Setting Partner Expectations and Reporting to Drive Performance and Accountability

1. Setting Partner Expectations and Reporting to Drive Performance and Accountability Presented by Jack G. Lee III, CPA

2. Poll #1 • What answer best characterizes your reason for attending this web seminar? • To understand the concept of “ownership” within the firm • To learn how to define customized partner role descriptions • To get better and more effective at partner goal setting • To improve the return and report process in my firm • Other

3. Partner Performance and Accountability Webinars • Our 2013 Partner Accountability Webinar Series has been designed to spark your strategic thinking in the area of partner performance and accountability, and includes the following sessions: • In today’s session (Session 1), we’ll focus on “Setting Partner Expectations and Reporting to Drive Performance and Accountability” • In Session 2 on Tuesday, July 16th, we’ll learn about “Driving Partner Performance and Accountability with Feedback and Straight Talk” • In Session 3 on Tuesday, August 20th, we’ll conclude with a discussion on “Managing Conflict Successfully”

4. Our Agenda • In this session, we will explore how to improve partner performance and accountability by: • Understanding the importance of “ownership” in driving firm initiatives forward • Gaining insight on the “link” between written partner role descriptions and execution of your firm’s strategy • Getting better and more effective at partner goal setting • Developing a “return and report” process to support achievement of agreed upon goals and strategies

5. Keys To Performance and Accountability • To improve partner performance and accountability, there are three key attributes on which to focus: • Unity – establishing partner unity around your firm strategy with trust as your foundation • Ownership – defining partner roles and goals and taking responsibility for achieving results • Accountability – monitoring and evaluating your performance, being willing to “return and report”, acknowledging you can be better These come together in our Leadership Development Model…

6. The Leadership Development Model Ownership Trust Accountability

7. Quick Overview:Unity – The Foundation of Partner Accountability

8. What Does Unity Mean? • Unity means: • Agreement and alignment on a strategy and direction for your firm and around key decisions • Majority agreement is required, but “super-majority” is preferred • Respect, trust and edification at all times • This includes following the agreed upon direction, abiding by decisions and working towards the strategy in which the majority agreed (even when you are in the minority!)

9. What Unity Does Not Mean • Unity does not mean that: • You have 100% buy-in or that everyone agrees all the time • Conflicts won’t arise • All partners like each other and are “friends” • Everyone will stay together forever

10. What To Do When Unity Is Missing: • When the firm’s strategy is unclear - decisions aren’t supported because partners cannot “see” where the firm is heading • Action: Establish the firm’s strategy • When we all want different things – and don’t disclose our self interest • Action:  Establish the firm’s strategy with it’s multi-faceted elements and communicate (relentlessly) the firm’s purpose and vision for the future • When partners won’t submit to an agreed upon strategy because it requires a change in behavior • Action: Change management and new behaviors are required, including submission • When there is no “cost” for the lack of submission, compliance or unity • Action: Put accountability structures and rewards for contribution to the strategy in place

11. Lack of Trust =Lack of Unity • The main reason firms struggle with forming and supporting a unified strategy is the lack of trust • For real unity to occur, trust is required among your leaders • It is the only way to empower your leadership roles (and committees) • Lack of trust shows up as: • Inability to make decisions, or “churn” • Triangulation and “side conversations” • Internal competition vs. external • Unresolved conflict among partners, and inability to move forward • Lack of passion and energy • Unwillingness to submit to or support group decisions

12. Three Trust Building Behaviors • Integrity is more than “honesty” or “doing the right thing” and includes: • Keeping commitments – not over-committing and under-delivering • Resetting expectations when commitments cannot be kept • Accountability isfollowing through on commitments and includes: • Taking responsibility when their “things” are not going as planned • Holding others accountable • Straight Talk uses candor and honesty in all communications and tells it like it is, and includes: • No beating around the bush • No avoiding difficult subjects

13. Bottom Line on Trust • Without trust you can’t have accountability and without accountability, you can’t have trust • Don’t attempt to implement or improve your partner accountability process in a low trust environment • Start with building or restoring trust among the partners • In some cases, forgiveness may be required

14. Ownership:Establishing Partner Roles and Goals

15. Booker T. Washington “Few things help an individual more than to place responsibility upon him, and to let him know that you trust him [or her].”

16. Ownership Starts At The Top • When partners exhibit ownership, they: • Put in the necessary amount of time and physical and mental energy to strategize about, forward and improve the things assigned to them • Actively communicate on the status of the things assigned to them with stakeholders impacted by their success (without prodding) • Take responsibility for the results of the things they own – both positive and negative

17. Ownership Challenge • In most firms, the exact items “owned” by each partner (and staff person) is often fuzzier than it should be • When you are unclear as to who owns what, it is hard to hold anyone accountable for performance • Let’s explore some ownership ideas that can clear up any confusion…

18. Our Organizing Principles • We believe there must be clearly defined ownership for all key areas of your organization - ONE owner for every: • Business function • Service Line • Office • Client • Engagement • Employee Bottom Line – things don’t progress without a clear owner and performance expectations aren’t clear without ownership defined

