As with any strategic initiative, progress can be significantly derailed by individuals that nod their heads in agreement in public but do not adopt processes and/or quietly countermand them in actual practice.
Reasons for non-compliance/support vary and must be actively discussed within the owner group to get full buy-in, many of which are seen as the firm’s “sacred cows” that are not to be discussed. Here are five specific discussions around owner resistance that can only be resolved at the owner level:
Firms must ensure that financial incentives reward the firm growing and not individual books of business. This means re-evaluating and re-negotiating compensation to reward those that support the strategic direction of the firm.
Some owners are close to retirement and see their buy-out being reduced (high-five years) if the firm increases their strategic investments immediately for long-term growth rather than keeping the status quo and not changing anything for their personal short-term earnings. This means re-negotiating retirement plans that may be viewed as Ponzi schemes by up and coming managers in today’s competitive environment and seen as no longer being financially viable.
3. Lifelong Learning
Most people would agree that traditional CPE training no longer cuts it in today’s rapidly evolving technological world. To be effective in the future, firms will need to create a training environment where everyone in the firm can learn, unlearn and upskill according to the needs of the firm and its clients and at the individual pace/preference of each member.
This means allocating resources for learning, technology, and non-billable time to facilitate the transition of technical and advisory skills, particularly those that are resisting the firm’s transformation.
4. Managing Change
The reality is that the rate of change that business owners have to deal with will never be a slow as it is now. Change within virtually every aspect of our business and personal lives is accelerating and some individuals no longer have the energy or the will to deal with this change.
The firm needs to have an honest discussion with individuals whose skills no longer meet the requirements of business services where the firm is heading.
Another reality today is that some firms are controlled by equity partners that have a controlling interest and are content with the status quo. In this environment, up and coming personnel that see the changes happening in the profession have never had a better opportunity to start their own practice with optimized CAAS technology that is cost effective and efficient out of the box.
When entrepreneurial, rainmaking seniors and managers leave the firm to pursue their own practices, they often have the most severe impact on existing owners’ succession plans which degrades the value of the practice.
Bringing up the firm’s “sacred cows” can be very uncomfortable in firm meetings, but the reality is that most people are aware of them and appreciative when they are finally addressed with the realization that fixing them makes the firm better overall.