16
Synergy and Alignment: One Plus One Equals Three

“Great players are willing to give up their own personal achievement for the achievement of the group.”

~ KAREEM ABDUL-JABBAR

Accounting firms are made up of many talented professionals who must work independently yet together. Even when partners agree on values, mission, and vision, it can be difficult for leadership to keep everyone moving in the same direction. How can leaders build momentum within their firms? How can the firm leverage a reputation for vision and growth to attract the best and most talented people? How can leaders create an environment that attracts the most desirable clients? How can leaders, managers, processes, and team members be so aligned with the vision, mission, and values of the firm that the whole is larger than the sum of its parts?

Terry Snyder, president of the accounting firm alliance PKF North America in Lawrence, GA, says, “We’ve all walked into a client, a vendor, or a customer, and there’s a certain harmony, a certain rhythm that exists. You know you’re someplace that’s successful. Our goal here at PKF is to create that rhythm, that harmony, so when somebody walks in, they experience that magic.”

In this chapter, we’ll discuss a variety of ways to achieve synergy within your firm. First of all, I’ll warn you that forward motion will create friction. The great leaders anticipate friction long before the friction or problems occur. We’ll discuss how leaders adapt and learn from crisis in their organizations, and we’ll discuss the phases of teamwork and how they contribute to synergy and alignment. I’ll introduce you to two leaders who have achieved excellent alignment in their firms: Terry Harris and John Wright, managing partner of Padgett Stratemann & Co. of San Antonio, TX. As you’ll see, I believe that synergy is only possible when we have a well-led team striving for a compelling vision, with management that is continuously building the future firm—all the concepts of the previous 15 chapters rising to a crescendo of harmony.

Building a Shared Purpose

To turn a mission and vision into a truly shared purpose that inspires synergy among all members of the firm, a leader must consider the following questions:

1. Do I have the right people reporting to me and other leaders?

2. How can I make sure that my direct reports have accurate and timely information?

3. Who needs additional nurturing, training, motivating, supervising, or challenging?

4. How should processes be designed to support the people and strategy?

5. Is the reward system aligned to motivate people to excel in their roles?

Bob Bunting, former CEO of the megaregional firm Moss Adams LLP in Seattle, WA, says

Your leadership style has to change as you get bigger, and if you don’t change, you will stall out. I worked in an environment at IFAC with a board of 23 members plus another 46 or so people who sat in the meetings and had the right of the floor. There were a lot of bright, opinionated, supremely confident people in those meetings. Getting 70 or so people to go in one direction in the course of a two-day board meeting is really fun and interesting because they also come from different cultures, and many speak English as a second language. And it’s fascinating work. It’s probably the most interesting work I have ever done.

Bob adds that he would identify the “opinion maker” subset of the group and preview the more controversial and difficult decisions with that subset prior to the real meeting to get their input. “They are the most powerful people in the room, and sometimes, you need to do that just to keep key decisions on the tracks. It’s helpful to have that conversation in advance.”

Often, a leader may want to tinker with the ecosystem of the team or firm without regard to the potential unintended consequences. To make changes in the teaming or ecosystems, you must spend time understanding each element and how they work together, or you will always get surprises. Whenever possible, a leader should beta test significant changes in the systems in a low-risk environment.

Accounting firms have traditionally appointed a great audit partner or tax professional to lead a section of the firm, without significant training in the discipline. Terry Snyder, president of PKF North America in Lawrence, GA, says

We see firms that get an HR professional involved. Maybe that’s a contract or a full-time person. They also get a marketing and an accounting department established with people with relevant experience.

What happens when you do this is you put your partners and staff back into the channels where they can deliver what we hired them to deliver. We’re not telling accounting and tax professionals to ignore them; we’re just saying that we’re not going to have them working on recruiting or marketing every day. We’re going to have other professionals performing those duties, so you’re always working at your highest level. That’s when I’ve seen firms make the biggest progress.

If the firm is large enough, you will have a chief leader and a chief manager. This decreases the amount of chargeable time the leaders have because the leading partner’s biggest client is his firm and his partners.

