Leading An Accounting Firm
The Pyramid of Success

The secret ingredient to any successful firm is great leadership. Fortunately, this new book demonstrates that great leadership skills can be nurtured and learned.

Using the model of the pyramid to illustrate his concept, author Troy Waugh builds a case for ongoing leadership development, guiding you through the essential ideas and practices that are at the core of great leadership and great firms. Using this powerful framework, you can improve your personal leadership and build great leaders around you.

Developed specifically for CPA firm leaders, it covers the full spectrum of leadership development, including:

• Leading Self
• Leading Staff
• Leading Strategy
• Leading Systems
• Leading Synergy

Plus, you’ll hear from more than 40 of the profession’s top leaders. Recognizing the multitude of approaches to leadership, Waugh reached out to colleagues in some of the most well-led firms in the profession and asked them to share their leadership experience and philosophies.

Preface xi

Acknowledgments xv

About the Author xvii

Chapter 1—Why Leadership Matters 1

Leading the Brightest of the Bright 2

Leading the Organization 5

The Leader’s Role—Influencing

Mission, Vision, and Values 6

Losing Focus 7

A Sad Tale (Tail!) 8

Leading Versus Managing 8

You Need Both 9

New Skills 9

Are Leaders Born or Are They Built? 10

Types of Leaders 11

Effective Leaders Must Be Humble 12

Challenges of Leadership 13

The Measure of a Leader 14

Conclusion 18

Section 1—Leading Self 19

Chapter 2—Self-Knowledge: The Inner Accelerator 25

Your Leadership Style 26

The Value of Self-Knowledge 28

Characteristics of Good Leaders 29

The Crisis of Success 32

Building Leadership Ability for Better Effectiveness 33

Commit to the Process 34

Opening Up for Growth 34

Build on Strengths or Improve Your Weaknesses? 36

Experience Matters 37

Building Self-Knowledge 39

Self-Knowledge Through Interaction With Others 9

The Undeniable Link: Lifelong Self-Learning and Leadership 40

Self-Knowledge for a Fulfilled Life 41

Conclusion 42

Chapter 3—Trust: The Leadership Imperative 43

Trust Is a Competitive Advantage Inside and Out 45

Dimensions of Trustworthiness 48

Consulting Experiences 49

Delegation 49

A Healthy Meeting Among Toxic Ones 49

Integrity 50

Group Dynamics 50

Intent 50

Invested in Trust 50

Rebuilding Trust Takes Time 50

Lessons From Consulting Experiences 50

Levels of Trust Development 51

Building Trust 54

Building Organizational Trust 55

When Trust Is Broken 58

Rebuilding Trust 58

Conclusion 62

Chapter 4—Critical Thinking: Creating Your Future 63

What Is Critical Thinking? 65

Thinking Standards 66

Critical Thinking Applied: Phil Holthouse 68

Depth and Breadth 68

Logic 69

Significance 69

Fairness 69

Applying Critical Thinking 70

Myths About Thinking 71

Leading an Accounting Firm

Learning to Think Critically—Like a Leader 72

Purpose 72

Question 73

Information 73

Concepts 74

Inference 75

Assumption 75

Point of View 75

Implications 76

Relationship of the Elements 76

Conclusion 77

Chapter 5—Preparation: Ready for Seizing Opportunity 79

Preparation, Preparation, Preparation 82

Developing Your Leadership Skills 84

Laying the Groundwork by Seeking Input From Others 84

Preparing to Lead Strategic Initiatives 85

Step 1—Prepare a High-Resolution Picture of the End Game 86

Step 2—Clarify Each Staff Member’s Role 88

Step 3—Assessing Potential Opportunities 88

Step 4—Understanding Possible Threats 88

Step 5—Gather and Review Relevant Research 89

Step 6—Budgeting Time, People, and Money 89

Step 7—Develop the Initiative Game Plan 90

Step 8—Launch the Initiative With Overwhelming Power 90

Preparation Is for Action 91

Getting Started 92

Conclusion 93

Chapter 6—Self-Discipline: Be the Master, Not the Victim 97

Leadership Demands Sacrifice 99

Self-Discipline Makes You the Best You Can Be 101

Your Inner Circle Values 102

Delay of Gratification 102

Five Qualities of Self-Discipline 103

Self-Knowledge 103

Strong Relationships 104

Commitment 105

Living Your Values 105

Self-Coaching 106

What Are We Leading Toward? 108

Focused Growth Is a Priority 109

Using Self-Discipline to Focus 110

Building Habits of Self-Discipline 111

Invest Five Minutes Each Morning to Meditate on the Major Areas of Your Life 112

Make Self-Discipline a Part of Your Daily Ritual 112

Dedicate Yourself to Lifelong Learning 113

Accept Responsibility 113

Face Your Fear to Develop Courage 113

The Truth About Self-Discipline 114

Conclusion 114

Section 2—Leading Staff 115

Chapter 7—Teaching, Coaching, and Mentoring: Multiplying Your Leadership 121

Developing Skills Over a Career 123

Training Begins One on One 125

Teaching 126

Training Programs Demonstrate Your Commitment to People 126

A Plan for Adult Learners 127

Creating Purposeful Training 130

Coaching 133

Working One-on-One Raises Your Commitment and Retention 133

On-the-Job Training Helps Coaches and Mentors 134

The Leap From Coaching to Mentoring 136

Great Leaders Mentor 137

Mentoring: Benefits for the Firm 139

Conclusion: The Impact of Training 143

Chapter 8—Accountability: Trust but Verify 145

Why Is Accountability So Important in Business? 146

Accountability Is the Opposite of Permissiveness 148

Increasing Accountability 148

Measuring Accountability 151

How Does Individual Responsibility Factor Into a Group Setting? 152

What Should Partners Know About Performance Measurement? 153

Positive Results of Performance Measurement 154

Implementing Accountability for Positive Results 154

Accountability Through Measurement: Scorecards and Performance Pay 155

Ways to Establish Staff Member Accountability 156

Establish Accountability Through Communication—Set Expectations and Reinforce Success 157

