Setting the Stage for Future Leaders 

Future LeadersMany small or solo practitioners hope that their younger staff members will buy them out when it’s time for retirement. If that’s the case in your firm, then it’s important to determine that your potential future owners are properly prepared to take over leadership responsibilities. If you’re not sure that they are, you’re not alone. According to the most recent PCPS Succession Survey, 42% of multi-owner firms believed that their younger professionals were not ready for leadership positions. Amazingly, though, 26% of all multi-owner respondents were not taking any steps to develop future leaders. Among solo owners, 52% were not taking any steps to train new leaders, although many were engaging in efforts that included identifying and training for specific competencies (39%), providing informal coaching by a partner (24%) and offering experimental assignments to develop certain competencies (23%).

I believe that a small firm size should not prevent its leaders from creating a clear path to future leadership. In fact, a bright future can be a strong recruiting and retention advantage for small firms in competitive hiring markets. Here’s one key requirement to a successful leadership development or succession program: You have to get your promising, upcoming talent out of the office. What do I mean by that?

Familiarize them with your local business community. Being visible in the local market is an important role for CPA firm leaders. Bring your promising people to chamber of commerce or other business events and take them along to lunches with referral sources, lenders and other business contacts. You’re essentially introducing them to the local movers and shakers and teaching them how to network with them. Encourage them to develop their own relationships and to take active roles in local organizations that are of interest to them and that are important to your practice and to your clients.

Get them networking within the profession.
Although small firms can offer staff members valuable insights into small business operations and their local communities, it’s also very beneficial to introduce your best people to the larger profession. State CPA society events and national conferences, such as the AICPA EDGE Conference and Emerging Partner Training Forum, give them the chance to hear about best practices in other firms, get professional and technical updates and network with other CPAs who may prove to be good referral or alliance sources.

Support their interests. Encourage your upcoming leaders to enhance their education and to get additional credentials in areas that interest them. They’ll gain new confidence and, most likely, develop deeper loyalty to and enthusiasm for your practice. A new niche could also enhance your practice and the training you offer could help you retain an ambitious future leader.

Introduce them to clients. This is one of the most important steps you can take, because a smooth client transition is essential to a successful succession. The PCPS Succession Survey found that only 32% of multi-owner firms required partners who were two to three years from retirement to begin transferring clients to selected owners or managers. Twenty-five percent believed that the lack of a penalty for owners who fail to transition clients properly was hindering their succession strategy. For clients, strong personal relationships are one of the many advantages of working with a small firm. That means that it’s particularly important to foster relationships between your future leaders and your clients (including the future leaders of their businesses) before the sole owner or partner is ready to leave the firm. If that doesn’t happen, clients are less likely to stick with unfamiliar new owners, which can harm both the firm and the former owner’s retirement payout. It is in everyone’s interest to ensure that future owners have solid bonds with clients before a transition takes place.

Give them a break. The PCPS Top Talent Study examines the opinions and expectations of professionals identified by their firms as the most promising. According to the most recent study, 90% cited paid personal/vacation time as a feature that would help keep them at a firm, and 78% pointed to flexible work schedules as a retention factor. Ambitious new professionals work hard to make their mark in a firm. To maintain their enthusiasm, and ensure they aren’t deterred by long hours, reassure them that the firm values their commitment to both family and career, and encourage them to make the most of their opportunities for time off. 

The PCPS Succession Survey found that 60% of multi-owner firms were expecting succession challenges in the next three to ten years, and 22% already had them. If you’d like to enhance—or launch—your firm’s approach to leadership development and succession planning, remember that it won’t necessarily require a complicated or expensive effort. And the summer months can be an especially good time to send your talented potential leaders out of the office so that they can broaden their own horizons and prepare to participate in your firm’s successful next stage.

Carl Peterson, CPA is the AICPA’s Vice President of Small Firm Interests.  Have questions for Carl? Contact him at or 651-252-4618.


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