Driving Partner Performance and Accountability With Feedback and Straight Talk

1. Driving Partner Performanceand Accountability With Feedback and Straight Talk Presented by Jack G. Lee III, CPA July 16, 2013

2. Poll #1 • What answer best characterizes your reason for attending this web seminar? • To gain insight on the importance of partner feedback • To understand the “barriers” to providing feedback • To learn the skills needed to provide effective feedback • To find out how to address difficult performance issues • Other

3. Partner Performance and Accountability Webinars • Our 2013 Partner Accountability Webinar Series has been designed to spark your strategic thinking in the area of partner performance and accountability, and includes the following sessions: • In Session 1, we focused on “Setting Partner Expectations and Reporting to Drive Performance and Accountability” • In today’s session (Session 2) on Tuesday, July 16th, we’ll learn about “Driving Partner Performance and Accountability with Feedback and Straight Talk” • In Session 3 on Tuesday, August 20th, we’ll conclude with a discussion on “Managing Conflict Successfully”

4. Our Agenda • In this session, we will continue to explore how to improve partner performance and accountability by: • Understanding the “business case” for providing effective partner performance feedback and what effective performance feedback looks like • Gaining insight on the “barriers” that keep us from providing effective feedback to our partners • Learning strategies for discussing difficult partner performance issues • How to “talk straight” when performance expectations aren’t being met

5. Let’s Review:Unity, Ownership and Accountability

6. Keys To Performance and Accountability • To improve partner performance and accountability, there are three key attributes on which to focus: • Unity – establishing partner unity around your firm strategy with trust as your foundation • Ownership – defining partner roles and goals and taking responsibility for achieving results • Accountability – monitoring and evaluating your performance, acknowledging you can be better These come together in our Leadership Development Model…

7. The Leadership Development Model Ownership Trust Accountability

8. Unity Defined • In our first session, we defined partner unity as the foundation of partner performance and accountability as including: • Agreement and alignment on strategy and direction for your firm and around key decisions • Respect, trust and edification each other • Submission to decisions and working towards the strategy in which the majority agreed (even when you are in the minority!) Unity does not mean 100% agreement on all matters all of the time, freedom from conflict, or personal friendship

9. What To Do When Unity Is Missing: • When the firm’s strategy is unclear - decisions aren’t supported because partners cannot “see” where the firm is heading • Action: Establish the firm’s strategy • When we all want different things – and don’t disclose our self interest • Action:  Establish the firm’s strategy with it’s multi-faceted elements and communicate (relentlessly) the firm’s purpose and vision for the future • When partners won’t want to submit to an agreed upon strategy because it requires a change in behavior • Action: Change management and new behaviors are required, including submission • When there is no “cost” for the lack of submission, compliance or unity • Action: Put accountability structures and rewards for contribution to the strategy in place

10. Lack of Trust =Lack of Unity • The main reason firms struggle with forming and supporting a unified strategy is the lack of trust • Lack of trust shows up as: • Inability to make decisions, or “churn” • Triangulation and “side conversations” • Internal competition vs. external • Unresolved conflict among partners, and inability to move forward • Lack of passion and energy • Unwillingness to submit to or support group decisions • Bottom Line: without trust you can’t have accountability and without accountability, you can’t have trust

11. Three Trust Building Behaviors • Integrity is more than “honesty” or “doing the right thing” and includes: • Keeping commitments – not over-committing and under-delivering • Resetting expectations when commitments cannot be kept • Accountability isfollowing through on commitments and includes: • Taking responsibility when their “things” are not going as planned • Holding others accountable • Straight Talk uses candor and honesty in all communications and tells it like it is, and includes: • No beating around the bush • No avoiding difficult subjects

12. Creating A High Performance Culture • In Session 1, we learned that each team member needs (and wants) to know what’s expected by: • Assigning ownership for all functions of the firm • Developing “one size fits one” written role descriptions that memorializes what’s expected for EVERY position in the business, including: • Overall objective, reporting structure, primary duties and responsibilities, skills and education required • Establishing measures of success – or goals • Providing ongoing and periodic performance feedback