Leadership in Tough Times

Anyone who has studied business knows that accounting firms will progress through good and bad cycles, very profitable and very lean years, periods of high demand and of a scarcity of new client opportunities, and all kinds of unexpected crises. Tough times really test the leader and his or her team’s preparedness for surprises. Although it is definitely easier to get followers’ attention when the going gets tough, the great leaders invest in teamwork and preparedness for the certain rough patch that will always come along. It’s not a matter of if tough times will cycle through; it’s a matter of when. Although there can be enormous synergy when the business cycle is in the upswing, the ultimate test of teamwork and the ability to achieve more with less comes during the down cycle.

Many of the leaders I met with in writing this book grappled with the concept of when great leaders do their best work. Some said, “Great leaders do their best work during tough times,” but others contended the opposite: that the great leaders do their best work in good times, so their teams are prepared for the difficult times.

Because most accounting firms haven’t dealt with really tough years for a number of decades, Larry Autrey, managing partner of the top-100 firm Whitley Penn LLP in Fort Worth, TX, thinks that the recent economic struggles have been defining for many organizations. “I think I’m a much better leader in good times than I am in bad. But I also would tell you that I don’t think I saw any bad times until the last 2 years. I think there are a lot of us from 45–65 who have not seen bad times until just recently. We’ve got a challenge now that we hadn’t seen before.”

Phil Holthouse, founder and managing partner of the top-100 multioffice firm Holthouse, Carlin & Van Trigt LLP in Los Angeles, CA, adds, “I think leaders have more influence during bad times. You tend not to give credit for people who managed to avoid the debacles. You give more credit to the people who recover from them.”

On the other side of the question is Steve Mayer, founder, chairman, and CEO of the regional firm Burr, Pilger & Mayer LLP in San Francisco, CA. “You can do your best work as a leader in the good economic times because you lay a solid foundation. It doesn’t get recognized until the bad times. One of the most difficult tasks is to keep your key partners from becoming complacent during the great times.”

Whether you consider the annual high-pressure season in tax work or a genuine, unprecedented crisis, the preparation of leadership during the easy or good times will determine many of the outcomes during the tough times. During George W. Bush’s term of office as president, the United States was hit by two national catastrophes: the September 11 attacks and Hurricane Katrina. Opinions on his government’s crisis response to these two tragedies, from the timing of the responses to the adequacy of the responses, varied greatly.

The immediate White House response to the September 11 attacks was widely seen as effective. Bush’s first congressional speech after September 11 was a major success and secured him strong bipartisan support. His personal approval ratings shot up in the wake of the September 11 crisis.

In contrast, the response to Hurricane Katrina was roundly criticized. Bush bore the brunt of unprecedented public condemnation for the bungled disaster response in New Orleans. His presidency never fully recovered from Hurricane Katrina. A congressional committee that examined the decisions leading up to and during the crisis labeled the Hurricane Katrina tragedy as a failure of initiative.

If presidential leadership is largely about “teaching reality,” then Bush passed with flying colors in the weeks following September 11. His performance projected a dignified authenticity and launched him as a heroic, charismatic leader. In contrast, he struggled, and was publicly criticized for struggling, during the aftermath of Hurricane Katrina. Hurricane Katrina will go down in history as a failure of leadership in a time of crisis, not just by Bush but at all levels of government involved in the tragedy.

These contrasting cases have much deeper meaning for the essence of true leadership. After September 11, the leadership shown by Governor George Pataki, Mayor Rudi Giuliani, and the first responders rested on groundwork laid after the first bombing of the World Trade Center in 1991. During the good times, Giuliani did many things that were unpopular and severely criticized. He cleaned up parts of New York against the outcries of citizen groups. The police and fire departments went through countless hours of disaster-response training. That New Yorkers responded so effectively to their own tragedy allowed the federal government to do its job of providing help and support, which by law is the federal government’s job anyway. The local systems in place in New York made President Bush’s response more effective.

The response to Hurricane Katrina was totally different. Although it was the first major test of the new Homeland Security Department, it was also the bungling of the local and state first responders. While the police and firemen rushed into the burning buildings in New York, some of the police were the first to abandon New Orleans. If it hadn’t been so tragic, it was almost comical to watch Governor Kathleen Blanco and Mayor Ray Nagin sit on the sidelines and complain that the feds hadn’t rescued the city.

The popular press applauded Bush for his response to September 11, whereas they had derided Giuliani a few years before for his insistence on preparation. Then, after Hurricane Katrina, Bush was the fall guy, and most of the state and local officials were given passes.

During crisis, leadership abilities are put to the test. If leaders are seen to have passed the test, their power and authority will increase commensurately. If, however, they are seen to have failed, their political capital will shrink quickly.

