By David C. Knoch, President and Chief Operating Officer, 1st Global
There once was a time when young CPAs got in line at a firm and “waited their turn” to become partner. Today, a number of factors are challenging this apprenticeship model. According to the AICPA’s 2012 PCPS Succession Survey, less than half of multi-owner practices have succession plans in place, and 42 percent point to a lack of confidence in the leadership ability of junior partners as the single largest succession issue.
As Boomer CPAs and advisors begin to retire, many believe there are enough Generation X & Y CPAs and advisors to fill the impending leadership void. However, it will not be an even 1-to-1 replacement of Boomers to Gen X & Y. When looking at advisors, only six percent are under the age of 30¹, pointing to a huge gap, and similar demographics exist with CPAs as well.
There’s going to be a battle for talent in the coming years. With a small pool of younger CPAs and advisors to choose from, it may only be a handful of firms that will be able to keep pace with business and continue the growth they’ve experienced in the past.
To engage Gen X and Y CPAs and advisors to take the reins, veterans must rethink their own leadership approach at their firms, and adapt to new methods of developing and conducting their businesses in a way that engages and nurtures the younger generation.
Today, many firm partners approach their business as practitioners, and far less commonly as leaders. They’ve been focused on building and nurturing their businesses and their client lists. While this has been very successful, these partners may not have developed themselves as conscious leaders, critical to the future development of the younger CPAs and advisors.
Some firms have partners with a charismatic personality that naturally engages employees, but these partners may not be fully conscious of their own leadership skills. While they make a strong connection and utilize their personalities to motivate and engage employees, they may have not yet reached full conscious leadership.
The majority of firms, however, have little or no conscious leadership and a fractured leadership approach. Many in this group are interested in how to be leaders and know they should focus on developing those skills, but they haven’t reached a driving need to change. The brain is aware but the heart isn’t. Not engaging themselves and their firms in formal leadership training, coaching and professional development has made them less likely to listen to and engage younger generations.
Listening and Learning
Senior partners lacking conscious leadership may be less interested in hearing what the young generation has to offer. Some might think “we’ll tell them what they need to think,” but that mindset will only leave younger generations disheartened.
To secure the future of our profession, we must engage the younger members of our profession by speaking to the things that matter most to them. These are innovation, engagement and collaboration.
A recent Deloitte survey found that creativity and innovation are highly regarded by young professionals. They like order and the prospect of disruption scares them. To overcome that fear, we must focus on the creative possibilities. By leveraging the creativity and innovation of younger generations, CPAs can keep them at the forefront of succession.
Engaging new members of our profession means more than just giving them their own committee. We must help them feel part of the profession by welcoming them into the boardroom and inviting them to participate in professional initiatives. We need to find ways to leverage their positive experiences by inviting them to participate in other ways.
The younger generation is also collaborative. They are willing to work together and they understand how collaboration and sharing creates more value than erecting barriers to the sharing of ideas. We need to consider changing older hierarchical models designed to control and restrict the flow of information, so young CPAs can play a leading role in designing new models that will facilitate collaboration.
Bring the Value Out
Gen X & Y value a fuller life and work hard to make sure they balance family, work life and charitable causes. They are willing to work hard but the hours they spend may not be anchored to a desk. They just take a different approach to getting the same amount of work done.
Young people are also often looking for a deeper meaning in their work. They are hungry for meaning and they need to see the long term impact of their work, not just the number crunching. By connecting them with things they value, helping them find meaning and seeing how the accounting profession is leading the way on matters of integrity, many will find inspiration to do their best work. We have a tremendous opportunity to anchor young CPAs to the values of our industry and help them understand how their work is for the good of the firm, the clients and even the nation and world.
Take the time to tell your younger CPAs and advisors a bit about who the client is, why they need the work done and how this will help the client. By understanding why the client relationship is important to the firm, the CPA and the industry, it can make a significant difference in the way that staff approaches their work.
CPAs have a tremendous opportunity to create and promote the values, visions and principles of the job, our firms and the industry. Help them see how the profession is leading the way on matters of integrity and value. Share with them the fiscal responsibility we uphold.
CPAs are a part of one of the greatest, most trusted professions in the world. Help your staff see and believe that, and encourage your younger members to get active and participate in that vision. Your people, your firm, your clients and the world will be better off for it.
David C. Knoch is president and chief operating officer at 1st Global, a research and consulting partner for high-achieving CPA firms offering wealth management. 1st Global provides CPA, tax and estate planning firms the education, technology, business-building framework and client solutions that make these firms leaders in their professions through dedicated professional client relationships built around wealth management.
¹ Future Independence, Research Magazine June 2013.
1st Global Capital Corp. is a member of FINRA and SIPC and is headquartered at 12750 Merit Drive, Suite 1200 in Dallas, Texas 75251; (214) 294-5000. Additional information about 1st Global is available via the Internet at www.1stGlobal.com.