It’s no secret that the workforce is aging. When looking at the age distribution of today’s workforce, over 23% are 55 or older. Many of these individuals enjoy leadership positions in firms, but we’re also seeing many older workers retire. As a result, firms must invest in leadership development to help prepare for the future and ensure their firm continues on.
This leads to the main topic of today’s article: cultivating your firm’s next generation of leaders. Before we dive into specifics, such as how you can cultivate your firm’s next generation of leaders, it’s important to talk about why it’s important to do so.
Why It’s Important to Focus on the Next Generation of Leaders
If there’s one thing that 2020 and 2021 taught firms, it’s that retaining top-tier talent is difficult. Most employees stay with their employer for 4.1 years, but there’s been a mass exodus of employees quitting their positions.
Accounting firms need to take steps to invest in the future of their business because current partners and existing leaders will inevitably quit, retire, pass away, or move on to other opportunities. Meanwhile, existing staff and new talent are looking for roles where they see future opportunities for career growth, advancement, and fulfillment.
Fostering this talent and their desires allows firms to better handle losing leaders because someone else can step into their role. So, how can you strategically cultivate your next generation of leaders?
4 Fundamental Ways to Start Cultivating the Next Generation of Leaders
1. Identify Your Firm’s Leaders
To start, what should you look for in a leader? Unfortunately, finding a leader is more complex than looking for the employee with the most experience. Your leaders need to have a few key traits:
- Growth mindsets
- Great communication skills
The person needs to be a good accountant, but it’s not the end-all, be-all of your choice. You need to identify leaders that can develop people, are good teachers, are open to learning, and have business development skills. Don’t choose an accountant to be a leader that is great at their job but is always on the defensive. Unfortunately, defensive employees never fit well in a leadership role.
- Want to learn and grow
- Be respected
- Be technically competent
- Have a curious and inquisitive nature
Good to Great by Jim Collins states that leaders have a number one trait: humility. Leaders are often not the smartest person in the room, but they’re willing to ask questions, listen and learn. The best leaders learn from mistakes and create more options by being open thinkers.
2. Create a Management Team
If you don’t have a management team, it’s time to create one. Once you have identified these future leaders, it’s time to get them involved in the decision-making process and begin sharing their perspectives.
Start by asking them what they envision for the firm 5-10 years down the road and what their core values are, then work to create something they and you are excited about.
When you understand the vision and core values of your management team, you can define what the firm’s culture is all about. You can use this cultural understanding during the hiring process and when talking with prospective clients, as you only want to hire team members and bring on new clients that are good fits.
At my firm, just because someone is intelligent doesn’t make them a good fit to work for us. They also need to be a great communicator.
3. Invest in Leadership Development
Investing in leadership training is how you mold the future of your firm. You need to offer group and individual training. Management teams must learn how to navigate challenges and work through internal issues together.
When management teams work through internal issues together, they learn skills that enable them to help clients who are dealing with similar issues.
Leadership training can be many things, but it needs to revolve around development in important areas, such as
- Communication skills
- Emotional intelligence
- People skills
- Firm management
- Practice development
Soft skills matter a lot in today’s leadership roles, and they’re crucial to consider. Through proper training and development, you’ll be a team of potential future leaders that will continue to guide your firm to success in the future.
4. Create a Plan to Bring New Leaders to the Firm
When you envision the next partner for your firm, it should be someone with a strong background in leadership and one who aligns with the vision and mission of your firm. However, this alone is not enough. You need to properly plan to bring new leaders on board. Some items to consider when creating your plan are the following:
- What’s expected of partners and how to attract new leaders
- Timing of becoming partners
- Roles and expectations of all partners
- Entitlements and non-entitlements of partners
- Overall description of a partner
- Checklist for the path of becoming a partner
The right leaders will inspire your firm, guide its growth, and maintain the culture and legacy that you worked so hard to create. Following the steps above provide with you actionable steps to start cultivating these leaders now so that they can begin taking a lead role tomorrow.
Christopher Hayden, CPA, CMA, CGMA is the managing partner of Hayden Nelson & Yoder, a CPA firm based in Pennsylvania. You can learn more about him and/or the firm on their website https://hnycpas.com/.