Hello everyone and welcome to The Upstream Leader. My name is Jeremy Clopton. Excited to be with you for this conversation. We are talking about the idea that there’s no time for maybe, and just how important it is that leaders in the profession become better decision makers. And for that, I have a guest with me today that is going to add lots of insight. We actually, we’re on a panel, Kathy Klang was on a panel that I was moderating, and she mentioned that if she ever wrote a book, that was the title that she was going to use. So I thought we’ve got to talk a little bit more about that. Kathy is the former managing partner of Cummings Keegan & Co. up in Minnesota. Currently, she now leads the Success Management Division of the firm, which is a pretty awesome name for a division. Kathy, welcome to the podcast.
Thank you, Jeremy.
I am excited for this conversation and the idea that we can all become better decision makers. Before we do that, though, I’m going to start the podcast the way that I start every episode: Tell us a little bit about how you became the leader that you are today.
Well, I think I have to give a lot of credit to my parents and my first managing partner, Jim Keegan, who is one of the founders of this firm. I’ve been with the firm my entire career—I’m going on 41 years. And my parents always taught us, the four kids in my family, that we could do anything we wanted to do if we put our minds to it. We were not, you know, a rich family. We were, you know, middle class. My dad was an airline mechanic. And they never made it seem like there were any barriers, financial barriers, or any other types of barriers to doing what we want to do.
Jim Keegan, for his time, was quite progressive when it came to running a firm and what the idea behind serving clients meant. And actually, the Success Management Division name was dreamt up by Jim. We’ve had that name trademarked for many, many years. He thought at that time that your average business owner did not look at their CPA firm as a consultant or as an advisor, and success management, in his mind, said, “We are here to help you be successful.” So considering he was the managing partner here 40 years ago, that was a pretty progressive thought process in the accounting profession at that time.
We’ve used the name “Success Management” more and less at different times in the firm’s history, but it’s always been there. And it basically encompasses any of the consulting and advisory services that we perform. So because of his leadership, I learned what it meant to be a good leader and what it meant to be on the edge, maybe on the leading edge, but not the bleeding edge, and what you had to do to accomplish that.
Okay. Very good. Which is probably why “trendsetter” shows up in your bio a couple of times, on the firm website. I always like to get to talk to a trendsetter. I’ve never been accused of that.
Well, I think that’s pretty much just our marketing person who thinks that, but that’s great.
No no. I can see it. I can see it. We were talking about this topic of “there’s no time for maybe,” it really came up in Kansas City, and you were on a panel for a new partner conference, and I was moderating the panel, and that’s when you said if I ever wrote a book, this is what it would be. It immediately stuck in my mind because we’re kind of in a profession that is known for maybe. Maybe we could change that. Maybe we don’t have to. Maybe we can stick to the status quo. And before we get into what it means, you know, within a firm, I would imagine being in the Success Management Division of the firm, you’ve got to help business owners work through the fact that there’s no time for maybe you’ve got to make decisions and move fairly quickly. Is that a fair assessment?
Absolutely, yeah. And in fact, the first time I used that phrase, it was with my husband, who’s also a business owner, and he and I have completely different management styles. And he had to make a decision, and he tends to put off difficult decisions. And I just told him that if I ever write a book on management, it’s going to be titled, There’s No Time for Maybe. And it didn’t really change the way he operates, but he took it to heart. And then I started thinking about it, and it’s like, you know, really, that’s what I learned: as managing partner, I don’t have time to spend analyzing a decision ad nauseam. There’s just, you have to get it done and move forward. That’s not to say that you have to make a decision in a vacuum or without adequate information. You just need to find that balance.
Okay, so, what is, in your mind, and maybe there’s no answer to this exactly, but what’s the ideal speed for a decision? At what point do you have to kind of put your foot down, so to speak, and say, we’ve got to take action because we can’t go any further? What level of comfort?
Yeah. Boy, you know, that’s hard because it really depends on the personalities. And when you’re, you know, when I became managing partner, and actually when I became a partner in the firm, we were very much a management by committee firm. And we were small enough at the time that that worked most of the time, and decisions tend to take longer when you’re doing that. We had grown quite a bit before I became managing partner, and when I did, I realized we can’t do management by committee anymore. We have to, at least for some of the day-to-day smaller items like, you know, do we renew this software? Well, whoever’s responsible for that area of practice should be able to make that decision. And so that’s part of the whole idea of “there’s no time for maybe,” is you don’t need four people to make some of those decisions, you just need to empower the one person who has the most vested in that decision to make the right decision.
