Change Management: A Leadership Skill every Managing Partner needs to Master
Change is inevitable. Great business leaders have practices in place that help them see a shift in the status quo and proactively plan for it.
All too often, the world of accounting has lacked a fundamental understanding of market changes and operated in reaction mode.
I think it’s time that changed, and all of the influential leaders in accounting today agree with me.
To that end, I’d like to relay some of the insights I’ve gained over several decades of experience as a leader in our field, and empower your firm to better prepare for the future, where change is certain.
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1. Scan the Environment to See What’s Changing
We know two fundamental things about change in any business: it is inevitable and it happens fast. What I haven’t said is that change is unpredictable and uncontrollable. In fact, a solid approach to change management starts with continuous awareness.
Firms that don’t scan the environment, don’t talk to other firms, don’t read the Wall Street Journal, don’t watch business news, and don’t pay attention are in big trouble.
Your firm leadership needs a radar up at all times. You need to know what other firms are doing as well as investigating Web 3, blockchain and marketing automation. Additionally, you need to watch mergers and acquisitions.
All of the information you need to insulate against the unpredictability of change is available. If you discipline yourself to live in a state of awareness, you’ll have the right knowledge to take action.
For Example: 3 Changes I See Right Now
In case this is a new practice to you (or you’ve been lax about practicing it) let me illustrate the types of things firm leaders should be looking for. I can easily spot three major dynamics happening right now in the market:
- A ton of attention is on outsourcing (this isn’t actually new – more on that in a minute)
- Private equity is on the outskirts of the profession, likely to enter it
- The talent pipeline is a critical issue that isn’t going to resolve itself
Every good leader is paying attention to relevant happenings like these.
2. Create Better Decision-Making Processes
No firm wants to be left in the dust by major market changes. But that’s exactly what will happen unless you tackle the bottleneck problem.
If your decision-making process cannot quickly take insights and craft a plan of attack, you’ve already lost. You may have one person who’s paying attention to changes in the market or business, but if five people have to make a decision, you get into a timeline problem.
As a leader, you must clear the path for decisive action. If this means an overhaul of the process, so be it. That’s a culture and operational change you’ll have to manage, and manage well.
3. Build Consensus
To balance the former point, I want to remind you that great leaders don’t manage change alone. You cannot categorically overrule your team and hope to succeed.
If you’re trying to pivot to a new idea but the rank and file partners won’t support it, it’s a waste of your efforts.
Using whatever leadership function you have, prioritize consensus building. Sometimes you’ll be presenting a proactive step to protect against a clear, impending market change. Other times you’ll simply be trying to change protocol. Whatever the scale of the change needed, you cannot achieve it alone.
Make sure you have a dependable organizational hierarchy to push information down through. This means leveraging your leaders to help expand a firm-wide understanding of your vision and achieve subsequent buy in. Consistent communication and proper execution are necessary for a productive and shared outcome.
4. Take Action
Time is of the essence, in this or any era.
In order for change management to be effective, you have to plan the change and, more importantly, execute the change. That means you must have the right idea, a realistic plan, consensus, accountability, and ongoing motivation.
Let’s talk about motivation for a minute. Thomas Friedman’s book, The World is Flat, was instrumental for me as a firm leader. It opened my eyes to the reality that the world was changing in front of me, and my firm should consider what was going on. This is why, back in 2007, before anyone else was doing, we started outsourcing. Moving the front end of our tax return preparation over to India was a relatively novel idea at the time. It was efficient, affordable, and easy.
15 years later, firms are beginning to do this in the way I did it back then. But now it costs more, it’s not as efficient, and some of the overseas talent is over-extended and capacity becomes an issue.
Firms could have done what I did, surveying the landscape, foreseeing the issue of millennial talent supply, and proactively implementing a solution. Managing that change then was fairly straightforward. Managing that same change now, in a time of critical understaffing and talent shortages, is a different ballgame. One that could have been avoided if firm leaders had paid attention.
Change Management is a Leadership Skill
You can’t be running the firm of 1995 in 2022. And the firm of 2025 will look different than the firm of 2022. Change is happening all of the time. Leaders who master change management well will excel.
I always tell my firms that in order to execute, senior leadership has to have time to work on the firm instead of in the firm. Part of this is taking the time to learn about the world around them, in which their firm operates, and see change coming on the horizon. Then, they must clear the way with efficient decision-making processes, consensus-building, and decisive action.
Cultivating leadership skills is mission critical for any firm that wants to lead into the future.
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