Articles and Interviews

David Maister’s thoughts and ideas in Capstone Marketing’s 2000 interview sparked a lot of discussion and debate about accounting and legal marketing. He’s back to talk about the findings in his latest book, Practice What You Preach, to be released on June 18, 2001.

Capstone: Do you think most CPA firms and law firms practice what they preach?

Maister: Certainly they do not. Over the past 20 years I have seen quite a few, and most firms’ strategies and mission statements are entirely sensible. They know what they should be doing, but if you actually test the proposition of asking whether they are willing to be held accountable for the things they advocate, then you get a lot of resistance. For example, everyone would say we should be committed to developing our people. But most firms would furiously fight you in introducing any system that actually measured how a partner was doing on that and made that partner accountable for it. It’s, “Yes, I believe in it. I’ll try, but don’t hold me to it.”

Capstone: I mentioned the idea of upward evaluations to a firm recently and they were not excited about it.

Maister: People go after the mechanism and say it is flawed. In fact, the fight is not about what the right mechanism is. The fight is about, “Are we willing to be held accountable for the things we advocate?” It’s as simple as that.

Capstone: What would it take for CPA firm and law firm partners to be willing to be held accountable? Is it leadership?

Maister: A good leader is absolutely central to that. Let me summarize the main lessons of the book. The wonderful lesson is that the difference between the people who are making out like bandits financially (those who are really successful) and those who are doing OK is not anything new, dramatic, sexy or exciting. The difference is that they are actually doing stuff that we have all known for years.

For example, one of the things that turns out to predict profits very accurately is whether or not people in the office agree with the statement, “We have no room for those who put their personal agenda ahead of the clients or the office.” In other words, teamwork wins. But notice how strongly that is phrased. The data says that if your employees agree with “We are sorta kinda team players,” that is not in any way predictive of profits because being sorta kinda something doesn’t make you much money. You get the benefits of that which you actually do, not that which you aspire to.

Therefore, I have data that reaffirms the simpleminded proposition that firms that are enforcing teamwork are, in fact, making more money because it is true that teamwork wins. The lesson is a hard one as well. The good news is that it is obvious. The bad news is there’s no reward for sorta kinda being something.

Capstone: So there would need to be a group of partners or people in a firm who say, “This is what we are going to be.” Those that aren’t in the same boat either need to join the group or leave.

Maister: Exactly right. The big difference is that it doesn’t start with the leader. It starts with, “Do we have a group of people who are sufficiently ambitious or energetic that they are actually willing to aim for and work for the rewards of excellence?” That’s not a trivial statement because if you are earning a pretty decent income by being competent then it’s an open question of how much energy you have left after you have achieved competence.

Capstone: Many firm partners tell me that they are doing as much work as they can handle and their people are busy and they have a pretty good life. Why should they do any more?

Maister: They shouldn’t if they don’t want to. They just shouldn’t pretend. How to win is obvious. That’s the good news of the book. The question that remains is whether people are willing to live with the discipline. I’m not a believer in dictatorships, a leader telling other people what to do. I don’t think you parachute in a charismatic, inspiring religious figure. The book proves that you do need a leader who is willing to enforce the rules that the partners agree to and who doesn’t compromise, who isn’t wishy-washy, and who isn’t expedient.

My research demonstrates that where excellence occurs, it is very much a property of the local office or, in the case of accounting firms or law firms, maybe the practice group. It has got almost nothing to do with the managing partner or the worldwide CEO. It’s down to, “Do you have managers that can manage?” A great manager is able to create energy, excitement, enthusiasm, ambition, passion, drive and commitment.

Capstone: Tell me what you think about CPA firms or law firms hiring non-CPAs or nonlawyers to lead or manage them.

Maister: Quite simply, it all turns on that one question of who is able to influence these people. If, for example, lawyers would accept influence from a nonlawyer, then there is no logical reason why that would not work. The reality in most countries is that no matter how skilled the person, lawyers would not accept influence from a nonlawyer. The person would be doomed to failure no matter how skilled he or she was.

Capstone: Then it’s not so much about the managing partner as it is about managers at the local, small-group level.

Maister: Yes, because the goal is to create the energy. We all need help living up to standards and raising the bar on ourselves. A good coach is crucial to keeping the team disciplined. The case studies demonstrate that these people do not tolerate noncompliance with agreed-upon standards. I’m not saying that the leader establishes the standards. The partners must say what they want to go for and how they will do it, and which disciplines they are prepared to accept in order to aim for the excellence that they want a return on. Then you need a system that, in real words, says, “If you are not in compliance, we will give help.” If the help doesn’t work, you are gone.

It also means that some people say, “That is not what I want. I am out of here.” That is entirely fair. You can’t have one office where, in essence, it’s a matter of individual choice and some are trying to go for excellence and some are saying “I’ll be competent.” Unless the group comes to some agreement on the game it wishes to play, then it cannot achieve the things that produce the rewards.