How can leaders prepare for, and perform under, the intense personal and political pressures generated by crises? We cannot assume that crises are simply bad news for leaders, with crisis management focused purely on damage limitation. A crisis may also provide leaders with unique opportunities to discard old ways of doing things and kick-start new ones, reform their businesses, and reshape the future in ways that would not have been possible without the tough times.

Crisis: Realities and Constructions

All crises create tough conditions for those who are expected to lead the response. These crisis leaders have to make quick yet far-reaching decisions while often lacking essential information. Accounting firms may face external disasters like the World Trade Center attacks, Hurricane Katrina, office fires, earthquakes, or flooding. Some firms will face internal disasters like a partner’s negligence; a partner’s legal troubles; audit or tax failures; or in the case of Arthur Andersen, an overreaching federal government and a stampede to judgment.

There are three ingredients in a crisis: uncertainty, urgency, and threat. In a crisis, there is usually a high degree of uncertainty. What is happening? How did it happen? What’s next? How bad will it be? More important, uncertainty clouds the search for solutions. What can we do? What happens if we select this option? How will people respond? Ted Mason, president and CEO of the top-100 firm Laporte Sehrt Romig Hand in New Orleans, LA, tells, “Hurricane Katrina hit on Monday, and none of us anticipated anything like what hit us. We learned very quickly that no matter how good your disaster recovery plan is, it can’t anticipate every situation.”

While many become complacent during good times, crises induce a sense of urgency. From 2002–08, everywhere I spoke, I talked about the crisis of success in our profession. I talked about the complacency, arrogance, and greed that sets in during periods of great success, which the accounting profession was enjoying during those years. Many accounting firm leaders thought that my speech was humorous and didn’t lose any sleep over my comments. But when the financial crisis began to take hold in 2009, accounting firm leaders began to feel the holes in training and business development that had been neglected during the good times. The crisis had made these issues urgent.

Crises occur when core values or vital systems of a business come under threat. Think of widely shared values such as security, health, integrity, and fairness, which become shaky or even meaningless as a result of looming damage or other forms of adversity. A crisis could be litigation, a natural disaster, intense new competition, senior partner defections, or a loss of a major client.

The psychological impact of a threat is related to cultural expectations, which vary widely within a firm depending upon existing levels of preparedness and prior experience. Although the sudden demise of Arthur Andersen caused the long-term unemployment, loss of finances, or incarceration of relatively few people, it nevertheless evoked widespread fear among public accountants worldwide.

A crisis is but a label denoting the negative impact of an event. When different leaders are confronted with one and the same set of events, such as a hurricane, potential litigation, massive changes in competition, and so on, they may adopt fundamentally different postures. You can distinguish among the following:

1. Leadership denial that the events in question represent anything more than unfortunate incidents. This stance is likely to produce a downplaying of the idea that the events have any serious repercussions.

2. Leadership acceptance of events as critical threats to the firm and its people. This posture is likely to diffuse criticism from other partners.

3. Leadership recognition of a critical opportunity to expose deficiencies in the status quo. Adopting such a position is likely to lead to blame being leveled at advocates of the status quo and attacks on dysfunctional policies in the firm to marshal support for change and reform.

In business studies, scholars have produced a substantial body of work on corporate crisis preparedness and response (for example, the Tylenol product failure; the Bhopal chemical disaster; the grounding of the Exxon Valdez; and more recently, the demise of Enron and Arthur Andersen, the BP oil well incident in the Gulf of Mexico, and Walmart’s astute response to Hurricane Katrina).

In the case of Walmart, the executives and employees contributed $20 million and 1,500 truckloads of merchandise to the victims of Hurricane Katrina. In addition, all Walmart employees who were displaced during and after the storm were guaranteed their jobs with full pay. Their CEO, Lee Scott, said that he wanted the company to respond to the disaster in a manner that matched its size. He did not want the response to be measured but to be huge, like the company. Scott was deemed a hero in the press. In chapter 5, “Preparation: Ready for Seizing Opportunity,” you read about Ted Mason, who led his firm in a very similar manner.

These cases are told and retold to prepare corporate leaders for reputation damage, market shifts, frauds, and other contingencies threatening their firms. In this field, crises are viewed as major opportunities to improve market perception and market share, help a firm’s reputation, and dramatize commitment to corporate citizenship.