That’s a pretty big change in our profession because that’s very much running the firm like a business owner and empowering division leaders.
Oh, weird!
I know, right? We’re, so success management, we can tell everybody else how to do it, but applying it to ourselves, that’s where it becomes really challenging. So one of the keys to there’s no time for maybe, it sounds like, is you’ve got to empower leaders to make decisions that they are in the best position to make, is that accurate?
I think so, yeah, and I think you also have to put parameters around that so that everybody understands which decisions they can make versus which decisions they should bring to the broader group.
Okay. So how do you help someone—because I’ve seen this from time to time where you’re empowered to make this decision. But that’s new, right? Historically, it’s been management by committee. I know I’m empowered. I know I can make it. Kathy just said, Jeremy, go make the decision. I still feel like I should bring it to the group because I’ve never had to make these decisions before. How do you get someone comfortable with the fact that they truly are empowered to do that?
Well, when we started making that change, because some of the people that we allowed, or gave that opportunity to, were not partners in the firm, so the first thing I did with that group was made myself available to talk through the decisions. And I also controlled what was brought to the management group, which included partners and managers. And I did that just by asking people to provide me with agenda items for the next meeting, and if it was something that I thought did not need that scope, I would have a one-on-one with that person and talk through it with them. And if there was some legitimate concern on their part that they felt the partner group needed to be involved, we would bring it to the group. But otherwise, I would just help them talk through the decision on their own.
It’s a really important role for a managing partner, it’s that almost, I don’t want to say a gate, but a filter, between operational leaders and then the governance body that is the whole partner group or the whole management group of the firm. And what a great way to not only empower someone by saying you need to make the decision, but when they tend to defer on it, you went back and said, you need to make the decision. How can I help you feel comfortable with that?
And is it true that there are certain decisions that perhaps the partner group or the management group doesn’t need to make? But there is value in whoever the decision maker is hearing from that group. And it’s more, hey, this is on the agenda, it’s informational, you’re not making a decision in this room, but they want to get your input. Did you have some of that as well?
Yeah, and we still do for various things, and as we change the responsibilities of people as they move up in the firm, you know, we give them an opportunity to say, we tell them, you go and gather the information you think you need to make this decision and come to us with a recommendation. We don’t need to hear the six different options you looked at. We just need to hear, here’s what we did, here’s our recommendation, and here’s why. And we still follow that idea.
Okay. So you lay out clear expectations. If you’re a decision maker
—I try.
Yeah, and that’s so important because it’s easy to want to delegate and say, okay, you just go do this. But then you’ve got a void of information because they’re making decisions and what we all know about partners and it’s not a knock on partners, it’s just the reality as a business owner, you want to have some insight into what are the decisions that have been made, so you’re never caught off guard.
Right.
So, laying out that expectation of making it and we don’t need to hear about it versus making it and then come tell us why you made it so that we understand—that’s a really important step that I would argue a lot of managing partners maybe don’t see that as important. It’s just, hey, I’ve empowered people, they should just go do it, but you’ve taken it a step further and said, now let me help you understand the why and the how and the resources available. So, when you were a managing partner, and even for the managing partner of the firm now, how often would you say you got pulled into those one-on-ones to help someone that was a new decision maker feel comfortable with the process?
Well, early on when we started trying to move in that way, there was a lot of that happened, because people would say, even though we had parameters around it, they’d say, is this really something that I can decide on my own? You know, and they, you know, feeling it out, getting an understanding of what they really can and can’t do. I have to say that the managers that we empowered with those decision-making abilities, they were very conscientious about the fact that they were spending our money. So, that caused them to be a little bit more cautious, which I really appreciate. And so I would have more of those kinds of conversations. Often, they were just informal. You know, they’d come in and say, here’s what I think. What do you think? And I’d ask a few questions and, you know, that would be it. But sometimes it’s hard for people to take on that responsibility. And those are the ones that need a little bit more handholding. I’ve always told everybody in the firm that they can ask me any question they want, and I still do that even though I’m no longer managing partner. They can ask me any question they want, I can’t guarantee I’ll be able to answer it.
