The Job of Managing Partner: Empowered or Emasculated?

Woman executive coaching a male employee across deskWhy eat-what-you-kill firm cultures produce weak CEOs.

By Bill Reeb and Dominic Cingoranelli

Let's review some best practices as to how the managing partner is elected, what is expected, for what term and how he or she is protected if removed from that role.

MORE ON PERFORMANCE MANAGEMENT: How to Monitor Goal Progress | How to Implement Strategy, Step by Step | How to Decide Who Decides Pay | Accountability Includes Partners | Succession Plan Requirements | How Retired Partners Are Robbing their Own Firms | 4 Ways to Create More Capacity | Partner Retirement and the War for Clients | Succession: The Questions to Care About | Hazards of Not Reallocating Equity | CPA Firm Performance Assessments: 15 Core Competencies, 21 Questions | 5 Harmful Management Attitudes (and How to Fix Them)

The job differs whether it is being filled under the Eat What You Kill (EWYK) or Building a Village (BAV) models. For example, under the EWYK model, the managing partner is likely the largest equity partner, or if not, then the default would be that the role of the managing partner would be that of administrative partner.  Because the EWYK model is usually a silo model built around superstars, the managing partner’s role is to handle all of the matters that the other partners don’t want to do.  It is not uncommon in these scenarios that the managing partner earns a stipend to fill that position, and that the stipend is not very much (maybe $25,000 to $75,000 a year).

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Partners as Role Models: The Good, Bad & Ugly

Two older businessmen talkingAccountability and reviews are more important at higher levels, not less.

By Bill Reeb and Dominic Cingoranelli

Evaluation of performance and goal achievement is something done that should be performed multiple times during the year. Unfortunately, many CPAs tend to think of management as a waste of time, and evaluations as purely a human resources requirement created by the government to protect employees to the disadvantage of the organization.

MORE ON PERFORMANCE MANAGEMENT: How to Implement Strategy, Step by Step | How the Best Managing Partners Turn Ideas into Reality | Make Accountability a Process | Accountability Requires Clear Expectations | Base Retirement on Today’s Operations | How Involved Should Retired Owners Be? | How to Find a Partner’s Replacement

Well, that is one way to look at it. But we think it’s the wrong way.
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How to Implement Strategy, Step by Step

Businessman's shoes toeing words "What's your next step?"Be specific and find ways to "catch" the partner in action.

By Bill Reeb and Dominic Cingoranelli

An Example of the Process

It's one thing to say "the managing partner implements strategy," another to put it into action.

MORE ON PERFORMANCE MANAGEMENT: Make Accountability a Process | Pay Varies When Performance Varies | Accountability Is for Everyone | Who Decides What? | Firms Say What Would Change Retirement Pay | Action Plans for Transitioning Partners | How Retirement Issues Affect Succession Planning | How Partner Ratings Factor Into Equity | Develop Your Employees or Suffer the Consequences

Following is an example of this process, providing more detail to show how it might look in actual practice. Let’s assume that one of the goals of a partner is to increase the Most Trusted Business Advisor Activity for his or her top clients. In the initial goal sheet, for this one goal from the managing partner, that might look like this:
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How the Best Managing Partners Turn Ideas into Reality

Man and woman in meeting across deskApproaches can differ dramatically from one partner to another.

By Bill Reeb and Dominic Cingoranelli

How can the managing partner operationalize the strategy within the policies, process and budget set forth by the partner group?

MORE ON PERFORMANCE MANAGEMENT: Accountability Includes Partners | Accountability Requires Clear Expectations | Base Retirement on Today’s Operations | How Involved Should Retired Owners Be? | How to Find a Partner’s Replacement | Best Practices for Mandatory Retirement | 7 Succession Questions to Ignore for Now

To keep this simple, because it can get very complex extremely fast, let’s say that the firm has three strategies the partner group has mandated:
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Managing the Managing Partner

Businessman standing at conference table with 4 colleagues seated behindChecks and balances are key.

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

As past success and personal development continuously demonstrate, organizations operate more effectively when people are managed. And since partners are people, rather than gods or superheroes, it makes sense that we put something in place to manage them as well.

MORE ON PERFORMANCE MANAGEMENT: Accountability Is for Everyone | Succession Plan Requirements | Base Retirement on Today’s Operations | How Involved Should Retired Owners Be? | Firms Say What Would Change Retirement Pay | 4 Ways to Create More Capacity | 7 Succession Questions to Ignore for Now | How Partner Ratings Factor Into Equity | Hazards of Not Reallocating Equity | 5 Harmful Management Attitudes (and How to Fix Them) | Do CPA Firms Need Management or Leadership? |  Job 1 for The Practice Owner: Client Management

With this general background in mind, let’s dive a little deeper into how a managing partner goal-setting process might work.
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How to Decide Who Decides Pay

Woman on building roof spraying out dollars with a garden hoseWhere to draw the line between managing partner and compensation committee.

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

Everyone likes the idea that “I” will hold “me” accountable. But few like the idea of “anyone else” holding “them” accountable.