13. Ownership Principles • We believe there must be clearly defined ownership for all key areas of your organization - ONE owner for every: • Business function, Service line, Office, Client, Engagement and Employee • Ownership does not mean that the owner: • Always has to be a partner • Does all the work • Makes all of the decisions by themselves or without input Bottom Line – things don’t progress without a clear owner and performance expectations aren’t clear without ownership defined

14. Creating Partner Role Descriptions • Once ownership is established, “one-size-fits one” role descriptions should be developed for each partner, outlining the “areas” they own and answering these questions: • What are the duties and responsibilities of the assigned role? • What clients, people, initiatives do they own? • How do we measure their success? • What skills, education, abilities, core competencies, and behaviors and desires are required for the assigned role? • Role descriptions should be written and shared openly with the entire team • Doing this will help with succession planning and transition of duties to the future “owners”

15. Setting Goals or Measures of Success • Each partner should set 2-3 “stretch” goals that go “above and beyond” minimum expectations based on each partner’s strengths • To be effective, goals should be – • Specific, measurable, realistic, relevant, written and shared • Directly tied to each partner’s role and areas of ownership • Prioritized -- don’t establish too many goals • Based on input from others and approved by leadership • Reviewed and updated at least annually • Achieving your goals should directly (and positively) impact partner compensation • Conversely, not achieving goals should adversely impact partner compensation

16. Return and Report Process • Once goals are set, break them into “bite-sized” pieces each with their own “by-when” dates • Determine the first action step and “establish momentum” by taking action to complete it right away • Also be sure to delegate “pieces” that can be assigned to others • Each partner should agree in advance with their mentor on the method and timing for periodically updating their progress and status whether via meetings or e-mail updates • When you “return and report”, engage in straight talk about unmet commitments and be clear on new commitments with clear actions and reset expectations with affected parties • Develop the habit of written e-mail recaps including “owner”, by when dates and agreed next return and report date

17. The Business Case for ProvidingEffective Feedback

18. Your Partners… …are your most important leadership assets …have options ...will make or break your plan …have to be clear on their role and responsibilities …need a way to measure progress and be accountable …want feedback (both positive and constructive) …need rewards …will rise to wherever you place the bar

19. Importance of Performance Feedback • Performance feedback is a gift we give others • It enables us to: • Communicate expectations and obtain insight on how we can improve our business processes • Explore ways to improve our own personal performance • Motivate partners who are on the right track to continue on that path and inspire those who are not to get better • Manage those who are not performing by communicating what is expected and steps they can take to improve • Providing feedback gives us the courage to admit when a partner is not working out, knowing we’ve done all we could

20. It IS Your Place … • …to talk with partners about their performance! • Drive firm growth and permanence, which requires a “constant refinement” mindset • As leaders, to strive to learn and improve every single day up until our last • But a lot of what partners portray is something like, “Don’t call me on mine and I won’t call you on yours” • If you’re the managing partner, CEO, a service line leader or a partner responsible for an operational element of the firm, you will have corrections and requests you need to make • …to provide feedback and talk straight to partners!

21. Great Performance Feedback Is… • Private • Timely and often • Shares good and “bad” • Direct/clear • Specific • Non-punishing • Focused on the future and provides ideas for growth or development • About asking questions – and listening • Concludes with a clear plan

22. Provide Feedback All The Time! • There are several "settings" for evaluating and discussing performance • Annual (or semi-annual) performance evaluations • Career planning meetings • Post-engagement reviews • Formal mentoring meetings • Informal feedback and “return and report” discussions • What else?

23. Poll #2 • How often do you deliver partner performance feedback? (please check all that apply) • Once per year at annual reviews • Semi-annually • Quarterly • As needed, giving feedback “in the moment” • Other

24. Barriers Keeping Us From Providing Effective Feedback

25. A Sad Story “I thought everything was okay. I have received positive performance evaluations each year and above average raises, too. But when it came time to be considered for the position of audit service line leader, I was passed over. I didn’t understand why and I finally asked our managing partner. She shared that there had been some issues with my management style and I didn’t have the support of the partners. Why didn’t someone tell me earlier, so I could work on this? And why as a partner am I ‘on my own’ when it comes to leadership training and feedback?”