During unexpected events, there are many challenges for senior leaders of accounting firms to iron out: understanding, decision making and coordinating, terminating, accounting, and learning. These are executive tasks.

Understanding

The attack on the World Trade Center took the United States by complete surprise on September 11, 2001. In the hours and days that followed, officials at all levels of government scrambled to understand what exactly had happened, why, and how. They worried what would be next and what could be done to prevent it. In hindsight, it is clear what happened that day, but for those who lived through it, September 11 was the day when nothing made sense.

Most times, a crisis comes as a surprise. During that awful day, I was in the high-rise office of an accounting firm in Denver, fully expecting the next wave to hit us. Everyone I talked with that day was expecting the next wave to hit them, even in Des Moines, Nashville, and Amarillo. Crises, especially in the very early stages, produce vague, ambivalent, and often conflicting signals, which leaders must interpret and recognize as a crisis.

For example, is a sudden departure of a key partner an isolated incident, or is it the beginning of a series of defections? Is the cause of the departures something systemic within the firm or idiosyncratic to one partner? Leaders must make sense of events as they unfold. Leaders need to determine the likely level of threat, who or what will be affected, and how the crisis is likely to develop, without overreacting in a way that can deepen the crisis. Signals come from many sources: some loud, some soft, some accurate, some rumor and speculation, and some bearing no relation to reality. How can leaders judge which is which? How can they extract coherent and credible signals from the noise of crisis?

Decision Making and Coordinating

After Hurricane Katrina broke the levees and flooded New Orleans, the response to this natural disaster just seemed to fall apart. Survivors spent days in their homes, the Louisiana Superdome, and the Ernest N. Morial Convention Center without food, water, or ice. A wide variety of organizations—national and international, public and private—gathered to help, but logistical chains did not reach some of the survivors for weeks.

In chapter 5, I recounted that Ted Mason and his partners gathered all the information they could during the time that Hurricane Katrina was bearing down on New Orleans. Ted and his partners clearly decided who was in charge and what they were going to do. With their preparation, Laporte Sehrt Romig Hand partners did not forget their long-standing commitments to their employees and clients, an area in which other firms blinked.

An effective response to a large-scale event requires coordination among leaders and their departments. After all, each decision must be implemented by a set of organizations within a firm and, sometimes, those from the outside. Only when these organizations work together is there a chance that effective implementation will happen. True synergistic efforts produce the highest levels of cooperation.

Terminating

Although tenacity is a strong leadership quality, knowing when to terminate an initiative is another quality of great judgment. My father used to say to me, “Troy, when the horse is dead, get off,” because he observed that I tend to believe so strongly in my own ideas that I will persist beyond reason. This tendency showed up in my early audit days at Price Waterhouse when I would go over budget because I wanted to get it so perfectly right that no one could question my work. Former PricewaterhouseCoopers partner Olaf Falkenhagen taught me to evaluate the risk in audit situations and back off in the lower-risk areas. He would accept over auditing in higher risk areas. What I learned was that as I did a better job of assessing risk and backing off my perfectionist tendencies in the low-risk areas, I gained some confidence to terminate my work in the higher-risk areas, as well. A leader’s role in the launch of an initiative is to give the initiative time to blossom but to know when to pull the plug and terminate.

Accounting

The best leaders find a way to review not only the failures but the wins. An after-action review is a process by which the military has looked at all events, whether very successful or very painful. Neal Spencer, CEO of the megaregional firm BKP, LLP, in Springfield, MO, says, “I use the term autopsy. Using an autopsy without a blame when we have issues with the way things have gone. Let’s let the dust settle, and let’s autopsy the sucker and see what we did wrong, so we can learn the next time. Not to see what we did wrong to blame somebody.”

Learning

Only weeks after Hurricane Katrina destroyed coastal areas in Louisiana and Mississippi, Hurricane Rita entered the Gulf of Mexico. When the projected trajectory of Hurricane Rita included Houston (the fourth largest city in the United States), the Texas authorities quickly ordered an evacuation. The lessons of Hurricane Katrina had been learned! Unfortunately, in the chaotic evacuation, more than 100 people died. Then, Hurricane Rita changed course and never reached Houston.

A crisis or disaster holds huge potential for lessons to be learned to improve contingency planning and training to enhance resilience in the event of similar episodes in the future. In an ideal world, we might expect everyone to carefully study these lessons and apply them to reform organizational practices, policies, and laws. In reality, there are many barriers to lesson drawing.

