Section 5
Leading Synergy

Anumber of years ago, I toured an automobile assembly plant in Detroit and was stunned at the choreography of the systems and how well they seemed to work. As a black chassis came down the line, black doors arrived from feeder lines. Everything seemed like a symphony of manufacturing. The same is true as I’ve visited some of the world’s best brands: Southwest Airlines, British Airways, a Disney theme park, or a Ritz-Carlton Hotel. I can feel the smoothness that has gone into aligning the many systems to support the people and their strategy. As this smoothness occurs, and friction is removed, businesses achieve a synergy that Terry Snyder, president of the accounting firm alliance PKF North America in Lawrence, GA, calls magic.

Synergy comes from a Greek word that means cooperative or joint work, but in business, it means that you produce an effect greater than the sum of what individuals can produce. As author Stephen Covey puts it, you achieve synergy when the whole is greater than the sum of the parts. Author John Maxwell calls it momentum.

In chapter 16, “Synergy and Alignment: One Plus One Equals Three,” we will go in depth into synergy and alignment, so that the teamwork that takes place is like a symphony, with everyone playing his or her part to achieve the vision and mission within the values of the firm. We’ll discuss preparing your firm for crisis and how to make sense when bad things interrupt the flow. When accounting firms achieve this synergy, leaders are developed, and succession planning (see chapter 17, “Sustaining Leadership: The Ultimate Succession Plan”) becomes almost a no-brainer. Building the enduring firm is the goal of synergy and succession.

Accounting firms are complex communities and systems of people working together and with clients, with many different elements that must be aligned to produce synergy. Some firms do not attempt to achieve synergy because it is too difficult. They settle for operating in smaller silos. Some of the primary elements of leading synergy include the following:

▴ Leaders who understand themselves

▴ A well-defined vision, mission, values, and strategy

▴ Leaders who understand the team members

▴ Well-defined work processes

▴ Systems and technology that support the people and their strategies

Alignment and synergy are never fully achieved. After everything is in place, leaders and managers continually tune the systems to run more smoothly. Another way to look at alignment is the absence of misalignment, which is usually easier to detect. Misalignment occurs when one part of the system interferes with or inhibits other parts. For example, suppose an accounting firm changes into niche teams but fails to consider the office layout and compensation system. The office walls that separate team members prohibit communication, and the company continues to reward individual performance instead of team performance.

Strategic Alignment

From the 30,000-foot level, the strategy of the accounting firm must be consistent with its leadership and team members; business environment; and vision, mission, and values. A strategy is important because it guides the operations of the entire firm. All the objectives in a firm’s strategy can’t be pursued with the same level of priority. By clearly agreeing on shared values, a firm can obtain a better alignment between financial and other objectives, such as client satisfaction and loyalty.

Objectives Alignment

Once a firm aligns its objectives with a strategic vision, it must specify and align goals at different levels and for different groups. Although leaders often acknowledge the importance of aligning goals, they often underrate the difficult work needed to make it happen. Teams of accountants produce their outputs through work processes that cut across accounting, auditing, tax, consulting, and administration. Goals for core processes must contribute to the firm’s goals while they satisfy customer expectations and ensure that work is effective and efficient.

Internal Alignment

All internal elements of a synergistic team—structure, subsystems, processes, and practices— must be aligned with the firm’s objectives. For example, in order to create a high level of client loyalty, the internal teamwork must be aligned, so there is little friction felt by the external client. The reward systems of the firm should reward staff members for their contributions to goals of the entire firm. All client and internal work processes should be aligned with one another. For example, performance scorecard, measurement, and information systems should support each other and provide employees with feedback to track progress toward their personal and team objectives.

Creating synergy requires the leader to consider the entire ecosystem of the firm: how each department interrelates, how teams are formed, how teams are led, and how people and systems work together. The ecosystem includes the leader and his or her attributes, members of the team and their capabilities, strategy, and management systems. To obtain true synergy, you must align the various parts of your firm’s ecosystem to remove potential friction.

Keith Farlinger, CEO of the national firm BDO Canada LLP in Toronto, Canada, says

It is very difficult to get a firm of 340 partners and 100 offices in alignment. So, I spend a lot of time making sure that alignment happens. I received a call yesterday that presented the opportunity to send someone to Australia for a period of time to work in credit unions and International Financial Reporting Standards. This would be a real benefit for our firm. It’s also a real perk for the staff. The office we approached didn’t want to participate because their staff members were working on some very important projects at that time. It wasn’t in the best interest of that office to send someone. So, I had to phone the managing partner to remind him that I understand the situation, but the firm is more important than one particular office, and this is very beneficial to the firm.

Many leaders have difficulty working as a member of a team. Keith clearly remembers when he began to develop those skills

When I became managing partner of Toronto, I was fairly young—40ish—and felt that I had to do everything myself. If there was a problem, I had to fix it, and if there was a new strategy, I had to make sure it was carried out. I was killing myself, literally, and one of my sage partners took me aside and said, “Keith, I don’t know whether you recognize it, but there’s a whole bunch of us around who can help you on everything that you do, and so, don’t think BDO is all about Keith. BDO is about all of us, so let us help you.” It was like a revelation, and it’s something that I really believe in.

Firms succeed best when they become more than the sum of their people. That is one of the tests of any great leader. No group will consistently progress unless the leader is able to create a synergy that will propel the organization forward more than the followers think is possible.

Synergy is not necessarily a frictionless environment; think of it more as a smooth-sailing boat. The exhilaration you get when sailing a boat is an amazing thing—the wind in the sails; the strong waves across the bow; the rudder holding the boat firm in the cross-currents; and you, the sailor, steering, adjusting, and tacking to sail anywhere you want to go.

Bill Haller, managing partner of the national firm CapinCrouse LLP in Indianapolis, IN, says

I make sure when I go to bed at night, there is no controversy that I am aware of in CapinCrouse. If there is, I want to put myself in the middle of it and resolve it tonight. One guy that I hadn’t seen in years told me, “I never forgot what you taught me. You always equipped us to go into a room without you and deal with our issues with someone else, so that we kept our bags empty.” I think that’s really important for the synergy of the firm if you are the protector of the culture. You make sure people know it’s meaningful and it’s important that we don’t go to bed at night with unfinished anger.

We don’t like a calm sea; nothing happens in a calm sea. When there is no wind, your sailboat won’t sail. The fact is that when movement occurs, there will be friction. As you advance toward your vision, the great leaders anticipate and welcome the problems that crop up. Leaders who fail to anticipate the problems get derailed and lose the opportunity for synergy or, as Bill might say, “smooth sailing in a windy sea.”