26. Where Is Partner DevelopmentOn Your “To Do” List? • It’s doubtful that you deliberately write it last on your “to do” list, or say “out loud” that partner development isn’t important. • But somehow, people development, especially for our partners, often ends up in last place behind all the other items, including: • Emails, time reports, billing, other administrative tasks • Client service • Business development • And what else?

27. Why Is This? • Here are our top three reasons: • You don’t know what to say or how to say it • Action: Learn and practice the necessary skills • You feel hypocritical because you’re not consistently leading by example • Action: Deliver the feedback to your partner anyway acknowledging your performance gap, and committing to improve together • You’re too busy and just don’t have time • Action: Consider the possibility that we are really in the business of developing people – including our partners - and make time for what is important

28. More Barriers To Providing Feedback • Other barriers to providing performance feedback include: • Not having set expectations properly in the first place • Not wanting to hurt feelings or get our own feelings hurt • Fear of someone stomping off in a “huff” leaving us hanging • Fear of not making a difference and the behavior not changing • Not knowing the best way to communicate the improvement that needs to occur • Fear of being too angry or upset and worrying about letting our emotions take over (and potentially saying something we’ll regret) • Fear of looking like we our expectations are too high or that we’re too hard to work with/for • Fear of being “exposed” for not “leading by example” • Not really being sure what we’re thinking is accurate • Not having authority to speak up

29. It’s Also Difficult to Receive Feedback • Mostly, the barriers to receiving performance feedback stem from our resistance to change: • Preferring to not have to “work at” improving our performance • Not understanding what’s wrong with what we’re already doing • Having difficulty admitting our weaknesses and flaws • Learning new skills and ways of doing things is hard • Knowing what we need to improve but simply not have the motivation to do it • Knowing that we need to improve our performance but not having the knowledge, skills, information, or resources to make improvements • Not really knowing how to ask for help • Having a negative perception of performance feedback based on past experiences that were not positive and supportive

30. Poll #3 • What is your biggest challenge when it comes to giving performance feedback? • I haven’t done a good job of setting expectations • I’m concerned that I’m not “leading by example” • I don’t know how to phrase what I need to say • I don’t have enough time • Other

31. Strategies for DiscussingDifficult Performance Issues

32. Delivering Positive Feedback Is Easy • Let’s first acknowledge that it’s easy to say: • You’ve met or exceeded your goals! • You’re getting a raise and / or a promotion! • Keep up the good work! • But let’s also acknowledge the crucial need to develop your “partners” by: • Providing ongoing leadership development opportunities and programs for them • Spending time with them, mentoring them, and providing “side by side” leadership training for them, too

33. Discussing Difficult Performance Issues • Is not so easy… • Why? Because it sets up (or seems to set up) a situation that is right at the top of our list of fears: A conflict Most of us avoid conflict because we are afraid of being wrong, causing an argument, damaging relationships, or hurting people’s feelings

34. Instead, We Tell Others! • We don’t go directly to the partner with whom we have a concern and instead we tell others • This is called “triangulation” • This eventually “gets around” to the partner any way, eroding respect and trust • And, it can erode trust and respect of those with whom you “confide” or “vent,” too • Instead of professionally resolving the matter, you make it worse, or at best, allow it to persist

35. The “Nice” Factor • The culture of many CPA firms is “too nice”, which can have the following unintended negative results: • Conflicts among partners go unresolved • Poor performance is tolerated and not addressed and therefore persists • Constructive feedback is not shared, so improvements are not made • Respect is eroded with partners who are counting on their leaders to do the right things even when it is uncomfortable or difficult to do so

36. A Better Way To Deal With Difficult Performance • First, we’ll start by looking at ways to disengage from the emotional aspects of a difficult performance conversation through acknowledging your self-interest and hopeful interpretations • Next, we’ll review a process for preparing for difficult performance conversations • Finally, we’ll learn how to become more effective in delivering difficult performance feedback to our partners

37. Your Mindset • The number one thing that will make a difference in your difficult performance conversations is your mindset • Your likelihood of success in the conversation is low if you’re coming from anger, irritation or that your partner is “wrong” or inept, or other negative interpretations • Your likelihood of the conversation going well is high if you center yourself around giving your partner a gift that will enhance their whole life -- doing what’s in their best interest • Come from a place of care and concern for your partner • Have your intention be to inspire them to succeed