Accountability Through Measurement 158

An Introduction to Measuring Performance 158

After Measuring, Now What? 161

Setting Goals 161

Frequent Feedback 161

Coaching 162

Performance Scorecard 163

Performance Pay 165

Keeping a Well-Rounded Perspective 165

Conclusion 166

Chapter 9—Challenging Personal Growth: Leading the Whole Person 167

A Path to a Better Person 169

Personal Growth, Firm Growth 170

Growing Pains 170

Intentional Success 173

Barriers to Personal Growth 174

Dealing With Change 176

Overcoming Barriers 177

Rule 1: Believe in the Meaning of Your Work 177

Rule 2: Communicate Regularly and Honestly With Team Members 178

Rule 3: Leaders Must Always Be Moving Toward the Larger Goals 178

Rule 4: Recognize Your Team Members 178

Finding Balance 179

Tips for Achieving Personal Growth 180

Conclusion 183

Chapter 10—Empowerment: The Secret to Exponential Growth 185

What Is Empowerment Really? 186

Keys to Effective Empowerment 187

Existing Leadership Philosophies 190

Mistakes: Both Risky and Rewarding 190

Empowering Members of a Team 191

Principles of Empowerment 192

Leading an Accounting Firm Develop a Rational Shared Vision 192

Provide Training and Information for Good Decisions 193

Raise the Level of Conflict 193

Allocate Proper Resources 193

Reward Staff Members for Empowered Behavior 194

Trust People 194

Working With Teams 196

Shared Mission 198

Mutual Respect and Trust 198

Frequent Substantive Communication 198

Shared Processes 198

Different Talents 198

Adaptability and Flexibility 198

Continuous Improvement 198

Building Highly Empowered Teams and Firms 199

The Seven Elements of Empowerment for Teams 199

Communication 200

Conflict Engagement 200

Contribution 201

Connections 201

Cooperation 202

Change Initiators 203

Commitment 203

Conclusion 203

Section 3—Leading Strategy 205

Vision (Chapter 11) 206

Mission (Chapter 13) 207

Values (Chapter 12) 207

Next Steps: Goals and Objectives 209

Goals 209

Objectives 210

The Role of Strategies and Initiatives 210

Example Plan 211

Vision 211

Mission 211

Strategy 211

Goal 211

Objective 211

Action Plan 211

Chapter 11—Vision: Reality in the Future 213

Vision: What It Is and Why You Need One 214

Making the Vision Real for Your Staff Members 217

Our Vision Shapes Our Future 219

The First Vision 219

The Value of a Vision 220

Building Your Vision 223

Get a Mental Start 223

Developing a Vision Statement 224

Things to Keep in Mind as You Begin 224

Bake In the Buy-In 225

Communicating Your Vision 227

Don’t Limit Your Vision 227

Common Stumbling Blocks 228

Strategies for Success 230

Conclusion 231

Chapter 12—Values: The Character, Actions, and Outcomes 233

The Purpose of Core Values 235

Core Values as Standards or Aspirations 236

Core Values Are Worthless Unless They Govern 237

Finding Your Values 238

The Elements of Core Values 241

Our Principles of Service and Communication 241

Go Deep 241

Be Responsible 242

Understand First 242

Deliver Excellence 242

Never Assume 242

Make Their Day 242

Invest in Myself 242

Are Strong Values Realistic? 243

Leading by Example 244

Core Values Help Frame Our Behavior 245

Sustaining Core Values 245

Conclusion 247

Chapter 13—Mission: Making a Difference 249

The Benefits of a Mission 252

Clarifying Your Mission 254

What Do We Do? 254

How Do We Do It? 254

For Whom Do We Do It? 255

More Than One Mission? Maybe So2 55

Six Steps to Developing a Mission Statement 256

Exercise 13-1: Client Statement 257

Exercise 13-2: Problem Statement 258

