How to Develop (and Retain!) Future Leaders at Your Practice

Practice Management Future Leaders Tax Firms

Let me be blunt here: tax and accounting firms are notoriously bad about handling and managing their talent, the greatest asset we have. Yet, the rate in which firms burn through their talent is staggering.

Per Inside Public Accounting, the rate of turnover for accounting firms averaged 12.4 percent in 2017. In my experience, firms typically shrug off this issue because they know there is always a new crop of candidates graduating college to fill their talent pipeline. Sounds good, but the problem is that continuously replacing an employee is much more expensive than hiring a new college grad. As a result, the long-term cost of high turnover means the leaders you need to run the firm won’t be there when you need them. Therefore, it is imperative to develop future leaders. Here are some ways to do that.

Become a Model

You won’t be able to develop leaders in your firm if you do not show leadership yourself. If employees do not see you as a leader, how are they supposed to learn how to lead? They will see your poor leadership and start to take on your habits, or leave in order to find another firm or employer who models good leaders. Ron Baker says bad clients will drive out good clients, but this can also be said for leaders. Bad leaders will drive out good leaders from your firm, so it’s crucial that you model good leadership within your firm. You also need to take care of yourself as the leader of the firm so you can lead those around you. Whether exercising, meditating, or doing something that takes stress away and restores your energy, take time to decompress. If you can’t lead yourself, you can’t lead others.

Power Does not Confer Leadership

Most firms have a typical pyramid hierarchy with three different levels: staff, managers and partners. Within those levels are sublevels, such as junior staff and senior staff, for example. I think firms mistake all of these levels for leadership, when in reality the levels just create a power structure. One must listen and do as their manager or partner says, not because they are good leaders, but because they have been given the power and responsibility of their title. Firms believe they are fostering leadership through promotion, when they are just fostering a power dynamic. In order to develop your staff to become future leaders, you need to do more than give them a new title. 

The Art of Failing

If you are going to build leaders, you need to give them opportunities to lead – and let them fail and learn from their mistakes. This is easier said than done! Failure could mean losing clients and revenue, but without trying, failing and knowing that you are there to help them when they do fail, staff will not learn how to lead. Leadership is learned and understood when there is trust that failure does not mean they lose their job, but rather a way for them to navigate what it means to lead. Some of the people we put up on a pedestal as great leaders became so because they had opportunities to fail.

Sow and Reap

Creating leaders in your firm is a long-term process, which means you need to invest the time in teaching your staff how to lead and let them know that you see them as leaders. If you let them know you are making the investment in them, they are more likely going to stick around and not jump at the next opportunity they find. This means giving them opportunities to lead a project or give voice to the direction of the firm. Perhaps you abandon an annual review process; instead, conduct action reviews so they can get feedback right away about what went well or badly so they can learn and evolve in their leadership.

Create a career track that bypasses normal convention. If you are doing the work of developing them as leaders and you see them blossoming as leaders, then you need to capitalize on that and give them that leadership earlier on rather than waiting for them to “put in the time.” By sowing and reaping when it is the right time, you will start building the leaders you need to take over for you.

Developing your future leaders shows that you see your employees as assets instead of disposable commodities who can replaced by the next round of graduates. By believing they are leaders you need to steward, you will you do a better job of developing them and build a firm that exists beyond yourself. Investing in the people you have in your firm will allow them to take over the reins and ultimately lead. Unless you want to lose control of what happens with your firm in the future, it’s imperative you start building leaders now.

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