MORE ON PERFORMANCE MANAGEMENT: Accountability Requires Clear Expectations | Base Retirement on Today’s Operations | Who Decides What? | How Retired Partners Are Robbing their Own Firms | Best Practices for Mandatory Retirement | How Retirement Issues Affect Succession Planning | Succession: The Questions to Care About | How to Target What Skills to Develop Now | What Having Your Employees’ Backs Means | 5 Harmful Management Attitudes (and How to Fix Them) | Do CPA Firms Need Management or Leadership? |  Job 1 for The Practice Owner: Client Management

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So, once the decision has been made to implement systemic changes to hold partners accountable to specific performance expectations rather than just relying on everyone to put in a self-proclaimed “good day’s work,” the next battleground is determining who will be holding whom accountable. The discussion always shifts to “let’s have a group of people, like a compensation committee, hold us accountable.”
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Make Accountability a Process

Man and woman reviewing a documentEveryone performs better when someone else has oversight.

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

Setting up an “accountability and goal process” always sounds much easier than it actually is to implement. So for those who already think this process would be painful, just know that you still are probably underestimating the amount of agony in store.

MORE ON PERFORMANCE MANAGEMENT: Accountability Requires Clear Expectations | Accountability Is for Everyone | Succession Plan Requirements | Base Retirement on Today’s Operations | Who Decides What? | How Retired Partners Are Robbing their Own Firms | How Involved Should Retired Owners Be? | Firms Say What Would Change Retirement Pay | 4 Ways to Create More Capacity | How to Find a Partner’s Replacement | Action Plans for Transitioning Partners | Partner Retirement and the War for Clients | Best Practices for Mandatory Retirement | How Retirement Issues Affect Succession Planning | Succession: The Questions to Care About 

This leads us to the standard question, “If this is so awful, why would anyone do it?” The answer is both simple and abstract.
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Pay Varies When Performance Varies

Closeup shot of a caliper measuring the word "Goals"Plus ways to measure both objective and subjective performance criteria (yes, it can be done).

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

An important point to keep in mind is that we, as human beings, have good months and bad ones, good years and bad ones.

MORE ON PERFORMANCE MANAGEMENT: Accountability Requires Clear Expectations | Accountability Is for Everyone | Succession Plan Requirements | Base Retirement on Today’s Operations | Who Decides What? | How Retired Partners Are Robbing their Own Firms | How Involved Should Retired Owners Be? | Firms Say What Would Change Retirement Pay

What is going on in our personal lives has a lot to do with how we perform in our professional ones. Therefore, if someone is going through a difficult time, such as a divorce, death in the family, major conflicts with extended family, etc., we can expect those events to spill over into our work life.
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Accountability Includes Partners

Manager dangling carrots in front of staffDeliver not only rewards but sanctions.

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

Let’s take a close look at what accountability might look like.

MORE on PERFORMANCE MANAGEMENT for PRO Members: Accountability Requires Clear Expectations | Accountability Is for Everyone | Who Decides What? | Firms Say What Would Change Retirement Pay | Action Plans for Transitioning Partners | How Retirement Issues Affect Succession Planning | How Partner Ratings Factor Into Equity | CPA Firm Performance Assessments: 15 Core Competencies, 21 Questions

For partners, accountability is best described as having a system in place that rewards partners for
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Accountability Requires Clear Expectations

Two businesswomen sitting at table and talking in office courtyardMake an effort to learn from your successes as well as your failures.

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

Accountability needs to be rooted in much more than a casual perception or it is destined to fail. Therefore, the first step to accountability is to move this from an “I will watch you and tell you if I think you are doing a good job” approach to one that clearly defines what you expect of someone up front.

MORE ON PERFORMANCE MANAGEMENT: Accountability Is for Everyone | Succession Plan Requirements | How Retired Partners Are Robbing their Own Firms | 4 Ways to Create More Capacity | Partner Retirement and the War for Clients | Succession: The Questions to Care About | Hazards of Not Reallocating Equity

Now this sounds fairly straightforward, and it is, but it is also loaded with plenty of traps that you can fall into. One of the traps we want to avoid is ambiguity. You can overcome this trap by taking time to describe the expectations you have of someone, like:
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Accountability Is for Everyone

Businesswoman working late at deskDo you credit others as much as you do yourself?

By Bill Reeb and Dominic Cingoranelli
CPA Trendlines / Succession Institute

Most firms consider accountability an essential part of their leadership practices.

MORE ON PERFORMANCE MANAGEMENT: Base Retirement on Today’s Operations | Who Decides What? | Firms Say What Would Change Retirement Pay | Action Plans for Transitioning Partners | How Retirement Issues Affect Succession Planning | How Partner Ratings Factor Into Equity | Develop Your Employees or Suffer the Consequences | 5 Harmful Management Attitudes (and How to Fix Them)

In the PCPS Top Issues survey, for firms with 11 to 20 professionals, partner accountability/unity landed in second place. For firms with 21 or more professionals, this same issue ranked first in concerns to be addressed.
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