Sure.
Because there are some things you just can’t talk about. But that was something that was instilled in me by Jim Keegan. His door, you know, we have a true open-door policy here. The only time my door in my office is closed is when I’m doing this sort of thing, or on a Teams meeting. Otherwise, it’s open and you can interrupt me anytime you want. If I can’t take a moment to talk, I tell them that. But, yeah, I feel like there should really be no secrets. Obviously, there are some. But you know, there are certain things that freak people out when they find out about it because they’re not equipped to handle the information, you know, so we try to keep it as open and collaborative as possible.
You just mentioned that sometimes people freak out when they learn something because they weren’t equipped for that, to receive that information. How do you equip them? How do you prepare your people within your firm to be ready to be decision makers even before they get to the partner table? Because that’s a lot of empowerment that a lot of firms, I don’t even know that partners are sometimes empowered to make that level of decision, right, to spend money for the firm? So you’re doing this below the partner level. What do you do that’s equipping your people to be ready?
Well, for the bigger things like our marketing area, our business development, we usually try to give them a budget to work within, and that helps a lot. We’ll say, what do you think you’re going to need to spend money on this year? How much do you think it’s going to be? And they know it can’t be outrageous. And we come up, we try to come up with a budget that they can work within during the year, and then we have to allow them to use that budget if they want to. We had a couple of instances in the distant past where they had a budget and then partners would complain about what they’re using the budget for. Like, that’s what we set the budget up for.
But the smaller things, again, I just try to put parameters around, okay, here’s what we’re doing, here’s what we need to know in order for us to feel good about the decision, and here’s generally what we expect it’s going to cost. Now if we don’t know what the cost is going to be, I’ll tell them, go out and do some research and come back to me with what you think this cost is going to be, and then we can go from there.
Some really important insights for leaders there that are looking to delegate decision making is you provide parameters, again, that’s been a very common phrase that you’ve, a concept that you’ve used is there’s parameters, there’s a budget, there’s an expectation and clarity around this is your level of authority. And how you can make the decision, what autonomy you have to make the decision and then resources available should you need to make that decision. And that’s a really important lesson for leaders that are trying to get people to take more ownership over their careers, their clients, take a more active role in the firm, is you’ve got to provide them with enough freedom to take that level of ownership.
But freedom doesn’t mean free-for-all, right? Freedom can have parameters because before they didn’t make any decisions. And now you say, hey, here’s a budget, you can operate within this. You mentioned that sometimes partners would look at that and say, well, why on earth would they have spent that on that or whatever, how do you deal, when you provide this delegated authority and decision making throughout various levels within the firm, how do you deal with the objections from partners that say, well, I would have done it differently. How do you deal with that?
Well, as you know, Jeremy, we are an Upstream Academy Network member. And one of the things that we learned there is that partners give up the right to remain silent. They had an opportunity to say something when we set the budget. And I just remind them of that. Usually, that’s enough, but once in a while, well, e’re a pretty cohesive group. We’ve all worked together a very long time. So, there’s rarely any kind of major disagreement among the partner group.
And I would imagine 20, 30 years ago when you all started this type of a mindset is probably when more of that happened than it does now since it’s built into your culture.
That’s absolutely right.
Where people have decision-making authority. So let me take a slightly different direction here and correct me if I’m wrong, if I overstate. I would imagine that those managers that are provided authority before they get to the partner table are much more engaged, much easier to retain, and likely become more effective partners down the road.
Yep, that is absolutely correct.
What do you recommend when, so you put the parameters and all of that in place. Do you all do any training? Is it informal? Is it formal? Is it shadowing? How do you help your managers? Because one of the things that I hear so often is, well, managers, they’re just young, they don’t know how the firm runs, they’re not sure how to run the business. For what it’s worth, I’m not convinced that all partners even fully understand the business side of it sometimes, and that’s, again, that’s an observation, not a judgment. How do you help them get ready to step into that role? So beyond the parameters, what are you doing to develop your people to be business decision-makers within the context of the firm, not just advising their clients?
