Managing Partner Viewpoints from the Archives, Part II: Motivating Partners, Fostering Consensus

Nothing about the job of the MP is easy. The internal and external challenges are many and the pace of change slow and fraught with complications. People issues can be the prickliest to manage, since by definition the MP solves the problems no one else will.

These were among the many observations to emerge from the anonymous, candid responses of more than 70 MPs to a brief survey from INSIDE Public Accounting awhile back that shed welcome light on some of the most common frustrations and rewards they have experienced in the position. During this current period of uncertainty in the profession, their insights on some of the specific topics from that survey seem worth revisiting.

Partner Motivation

Partners are driven in their work by different things – be it money, recognition, prestige, respect or some combination of these – which is why MPs say a one-size-fits-all motivation theory simply won’t work. But getting to know partners on a “deep personal level” can draw out what motivates them, one MP says.

Many MPs say partners must be involved in setting firm goals, but they also need to be pushed and held accountable. Nevertheless, it can be difficult to balance the needs of individuals with the greater good of the firm, “especially if those actions don’t involve client service,” one MP says. It’s no surprise, then, that more than one MP commented in regard to the challenge of partner motivation: “It’s like herding cats.”

Beyond that common refrain, some of the MPs’ non-feline observations on the topic are applicable to a variety of situations, including:

“I wish someone had told me that most partners are happy with the status quo.”

“Sometimes it’s impossible to motivate partners. You can take away money, prestige, etc., but with today’s personnel shortage, they can just leave and someone will take them on at the same pay rate and benefit level.”

“Most CPAs are hardwired pessimists.”

“Figuring out what motivates them is challenging enough. Once you do that, you have to figure out how to best motivate them and keep the motivating factors aligned with the strategic plans of the firm.”

“Money is the No. 1 motivator that they don’t totally control. All else is based on self-motivation.”

“Not every partner is as successful as they think they are. Find what they need to keep working on, otherwise they coast.”

“Don’t spend time on the naysayers. Move on. Work with those who are enthusiastic and want to make it work. Recognize them, share the results and communicate often. Those who are naysayers will usually come around and adapt.”

“Use guaranteed payments and bonuses as the primary form of compensation rather than draws and distributions.”

“As much as individual partners will agree with required policy or necessary change, when the change touches them, the resistance can be as significant as one who overtly disagrees. The amount of managing partner time and energy necessary to maintain partner buy-in is significant.”

The Importance (and Limitations) of Consensus

When it comes to making big decisions, some MPs seek complete consensus on a range of issues, while some prefer to act quickly and inform partners afterward, and others only go to partners for big decisions. Many MPs said a small, efficient executive committee helps tremendously when the partner group gets too large, with one noting that a “democratic, very inclusive decision process” only works well if the partner group is eight or less.

The first thing an MP must do is determine which issues require consensus. One MP says, “I find the balance by deciding how much consensus to get, based on the issue. It is rarely good to make any decision quickly AND without consulting at least someone or a few persons. That said, sometimes time is of the essence and after at least a brief gut check with one or two others, you have to make the decision and prepare yourself to defend it without changing directions.”

Different MPs, not surprisingly, have different approaches to decision-making in their firms:

“We have set agreements and PICs of certain areas. They can make all decisions over their area and only certain decisions need an all-partner vote.”

“Only large decisions like new partner promotions and a merger or acquisition go to the full partner group. Some partners push back as they feel like they should have a say on all decisions, but that’s just not realistic. We have to get the work done.”

“I seek complete agreement. Will discuss to reach agreement among the group.”

“Communicate. Give everyone the opportunity to voice their opinions, but it must be clear that the MP will do what he/she believes is best for the firm given the fact that the MP knows more about the inner workings of the firm than anyone else in the group. It’s important that partners understand that it’s OK to not agree with the MP’s decisions, but they must accept them and allow the MP to do his or her job.”

One MP warns that consensus is not always best. “Sometimes decisions have to be made that are not popular. Many times decisions directly affect specific partners and they are probably not going to like the result. You are not the managing partner because you always please everyone. You are in that position because your partners trust you and your decision-making with their livelihood.”

Communication is, as always, a critical part of a well-functioning partner group. One-on-one time with partners is important to explain the whys and hows of issues that require tough decisions. MPs appreciate the ability to talk with a few partners who are willing to serve as a sounding board before decisions are made. There’s no such thing as over-communicating, and patience is key. As one MP put it, “Change is slower than you want it to be and never as easy as you expect it to be.”

