Winning at Internal Succession

Internal succession is crucial to the continuity of CPA firms. Just as the skills and drive of firm leaders change with time; the facilitation of internal succession needs to morph, as well. Too many firm leaders automatically expect talented people to want to be partners because it’s what they wanted at the same age or stage in their career.

Today, people have to be sold on becoming a partner—in the same way new clients need to be sold on hiring you. Here are 5 steps to strengthen your internal succession pipeline.

1.       Broadcast the financial upside. Share the average bonus comp partners receive—or share the percentage of compensation partners receive as a bonus if that’s more comfortable. Share the ways compensation rewards efforts and the attributes that are rewarded.

2.       Focus on fun. Continually communicate and build on the perks that come with being a partner, such as more autonomy and a seat at the decision-making table. Empower your marketing team (in-house or external) to develop a pitch to weave the perks into firm life.

3.       Inspire engagement. Define the partner roles annually and invite your team to participate in the structuring of the job and the goals partners should have. The more people have a say, and understand that say is respected, the more likely they will be on board with it.

4.       Coach early. In baseball, players don’t start in the majors. They start in high school, college, and/or the minor leagues. Create a leadership development curriculum and mentoring process which starts grooming people early in the process—for example, with three years’ experience at any CPA firm—and at least one year with your firm. Coaches should be high profile, support a message of how special your firm is, and reinforce how special the program candidates are.

5.       Bond quickly. Loyalty and desire are built when people feel the owners care about and know them—and that they’re supported as part of the true team. Relationship-building should include understanding styles and what makes different successors “tick.”

Years ago, every candidate for employment as an accountant was coached to say they wanted to be a partner to get the job. Today, firms need to motivate excitement and desire to be a partner 365 days a year to learn to win at internal succession.

What You Don’t Know Will Hurt You

All too often, quality firms do not achieve the right level of financial performance or the optimal results in a deal. To optimize those outcomes, you need to know what the right results should be for partner compensation, profitability, client profiles, and deal terms — and how those levers play out differently in your market.

Published surveys, especially for the Mid-Atlantic, are not enough, and articles don’t cut it for dealmaking because they don’t share the secret sauce. Ira brings advantages that come from being a “walking database” of the right information for the Mid-Atlantic, combined with his depth of experience.

What you don’t know will hurt you.

Contact Ira to gain the advantage you deserve.

About Ira S. Rosenbloom

Ira Rosenbloom, CPA (inactive), The Merger & Profitability Optimizer℠, helps CPA firms of 15-150 people evaluate and complete M&A transactions and achieve their goals. For many firms, this starts with determining which side of the deal table they want to sit on—buyer or seller. And for firms who have made the decision to align upwards, Ira has the expertise and resources to help determine whether Private Equity, a PE-infused CPA firm, a non-traditional investor, or a traditional investor will be the optimal succession partner for you.

As COE of Optimum Strategies, which he founded in 2010, Ira offers firm leaders objective and proven guidance, advising on matters of internal and external succession, optimizing competitive advantage, and improving performance and profitability metrics. Ira previously served as managing partner of a mid-sized regional accounting firm, practice director for a national firm, and as regional partner in a national CPA M&A advisory firm.

Focused on CPA firms of 15-150 people in the Mid-Atlantic region,

Optimum Strategies specializes in M&A, succession, and optimizing firms' competitive advantage.

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