Well, first of all, we help them draw the parallel between advising the clients and running the CPA firm as a business. I mean, sometimes that doesn’t dawn on people. It’s like a light bulb sometimes. But then we also provide training beyond just the required continuing education. We understand technical training is important, obviously, or we can’t provide the client services, but we make sure that our staff level people, as they move up through the ranks and become managers, that they have the tools they need. We utilize CPAmerica resources, Upstream Academy resources, other outside types of leadership training, and that—because our culture is kind of built around the idea of high-performance firms, it all kind of speaks the same language.
We find that really helps them to understand more about the business of a CPA firm, versus technical skills, which, like I said, are important, but it’s not the only thing. We also include all full-time managers in monthly meetings that we have about the management of the firm. And a lot of that has to do with the fact that they’re much more connected to the rest of the team than maybe the partners are. Although we do still have a lot of one-on-one contact with the team. But we get a lot better insights about personnel and training and concerns from the manager level people.
Okay. Is there a point where you have found that maybe it’s an experience level, maybe it’s based on background where people are kind of ready for that decision-making type of training. Is there, can it be done too early? Can it be done too late? Kind of what’s the sweet spot that you’ve found where it’s kind of the right level of experience to get somebody into the decision-making process, understanding the business aspect of the firm, but it’s not overwhelming where they’re still trying to figure out what does it mean to be in public accounting?
Yeah, I think they have to have a certain—I can’t necessarily put a years of experience number on it because everybody’s different. They have to be at a minimum on the cusp of becoming a manager. If it was up to me, we wouldn’t have titles.
Right. We’d have roles.
That’s just me. But we only basically have four levels. We have staff, senior, manager, partner. So you can spend quite a bit of time as a senior as you gain experience, good, bad, or otherwise, some people chase the title. But I think they have to be very close to being a manager. And at that point, in our firm, that means they’re already handling client relationships. They’re the primary responsible person for a client relationship. They maybe are already doing a little bit of billing, which in and of itself is a decision-making process. They’re very astute in their technical area that they’re working in and developing. So, I think that probably means at least five years of experience, maybe more for some people. And it really just depends on their personalities and how they react to adverse situations, because that comes up when you’re doing those kinds of activities and making decisions and how they react to change and new developments and new information.
Yeah, well, and so you mentioned something there that I think is really important that I want to call out for everyone is that they’re already technically proficient. That doesn’t mean that, you know, at the world-class level or anything, you know, but they’re not worrying about the technical side and trying to make sure that they understand how to do their job. So they’ve got that extra capacity, if you will, to then take on the decision-making aspect of the firm. And that’s a really important area where it doesn’t become overwhelming, because if somebody is still struggling technically to become proficient, it’s really hard to then say, by the way, you’re still learning how to do your job, but we’re also going to give you business decision-making responsibility that impacts the firm. That can be very overwhelming and can be, I would imagine, counterproductive.
You mentioned at the end of that, I want to go one more direction here in our conversation, and you mentioned that you’ve got to be able to respond to adverse situations. It seems to me that if there’s no time for maybe, we’ve got to make decisions rather than simply overanalyzing and analyzing and analyzing. There’s never perfect information. One of my very favorite books on this topic is Thinking in Bets by Annie Duke, which is all about the idea of how do you make decisions when you don’t have perfect information, which you never have, so that’s all the time. If there’s no time for maybe, you’ve got to make a decision, arguably faster rather than slower. What happens and what do you teach your folks if you make the wrong decision? What do you do next?
Well, we start early with that when they’re first starting to get direct contact with clients, and we tell them it’s okay to tell the client “I don’t know,” but you have to follow it up with “but I will find out,” and then you have to find out and get back to the client. Many people, when they’re learning their profession, whether it’s accounting or whatever it is, they’re just afraid to admit that they don’t know something.
Gotta be seen as an expert.
Yeah, that’s right. And we just make sure that they know it’s okay not to know the answer. It’s better to say “I don’t know the answer” than it is to give some answer that you think might be right, but it’s not. So, we start with that, and then when we do tell them to start making decisions, and give them the ability to do that, we also let them know that it is okay to make a mistake, but we need to be able to quantify what that mistake might cost, what kind of resources it might take. And again, that’s where giving them some guidance on how to go about gathering the information, how much and what type of information to pull together, and really just being available for them to talk through anything that they’re not sure about as they’re working towards that decision.
