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Building Bench Strength

Building Bench Strength. Presented by: Art Kuesel LEA HR SIG June 7, 2016. Art Kuesel, President. EXPERIENCE Sales Executive 3 years @ $225M CPA firm 5 years @ $40M CPA firm 6 years at PDI/Koltin Consulting 3 years at Kuesel Consulting EXPERTISE

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Building Bench Strength

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  1. Building Bench Strength Presented by: Art Kuesel LEA HR SIG June 7, 2016

  2. Art Kuesel, President • EXPERIENCE • Sales Executive • 3 years @ $225M CPA firm • 5 years @ $40M CPA firm • 6 years at PDI/Koltin Consulting • 3 years at Kuesel Consulting • EXPERTISE • Leadership and Sales Coaching • Sales/Marketing Training • EXPERTISE (Cont.) • Growth Plan Development/Implementation • Managing Partner Coaching • Sales & Marketing Recruiting • Partner Roundtables • STREET CRED • Top 100 Most Influential Person in Public Accounting: 2014 • In-house and external experience • Clients include scores of T250 Firms including a third of the T100 • Frequent writer and blogger for Accounting Today • Accomplished speaker and presenter on growth trends

  3. Today’s Discussion • Survey Results • Industry Trends • What’s in a Succession Plan • Your Succession Planning Matrix • Building your Bench • Bench Building Programs • Boosting the Bench • Timeline, Contingencies and Best Practices 3

  4. MP Survey Results

  5. Succession Planning @ LEA Firms • 1. What percentage of LEA firms have a formal, written succession plan in place? • LEA Yes = 55% • Nationally/Top 250 Yes = 30% (AICPA) • 2. Does your firm have a mandatory retirement age? • LEA Yes= 91% • Nationally/Top 250 Yes = 64% (Rosenberg)

  6. Succession Planning @ LEA Firms • 3. We want to remain independent? • LEA Yes = 91% • Nationally/Top 250 Yes= “vast majority” • 4. What percentage of your partners will retire in the next five years? • 1-24% = 45% • 25-49% = 55% • 50-74% = 0% • 75+% = 0%

  7. Succession Planning @ our Firms • 5. Please rate your firm’s “bench”: • 18% = GREAT (more candidates than partner slots) • 73% = GOOD (1:1 ratio) • 9% = FAIR (maybe 1 rising star) • 0% = POOR (bench is empty)

  8. Succession Planning @ LEA Firms • 6. Do your firm’s “rising stars” know what it takes to be a partner? • 86% = Yes • 14% = No

  9. Succession Planning @ our Firms • 7. What is your firm doing to build the bench and develop top talent? • 86% = Mentorship • 64% = External development programs • 59% = Personal development plans for rising stars • 50% = Internal development programs for rising stars (XYZ Path to Partner Program)

  10. Succession Planning @ LEA Firms • 7. What is your firm doing to build the bench and develop top talent? • 41% = Experienced lateral hires aligning with our current practices • 45% = Internal development programs (XYZ University) • 41% = Real-time feedback • 41% = Performance Coaching • 36% = Experienced lateral hires bringing new practices/niches

  11. Succession Planning @ our Firms • 8. How is your firm fueling growth? • 95% = Service line expansion • 86% = Active client development • 62% = M&A • 48% = Practice innovation • 38% = Lateral hires • 29% = “Productization” • ??% = BDE’s • ??% = Other?

  12. Succession Planning @ LEA Firms • 9. My Firms biggest Succession Planning Challenge: • (4) Finding the time to develop/train future partners especially in BD/rainmaking • (3) Getting Partners to Transition Clients by 65 • (2) Fueling Growth • (2) People Retention • Building the Bench with Laterals • Effectively using BDE’s

  13. Succession Planning @ LEA Firms • 9. My Firms biggest Succession Planning Challenge: • Aligning all Partners under Common Vision/Strategy • Keeping outgoing partners busy during last three years while work is being transitioned • Equity vs Income Partners (Income want it handed to me vs growing it) • Not enough 4-8 year talent to allow rising stars at SM level to become partner

  14. Succession Planning @ LEA Firms • 9. My Firms biggest Succession Planning Challenge: • Commitment of NG partners to relationship development, problem solving, and consulting • Finding good leaders 10 years out • Gap in business strategy knowledge among HP’s

  15. Industry Trends

  16. #1 Average Age of Equity Partners In 1995: 46 In 2000: 48 In 2015: 52 Percent of Partners 50+ in 2015 61% Source Rosenberg Survey and IPA

  17. #2 Population Size by Generation Availability of Accounting Grads Source: Pew Research

  18. #3 Labor Force Size by Generation Population Size

  19. #4 Availability of Accounting Grads Source: AICPA 2003: 53,000 2009: 35,000

  20. #5 MP Job description • Turn lights on @ 5:05am, client service, business development, people issues, partner issues, technical knowledge, physical space issues, financial management, hiring decisions, niche expansion, competitive intelligence, public relations, client retention, technology, vision, leadership, sports tickets, vendor relationships, industry knowledge, referral sources, recruiting and retention, legal and liability issues, lateral hires, M&A, partner performance, realization, profitability, strategic alliances, partner compensation, succession planning, and turn lights off @ 9:27pm.