38. To Adopt the Necessary Mindset… …you have to take 100% responsibility for your role and give up making the other party wrong! … and instead look for ways to collaborate with your “conflict partner”

39. Discussing Difficult Performance Issues NOT: “I’m right, you’re wrong” INSTEAD: “Let’s partner together”

40. To Achieve Your Desired Outcome • Self-honesty is required • You have to acknowledge your self-interest and be willing to share it • Vulnerability and humanity are required • There are few real “Mother Theresas” • Your goal is to create an environment where your conflict partner can do the same • You cannot collaborate until all agendas are on the table

41. Distinguishing Self-Interest • We all have self-interest which usually falls into one of the following categories: • Looking good or avoiding looking bad • Getting more time or taking less of our time • Getting more money or taking less of our money • Experiencing pleasure or some form of feeling good • In effectively dealing with conflict, you have to openly share your self-interest and understand your conflict partner’s possible self-interest

42. Interpretations Can Be Tricky! • It is worth developing a number of potential ways to view the situation before identifying your approach to it • We suggest you play an “interpretations game” • You will see that there are many potential reasons or causes for each issue and different ways to view it • Use the interpretations game to “vent” your negative feelings and see that there are other possible ways to view each situation that are worth exploring

43. Performance ExampleSelf Interest • Your partner responsible for the audit service line is off plan by $500K, putting significant pressure on profits • Your self interest in this matter could include not wanting: • To make less money • To take the “heat” from the other partners • To reduce staff or do other difficult things to cut costs • To take the time to talk to the partner • Your audit partner’s self interest could include: • Wanting credit for past accomplishments and to not be judged merely on this year’s shortfall • Wanting the time for the economy to turn around • Not wanting to feel bad about letting the team down • Not wanting to make less money

44. Performance ExampleSelf Interest • Your partner regularly disrupts partner meetings with blow ups, tirades or taking hurtful verbal jabs at others • Your self interest in this matter could include: • Wanting to have more peace and less tension in meetings • Not wanting to engage in verbal debate or fight with your partners – having fear of doing it poorly or getting mad yourself • Not wanting to talk to the partner about this • Not wanting your partners to think less of you because you aren’t dealing with it • Your partner’s selfish interest could include: • Not wanting to be “forced” to do anything in meetings so he pushes back • Wanting to control situations and/ or not feel out of control • Fear that your group is heading in the wrong direction and wanting to passionately push back

45. Performance ExampleInterpretations • You could be making your partner wrong for being “off plan” by thinking that he/she: • Is lazy • Doesn’t care about their work • Doesn’t care about the clients or the firm • Is trying to sabotage you and make you look bad • Hopeful, or positive interpretations that will be more constructive are that it’s possible that your partner: • Is dealing with some unspoken personal matters • Was “forced” to commit to a plan they clearly expressed concerns about • “Owns” too many areas within the firm and doesn’t have clarity around which area has priority • Hasn’t communicated their roadblocks for fear of letting his partners down Which is the truth?

46. Performance ExampleInterpretations • You could be making your partner wrong for going on tirades and making jabs in meetings by thinking that he/she: • Is selfish and immature • Is hyper-controlling, bullying, dominating • Doesn’t fit the rest of the group • Doesn’t care about the feelings of others • Isn’t committed to your core values • Hopeful, or positive interpretations that will be more constructive are that it’s possible that your partner: • Is willing to speak up when no one else will • Is so committed to the success of the firm and partners that he becomes overly passionate trying to keep you on track • Is thick skinned and doesn’t realize how his tone, volume and word choice affects the rest of you Which is the truth?

47. Preparing For DifficultPerformance Conversations(Before The Meeting)

48. Preparing For Difficult Conversations • Start by defining the potential for conflict • Examine the situation and consider solutions. • This is essentially a “venting” place for you to clear your wrong-making thoughts. • Commit to having the discussion • Set the time and place for the discussion • Avoid distractions and public places • Give yourself enough time

49. Preparing For Difficult Conversations • Prepare an outline of your view of the situation • Consider the root cause and examine your interpretations • Ask how you could be as much as 100% responsible for the problem • Consider the ramifications • Examine possible solutions

50. Conducting DifficultPerformance Conversations(During The Meeting)