Organizations tend not to be good learners, certainly not in the aftermath of crises and disasters. One crucial barrier is the lack of authoritative and widely accepted explanations for the causes of crisis or disaster. Worst-case thinking is rarely high on agendas.

The best way to achieve great synergy and alignment is for people to cooperate in teams, so that everyone does his or her job effectively. People on teams must know that their fellow team members will also do their jobs. It’s the bond of trust that team members share that allows each member to focus on his or her job to the best of his or her ability while other team members execute their roles. Teamwork enables firms to maintain synergy and alignment during business up-cycles and crisis. Let’s turn now to a discussion of basic teamwork.

Teamwork

A leader must accomplish the very difficult task of getting team members to believe in “we” more than “me.” In business, we must share knowledge, experience, information, contacts, and ideas. Many leaders take for granted that their team members know how their efforts help the firm—this is most often not the case.

Coach John Wooden used the 10 hands concept to teach his team that everyone contributed to every basket, not just the scorer. It took both hands from all 5 players to score a basket. In other words, the 4 players who didn’t score directly helped with each basket, whether they inbounded the ball, passed to the scorer, or simply blocked out an opposing player.

That is the same in an accounting firm. It takes two hands from every employee to serve a client, so we must ask ourselves the following questions:

▴ What is the impact of a negligible producer, or a ball-hogging glory-seeker, on everyone else on the team?

▴ Why is this person on our team if his contribution is minimal or distracting?

▴ Is there anything I can do to enhance this person’s contribution?

▴ Can we move her to another position where she can contribute?

▴ Should we trade this person to another firm?

Rick Dreher, CEO of the megaregional firm Wipfli LLP in Green Bay, WS, has worked hard to get his firm aligned around a team-oriented culture.

I want to get into a cloud environment, and I want to tear down silos. If I start measuring things at the individual level, you think I’m going to get people to work in a team environment? I equate business and running an accounting firm to a sports team, and the key word there is team. In a team, we all have roles, and we all have contributions to make. We’re trying to align people to their passions and their strengths. You know, if we only have 11 offensive linemen on our football team, we don’t have any great quarterbacks or running backs or wide receivers.

David Maister, speaking at the Winning Is Everything Conference in January 2008, said there are two types of individuals: those who are team players and those who are loners. He admitted that he was a poor team player and, therefore, was best being a loner. He recommended that to build your firm, you must recruit and retain those people who understand and internalize the concept that the best people are those who will make the best team, not those who have individual talents but can’t support the team. Often, the most talented individuals will not be a good fit for your group.

All roles on a team offer the opportunity for individual greatness. This idea will be understood and accepted only if the leader reinforces it on a consistent basis. Everyone must believe that his or her contributions count and affect the success of the entire firm.

As a leader, you can create an environment that rewards hard work and improvement as you unleash the unseen talents of those you lead. Team members who feel they can better themselves by doing a great job and helping the team will work at the highest level.

Leading Teams for Synergy

Aligning all the parts of an organization is like aligning your car. When one of the four wheels is out of alignment, the entire vehicle veers one way or the other. Synergy creates a technically elegant system where all the parts work together, so that the team is greater than the individual players, and they help you achieve the firm vision.

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

Working to give this large firm, with offices of varying sizes and locations, a single unifying vision takes lots of patience and time. I am a big believer, as I travel to the Owen Sound and Cornwall offices and then go to the Toronto offices, that we are the same firm. It’s an absolute cop-out that we have to have different values and visions in different offices in the firm. So, we are really focused this year on rolling out a vision and values and expectations that are consistent right across the firm. Frankly, we’ve got a ways to go, but that’s our rallying cry as we go forward over the next few years.

Creating synergy in a constantly changing world is a huge challenge. Change requires a leader to use imagination, rather than just experience, to successfully handle new challenges. So long as you measure your intended choices against solid principles, your results can be more predictable and positive. Leaders must develop the capacity to cope with dramatic changes and shifts in order to build long-term strength.

The best companies in the world create synergy around their teams. They create a set of standards and then train like crazy to equip all team members to deliver behaviors that meet the prescribed standards. Teamwork is a value that many accounting firms espouse, but you can always improve your team.