Exercise 13-3: Statement of Purpose 259

Exercise 13-4: Business Statement 260

Exercise 13-5: Value Statement 261

Exercise 13-6: Writing a Mission Statement 262

Problems to Keep in Mind 263

Developing a Personal Mission Statement 265

Exercise 13-7: Personal Mission Statement 265

Sample Personal Mission Statement Development 266

Past Successes 266

Core Values 266

Identify Contributions 266

Identify Goals 266

Mission Statement 266

Final Thoughts 267

Conclusion 268

Section 4—Leading Systems 269

Chapter 14—Managing Processes for Your Future Firm 273

Setting up Business Processes 274

Advantages to Structured Procedures 277

More Consistent Results 277

Measurable Outcomes 277

Training for Team Members Improves 278

Benefits of Creating the Process 278

Establish Standards, Policies, and Procedures 278

Improve the Consistency of the Client Experience 279

Standardizing Work-Flow Management 279

Process Should Follow Strategy 280

Manage to a Written Strategic Plan 281

Management for the Future 282

The Balanced Scorecard Framework 283

Selecting the Right KPIs 284

Standardizing KPIs 285

Business Process Management Overview 286

BPM Activities 287

Design 287

Modeling 287

Execution 288

Measuring 288

Optimization 288

Issues to Look Out For 289

Conclusion 289

Chapter 15—Building the Future Firm Continuously 291

Commit to Continuous Improvement 293

Critical Success Factors for Change and Growth 295

Leading an Accounting Firm Building a System to Manage Change and Improve Processes 296

Six Sigma 297

Lean Processes 298

Kaizen 299

Flowcharts for Seeing and Improving Processes 302

The Benefits of Continuous Improvement 304

Conclusion 305

Section 5—Leading Synergy 307

Strategic Alignment 308

Objectives Alignment 308

Internal Alignment 308

Chapter 16—Synergy and Alignment: One Plus One Equals Three 313

Building a Shared Purpose 315

Leadership in Tough Times 317

Crisis: Realities and Constructions 319

Understanding 321

Decision Making and Coordinating 321

Terminating 322

Accounting 322

Learning 322

Teamwork 323

Leading Teams for Synergy 324

Team Development 325

Forming 325

Storming 327

Norming 327

Performing 328

Conclusion 328

Chapter 17—Sustaining Leadership: The Ultimate Succession Plan 331

Developing Your Leaders From Within 335

Approaches to Succession Planning 336

Top Down 337

Bottom Up 338

Futuring 339

Targeting Approach 340

Succession Planning Versus the Traditional Replacement Method 342

Potential Labor Crisis 343

Challenges of Implementation 343

Why Succession Plans Fail 344

Your Leadership Development Program 345

Overall Approach 345

Define the Leadership Competencies for Each Level 346

Assess Potential Candidates 347

Measure Leadership Styles 347

Refer to Your Developmental Process 347

Build the Next Generation of Leaders 348

Prepare a Nomination and Application Process for the Program 349

Selecting Partner Leaders 351

Rename Your Next CEO as the Leading Partner 351

Choosing the Lead Partner 352

More of Choosing a Leader 354

Can a Leader Serve Clients? 356

Conclusion 356

Appendix A: 357

Appendix B: 359

Appendix C: 363

Appendix D: 367

Appendix E: 369

Appendix F: 377

Troy Waugh is the author of 3 books and has been selected as one of the 100 most influential people in the accounting profession for 7 years in a row by Accounting Today magazine. As a leading consultant to the profession, Troy and his team have helped firms add more than $800 million in new business through their services.