From finding ways to motivate their people to determining how to best arrive at key decisions amid trying times and challenging circumstances, these are insights that many MPs may find worth revisiting in the here and now.

Guest Article: A Culture Without Walls

By Bulldog Drummond

We recently reached out to Chatbooks for an interview focused on storytelling, but talking deeper with their CMO, Rachel Hofstetter, we learned how amazing this brand really is. The values they operate by actively guide the way the company operates. Employees are actively and passionately engaged in the business, operating from a sense of confidence and empowerment. Their values-based culture results in high employee involvement, strong internal communication and a healthy level of risk-taking which encourages new levels of innovation. If there’s any doubt about the value of investing time in culture, Chatbooks is an example of the significant benefits that come from a vibrant and alive culture.

Culture, like brand, is misunderstood and often discounted as a touchy-feely component of business that belongs to HR. It’s not intangible or fluffy, it’s not a vibe or the office décor. It’s one of the most important drivers that must be set, or adjusted, to attain long-term, sustainable success.

A strong culture flourishes with a clear set of values and norms that actively guide the way a company operates.

Chatbooks has five values from which they operate. These values are not only values that they hire and promote by, but values that they ensure every person on their team shares.

  1. Grown-Ups: It’s what lets us have a flexible culture. We don’t need to track you. We expect that you will do amazing work, be proactive and do what you need to do—in your life and at work.
  2. Ship: You get things out the door. Be active. Make things happen. Get shit done.
  3. Amazing: Naturally conflicts with ship, not everything we do has to be amazing but it’s our goal.
  4. Optimistic: Makes us what to show up every day. What makes us a true Chatbooker—you look for solutions instead of problems.
  5. Kind: Makes it a fun place to work. A focused core value—we don’t hire anyone that has #s 1-4 values, but not #5.

By vetting operations around their values, Chatbooks creates an environment that sets-up their entire team for success. They are a stellar example of a living culture that drives people and performance.

It’s important to have diverse thinking and interests, but shared values and a common purpose are also a must to foster a cohesive community of people within the walls of an organization.

I encourage you to step back and ask whether the purpose of your organization is clear and whether you have a compelling values system that is easy to understand. Mobilizing and energizing a culture is predicated on the organization clearly understanding the vision, mission, values, and goals and creating an environment for them to come alive.

Chatbooks values support a number of internal and external programs. One example is their Momforce Model which is made up of over 60 men and women around the world working on their own hours at home—and 60% of those hours are outside of the typical 8am-5pm work day.

Another example is WFH Wednesdays. Expanding their mindset beyond 8-5, they offer all employees—regardless of seniority­—the opportunity to work from home on Wednesdays to support parents and allow their people to explore. They also believe in breaking barriers and supporting women in the workplace. Sixty percent of their leadership roles are filled by women. And, inspired by their strong belief in family, they also provide a 90-day fully paid leave.

Chatbooks also has unique ways to celebrate what they do. They have a Slack channel that is dedicated to the amazing stories they hear every day. As Hofstetter pointed out, “It’s our Whyit reminds us all why we matter, why what we do matters.” Most companies that run at speed often forget to celebrate their victories, both big and small, and they rarely have time or the humility to acknowledge and learn from their failures. Celebrate your victories and failures in your own unique way, but share them and share them often.

They also give abundantly. “Give like a friend, before you ever think about getting anything in return” is a mantra they follow. They don’t target specific ROI’s but rather look forward to giving. They ensure that employees genuinely care about the company’s role in the world and are passionately engaged. There’s always an opportunity to connect employees at a deeper level to warrant that the pursuit of the common good is driving common wealth.

Building a strong culture takes hard work and true commitment, but provides a collaborative environment for a brand to thrive in. Your brand is the single most important asset to differentiate you consistently over time, and it needs to be nurtured, evolved and invigorated by the people entrusted to keep it true and alive. Without a functional and relevant culture, the money invested in research and development, product differentiation, marketing and human resources is never maximized and often wasted because it’s not fueled by a sustaining and functional culture.

This article was written by Shawn Parr. Published at November 22, 2017

New Online Tax Filing Site Launched

Henry.tax, a new platform for filing personal income taxes, has been launched. It is a personal tax preparation platform, with each return being prepared and submitted by a professional CPA.

