hear something to this effect when we talk with CPAs. We hear this at small firms and we hear it at large firms. We hear it from partners, from directors, and from managers. It doesn’t matter what size firm they’re in, nor does it matter what level or position they hold.

It’s always the same line. It reminds me of the old adage, “the inmates are running the asylum.” And, it raises the question of who actually is running the firm. Who’s in charge?

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The Two Most Common Management Styles

Senior businessman with his team at officeDo CPA firms need management or leadership?

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

Let’s start out with a straightforward question. What is the difference between management and leadership?

MORE ON PERFORMANCE MANAGEMENT: 8 Ways to Manage Clients | The Limitations of Rainmakers | Firms Only Grow When Partners Play Their Roles | The Four Basic Parts of CPA Firm Partner Agreements | Younger Partners See Succession Differently | How to Compensate Your Managing Partner | The Job of Managing Partner: Empowered or Emasculated? | How the Best Managing Partners Turn Ideas into Reality
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From one point of view, leadership is far different than management.
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8 Ways to Manage Clients

Two men shaking hands across a tableThis is Job 1 for the practice owner.

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

Whether you simply desire to improve your firm’s operations or identify and implement a new long-term strategy, you need to be clear about the role that the owners, partners or shareholders should be playing in your firm.

MORE ON PERFORMANCE MANAGEMENT: The Limitations of Rainmakers | Different Roles for Different Partners | How Big ‘Books’ Hurt Firms | Developing a Three-Year Vision [VIDEO] | More Merger Questions Than You Imagined | MPs: How to Elect Them … and Fire Them | Partners as Role Models: The Good, Bad & Ugly | Managing the Managing Partner
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To be sure, the roles and responsibilities of a CPA firm owner or owners will vary from firm to firm, based on that firm’s needs and circumstances, and you need to adapt any recommendations to fit your firm’s situation.
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The Limitations of Rainmakers

Young man under rain-covered umbrellaWhy marketing has to permeate the firm and the process.

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

For most firms, new business comes in through referral. Therefore, the bigger a partner’s client base, the more likely that partner will bring in new business – which simply means that the more clients a partner knows, the more referrals that partner is likely to receive (not in percentage, but in raw numbers).

MORE ON PERFORMANCE MANAGEMENT: Different Roles for Different Partners | Dealing With A-D Clients (You Know Who We Mean) | How Small ‘Books’ Hurt Firms | Why the Partner Agreement Matters | Merging for the Wrong Reasons | How to Implement Strategy, Step by Step | Accountability Requires Clear Expectations | How Retirement Issues Affect Succession Planning | How Partner Ratings Factor Into Equity
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Other drivers of referral success are long-standing service (seniority) and position in the firm (such being one of the named or senior partners). In these cases, there is an extended opportunity for referral simply because:
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Different Roles for Different Partners

Image of charts in foreground and business partners in backgroundSome people should stick to technical roles, but there's an impact on profitability.

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

When you are a client relationship partner, regardless of your technical specialty, you take on the role of being that client’s general contractor for professional services – that is, his or her most trusted business advisor.

MORE ON PERFORMANCE MANAGEMENT: Dealing With A-D Clients (You Know Who We Mean) | Firms Only Grow When Partners Play Their Roles | The Four Basic Parts of CPA Firm Partner Agreements | Younger Partners See Succession Differently | How to Compensate Your Managing Partner | The Job of Managing Partner: Empowered or Emasculated? | How the Best Managing Partners Turn Ideas into Reality
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If you are unwilling to fulfill this role, then you shouldn’t be a client relationship manager; you should be a technical partner. We define these two roles broadly as follows:
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Dealing With A-D Clients (You Know Who We Mean)

ABCD PotAll A's isn't necessarily the goal.

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

Partners, and in some firms, managers, need to take their responsibility for client relationship management seriously.

MORE ON PERFORMANCE MANAGEMENT: Developing a Three-Year Vision [VIDEO] | Younger Partners See Succession Differently | Partners as Role Models: The Good, Bad & Ugly | 4 Ways to Create More Capacity | CPA Firm Performance Assessments: 15 Core Competencies, 21 Questions | What Having Your Employees’ Backs Means | 5 Harmful Management Attitudes (and How to Fix Them)
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In order to more fully explain these roles and responsibilities, we need to define for you what we mean when we refer to A, B, C and D clients.
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Firms Only Grow When Partners Play Their Roles

Money tree growing in the middle of green meadowHow often are you seeing your clients?

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

Whether you simply desire to improve your firm’s operations, or identify and implement a new long-term strategy, you need to be clear about the role that the owner(s), partners or shareholders should be playing in your firm.

MORE ON PERFORMANCE MANAGEMENT: How Big ‘Books’ Hurt Firms | How Small ‘Books’ Hurt Firms | Why the Partner Agreement Matters | Merging for the Wrong Reasons | Accountability Includes Partners | 7 Succession Questions to Ignore for Now | Develop Your Employees or Suffer the Consequences
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The roles and responsibilities we’ve suggested are based on the best practices we’ve had the opportunity to observe and be involved with in our work with CPA firms throughout North America.
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