Jim Metzler, vice president of the AICPA, says

I’ve seen it for years and years: in firms that generally get somewhere between $3 million and $6 million dollars of revenue, they tend to hit the wall. They’re no longer a small firm, and they want to be a bigger firm. Yet, understanding what it takes to grow both from a business standpoint and a leadership standpoint is very difficult. At some point, they must gel as a team to break through to that other side. They realize that a serious firm is about a business, not about individuals.

Team Development

Leaders understand that a team is not static; it will progress through developmental phases. Leaders must anticipate those phases and allow team members to mature through them. If you shortcut a phase, the team’s effectiveness may be at risk. Great leaders know how to form teams and coach them through the following phases of team development:

▴ Forming

▴ Storming

▴ Norming

▴ Performing

In each phase, a good leader can adjust his or her leadership style to fit the team that he or she has at the time. In large, multidisciplinary accounting firms, there may be many teams, all at different stages of development.

The forming—storming—norming—performing model of team development (see figure 16-1) was first proposed by Bruce Tuckman in 1965, who maintained that these phases are all necessary and inevitable in order for the team to grow, face up to challenges, tackle problems, find solutions, plan work, and deliver results. This model has become the basis for subsequent models of team dynamics and a management theory frequently used to describe the behavior of existing teams.

In each one of these phases, the skilled leader takes a different leadership approach to create alignment and synergy. In the forming phase of team development, team members are chosen and assigned their roles and responsibilities, so the leader will take a more directive approach. During storming, team members are searching for their voices and boundaries, so the leader must be a teacher and coach. Once the team begins to fall into the norming phase, the leader allows the team members to accept more of the responsibility by helping them through any friction and coaching them toward harmony. Once the team matures into its performing mode, the leader steps back into an empowering role. Each of these phases is described in more detail in the following sections.

Forming

Team forming happens first. The leader may select the members and begin assigning them roles based upon their experience and desires. The team learns about the opportunities and some of the barriers that they may face. During this phase, many team members are very focused on themselves but may act like they are team players.

Too many teams are formed without making sure that members have skills to fit their roles and that not everyone on the team has the same skills. Just like a good basketball team has five specific roles, work teams also have roles. For example, a team full of “idea people” tends to be very creative but has difficulty following through. On the other hand, if all the people are implementers, they may struggle with coming up with ideas. So, in the forming stage, various team roles like creator, refiner, advancer, and implementor may be assigned, and mature team players begin to model appropriate team-oriented behavior.

Figure 16-1: Stages of Team Development

Creators are tasked with idea generation. A refiner’s main role is to refine the ideas, so they are workable or marketable. Advancers will usually sell or communicate the ideas to the rest of the team, firm, or clients. Implementers actually love executing well-crafted ideas. Leaders tend to be quite directive during this phase. The members get to know each other, make new friends, and see how they can create synergy together. Processes and policies are sometimes ignored, and certain members may test the leader. Leaders must be prepared to answer lots of questions about the team’s mission and objectives and how they fit within the firm’s mission and objectives.

Carl George, former managing partner of Clifton Gunderson LLP, says

I figured out very quickly that an office is a microcosm of a larger practice, and my job is to help grow this thing by developing relationships. I think that’s a key for our people today that any professional business is just as much about people and relationships as it is about law or accounting. When we do a merger, the financial model is the financial model, take it or leave it. The brain surgery is meshing their culture in with ours. So, we do the psychological profiling before we close a transaction.

As Carl suggests, in the early formation of a new team, the leader will be a bit more directive and sometimes say, “Take it or leave it.” This is the best time to eliminate team members who are going to be disruptive because as the rest of the team begins to gel, the friction will grow. A great leader will be relationship oriented but will strongly demonstrate passion for the goals of the team, letting everyone know that the team comes first and the members come second.

Storming

A team enters the storming stage when different people and their ideas compete for leadership. Team members address issues such as the team’s goals and how they fit with the vision of the future firm, the problems that they should tackle, how they may function together and individually, the role that each person plays, and how they fit with other members’ roles. Some team members will open up to each other; they may confront each other’s ideas and perspectives. In some teams, storming can be resolved quickly and smoothly, but other teams become bogged down in conflict. Immature team members and rugged individualists may want to demonstrate how much they know. And a few team members may engage in analysis paralysis or focus on minutiae to avoid moving forward.

