Succession planning can stall long before a firm reaches the question of who will take over.
In part two of his conversation with Rob Brown on the INSIDE Public Accounting Podcast, Ira Rosenbloom of Optimum Strategies examines the internal dynamics that can make succession difficult and why firms should approach it as a long-term business issue.
What Gets in the Way of Succession
One obstacle is how current partners evaluate the people coming up behind them. Rosenbloom said experienced partners can set expectations for emerging leaders that they themselves could not have met earlier in their careers. Developing successors requires giving people room to grow, take responsibility and make mistakes.
Compensation can create another roadblock. Before a firm can make meaningful progress on succession, Rosenbloom said partners need alignment around the firm’s priorities and how different contributions are valued.
Those issues reinforce a larger point: An accounting firm is a business.
“Too few people who join accounting are introduced to the concept that this is a business,” Rosenbloom said. That business perspective becomes particularly important when firms assess whether an internal succession path is realistic.
Leaders should look at both the depth of their talent pipeline and partners’ own retirement timelines. If a partner hopes to step back in five years, Rosenbloom said the firm should begin preparing now. Starting 10 years ahead can create even more flexibility.
Building the Firm That Comes Next
Planning early does not necessarily mean choosing between an internal transition or an external option such as a merger. Instead, it gives firms time to develop future leaders, rethink roles and understand what alternatives may be available when partners are ready to transition.
Rosenbloom also encouraged firms to think more broadly about who can help lead the next version of the organization. Operations, HR and other professionals who are not CPAs can bring expertise that strengthens the business and, where appropriate, become partners themselves.
The goal is not simply to preserve the firm as it exists today. Rosenbloom described the opportunity to create a new version of the organization that retains what works while adding new capabilities and perspectives.
“There’s no question that crisis does not produce a good result,” Rosenbloom said. “I think the more time you have, the better.”
For firm leaders, the message is to address succession while it is still important rather than waiting until it becomes urgent. Treating succession as part of the firm’s broader business strategy gives leaders more time to develop people, make deliberate decisions and shape what they want the organization to become.
