Why Many Managing Partners Struggle as Leaders
Managing partners in CPA firms have tremendous responsibility and wear many hats. Your responsibilities span from overseeing day-to-day operations to long-term strategy, from developing and keeping client relationships to finding and growing staff. However, doing the job of a manager versus enacting real leadership are profoundly different. Many partners excel at management but struggle to lead their firms effectively into the future.
The Critical Difference
The distinction between managing and leading is crucial to understand. Managers tend to be reactive, poring over data and reports before making plans. Leaders are proactive, beginning with a vision that guides their team’s focus. Management doesn’t move organizations forward—leadership does.
There are some key differences between being a manager and being a leader:
Focus: As a manager you are focused on the short-term goals, tasks, and operations of a team or organization. As a leader you focus on the long-term vision, strategy, and direction. Managers work in the business; leaders work on the business.
Approach: As a manager you tend to take a more tactical, day-to-day approach centered on implementation and oversight. As a leader you take a more strategic, big-picture approach focused on planning and setting the vision.
Style: Management tends to involve you directing and controlling employees. Leadership is more about you inspiring, motivating, and empowering others.
Skills: As a manager your priorities are technical and administrative skills like planning, budgeting, and problem-solving. Leadership requires you to have strong communication, collaboration, influence, and interpersonal abilities.
Change: As a manager you maintain stability and run things efficiently. As a leader you embrace change and leverage it to drive innovation and improvement.
Perspective: Management is often centered around your internal, organizational perspective whereas leadership incorporates a more holistic, external industry wide view for you.
To sum it up, management is needed for smooth operations whereas leadership provides you with inspiration and strategic direction to create lasting change. The best leaders utilize both skill sets. The ideal combination is to be an influential leader who has managers and systems to manage in place, so they do not have to be consumed with managing it all themselves. This allows very little management from the leader, and more freedom to keep their head up and eyes forward on the Vision, Future and Inspiration of the staff, clients and relationships.
Driver vs Mechanic
I love car analogies, so let’s think of leadership as being the driver of a car. As the driver, you steer your firm, team, or organization steadily toward its destination, watching the road ahead while avoiding obstacles. You know when to speed up, and when to hit the brakes, when to pass another vehicle, and how to divert your route if there is construction or a wreck up ahead! You plan for pit stops and breaks to keep your team motivated for the long haul. No one is asking, “When are we going to stop for lunch? Or, “When are we going to be there?” because you’ve already communicated the vision and plan.
A manager, on the other hand, would be fixated on the car’s diagnostics. At the first sign of trouble, they clinically examine data and make repairs. They ably handle breakdowns as they happen, but lack the foresight to prevent issues proactively, other than making sure the tank is full and oil has been changed on time. The passengers in the back seat often don’t know what to expect next with any of those contexts. The passengers are free to execute their roles and arrive at the destination.
What CPA firms need are managing partners trained in the fundamentals of leadership. CPAs are natural problem solvers with the tendency to be strategic with clients and tactical in their own firms.
However, with the right foundational leadership competencies, you can build high performing teams, rather than putting out fires that only get bigger between January and April. Leadership means maintaining perspective on where your firm is headed and getting really comfortable being uncomfortable.
Managing Partners vs. Leading Partners
Beyond foundational leadership, managing partners also face challenges transforming and evolving from traditional compliance models to full-service advisory practices. They excel at overseeing the “tax factory,” analyzing KPIs, and staff performance. But leading strategic transformations requires a completely different set of skills.
Managing Partners should instead be re-termed “Leading Partners” for firms who are moving into the future as advisory firms. Why? Because, quite simply, software and even AI manage processes. But it takes human leaders to inspire evolution.
Good leaders attract great talent. In a profession like public accounting, where the pipeline of talent is shrinking, leadership is essential.
No one is born a leader. Influential leadership is learned and practiced, and it starts with some basic foundational skills like creating and communicating a vision, mission, core values, and a comprehensive leadership philosophy. Leaders learn to serve and inspire.
Ready to take the steps to transition from managing to leading? Our Leadership Lab is an immersive, self-paced course designed to equip you with the tools and skills to become the Leading Partner your firm needs.
