In the first of a three-part series on the expectations CPA firms should have for targeted personnel within their operations, Ira Rosenbloom, chief executive officer for Optimum Strategies in Spring House, Pa., discusses the role of the CPA firm operations manager. Rosenbloom explains how an individual in this position must be analytical, proprietary, and accountable.

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By: Bill Hayes, Pennsylvania CPA Journal Managing Editor

Podcast Transcript

Last year, Ira Rosenbloom, chief executive officer for Optimum Strategies in Spring House and member of the Pennsylvania CPA Journal Editorial Board, participated in a three-part series on the top priorities for CPA firms to ensure continued success. This year, he's back, offering another trio of podcasts, this time focusing on the expectations CPA firms should have for targeted personnel within their operations. Today, we will discuss the most pressing expectations CPA firms should have for their operations managers.

Just so people know, as we said, this week we're going to go over the top five expectations CPA firms should have for their operations managers. In one week's time, we'll discuss expectations firms should have for their marketing managers, and two weeks from today, we'll touch upon what CPA firms need from their HR departments. Now the top five for CPA firm operations managers, it's going to be analytical and anticipatory, clear and direct communication method, proprietary, accountable, and initiator. We'll start with analytical and anticipatory. Why is it important for a firm manager to have these traits?

[Rosenbloom] I think the first thing that I want to tee up right out of the box is that the person that we're talking about, probably for the last 20 years, has been referred to as the firm administrator.

And in some very, very unique circumstances, the person has continued to want to take on more and more responsibilities and actually have a more advanced team and they move forward to becoming the COO or the director of operations. In recent time, the Association of Firm Managers has decided to change the title from firm administrator to firm manager.

In my view, this person has to be able to earn the respect and the credibility of the ownership group and CPAs or extraordinarily analytical people. So, if the firm manager or, better stated, in my opinion, the operations manager is going to have the respect and the trust of the management/ownership of the firm, then they have to speak the same language. Analytics are crucially relevant to building that rapport and establishing that credibility, and much like a great accountant can take data and interpret it and guide their client to anticipate or to focus on a trend, it's the same thing here.

This operations person cannot live a static life. They have to be able to anticipate what the road in front is going to be. It is really crucial that they are comfortable with analytics, they anticipate where the trends are coming from, and they are very aware of the kind of analytics that would be meaningful in the environment of the firm that they are in, because there's a slew of analytics that you could have in front of you, especially with the advances made in the time management system, and certainly in financial preparation software, but you don't want information overload, but at the same token, you've got to be able to have data, that's going to be very relevant and very opportunistic.

What are the best practices for maintaining a clear and direct communication method if you're a CPA operations manager?

[Rosenbloom] I think that this is going to vary from firm to firm. And what I mean by that is, it's the size of firm. The smaller the firm, it's highly likely that there is a tremendous amount of informal communication between the operations manager and the managing partner or the senior partner, whoever it is that's the direct report. As firms grow, it's hard to have this informal type of contact. You've got to create a structure whereby we don't miss a beat in terms of having dialogue. I think communication is a function of two particular focal points. One, it's the distribution of information. So, I would suggest that either at the beginning of the week, or at the end of the week, the firm manager knows the kind of information that they have to relay to their direct report, that's the information. The dialogue is in terms of establishing the priorities and focusing on the roadblocks for that place in time.

I would certainly think that it's the time of year, which is the busiest time of year when we're recording this particular podcast, that it would make sense for there to be a formal conversation two to three times a week between the firm manager and the managing partner. When you move out of your busy season, it could be one to two times a week. And the goal is not to have a one- to two-hour conversation. The goal is to keep it down to 20 to 30 minutes so that everybody can go and do what they do best. The managing partner is there as a guidepost, is there as a motivator and as a processor of information. They shouldn't need to be on that conversation for an hour's time. The other component is the visual. It's important, even if people can't be in the office, to use FaceTime, to use Teams, to use Zoom, to use something where there's the visual, so you can sense a full reaction to the circumstances.

What does it mean for an operations manager to be proprietary? How does that aid the CPA firm?

[Rosenbloom] A manager of a CPA firm needs to be very committed to the bottom-line mission of the firm. It's not about focusing on the completion of the tasks and leaving it at that. It's about focusing on the reputation of the firm and the quality of our work product. A firm manager who gets that we have a reputation and that satisfying the customers and the clients and satisfying the staff is core, has that kind of proprietary disposition that's necessary and vital to succeed as a manager. This is heavily a manager of reputation and communication. It's not the old-fashioned administrator. I think it's really important to applaud the distinction that was made from moving from the title of firm administrator to firm manager or operations manager. This is somebody who has to be able to anticipate and react and not just do tasks which are much more of an administrator's job. A manager has to anticipate, has to communicate and understand the mission of the firm and focus on where those roadblocks may come, which would interfere with achieving the mission.

Can you explain the importance of accountability for a CPA firm operations manager? It's probably important for most employees, but what's the particular significance here?

[Rosenbloom] I think that it is important for the ownership of the firm to realize its highest potential and greatest achievement from the operational people. Of course, they want the same from their accounting people.

But if the ownership of the firm is going to take a step back and not be in the weeds, which is exactly why there is an operations manager or a firm manager or a COO, then you've got to be able to create some system of challenge, reward, goals, and expectations. That motivation will serve to enhance the confidence and produce that much better of a result. Accountability is something that should be intertwined with compensation, intertwined with responsibility, intertwined with acknowledgement, and the more accountable everybody in the organization is to major areas. This is not about micromanagement. “Did we buy enough stamps?” That's not the kind of accountability we're talking about. We're talking about the vital and core bloodlines of the firm so that the partner group can be much more divorced from the day-to-day issues and much more engaged as, in essence, a board of directors who opines and weighs in on that very relevant strategic agenda of the firm.

Two-part question here to wrap us up: Why is it important for a CPA firm operations manager to be an initiator? And what is it exactly that they're going to be initiating?

[Rosenbloom] I think to appreciate the need for initiation is to take a deep dive and look at the prototypical partner in a CPA firm. Generally speaking, partners in CPA firms enjoy client work more than they enjoy operational work. It doesn't mean that they don't like creating systems, but they really don't like to deal with confrontation and controversy, and they are not wired to think about the HR components in its most satisfactory and most viable fashion. They all respect people and they respect the need to have good people, but they are not focused on the building of the platform. So oftentimes to have the kind of environment that the ownership wants, they want to win the award for being the best place to work, you need to have a firm manager who is going to initiate actions and protocols and programs to achieve the wishes of that ownership group and to remind them and to motivate them to play the role that would be appropriate for a partner/owner/executive in a firm. It's way too comfortable for your prototypical CPA to move back into the cave of client service, which is clearly their domain.

But if the firm wants to be a real business, and more and more CPA firms are gauging themselves to be a real business, it's not because that's what ownership wants, it's because that's what the employee base wants, and they want the kind of benefits and working conditions, then you have to have the initiatives move forward and that is critically important for the firm manager to understand what kind of initiatives. If they don't have the skills to push them ahead, then they have to go out and find the outside resources to make it happen as part of that initiative.