The site’s proprietary technology allows taxpayers to upload documents and file in less than 10 minutes. A CPA with more than 10 years of experience will prepare the personal income tax returns. Henry.tax will maximize the amount of each refund expected for a base charge of $250 for most filers that includes preparation, CPA verification, filing and audit protection.

“We are pleased to be launching Henry.tax during a time in our nation’s history when the tax system is more confusing than ever. The new tax law passed a few weeks ago has created confusion and added stress to the tax-filing process,” says Michael Chen, CEO and founder of Henry.tax. “Our top-tier Henry.tax CPAs have reviewed the new law and are fully versed in its intricacies. Their 10+ years of experience ensures that no money will be left on the table.”

2018 Predictions: 5 Trends in Financial Wellness Benefits

January is financial wellness month and while many Americans are likely making financial-related New Year’s resolutions, employers should focus some attention on financial wellness benefits.

“Employees’ financial stress and how it affects an organization’s productivity and bottom line are certainly on the radar for most employers today,” says Elizabeth Halkos, Purchasing Power COO. “It’s a significant concern because half (52%) of America’s hard-working employees are stressed out about dealing with their financial situation, according to the 2017 PwC Employee Financial Wellness Survey. Accordingly, 77% of stressed employees say their stress levels have increased over the past 12 months. So employers are going to have to take a deeper dive into providing financial wellness benefits in 2018.”

Halkos offers five predictions for 2018 financial wellness benefits.

  1. More employers will add financial wellness benefits. In 2017, 48% of U.S. employers were offering some kind of counseling or instruction about money, according to SHRM and IFEBP surveys. Look for that to increase in 2018 as further research in the past year confirms the impact employee financial stress has on a company’s bottom line including lower productivity, higher absenteeism and more health care claims.
  2. Financial wellness benefits will become more holistic. That includes not only financial education tools and resources but voluntary benefits that are designed to address both physical and emotional struggles while working to help employees with short-term financial needs.
  3. More student loan repayment benefits will become available. In 2018, we will see more student loan repayment benefits appear including programs in which employers are making contributions to loan balances or providing methods for employees to refinance their debt.
  4. More attention will be given to helping employees with short-term financial issues. In 2018 look for employers to add voluntary benefits such as employee purchase programs and low interest installment loans and credit that help employees avoid payday loans and cash advances from credit cards when they have emergency needs such as a broken refrigerator or unexpected out-of-pocket medical expenses. There will be certain times whereby a payday loan from lenders like fresh loan will be beneficial, for example the holiday season or for a vacation, so they are worth considering in these instances. In terms of emergencies like a refrigerator replacement or medical expenses it is worth always having an extra bit of money saved along with employer benefits.
  5. Employers will begin to look for ways to provide financial education to future generations. Employers should look for ways to provide an element of family-focused financial education. Incorporating a few age-appropriate financial education lessons into financial education resources and opportunities can start to pave the way for future generations. For now, young adults have to more often than not educate themselves in financial areas, even if they were to search how do installment loans online work.

Ban on the Salary Question Expanding

At an early age, most were taught to avoid talking about numbers of a personal matter: age, weight, salary. Now, increasingly, local and state legislators agree that this extends to potential employers. In numerous places, laws are being passed that ban questions pertaining to salary history.

Supporters of the laws say that they help combat the gender-based wage gap that can too often follow woman from job to job and studies show that this wage gap only widens as they progress in their careers.

Cities and states that have, in some form, banned questions related to previous salary include: California, Delaware, Massachusetts, New Orleans, New York City, Oregon, Philadelphia, Pittsburgh and Puerto Rico.

These bans pose an issue for larger firms with offices in multiple locations with different iterations of the ban. While New Orleans has banned inquires only for city departments and employees of contractors who work for the city, states like Delaware and New York ban all employers from asking about a candidate’s pay history. This means that larger firms will have to decide whether they want to tailor their hiring approach on a location basis or create a model that can be replicated to avoid the question.

“A candidate’s past salary history is not indicative of what they are worth; it’s more about what the market compensates for a particular position,” says Stacey Browning, president of Paycor, in a statement to Forbes. Employers wanting to change their thinking on hiring practices might want to take a more holistic approach. Lydia Frank, vice president of PayScale tells USA Today that organizations should “price the position, not price the person.”