The storming phase can be contentious and painful to those who avoid conflict at all costs. In this stage, leaders should show tolerance for differences. Without patience, teams can fail, never achieve synergistic functioning, or even be destructive to the firm. The great leader will allow the storming to take place in a controlled environment. Sometimes, getting the team offsite to go through this phase is effective. If your team members begin storming in front of nonmembers, the ensuing confusion can be overwhelming.

Leaders of teams and firms during this phase still need to be directive in their guidance of decision making and professional behavior. During storming, decisions don’t come easily. Although clarity increases, uncertainties persist, and power struggles blow up. The primary focus for a great leader during this phase is coaching each member to play his or her role effectively and in context with others on the team or in the firm.

Norming

When the team enters the norming stage, players adjust their behavior to dramatically reduce the friction of working together. Members arrive at this stage by agreeing on shared values, professional behavior, processes, codes of behavior or communication, working tools, and even lists of dos and don’ts. Trust begins to develop as members see each other demonstrate integrity, intent, and results. The leader must watch for too much comfort in this phase because some people may lose their creativity if the norming behaviors become too polite, valuing artificial harmony over effectiveness.

Leaders of firms and teams during this phase tend to adjust their styles to be more participative than in the stages of forming and storming. Members take more responsibility as their roles and responsibilities become clearer. More of the decisions are now made by team members or subgroups.

In a norming team, leaders work to facilitate the team’s and firm’s efforts in each initiative. By creating success experiences, they help the team bond further. During this phase, it is crucial to get both strong individual effort and team motivation.

Bob Hottman, CEO of the top-100 firm Ehrhardt Keefe Steiner & Hottman PC (EKS&H) in Denver, CO, focuses on this phase in his firm’s business development efforts. “In our firm, we’ve developed business for a lot of reasons. One is for fun, but number two is that we need to provide opportunity for our people. We want to have great people, and we have a very simple business philosophy. You get great people to take care of great clients, which enables you to get more great people to take care of more great clients.”

Performing

Many firms and teams will reach the performing stage in which they are able to function as a unit. Now, we achieve real alignment and synergy. If a team or firm gets stuck in storming or even norming, real synergy cannot occur. During the performing phase, members rely on each other and become truly interdependent. When synergy occurs, one plus one now begins to equal three or even more, and these results motivate the team members to excel. A great leader will encourage some conflict and dissent to keep the team improving.

Leaders of performing teams will delegate and empower the team members to make most of the decisions. Bill Haller, managing partner of the national firm CapinCrouse LLP in Indianapolis, IN, has long since dealt with many questions about how work gets done, how the team relates, and how his team performs.

Once a business is mature, leadership cannot be so domineering. In a business in crisis or in infrastructure building, consensus leadership is not very effective. Once an organization is mature, consensus leadership is probably best, unless you want revolution. Our recruiter is a work-at-home mom who is nowhere near the offices and, yet, recruits all the talent in the firm. I am the managing partner, and I live remotely 500 miles from the nearest office. Some of the issues other firms are [dealing with], asking if they should do that, we’ve already accepted, like flex schedules and remote work, so some of the basic things that cause turnover we don’t have.

During the performing phase, synergistic leaders oversee, delegate, and empower.

Conclusion

Well-designed processes and teams should help people work smoothly, should minimize nonvalue-adding activities, and should provide some flexibility, so people can adjust to unexpected demands and contingencies. The structure of the firm or team should ensure the proper reporting relationships, that team members have their best responsibilities, and that people who fit best on a team should be working together. Leaders must use care in determining who is hired or placed on teams (putting the right people on the bus), overseeing how they are trained, and then providing opportunities for team members to learn and develop themselves. When this doesn’t happen, things may never be optimal. For instance, Terry Snyder says

“One of my roles was as a regional managing partner in a firm, and I just couldn’t solve why there wasn’t harmony. It was frustrating because the people didn’t trust each other there. I’ve worked in the opposite situation. I first started my profession at Andersen, and to this day, some of those people who were my partners are still some of the people who I have the most confidence in and the most trust in. It was never about how much money we made. It was about how well we worked together and how we were building the practice. When you find that, it is so important.”

Leaders must ensure that people have good information in a timely manner to make proper decisions. Leaders should be careful to place the people in decision-making roles who have the best expertise for that role. Finally, leaders must ensure that financial, positional, and opportunity rewards are properly aligned to the strategy and vision of the firm. Rewards must be designed to encourage teamwork and individual effort at the same time.