Capstone: There are fewer students entering the accounting profession, and they leave public accounting firms quicker. Given these circumstances, how can CPA firms be as choosy or intolerant regarding the quality of their professionals?

Maister: There is a loop here. The reason they need to recruit so many is that they lose so many. If the firms ever solve the problem of making the work environment one where people wanted to stay, they would have the power to be a lot more selective. The first solution to the recruiting problem is to work on retention. It’s nothing magical. It’s all old stuff. The message is, “Start doing it, you buggers.”

It’s nothing more than supervising people on their work. Make sure people are getting a decent mix of work experiences so that they are challenged. Make sure the people ahead of you are energized and turned on. It’s very hard to energize junior people when the senior people are ho-hum about their work.

Capstone: Who is responsible for lifelong learning? The individual? The firm? A combination?

Maister: It’s primarily the responsibility of the individual in the sense that “if you don’t work on learning, you don’t fit around here, and you’re out.” Now, the firm has to help. If you have an employee who is standing there, taking no initiative, saying “Develop me, develop me,” actually, it’s not a bad sign. You know you have the wrong person. Here is the message: We all need help. David Maister needs help. If you just leave it to me and say, “See you at the end of the year,” it gets real hard after meeting my billable quota to say, “I also have to write an article or start my next book as well.”

Sustaining that drive is very hard if you have to do it alone. This is about all of us. It’s not about them, the stupid lawyers or accountants. These are the basic rules of what it takes to make a lot of money. They are the things that apply to all of us. A lot of individuals in firms want forgiveness. They want to not do the work and have some other way of succeeding. The bad news is that there is no other way.

Capstone: Why don’t CPA firms and law firms pay more attention to client satisfaction?

Maister: I think there is a perverse syndrome that takes place in many firms, which is that the client is viewed as the enemy. It’s us against them. The client is a person to be seduced or conquered, then negotiated furiously with all during the relationship and watched like a hawk in case they don’t pay the bill. We’ve set up an adversarial mentality because clients, in many ways, are resented.

If you happen to work with clients that you don’t view as the enemy and view them as people you like and are trying to help, it’s actually a relationship, and everything will work better. You will have a more fun work life, they’ll quibble less over fees and they’ll tell their friends. If your starting point is us versus them, then client feedback is viewed as data from the enemy.

Capstone: Then they need to change their mindset from the beginning.

Maister: I think it’s a fundamental mindset change of how they view clients if you want to make a lot of money. Most people view what they do as tolerable work for tolerable clients. If that’s how you view it, then you don’t want feedback from your clients! They don’t view their clients as relationship partners; they view the clients as people they have seduced.

Capstone: How can CPA firms and law firms achieve excellent results when they operate with a billable-hour mentality?

Maister: There is nothing wrong with billable hours. What’s wrong is saying that billable hours are the exclusive measure of success. If you are working on something that can be delegated, and you do delegate it, then everybody wins as long as you are willing to live through the transition. Yet in the short term everybody loses. In order to get through the transition, staff needs to be trained; you must take nonbillable time to teach staff how to do it.

Therefore, the only reason I’m going to live through the transition takes us right back to the beginning of our conversation, which is that I’m only going to do it if I have a dream, have passion, have somewhere I want to get to and I want that with passion. If everyone took the sort of time-frame decisions that accounting firms and law firms do, nobody would go to college! Why would you give up four years of income to go study?

The only way to get to the next level in a firm or as an individual is that you’ve got to have a clear sense of where you want to get to. I have to want that future goal with a passion, and I’ve got to have the courage to believe my own strategy. The problem inside many accounting and law firms is not a lack of intelligence; it’s excessive short-term thinking and a lack of guts. Do you have the guts to go to four years of college and bet that four years of college will give you a better life? Do you have the guts to start delegating? Do you have the guts to ask your clients if you’re any better? You will never do any of that unless you have a dream that you passionately want.

Capstone: What is the most important thing we can learn from this book?

Maister: First, you get the benefit from that which you do—not that which you aspire to. You’ve got to do it. The bad news is that, in business, there is very little reward for being kinda sorta good at something. The other very big lesson is that the people I met, these are not unique people in the intellectual sense. Some of these people were in very low-fee businesses. These are good, sensible, ordinary human beings. What they were capable of achieving when they were turned on was astounding! Second, a great manager who knows what he or she is doing can get incredible performance out of ordinary people.

It’s not that the current managers of accounting firms or law firms are doing it badly. I don’t think many of them see it as their job at all. Many of the people in managerial roles, particularly at the practice group level, don’t see energizing those around them as their job. They see it as their role to be a financial administrator, the group’s best marketer and the intellectual luminary of the group. The issue is not that they know what they should be doing and are doing it poorly. What I see is that we’ve got managers in place who don’t even know what they should be doing.