Changing Behavior in Consumer Decision-Making: KPMG Report

Customer behavior and purchase decision-making is growing increasingly complex, driven by multiple factors that include accelerated mass adoption of new technologies and mobility, according to KPMG. A new KPMG report, Me, My Life, My Wallet, introduces a new customer engagement framework that is designed to help businesses understand the forces that influence decision-making and preferences of today’s customers.

“How companies understand their customers and respond to their unmet needs has changed drastically,” says Julio Hernandez, head of KPMG’s Global Customer Center of Excellence and U.S. advisory customer solutions lead partner. “Differentiating your products, services and experiences requires a deep understanding of the trade-offs customers are willing to make, as well as the forces impacting their decision to open and close their wallets.”

The survey found that 57% of U.S. respondents said they would like technology and apps to automatically filter information for them and that the U.S. has the highest media and digital media consumption compared to the rest of the world. U.S. consumers also demonstrate more trust in online reviews.

“Ordering and paying for goods and services on mobile devices is becoming the norm, which is why we’re seeing significant investments by retailers in the mobile consumer experience,” says Mark Larson, national leader of KPMG’s consumer and retail practice. “Companies need to adjust to customers’ increasing dependence on mobile devices and provide frictionless experiences and on-demand services for everything from food to a pet grooming.”

KPMG’s ‘Five Mys’ framework is designed to help strengthen businesses in the race to the customer. The ‘Five Mys’ include:

  • My motivation – characteristics that drive behavior and set our expectations.
  • My attention – ways we direct our attention and focus.
  • My connection – how we connect to information, devices and each other.
  • My watch – how we place a value on time and manage its constraints.
  • My wallet – how the spend and save functions of our wallet change during our lives.

“Making sense of the signals of change is critical to keeping up with your evolving customers.  Finding the right ways to mine and analyze these signals will help companies better predict customers’ changing needs and expectations,” says Colleen Drummond, head of KPMG Innovation Labs and KPMG partner in the U.S.

Click here to access the full report.

ACCA Report Outlines Priorities of Young Professionals at Small and Medium Practices

A new report by the Association of Chartered Certified Accountants (ACCA), Generation Next: Managing Talent in Small and Medium Sized Practices (SMPs), dives deeper into ACCA’s 2016 global survey examining the career aspirations of the younger generation in finance today.

“Our research on young finance professionals globally suggests that this is a generation with ambitions for fast progression and rapid career development,” says Warner Johnston, head of ACCA USA. “These traits place new pressures on SMPs to rethink how they attract, develop and retain young talent.”

From an employer’s perspective, a focus on attraction, engagement and retention should lead to wider changes in how many approach talent-management strategies. Generation Next as a whole is particularly mobile, and that pattern holds for those employed at SMPs: 31% would like to move to their next role in one year, and 64% in two years.

For attracting young finance professionals to SMPs, job security and work life balance are a major factor; 86% agree that job security with an employer is important; 83% agree that work-life balance is a priority; and 71% say that flexible working arrangements are an attraction.

For Generation Next, the key to retention is development: 93% agree that the availability of opportunities to learn and develop skills is key to remaining with an employer.

“Encouragingly, this research shows that the new generation of young finance and accountancy professionals entering the world of SMPs is well-equipped to deal with the changes being driven by globalization and technology,” says Johnston.

SEC Inquires Go Unanswered Due to Spam Filter

According to a Fast Company article, on Aug. 10, the SEC emailed Axon Enterprises, a manufacturer of police body cameras and taser stun guns, with questions about the company’s accounting practices, but received no response. Then a month later, the accounting branch chief at the SEC, John Cash, sent another email to ask for a response to the initial inquiry. Once again, no response.

Cash emailed a third time to inform Axon that the inquiries were “outstanding and unresolved,” and so the correspondence would be made public. “As you have not provided a substantive response, we are terminating our review and will take further steps as we deem appropriate,” Cash wrote.

Axon said it only just discovered the agency’s queries on Oct. 19. The problem: the emails were relegated to the spam folder of the company’s new chief financial officer.

In a statement to Fast Company, Axon notes:

“Historically the SEC has sent hard copy letters. In this instance, they sent the request via email to one individual that had never corresponded with the sender before and therefore the sender’s message was caught in a filter and never reached the intended recipient. Once we were made aware of the original letter and confirmed receipt we responded to the SEC and we will be providing them with responses to their questions.”

