AccountingWEB Interviews: David Maister, Practice Management Consultant

David Maister, Author and Professional Services Firm Management ConsultantAs part of a series of interviews with prominent members of the profession, AccountingWEB sits down with David Maister, acclaimed professional services firm expert and author, to get his perspective on what's happening in the profession.

AccountingWEB (AW): Over the years you have offered many of the best suggestions for professional services firms to be more successful. Out of the many great ideas, if you could choose only ONE piece of advice for practice leaders, what would it be?

David Maister: I would remind them that management is not the same as administration. Many firms are well administered, but relatively few are well managed. Administration is about being good with numbers, but management is about being good with people.

I would remind them that the job of a practice leader is to HELP people succeed, not just demand that they do (or pay them if they do.) Most people work far below our potential, and are unhappy about it, and unable to change it on our own. A good coach, working one on one with people, challenging them and encouraging them to raise their game can help everybody win (the individual, the team, the firm) by helping people, one-by-one, find the drama, the excitement, the passion and the fulfillment in what they do.

In many firms. There is a need to get people out of "doing their job competently" mode (which is very common), and into a "vigorous pursuit of a challenging career" mode. If this is done, clients will be better served, the firm will make more money and the people will be eager to get to work each day.

AW: If you could wave a magic wand and eliminate one negative characteristic or trait of an accounting firm practice, what would it be?

DM: The tendency to think: "It's the money, stupid!" Not surprisingly, accountants are very good at financials, but give them way too much importance in their decision-making. What is too often forgotten is that financial results are exactly that: the result of doing something else. What makes the firm its money is improvements in quality, efficiency, enthusiasm, client service and collaboration. But firms don't spend as much time obsessing about how to improve energy, client service, efficiency and teamwork as they do about financials. It's like trying to win a sports game by keeping your eyes firmly fixed on the scoreboard. The typical management team reviews financials at least weekly, and the things that produce financial results are examined only occasionally. This is not an anti-money argument. I'm trying to point out that there are some deep misconceptions out there about what firm leaders should be doing to GET the money.

AW: You deal with many professions. Are there any groups that stick out in your mind as doing it "more right" than any others? If so, why?

DM: There are individual firms, not entire professions, that do it better. Alas, there is some truth to the caricature that, as one partner said it to me: "If we had wanted to be interested in people we wouldn't have become accountants." Unfortunately, this person was referring both to dealing with people internally and dealing with clients!

The relative neglect of good people management in accounting is matched in other technical, intellectual professions such as law, engineering and actuarial services. As a broad generalization, it is my experience that consulting firms and PR agencies have a slightly better head start in attracting people who like dealing with people. But of course, there are exceptions there, too.

AW: Where does the accounting profession fit in with this comparative view?

DM: Like those other professions, accounting has a number of individual firms that understand that chasing money is not what makes you the money. But overall, I don't see accounting as either ahead of or behind other professions.


Contribute to David Maister's Next Book...
Do you ever wish someone could have told you early in your career what they learned - The lessons, insights and observations of the veterans - so you could be more successful at what you do? AccountingWEB is working in cooperation with David Maister to identify interesting stories, anecdotes and other advice for young professionals to be included in his next book. We welcome and encourage your participation.

AW: Because of the recent spotlight on the accounting profession and the restrictions in some of the new regulations, some CPAs are now expressing the view that they can't be too client focused because of the possible perceptions of not being independent. What do you say to those CPAs?

DM: I think there's a paradox at the heart of all attest services. You can't hope to be seen as being independent in your attestation if the person who hired you to render an opinion for use by a third party is the person you are supposed to be evaluating. Even small firms serving private clients have this issue. If your audit is going to be relied upon to help your client get a greater bank loan, then the banker is going to be suspicious when it is your client who hires, pays and decides whether to retain you. He or she will always wonder whether your audit is uninfluenced by your paymaster.

Notice, that this has nothing to do with providing additional advisory services. The perceived conflict is in the attest service itself. You could argue that, for decades, we have misused the word "client." When I'm doing an audit, for example, is it really clear that the company I'm auditing is my client?

Up till now, the marketplace has (appropriately) trusted the integrity of the accounting profession to manage this paradox, but as your question shows, that might be changing - and fast. Indeed, as your question suggests, the marketplace might no longer accept accountants who are too "client focused" on attest clients.

Is there a solution? I don't know, but it would not surprise me to see a lot of accounting firms get out of the attest business, over time. It's high risk, high exposure, relatively low growth and often modest in profitability compared to premium advisory services. Looking at it as a portfolio decision, if I had high-priced talent and money to invest in advisory services or attest, I wouldn't choose attest. I'd be working to get out of that business as fast as possible (if it's possible.)