  21. #6 Perceptions • Our perception of the immediacy of this issue • Our perception of the need to help/develop the next generation • Our perception of the work ethic or style of the next generation of partner • Their (NG) perception of our firm • Their perception of the partner role • Their perception of the current partners • Our perception of our options • And the list goes on>>>>

  22. What’s in a Comprehensive Succession Plan?

  23. What’s in a Succession Plan? • Strategic Vision: 5-10+++ Years (vision, mission, size goal, services, geography, niches, etc.) • ID retirement scope for each current partner • Identify people development needs to fill retirements and meet growth targets • Assess gaps & how we’ll fill them • Define criteria for future partners • ID partner candidates and plans for each • Buyout plan, buy-in plan • Client transition plans for “A” and “B” (process for “C”)

  24. Your Succession Planning Matrix

  25. Step 1: Your Partner Age Matrix

  26. Step 2: Revenue/Partners Needed

  27. > What Percentage of Managers “With Potential” Actually Make Partner? • 10% • 33% • 50% • 75% • 100%

  28. Step 2: Revenue/Partners Needed

  29. > What Percentage of Supervisors “With Potential” Make Partner? • 10% • 33% • 50% • 75% • 100%

  30. Step 2: Revenue/Partners Needed

  31. Building your Bench

  32. So, Who’s on the Bench for 12/31/18? • 2 spots open and we have 2 potentials… • Our Statistics tell us that up to 50% will: • Get recruited away, leave the profession, be terminated, have a major family change, have a personal life crisis, doesn’t end up being partner material, won’t delegate, can’t develop business, can’t develop people, cause internal issues, etc. and so on… • So We Ideally Need 3-4 Partner Potentials in Development…NOW.

  33. Building the Bench for 12/31/18 • Finding 1-2 more… • a) Accelerated development of YP’s with HP • 8 years to partner? Why not! • There is no law that says it needs to be 12-15 years “just because that’s the way it was for me…” (In fact, we can’t afford that luxury right now) • Create a customized internal plan* for your HP’s that are a bit “green” but are clearly partner material • Plug these people into external programs or internal programs earlier • ADVOCATE and SPONSOR

  34. Building the Bench for 12/31/18 • Finding 1-2 more… • b) Laterals/Experienced Recruitment • Retained search firm – with acute target(s) in mind • Recruiters on-staff • Staff communication and bonuses to recruit their friends • Personal talent pipelines – required @ all levels • Boomerangs (geography and firm) • WHITE GLOVES OFF

  35. Building the Bench for 12/31/18 • Finding 1-2 more… • c) Rewrite the Requirements • Non-Equity • PT, Virtual, Flex, 70% • Non-CPA’s?!?!?! • Look outside our market • Use better VALUE PROPOSITIONS

  36. Building the Bench for 12/31/18 • Finding 1-2 more… • d) M&A • If the talent matrix works – why not? • Just make sure the culture is right

  37. Who’s on the Bench for 12/31/20

  38. Who’s on the Bench for 12/31/25

  39. Bench Building Programs

  40. “Path to Partner” Program (2018’s) • An intense program that combines evaluation, mentoring, coaching, sponsorship, shadowing, training/CPE, leadership project(s), roundtable forums, information sharing, Q&A, and more • Eligible candidates are senior managers (or equivalent) • Usually time-limited (for example 2 years) • Monthly touch-points and quarterly review-points • Significant commitment from participants and direct supervisors • Annual self-review/review • Partner memo

  41. “Leadership Development” Program (2020’s) • A program that combines mentoring, training/CPE, roundtable forums, leadership projects, sponsorship, information sharing, Q&A, and more • Eligible candidates are new managers • Usually time-limited (for example 4 years) • 6x annual touch points • Moderate commitment from participants and direct supervisors • Annual self-review/review

  42. “XYZ Firm University/Academy” (2025’s) • A program that combines mentorship and training/CPE • Everyone is eligible, no time limits • 4-12x annual touch points • Limited commitment from participants • Limited commitment from direct supervisors

  43. Boosting the Bench

  44. Core Skills for Leaders in CPA Firms

  45. Personal and Professional Development • Technical Expertise • Personal SWOT/Defining your Personal Leadership Style • Time Management 101 • Accounting Firm 101 • Credibility • Communication • Strong Work Ethic • Billable Hours/Realization Goals

  46. Client Development • Understanding your Role with the Client • Being a Proactive Advisor • Developing Relationships and Building Trust • Cross-Serving/Selling • Achieving Loyalty – and Referrals!

  47. People Development • Delegation and Leverage as a Development Tool • Team Building 101 • Serving as a Mentor and Coach to your Team • Performance Management of Others • Delivering Effective Feedback

  48. Business Development • Building a Personal Brand and/or Niche • Capitalizing on your Biggest Asset: Clients • Developing a Referral Source Network • Succeeding at the Sales Process • Achieving a Goal for Originations

  49. Firm Development • Herding Cats: Leading Other Partners • Creating a Culture of Accountability • Strategic Planning 101 • Leveraging Technology • Talent Acquisition • Niche Growth and Expansion

  50. Each Plan will be Different

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