Why don’t CPA firm leaders trust their people?

Dan Morris and I recently presented two courses at the California CPA Education Foundation CE Week in San Diego. One of our colleagues in the first course we presented, When Debits Don’t Equal Credits, sent us a very interesting email that illustrates the general frustration we at VeraSage have regarding the lack of leadership in our profession.

Not only don’t firm leaders trust their people to do their work—hence the insane requirement they account for every six minutes of their working lives—they also don’t trust them enough to give them free access to the Internet at work.

Here’s how Richard Muscio explained it to us in his email:

Good morning Ron!

I want to relay an experience that I had at CE week last Friday, only because I guess I need a shoulder to cry on…my apologies in advance.

Anyhow, after 4 great presentations Monday through Thursday I had the misfortune of finishing the week with a course called “Internet and Network Security: A Paranoid’s Guide.”

The instructor was good, and his outline was good, but the course went in the direction of the crowd’s questions, which usually isn’t such a bad thing, but in this case it was. The audience seemed most interested in how to monitor their team members’ use and abuse of e-mail, the Internet, etc., on the assumption that team members are wasting lots of employer time handling personal matters at work.

The instructor pointed out how “the boss” can measure all of these activities, down to time spent using e-mail and websites most often visited and for how long.

So, not only does employee chargeable time get measured down to the 10-minute increment, employers can measure how team members are spending their time when they aren’t charging clients for their time…wow. I guess this is what happens when team members don’t have challenges to pursue, and “the boss” is a dinosaur.

I really love my profession, but sometimes I get real frustrated. I mean, what a way to finish an otherwise great week.

Sometimes the gap between my vision of what the profession could be and what it presently seems to be is wider than Rosie O’Donnell’s rearend.

But on the bright side, I have another great story about why the timesheet needs to be buried 50 feet deep…

Best regards,

Richard Muscio

Supposedly, PKF firms are built on trust. Not only trust with our customers, but also trust with our team members. How can you build a climate of trust in an organization if you believe you have to monitor your team members’ every action, whether on the Internet or doing their work? Is this any way to inspire knowledge workers?

Is it any wonder why no one wants to work for these types of firms? Stars don’t work for idiots, and the surest sign of idiocy is not trusting the very people you hire.

In his latest book, What Were They Thinking?, Jeffrey Pfeffer recalls what Jim Goodnight, cofounder and CEO of the largest private software company, SAS, told him in an interview. Goodnight “considered giving people the Web addresses of sports and pornography sites so they wouldn’t have to spend so much time finding them.”

I know the lawyers will explain why this is a bad idea since we live in such a litigious society with sexual harassment suits, etc. But who wants to work in a PKF where the leaders don’t trust you to use your professional judgment and discretion?

Little wonder the accounting and legal profession is having such a difficult time attracting, developing and inspiring knowledge workers. Rather than blaming the market, they should examine their attitudes.


  1. Ron and Tom,

    Right on! I often find myself saying, “If you don’t trust your people, why did you hire them.”

    Don’t leaders realize that this lack of trust is not a reflection of their people, but of themselves. If you don’t trust your people what you are saying is you don’t trust your own ability to hire the right people, ergo, your ability to lead.

    It is very sad. Please someone tell us we are wrong here!

  2. Good question, Ed.

    > ?If you don?t trust your people, why did you hire them.?

    But they, most likely, didn?t hire those people. They hired a recruiting agency, and the agency without a good understanding of the firm?s culture and core values, hired the people based on some educational specifications.

    Client: We need someone with an MBA.

    Agency: Here is someone with an MBA.

    Client: Great, Thank you.

    In many firms partners invest huge amount of time to select the right microwave for the staff kitchen and the right kind of bum fodder for the toilet, but ?don?t have time? to get involved in acquiring the most important assets (as they call them): Their people.

    Partners abdicate talent acquisition to an agency because they?re too busy selecting microwave ovens and other trivial bits and bobs.

    Some people may say that these agencies are great. Yes, when hiring manual labourers. They don?t necessarily have to tie into the culture of the firm. Besides, labourers hardly ever represent the whole company. Knowledge workers do. So, this culture stuff is vital.

    And what is the result? Pretty sad.

    A recent Gallup Poll study indicates that 59% of the workforce is disengaged, 14% of the workforce is actively disengaged and that a mere 27% are engaged. The bad news is that most work places have 3 out of 5 disengaged workers. According to Gallup, these people show up like sleepwalkers on the job. Disengagement directly impacts productivity as well as how customers are viewed and treated.