On the other hand, let me rush to say that I can imagine a very vibrant and successful business dedicated only to attest services. I'd speculate that these could be broadened to include attest functions in a wide range of business areas. Virtually every business transaction or contract needs an attestation (the goods are in the warehouse, we have that many subscribers, etc., etc.) I could see a sort of Dun & Bradstreet style business being built from an accounting base, and it could be very profitable.

AW: The accounting profession has been in a great deal of turmoil over the past year or so. As one who deals with the various professions, what do you think went wrong?

DM: For certain accounting firms (whose names might be obvious) I think we saw a shift from "Let's make money by adhering to high standards of excellence" to "Let's make money any way we can." Making money is important. So is how you set out to make the money.

I also think we have seen the negative fallout of size mania: the rush to get big on the theory that size is crucial to success. Yes, Size helps, but it's not crucial. Excellence is crucial, and the minute you put size (or growth) ahead of excellence, you're in trouble.

It's important to note that few of the dramatic events of the last year were primarily caused by actions in the last year. They were just the last straw. The real causes (the underlying culture shift) started many years ago.

AW: What do you see is the biggest challenge for professional services firms - and accounting firms in particular - over the next 2-3 years?

DM: I'm not a futurist, so I can only comment on what I see today. I think today's biggest problem is the lack of excitement I feel when I visit accounting firms or attend accounting conferences. I meet very bright people, working very hard. But they tell me that they do not feel turned on by their work, they are not energized by their clients. In many ways, they view what they do as "just a job."

I'm not a moralist, so I can't say whether this is a good or a bad thing for people's lives. But I do know a little about business, and I know you cannot excel or thrive unless there is energy, excitement, enthusiasm, ambition, passion, pride, determination. Only with those things around do you find the discipline, day in and day out, to do all the little things it takes to succeed.

Someone has got to help these people, partners no less than staff, find the magic in accounting - find the reason to throw themselves into what they do with more than half of their waking hours.

AW: What is your advice to many smaller firms who feel they just can't compete with the Big 4 for business - whether it's on price, talent, resources, etc.?

DM: In other words, what can a smaller firm offer that a Big 4 does not? (Notice that the question is not what the Big 4 cannot offer, but what they may not be offering now.)

Let me speculate on a few things that might be appealing to a younger person:

  1. Closer personal attention, supervision and monitoring
  2. More professional responsibility earlier
  3. A more tight-knight collegial workplace
  4. The chance to work directly with clients at an earlier stage
  5. The chance to work with entrepreneurial, middle market clients, who are more interesting
  6. Learn more by dealing with a wider range of clients in a year

Of course, the challenge is whether the small firm actually can and does deliver on these things!

AW: Traditionally the accounting profession has attracted people who are more "number" oriented than "people" oriented. Yet you preach that this is very much a people business. How do you reconcile those seemingly inconsistent perspectives?

DM: I'm not by inclination or training a "people person," either. But the point is - it ain't optional! It's not an acceptable answer for me or anyone else to say "Well, I don't like this people stuff, so I'll ignore it. I'll just tell my clients where they are wrong, and leave it at that!" Actually, I can try to operate that way, but I'll suffer for it, just as I'll suffer if I don't learn how to deal with my employee.

The "reconciliation of inconsistent perspectives" is this: we've got to stop forgiving ourselves for our flaws, and stop accepting excuses from those around us. How would you like your doctor to say "I'm not a people person, I just tell them what's wrong, give them the prescription and show them the door!" If we don't like it in others, we shouldn't accept it in ourselves.

AW: What should students considering a career at a professional services firm look for in making their decision of the "right" firm to work for?

DM: I'd take the list of nine key attributes which have been proven (in my book PRACTICE WHAT YOU PREACH) to be the characteristics of financially successful firms (and the attributes which, not coincidentally, are present in high employee energy firms) and ask the staff (not the partners) whether these statement describe the firm well. Here are the nine key attributes:

  1. Customer/client satisfaction is a top priority at our company.
  2. We have no room for those who put their personal agenda ahead of the interests of the clients or the office.
  3. Those who contribute the most to the overall success of the office are the most highly rewarded.
  4. Management gets the best work out of everybody in the office.
  5. Around here you are required, not just encouraged to learn and develop new skills.
  6. We invest a significant amount of time in things that will pay off in the future.
  7. People within our office always treat others with respect.
  8. The quality of supervision on client projects is uniformly high.
  9. The quality of the professionals in our office is as high as can be expected.


David Maister is widely recognized as one of the world's foremost experts in professional services firm management. An acclaimed author, Mr. Maister has written several books which are viewed as "must reads" for anyone in a professional services firm environment:

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