19. Avoid Ownership Politics • Sometimes we avoid defining who owns what because we don’t want to “award” ownership to any one person due to: • Politics between two parties who both want the “power” or “glory” • Two parties wanting to co-own something because they don’t want to all of the risk or burden • Fear on behalf of any potential owners that they will have to do all of the work (so no one wants the job) • Ownership does not mean that the owner: • Always has to be a partner • Does all the work • Makes all of the decisions by themselves or without input The owner is a facilitator and strategist for their “things,” but they use a team approach to develop and implement their plans

20. Establishing Ownership • We like to use “roles grids” to identify and assign ownership for each of your firm’s functional areas, service lines and initiatives • Use first-level roles grids to identify ownership for each functional area and service line • Then have each owner create a second-level roles grid to break their items up into small pieces to delegate ownership at a lower level Let’s review some sample roles grids…

21. Firm Roles Grid

22. Level Two Roles Grid – Tax Department

23. Tax ClientEngagement Roles Grid

24. Creating Partner Role Descriptions • Once ownership is established, formal written role descriptions should be developed for each partner, outlining the “areas” they own • Role descriptions are “one-size-fits-one” – tailored to each individual partner • They should answer these questions: • What are the duties and responsibilities of the assigned role? • What clients, people, initiatives do they own? • How do we measure their success? • What skills, education, abilities, core competencies, and behaviors are required for the assigned role? • Don’t focus only on technical abilities – especially if the role is responsible for leading, developing and managing others

25. Sample Excerpt – Service Line Leader • Creating and executing a strategic plan, budget and capacity plan for the service line / initiative each year • Identifying and directing product/service mix, pricing, promotion (marketing management) • Taking responsibility for service line’s financial performance • Directing and leading the team involved in delivering the service • Partners and managers may report to them – depending on your firm’s size, staff may, too • Hiring and firing authority • Reviewing and approving promotions and raises • In addition to the specific responsibilities for each role, there may be responsibilities for certain firm management functions

26. Creating Partner RoleDescriptions • Role descriptions should be organized by skill block for each partner type in your firm, including: • Managing Partner • Operations Partner • Service Line Leaders or Department Heads (Tax, Audit, etc.) • Line Partners • Business Development Partners • This will help with succession planning and transition of duties to the future “owners” • Role descriptions should be shared openly with the entire team

27. Poll #2 • What is the status of your firm’s partner role descriptions? (specify only one) • They are written, current and customized to each partner • They are written and current, but not “customized” • They need to be updated • We do not have written partner role descriptions • Other

28. Defining Performance:Setting Goals and Measures of Success

29. "A goal properly set is halfway reached.“Abraham Lincoln

30. Setting Goals or Measures of Success • To be able to measure the success or contribution of each partner, each should establish goals specific to their role • Your goals need to contribute to the overall firm strategy • Also consider growth and personal development opportunities • You should have no more than 2-3 “stretch” goals that tie directly to your role and your areas of ownership • Decide on your priorities, don’t establish too many goals • Obtain input from others and approval by the leadership group • This process should be completed annually • Achieving your goals should point to your success and directly (and positively) impact your compensation • Conversely, not achieving your goals should adversely impact your compensation

31. Minimum Performance Expectations • “Minimum” partner performance expectations should be defined in competence areas such as: • Firm core values and leadership • Client service • Technical excellence • People development • Business development • Financial contribution • Each partner should set goals that go “above and beyond” minimum expectations based on each partner’s strengths – and goals must s-t-r-e-t-c-h you to make a difference

32. Two Types of Goals • Consider both types of goals when you are developing your goals -- • Those that improve a behavior or skill • For example – more straight talk, less triangulation, better communication, improving business development   • Those that produce a deliverable or tangible end result • For example – set goals around things you own – specific initiative goals, assigned roles, etc. (“current production”) • Or goals around succession, developing future leaders, transitioning of clients, developing new business (“future capacity to produce”)

33. When Establishing Your Goals • Make them: • Specific– your goals should be specific rather than general and answer the “W” questions (who, what, why, when, and where) • Measurable – establish specific criteria for measuring progress whether financial, based on activities, etc. • Realistic and Relevant – a goal must be something the organization is committed to and that you are willing and able to work toward • Written and Shared – commitment to performance increases when goals are written and you tell others

34. Sample Partner Goal Form YOUR FIRM Partner Goals Evaluation Period ________________________

35. Goal Examples – Financial Performance • Achieve $X in personal revenue production by XX/XX/XX • Grow my personal revenue production by X% year over year • Increase my revenue per client to $XXK per client by XX/XX/XX • Increase my engagement realization to XX% by XX/XX/XX • Increase my realized hourly rate from $XXX to $XXX by XX/XX/XX • Improve my on-time billing performance to eliminate reminders from finance as evidenced our billing manager acknowledging this improvement by XX/XX/XX • Increase the profit contribution from the service line that I manage to XX% by XX/XX/XX

