The Role Of Trust In The Partnership Ranks

Excerpted from the June 2008 issue of INSIDE Public Accounting

Consultant August Aquila believes that firm leaders are as perplexed about accountability as they are about selling.

Partners resist selling, picturing themselves as used car salesmen instead of professionals giving clients the services they need. Today, when they think of accountability, they imagine their MP forcing them to do things they don’t want to do. But that’s not the case.

No MP wants to feel like a den mother, says Aquila, CEO of AQUILA Global Advisors of Minnetonka, Minn. “Accountability is really an obligation to accept responsibility for your own actions,” he says. “Accountability is something you hold yourself to.”

Accountability is closely intertwined with trust, he says. “If you don’t have trust in a relationship you don’t really have anything, so to me, trust is the foundation of any strong partnership.” Aquila agreed to talk with IPA about the role trusts plays in the productivity and success of a partner group.

Aquila referred to Stephen M.R. Covey’s book, “The Speed of Trust,” which defines trust as having two components – character (who you are) and competence (the results you produce). Trust can be earned. As partners show excellent work and positive results, it’s like money in the bank, but when success is countered by abusive treatment of staff, it’s a big withdrawal.

Certain behaviors are indicators the firm is operating without a high level of trust – ignoring problems, pointing fingers, making excuses, justifying mistakes or waiting for directives rather than taking initiative. In a low-trust firm, doors are often closed. Meetings are held and no one says what they’re really thinking. Supervisors micromanage their staff because they don’t trust them to do their jobs. Because so much time is spent making sure tasks are completed, less time is spent servicing clients, which can affect profitability, he says.

In a firm with a high level of trust, professionals have the confidence to point out issues or problems, take responsibility and solve them. “These concepts take a long time to develop if you’re starting from a lack of trust and accountability,” he says. “It’s not something that takes six months or a year – it’s ongoing.”

Aquila has some insight for firm leaders interested in building a stronger sense of trust and accountability in their organizations:

Get the facts. While you can’t measure ‘trust’ per se, you can measure behaviors. You can measure if partners are learning new skills and producing results. Remember that competence is half of the trust equation. To get at character issues, a 360-degree survey could be helpful with questions like, How well does Partner X live up to the firm’s values? How trustworthy is Partner X? Does Partner X withhold information? Everyone must trust the questionnaires will be kept confidential, so bringing in an outside consultant is advisable. Client surveys can also be helpful, along with staff turnover statistics.

Put together a team to tackle the problem. Identify a couple of partners who feel the same way as you do. “An MP can’t force it,” Aquila says. The team can also include senior managers or a long-term administrative professional.

Make accountability a priority. “One of the things that really hurts firms the most is the whole concept of complacency: We’re happy where we’re at, we’re doing OK, and we’re making money; why change?” Aquila says. “Sometimes an MP [or the firm management] needs to overcome complacency and create a sense of urgency.”

Develop a plan and communicate it. The MP must lay out a vision and a strategy for improving the level of trust and build support with partners through one-on-one meetings.

Look for the low-hanging fruit. Early successes will build momentum for the effort. Aquila says unless partners and staff see concrete results and get frequent, gentle reminders, they might look at the initiative as another “program du jour” that will die quietly.

Stay on course. “You’ve got to believe this stuff. Don’t slip back into your old ways of doing things,” Aquila tells IPA. “I think that’s hard because people want to change, but they don’t see – or they don’t understand – how hard it is to really change an organization.”

Aquila has seen firms with prima donna partners who think they can treat staff any way they want because they work long hours and make money for the firm; he’s seen MPs who seem to care more about themselves than the success of the firm. While firms like that experience success, it’s only in the short term. Low-trust firms attract low-trust staff, he warns.

He’s also seen plenty of firms turn themselves around, with partners catapulting from underperformers to overachievers. A crisis in the firm, such as the loss of a major client or the sudden death of an MP, can create an urgent commitment to change. Another trigger for change is strong leadership.

No matter what spurs change in a firm, standards are key. Partners and others need to understand the expectations through written goals. Aquila conducted a survey a few years ago in which he asked respondents whether they believed a firm would be more profitable if partners had written goals. A strong majority – 85% – answered yes. The next question was, “Does your firm have written goals?” The same percentage said no.

Creating and strengthening trust is a lot of work, but the investment is worth it, Aquila says. “The more you can build the whole culture of accountability and trust within an organization, the stronger the firm becomes.”