I believe that in most horror stories - quick and cold-blooded notification to managers, staff, and sometimes partners, that their services and presence in the firm were no longer needed - the senior partners breaking the news are neither cruel nor unfeeling individuals. Rather, they are simply unskilled in handling sensitive personnel issues, desiring to get the dirty deed done with as little emotional residue as possible.

There Is a Cost to Insensitivity

Explainable behavior perhaps, but ultimately damaging, not only to the morale of the remaining partners and staff, but possibly to the firm's external image as well. The badmouthing from former partners and employees terminated in this way, will be costly for a long time in attracting new recruits, laterals, clients, and prospects. Particularly, what do clients think upon hearing the tales of the swift guillotine, the bungled explanations, the denial of real causes for cuts? Even if they themselves have faced the same needs to cut back, they cannot be pleased and comforted to know that their outside experts consider such occurrences as satisfactory ways to treat colleagues. If clients perceive a lack of caring and cohesiveness within the firm, their loyalty can disappear.

These types of incidents reflect that many firms increasingly suffer a lack of internal cohesiveness, common goals, and direction, and are not equipped to be flexible when external events require a change in course are emphasized.

Leadership Over Management

More than good management, solid leadership is required. Leadership must set the standard for communication - down, up, and across the firm - on long-range strategic issues and daily working relationships.

In boom times, poor communication is too easily dismissed as the consequence of being very busy generating high revenues. Quality of the working environment and even the production of work suffers, but usually that is glossed over when increased compensation is distributed and more slots are available for new partners and staff.

In a downturn or even a leveling, there is more time for problems to surface and fester, more opportunity for doubts and mistrust, more frustration with poor channels of communication, and more tendency for clients to listen to some other firm's sales pitch. More and more effective marketing is necessary just to stay in place; but this is difficult without good communication, high morale, trust, and loyalty.

True Partnership

In tight economic times and any other period when the rules change, more flexibility in a firm's culture is required. The meaning of partnership should be reexamined, both within a firm and between firms and clients. Firms that work as partners or team players with their clients will build the most solid, long-term relationships. Firms that are clear about expectations of their partners, managers, and staff on the one hand and the support they will provide on the other will experience stability and greater loyalty from their most desirable professionals. Direction and support for a broader base of the firm's personnel will result in greater buy-in to the firm's objectives and wider participation in business development. The trick in any professional partnership is to give the professionals the freedom and sense of control they demand, while obtaining their buy-in and cooperation to the elements of firm life and practice that must be institutionalized.

Motivational methods that generally do not work in the long-term are one-way proclamations from management, superficial and nonconstructive criticism, overzealous management, or even money as the prime reward without the intangibles most professionals seek for personal satisfaction.

Effective motivation requires communication of the firm's values. It means establishing and articulating priorities and expectations, evaluation procedures, and assuring recognition - with the professionals' input at each stage. The key is self-motivation, supported and stimulated by the firm's management and culture. CPAs and others need to feel they are participating in determining the firm's short and long-term goals, especially in times of uncertainty. Policies relating to non-billable activities such as management, marketing, and community work should be established by the firm and should be clearly articulated. Support should be concrete, not just cheerleading.

For example, to support individual and team business development efforts, assistance should be provided by the firm through sales training and marketing materials. Strategy assistance can be provided by marketing directors and consultants. A firm should not write off the large group in the gray area between star rainmakers and those who simply can't sell. With training and encouragement, most can participate in some aspect of marketing: writing, panel discussions, research, providing contacts, coming up with new ideas for services, and learning the technical skills to deliver them.

The firm can ask professionals to assess and project their total contribution to the firm: billing, business development and client relations, reputation building, and community involvement. If this approach is undertaken, each person's efforts must be evaluated seriously and constructively, taking into account individual differences. The compensation system must be structured to support firm goals and values, and it should be explained and understood by all.

The Mystery of Compensation

Compensation policies are the most difficult and emotionally explosive aspect of firm governance, and there seemingly are no perfect solutions. However, the majority of professionals in most firms are at least as put off by feeling they do not have access to the thought processes and parameters that make up the system as they are by not earning more. In other words, they tend to feel the system is unfair if they don't think it is open or if they don't understand it.

In their concern about tight finances and less than desirable billable hours, some firms look only to cut back on personnel, training, and marketing expenses. Some of these firms believe, "If several people are not billing enough hours, they don't make the grade." But in truth, in many firms people aren't billing the desired level of hours because there isn't enough work to go around. The problem is on the supply side, and the work will not come in without more strategic and aggressive marketing. A firm will not thrive by only cutting and not investing in its business. This is the time to pull together to bring in more, not to cut capabilities and quality.

Firms should give people challenges that provide an opportunity to prove themselves and to draw on others. Particularly in a professional service business, the best strategy is to put more effort into increasing revenues rather than cutting inventory (the professionals), except as a last resort. When the objective is to build revenues, marketing should receive more effort and investment, not less.

Savvy organizations such as IBM and DEC, when growth slowed, made everyone a salesperson - from secretaries to engineers to all levels of executives. Advertising continued to support the sales effort, and sales increased.

Seize the Moment

If partners and managers are not busy enough with client work, there is opportunity to capture their time to do the marketing they should have been doing all along, but for their lack of time. Here is a way to exploit the opportunity. * Lose no time in commencing an organized marketing program.

* Use creative techniques to help you come up with new strategies, services, and ideas to market them.

* Think about how you can help clients and prospects achieve more success in their businesses.

* Ask them what more you can do.

* Ask clients and colleagues in other fields for referrals - and reciprocate.

* Ask each partner and manager to develop his or her own plan for business development with time schedules and a monitoring system.

* Provide assistance to those who are willing to market but don't know what to do or how to do it.

Tight economic times do provide opportunities for those who are open minded and looking for them. First, there is time. Under pressure to produce business, the firm's marketing heads can get the professionals' attention and interest focused on marketing.

Once the professionals' attention is obtained, give people specific responsibilities and assignments. Give them the support they need, and keep them motivated with recognition for their efforts as well as their results. Professionals will perform well if they believe there is good opportunity to improve their professional, economic, and personal status in a firm culture that conveys the desire that they succeed.

In tight times, many firms pull back and wait out the storm. That doesn't work for most firms. Smart firms invest in marketing and increase their market share at the expense of the cutters and ostriches.