[TA72] Change for Accountants Barrier #4 – Partnerships are Complicated

Part 4 of 6 part series on Change for Accountants

In my experience, when I sat in a chair like yours, the failure to implement could be explained by a fear of change or failure to change.

This series investigates 5 Key Barriers to Change that are specific to Australian Accountants.

Specific Barriers to Change for Accountants

There are common reasons why we find it hard as Accountants to change what we are doing.

1. It’s easier not to change (TA69)
2. Established industry patterns don’t support change (TA70)
3. Concern about negative reactions from clients (TA71)
4. Partners complicate the decision making process (TA72)
5. Procrastination (TA73)

Over the course of the series I’ll look at each barrier separately – discussing the nature of the issue and why it occurs, before suggesting action/s to move beyond the barrier.

This week we are up to Barrier #4 : Partnerships Complicate the Decision Making Process.

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4. Partners complicate the decision making process

Whilst a business corporate model is based on a dictatorship model, partnerships are based on democracies. Although a democracy ensures equal say, this actually makes it harder to get everyone to agree on the same way of doing things and can be a barrier to change. Also, it’s harder to understand the true benefits of change when partners are concerned that not everyone is prepared to commit to the new way.

Let’s look outside the industry for a moment…

Take Harvey Norman which started as a partnership of Gerry Harvey, Greg Harvey and Norman Ross.

If you think of this now big business, their success and ability to effect change has been solely dependent on who their leader is. Gerry Harvey is well known as the driver and implementer thus it has been his individuals leadership and ability to affect change in the business that has driven its success. Separate of course to the strategic direction the board of directors agreed to.

The actual makeup of Gerry Harvey’s partnerships and business leadership teams over the years can be easily overlooked, because Gerry’s personal ability to make things happen eclipses the roles of other partners, CEO’s or boards.

During my consulting I consistently hear clients saying things along the lines of: “we know we have to change, but the task seems mammoth because there are so many partners involved”.

Partnerships are infinitely more difficult to steer to success, for a number of reasons. For one thing, partnerships are unstable, usually only lasting a few years before there is a change to their composition.

In 99% of successful businesses, charities etc it comes down to just ONE person to determine the success of changes. This single individual may contribute the necessary leadership, vision or drive, or a combination of all three, like the journey of Gerry above.

When more chiefs are involved in the leadership process, more disjointedness, confusion, inefficiencies and poor performance are experienced across the organisation. Multiple leaders increase the likelihood that systems will not be adhered to, people will do things their own way. This means that changes such, as software introductions, are not implemented consistently across the organisation, resulting in much lower efficiencies.

How Accounting Partnerships Get Complicated

The typical accounting partnerships complicate the decision making process because they do not:

• act like a true board to corporations, or like a true board of shareholders.
• and partners meddle in the daily operations – they will not let go of who runs the business operations.

It’s not hard to see how this creates a massive problem.

Imagine if Harvey Norman decided to roll out a new process nationwide. Now imagine if each store decided to do this their own way. It would make it almost impossible for the implementation to succeed, and performance would be based on chance.

This top-down leadership ensures consistency across the entire organisation and drives changes.

An Industry Example of the Problem with Partnerships

I saw this in a recent client example…

Recently, a prospect called me for help with implementing their packages and products. The firm was run by five partners. When I asked if the entire partnership team was onboard, I got a troubling response. The reply was that while everyone agreed ‘in principle’, they all knew that one of the partners was most likely to continue to operate as usual.

In my experience, it is essential that everyone has to be on board to succeed. If four of the five partners agree to head in a particular direction, they must either convince the fifth to join forces, or agree to sack them.

Two Keys to Growing Multi-Partner Firms

I’ll share two steps to focus on further down, but here I just want to give you an idea of the fundamentals of growing multi-partner firms.

The key to managing this is:

1.Don’t be silent on issues

• If YOU as a partner do not agree with a decision, you need to raise your concern up front and push your case. It’s better to say NO right from the start then to agree passively and have the operation head in a direction you don’t want. In 99% of cases, it’s not the strategy that’s wrong it’s how it’s to be rolled out or the timing of the roll out.

2.In you agree, then follow suit 110%

• If you agree then follow suit! Forget your ego, and remember you’re in partnership for all the right reasons and you knew before signing up that not everything would be exactly as you liked! Make every effort to be on board and support the new way by actually changing yourself and doing the hard work to learn and use the system.

This approach can help our industry to lead the financial world

If more firms adopt this, our industry will improve performance and may truly become the trusted advisor and lead the financial world again. All it takes is for partners to realise that they are owners in the first right. And that operations need to be lead by ONE. eg. create board, the board makes decisions, then one person (CEO) ensures that the decisions are implemented.

This allows change to occur:

1. faster, and
2. in a more controlled manner.

Two Steps to Help Overcome Partner Complications:

The key here is to understand and tap into individual self motivation to change, instead of trying to force changes.

1. Create a system that allows for individual solutions. The system ensures that the same process is followed for reporting, analysis and client presentation.
2. Allow partners to deliver the solution the way their skill set direct them. This allows each partner to have a unique conversation, depending on the client sitting in front of them and the level of knowledge and experience they have.

For this to work, it’s crucial that the partners are in agreement on how the system is put together.

I have also covered Partnerships in TA 66 – Is Your Partner Blocking Your Growth?

What are your experiences?

·         Are all of your partners 110% on board?

• Do you have partners who say ‘yes’ in board meeting and then just go off and do their own thing anyway, and
• Do all your partners enforce the procedures and systems within the business?

·         Do you have one person who is responsible for ensuring that implementation is on track?

I’d love to hear from you about this topic. You can comment below, or email me directly.