Change Agent

I've had on my task manager for more than 2 years now "Change Agent – Accounting Profession" and while I've been to a few conferences in that time where the topic of change has come up, I hadn't seen any mention of Change Agents in print, until I saw this article on WebCPA.

BROKEN

The traditional model breaks down with firm growth. It works well when a firm is new and has one or a couple of partners who do most of the work. In fact, it tends to be the easiest way for two people to split revenue. It makes a great deal of sense, in the beginning.

However, as a firm matures and grows, this traditional model begins to make less sense. At a point when most of the billable work gets done by non-owners/non-partners, there becomes a calculation that a rational non-owner makes. This calculation comes boils down to, "why am I going to put money into their pocket when I can put it into mine?" When you are required to "build a personal book of business" in order to progress in your career while giving up your rights to the business you've built, any incentives to actually progress diminish the closer you get to reaching the next career goal. At some point, a rational person doesn't want to enrich another person at their own expense.

A firm that recognizes this problem can address it in any number of ways and there is no "right" answer. A firm can get large enough to become a revenue generator in its own right (see the Big Four) where the firm brand generates significant and growing revenue. A firm can become profit center oriented, whereby every employee is evaluated and compensated by their contribution to firm profits (everyone is a partner/owner to some degree). In this way the employee is in-charge of their career path from the moment they come on board. I'm sure there are other models that work, but every firm must recognize the issue before the problem can be solved.