The Seven Rules of Fearless Growth: What Fearless Companies Are Doing to Grow Faster and Smarter

Amanda Setili, author of Fearless Growth: The New Rules to Stay Competitive, Foster Innovation, and Dominate Your Markets, is president of strategy consulting firm Setili & Associates. According to Setili, when the rules we used to live by are becoming obsolete overnight, which doesn’t foster calmness and confidence.

“To be able to respond quickly and intelligently to the fast pace of change, all levels and functions in your businesses must be creative, responsive, and agile,” says Setili. “You’re going to feel fear, sure—and yet you must act in spite of it.”

In her work as a strategy consultant, Setili says she has found there are seven rules to help you navigate the new economy and achieve fearless growth.

  1. Embrace uncertainty.
    Uncertainty creates opportunities to pull ahead of the competition. Having the right risk mentality and moving quickly gives you an advantage over competitors that are slower to respond. Repeat past successes and keep budgets realistic and proportionate to projects.
  1. Get in sync with your customers.
    When you allow your customers to customize the products and services you sell, you’re able to learn a lot about them. This gives you the information you need to innovate new products, services and ways of doing things, and stimulate growth. You can also observe and cater to your outlier customers – the ones who use your products and services in unusual ways – to gain insights. They can provide you with a window into emerging market trends and ideas for new products and services.
  1. Partner, borrow and share.
    If you can collaborate with others outside your company, you can experience rapid adaption when the market changes. It benefits you to outsource things that are not your distinctive competency. All of this can leverage the ideas and capabilities outside your organization, while strengthening the people, processes and capabilities inside it.
  1. Connect and strengthen your ecosystem.
    Figure out who’s already in your company’s ecosystem and whom you would ideally like to have there. Then determine what value you would like each member to both give and receive. Consider creating a technology platform to enable richer interactions between ecosystem members and facilitate and nurture their real-life relationships with each other as well. Building the strength, size and participation in your ecosystem can fuel growth, build customer loyalty and insulate your company from market upsets.
  1. Open the floodgates of employee creativity.
    Be sure to continually pose new questions and challenge assumptions by introducing competition or games to stimulate new ways of thinking and free people to take risks. Allow new ways to work by encouraging collaboration and forming project-based groups, rather than top-down structures. Communicate your values clearly and frequently, so employees know what you expect, even when no one is looking.
  1. Learn fast and fearlessly.
    Keenly observing the business environment, taking action before you feel fully ready and incorporating what you’ve learned immediately into your strategy are all tickets to playing in today’s fast-changing global economy. Make sure you are constantly experimenting, learning from successes and failures, and applying your knowledge. Anticipate the changes in your business environment and set specific learning goals based on those changes.
  1. Build trust into all you do.
    Trust speeds innovation and growth and improves efficiency. To begin building trust, work to neutralize fear in your organization, making it psychologically safe for employees to voice their ideas and opinions, make decisions, take action, gain new skills and try new things. When you give people challenging but realistic goals, act in a transparent way, show vulnerability, grant people discretion about how they do their work, and show appreciation for work done well, you’ll be amazed how much your team can accomplish. Finally, foster and expect creative conflict by encouraging employees to disagree and challenge each other.

“Like it or not, it’s time to throw out the old rule book and start fresh with approaches that make sense for the new economy,” says Setili. “The strategies that help you facilitate trust, learning, creativity and partnership seem counterintuitive at first, but will soon pave the way to success not only for you but for your team and your customers as well.”

Do C-Suite Executives Work Differently?

In a new report, “Business Chemistry in the C-suite,” researchers from the Deloitte Greenhouse Experience team surveyed 661 C-suite executives.

According the report, C-suite executives are more likely than the general business population to think about the big picture, embrace the competitive spirit and make quick decisions. But the report also finds that those in C-suite roles are not necessarily more (or less) disciplined, punctual or practical.

The differences that the study reveals in the amount of Business Chemistry types in the C-suite are related to function, organization size, industry and gender.

The report discusses:

  • Factors influencing C-suite executives’ working preferences
  • Why we are seeing these patterns and what those implications mean
  • Recommendations for leaders and those who work with them

To read more about the study, please see the full report.