    This is the result of traditional HR practices, which glorify credentials but utterly ignore innate talents.

    Here are some stats from Harris Interactive?s survey based on 23,000 people. I got this from The 8th Habit by Stephen Covey…

    Only 37% of people have a clear understanding of what their companies are all about

    Only 20% of people are enthusiastic about their teams and companies? goals

    Only 20% of people understand the connection between their work and their organisations? goals

    Only 15% of people feel they are fully empowered to execute key organisational goals

    Only 15% of people believe they work in a high-trust environment

    Only 10% of people feel they are held accountable for their work

    Only 20% of people fully trust their organisations

    Only 13% of people have high-trust, collaborative relationships with other colleagues and departments

    Translating this into soccer language…

    Only 4 out of 11 players would know which goal is theirs

    Only 2 out of 11 players would even care

    Only 4 out of 11 players would know what position they play and they are supposed to do

    9 out of 11 players would compete with each other while ignoring the opponent

    Now these alone are good enough reasons for a well-implemented suicide. There is one more consideration.

    Most professional knowledge forms are seeking MBAs and other business graduates. A study, which included 5,000 MBA students from 11 graduate business schools in Canada and 21 schools in the U.S., was conducted by management professors at Rutgers, Washington State and Pennsylvania State universities. 56% of the students admitted cheating and lying to pass their exams. The study points out an ongoing trend that lying and cheating in the world of business is just normal and they are here to stay. So, students learn at an early age that since business is about screwing clients out of their money and stabbing colleagues in the back fro promotion anyway, using lying and cheating in studying business is acceptable and perfectly normal.

    In a 2005 study by analysts at Wetfeet, over 800 students, who pursued careers in management consulting, were asked: “Please select up to 3 factors that make your top ranked company appealing to you.” Only 2 (0.25%) people said that “Ethics” was one of their top 3 factors for choosing a consulting firm. (Even the category “Other” was rated more highly than “Ethics.”)

    Standard HR practices don?t care much about character. As long as the candidate?s resume (as a friend of mine calls it Ridiculum Vitae) matches the company?s spec sheet, most agencies will hire the person.

    And the first time this will change when firms take responsibility for the people they hire and stop farming out this vital function to recruitment agencies. And if they do their own hiring, they do it without involving HR.

    The first step could be firing all ?HR experts? from the firm because HR is solely responsible for keeping talents out of organisations. HR (Human Repression or Human Remains) is the human equivalent of Procurement or Purchasing departments with a retarded mantra: Looking for people who look good on paper and are appropriately cheap to acquire. What HR has in common with Procurement is that neither of them understands value only costs. And this stupidity is costing firms a small fortune.

    The second step for the hiring people should be to read everything they can find on talent from Marcus Buckingham. I think when it comes to recognising and acquiring talents, Marcus is a genius.

  3. I agree with the overall tone of your post. It is a rare company I come across where the employees and management are in tune with each other, trust each other and are all looking to further the firm’s mission.

    The problem starts at the top not with the employees. Clear goals,open communication, fair pay, regular feedback and career opportunity are just a few of the management tools needed to create a trusting environment. And, please please, learn to hire smart and get rid of those that don’t fit the corporate culture!

    I want to respond one of Tom’s comments about an outside firm doing the hiring versus the company itself. Are you saying that in your experience, companies (law and accounting firms included) contract out 100% of the hiring decison to 3rd parties ie agencies, recruiters, headhunters. I have been in that business (for high level CPAs) for 20+ years and have never had or heard of that kind of carte blanche provided.

    I welcome comments to my blog as well

    Thank you

  4. Robert,

    Maybe my comment was a bit more general than the situation warrants.

    I would phrase it this way.

    I’d like to see firms keep recruitment in-house, but if necessary call upon third party help in the form of “Help us to find the right person” instead of “Find the right person for us” type abdication.

    I think this is more accurate. my problem is when firms pull themselves out of the process and rely 100% on agencies.

    But you’re right. It’s top management’s lack of interest in bringing in good people.

  5. Ed Kless says:

    Tom, I love the soccer team comparison.

    Robert, I think, as Tom, does that outsourcing recruitment is acceptable, but no company should even outsource the hiring decision. I do believe that some firms do this. In addition, some recruitment companies pressure firms into hiring someone.

    My advice, it is ok to use recruiters, but I suggest that all firms have a rock solid hiring process that is adhered to whether or not the candidate came from a search firm or was developed internally.


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