36. Goal Examples – Business Development • Bring in X new audit clients from contacts generated by me worth $XX,XXX by XX/XX/XX • Refer $XXK in new business for our OTHER SERVICE LINE by XX/XX/XX • Conduct an average of 4 referral source or prospect meetings per month, or 48 meetings in total by XX/XX/XX; track these meetings and their outcomes/next steps in our CRM or in Excel • Increase revenue per client for my top 10 clients by XX% by XX/XX/XX

37. Goal Examples – Client Management • Hold strategic client account planning meetings for my top 15 clients, completing three specific actions or outcomes determined for each client by XX/XX/XX • Introduce two other manager or partner contacts to my top five client contacts by XX/XX/XX • Make two additional C-level, board member or key service provider contacts for each of my top five clients by XX/XX/XX • Transition thirty smaller corporate or personal tax clients to PERSON’S NAME or OUT OF OUR PRACTICE by XX/XX/XX • Develop the client portion of my succession plan by identifying who I will transition each client to and by when and reviewing that plan with my department head by XX/XX/XX

38. Goal Examples – People Development • Develop procedures and best practices associated with estate and gift tax service line that are approved by the Tax Department Head and rolled out in a web-based training to all Tax staff by XX/XX/XX • Mentor PERSON’S NAME to prepare her to move to the role of Manager including taking her to 2 referral source meetings, 2 sales meetings and including her in 2 performance conversations with staff by XX/XX/XX • Recruit a senior audit manager into our group by XX/XX/XX • Transition the CLIENT NAME audit relationship and engagement management to PERSON’S NAME by XX/XX/XX

39. Goal Examples – Leadership • Develop a written plan to develop our penetration in the X market and gain approval from PERSON by XX/XX/XX • Stop participating in triangulation and complaining about others and bring my concerns instead to PARTNER NAME. This will be measured based upon input from PARTNER NAME when surveyed by XX/XX/XX • Improve my listening skills with my team members as measured by an upstream listening assessment to be conducted by XX/XX/XX and then a check in survey conducted on YY/YY/YY • Become better at accepting feedback on my performance. This will be measured based on input from my MENTOR and the improvement in my overall rating score for YEAR over PRIOR YEAR

40. Poll #3 • How are you doing with your partner goal setting? (specify only one) • We have written goals and review progress quarterly • We set too many goals or goals that are not specific enough • We have written goals, but don’t review progress regularly • We do not have a partner goal setting process • Other

41. “Return and Report:”Establishing a Process to Drive Achievement of Goals

42. “If you don't design your own plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much.”Jim Rohn

43. Once Goals Are Set • Break them into “bite-sized” pieces each with their own “by-when” dates • Determine the first action step and “establish momentum” by taking action to complete it right away • Identify the “pieces” that can be delegated or assigned to others • Be sure to specify expectations and set by-when dates • Confirm that the person you delegate to is equipped to perform the task

44. Why Delegate? • Leaders must learn to improve their delegation skills because delegation: • Shifts tasks to the appropriate level in the business • Allows you to focus on other important tasks reflecting your “highest and best” skills • Motivates team members who enjoy having increased responsibility and challenge • Provides an opportunity for others to improve and learn • This is vital for succession and building a firm of the future! • And because no one can do it all themselves!

45. Return and ReportProcess • Each partner should agree in advance with their performance advisor on the timing for periodically updating their progress and status whether via meetings or e-mail updates • Doing so gives both parties the ability to check status, address roadblocks, and uncover potential for falling short of your goals • Effective leaders don’t leave others “wondering” how they’re doing • When you “return and report”, engage in straight talk about unmet commitments or “reasons” that will not allow you to meet the stated commitment • Don’t “ball drop” or give fuzzy language when making commitments (i.e. “I’ll try”) • Collaborate on ways to shift plans if things aren’t working • Always be clear on new commitments with clear actions and reset expectations with affected parties

46. Clearing Up Communication • Develop the habit of written e-mail recaps • Ideally, recaps should be written by the person delivering the report! • The recap will tell readers: • What’s going to happen • Who owns getting it done (item by item) • “By when” each item will be completed • How each person will return and report their status • Next steps or meeting date • Clear communication will pave the way for healthy partner feedback and performance discussions to occur – which is the subject of our next web seminar (July 22nd)

47. Poll #4 • What one thing will you commit to do out of today’s discussion on establishing partner expectations: • Identify ONE owner for each business function, client, etc. • Develop or update role descriptions for each partner • Establish or refine your partner goal setting process • Update my own personal goals • Use “return and report” to support goal achievement • Other

48. Thank You! • Contact us at any time! Jack G. Lee III, CPA (414) 659-9822 Jack@convergencecoaching.com http://www.linkedin.com/in/jackleecpa

49. Resources

50. ConvergenceCoaching Resources ConvergenceCoaching’s web site includes articles and tools on these topics www.convergencecoaching.com Visit our blog for posts on various business development and leadership topics: http://blog.convergencecoaching.com Visit our learning center for access to additional courses http://www.convergencelearning.com Visit us on Facebook: http://www.facebook.com/convergencecoaching