Same-Old Professional Development Costing Firms In Talent War, Succession Progress

One of the ongoing challenges firms face is bringing in the right people with the right skills and keeping them engaged, rewarded and prepared to become partner. At the same time, firms need to ramp up technology – and fast – bringing even greater urgency to planning for the future.

Firms are taking various approaches. Some are hiring outside technology experts; some are merging in smaller tech, cybersecurity or consulting firms and some are stealing partners from other firms or seeking out free agents. The biggest firms have the resources to do all of these things while making sizable investments in up-and-coming technologies, but they are the exception not the rule.

Some observers fear the profession is too slow and too reliant on outside experts to shake up professional development. The result could be firms without the necessary next-generation skills and future partners.

Technology transformation is a huge challenge, says consultant Kris McMasters, formerly the co-CEO of CliftonLarsonAllen. While many firms are focusing on technology tools, and hiring tech talent into the firm, it’s critical that firms create a thoughtful strategy around upscaling the skills of the existing professionals. And that means more than improving technology skills, but analytical thinking and creativity as well. Lower-level tasks will be transformed by automation, she says, and the accounting firms of tomorrow will look far different than those of today.

The Choice: Buy Versus Build: Dom Esposito, who consults with small and mid-size CPA firms, says the No. 1 shortcoming of these firms is buying the next generation of partners instead of building them from within. Because some firms are only paying lip service to professional development, they look for lateral hires to fill the gaps.

For example, a firm may hire a professional with 10 or 12 years of experience in technology with the intention of making that person an important part of the firm’s growth as a partner. “Sometimes it works, and sometimes it doesn’t,” says Esposito, CEO of Esposito CEO2CEO LLC. “Often it doesn’t.”

Lateral hires are necessary sometimes, but they’re also risky. Do these hires come from a firm with a similar culture, work ethic and workload? Was the same level of quality expected? Ambitious professionals can view a lateral hire as “cutting in line” and taking a partner position that could have been theirs. Esposito says that in his experience, laterals often don’t make the impact anticipated, exit after a short time and leave the firm with morale problems, disruption, dissatisfied clients and an expensive lesson learned.

Small and mid-sized firms often fail to take care of their own, he says. “They don’t spend enough time developing that talent into a real client executive. They let them linger and pump out work every day but they’re not looking beyond the immediate benefits,” says Esposito. Slow and steady wins the race, and rigorous leadership development academies smooth out professionals’ weaknesses, strengthen their confidence, increase their ability to sell and create lasting business relationships, he says.

Finding the Right Fit: It’s not easy to find the right kind of professional development program, but Chuck Mullen says you start by asking for help rather than trying to figure it out on your own. “I think firms get pretty stale year after year conducting training the same way. It can very much become a pattern. All you have to do is listen to your staff and they’ll tell you if it’s any good or not.”

Mullen is chairman of Akron, Ohio-based Apple Growth Partners. He went through an MP boot camp about a year after taking the top spot at the firm. The experience taught him how to be innovative, how to think in the long term and how to question the status quo when it comes to training.

Director of Operations Erin McCafferty says that in 2019 and 2020 Apple Growth Partners will undergo a full assessment of the professional development offered now and where it should go in the future.

In the meantime, the firm has made a significant investment in the concept of intentional coaching, which takes the whole person into account and is championed by Erica Ishida, the new CEO of LEA Global. “If you focus solely on someone’s career and their performance, you never get to true growth and development,” she said in a recent podcast.

McCafferty says the firm works with three coaches, all with different styles, who work with firm professionals confidentially on professional or personal issues. It’s not counseling, it’s coaching, and the guidance helps professionals sort out where they stand on that blurry line between professional and personal.

“If people can bring their best self to work every day and work through challenges at home or at the office, it’ll make all the difference,” Mullen says. “Even a little improvement will have a ripple effect.”

What’s Our Purpose? Why Do I Work Here? Ishida says intentional development is a new way to think about coaching in the profession, and she is receiving inquiries from multiple firms on the topic. To start, each professional needs a sense of purpose, or a good answer to the question, “Why do I work here?” Organizations that operate at their best communicate a clear intention of purpose and make sure they have the culture and strategy to support it.

“Lots of CEOs think they have that,” Ishida says. “They have it in their heads, but if you ask people in the halls, they can’t answer. They have no idea.” Going through a holistic coaching process helps professionals define their core values and prioritize their activities.

A clear purpose, strong culture, an openness to new ideas and a forward-looking approach to professional development are some of the elements that keep professionals involved and interested in advancement.

Mullen recognizes that technology will be a bigger part of the firm’s future. “I just don’t think it’s going to be as fast and drastic a change as some of the fear mongers say it’s going to be.” A CIO was brought in about four months ago, and together with the IT director and a technology committee, the firm is evaluating what types of artificial intelligence and data analytics would make the best investments. Meanwhile, the firm is hiring the most tech-savvy professionals it can find.

Mullen says many firms have it backwards. Rather than focus internally, their “grow, grow, grow” mentality can result in a disgruntled workforce and a loss of clients who sense professionals don’t want to work there. Recruitment and retention are easy if you create a top-notch workplace, or a “workers’ paradise,” as Mullen puts it.

“This is an inside job. I’m not looking at the market all the time. I’m looking inside.”