Well, and being able to quantify what’s the risk of the bad decision. It’s not to say that you can’t make the wrong decision. We’ve all made the wrong decision at some point about something. One of the things that’s nice about decision making, especially in public accounting, is we’re not a profession that’s life or death. So, if we make a bad decision, generally speaking, we can make another decision to improve it. But to your point, you want to know how much is the second decision going to cost to account for the bad first decision. So if this is wrong, then what do we need to be aware of? But what that does is it helps them make a risk management decision then, right? And that’s what all decision making is in business at the end of the day, is it’s somehow balancing out risk. And if we think this is the best decision, what’s the downside that we might have to deal with?
And then figuring out how do you help them understand to make that second decision, right? So, let’s just go down that scenario real quick. Somebody makes a bad decision, they were empowered to make it, they realize after the fact, crap, that was wrong, got an outcome that I wasn’t hoping for, maybe it was spin, maybe it was a policy decision, whatever it might have been. How do you help them then make that second decision? Do you still give them full autonomy and empowerment to fix it? Is there a kind of, again, parameters? Is there something in there that says, well, if it’s a little issue, you go fix it, but if it’s big enough that now it’s impacting other people, we’re going to step in and help you. Talk a little bit about that from a leader’s standpoint: How do you put in those parameters?
Yeah, I think exactly what you said is that if it’s a little thing, give them the autonomy to go and correct it, maybe with a little bit more communication during the process, just to make sure they aren’t going down another bad path. But if the magnitude of it is more severe, and like you say, if it’s affecting other people, then I would still keep them involved in the decision process, but maybe be more involved myself, or have somebody else that might be better suited to that area, help them through the process.
One thing in my management style, I am not a micromanager. I pretty much, if I’m confident that somebody can do something, I assign it, and I expect them to come to me if they can’t get it done, or they have questions, or they need help. And like I say, I try to be as open as possible about making myself available for that sort of thing. But I do have to remember that sometimes people are afraid to come and ask for help, and if I sense that maybe something’s taking longer than it should to decide, I will go to them and say, how’s it going? What do you need? Where are we at?
Yeah, two really important points there. First, you just said that you don’t like to micromanage. Checking in is not micromanagement. So I think it’s really important to call that out. You’re willing to go in and say, hey, where are we at? Anything I can do to help move you along? That’s a really important differentiator that I think leaders at times get a little bit caught up in. They’re like, oh, if I check in, that’s going to feel like micromanaging. Micromanaging is saying, let me help you with every step. Checking in is what great leaders do. So it’s really important to differentiate that.
The second thing that I really liked that you said there, Kathy, is you empower somebody to make the decision, and even if they can’t be the one to fix a bad decision, you keep them involved rather than taking them out. So it doesn’t feel punitive, it feels like it’s a learning experience. “Hey, you got in over your head. That’s okay. I’m not just going to take you out of it entirely. Instead, I’m going to join you and help get through this. And you’re going to learn through that.” And that’s the great thing about decision making is you’ve got the opportunity to learn and make better decisions in the future. And I’m convinced until the day we retire, and then probably even beyond that, we’re still going to learn how to make better decisions every single time. It’s not like it’s a craft that can be absolutely perfected. Even once we think we’re one of the best decision makers, one of those other decisions comes along that really makes you think, I thought I knew what I was doing, maybe I don’t.
Yeah, absolutely. The other part about decision making, and about presenting your decisions, that I always try to get people to understand is that the better you understand your audience for describing your decision, or if you need to present like a couple of alternatives and the broader group makes a decision, understanding how that group wants to receive information. And that has a lot to do with the personality profiling and that sort of thing, and if, as a young, new leader in a firm or an emerging leader, if you can learn how to read other people and what their style is, how they want to receive information, that will help a lot in these kinds of activities and understanding. And it helps with dealing with clients as well. Some clients, they want to go through every line on the financial statements. Other clients just want to know what the bottom line is and how much cash they have. You know, and you have to learn that’s how you need to communicate with them.
Yeah, now that’s such an important point, and there’s so many different tools out there for that. DISC, Enneagram, Working Genius, there are so many different opportunities out there. But you’re right, the more that you can understand your audience, whether it’s communicating in a presentation or communicating around decision-making, it’s going to be so valuable, because how you communicate that decision oftentimes is what’s going to really determine how it’s received, because if you don’t communicate it in a way that resonates, you’re probably going to get a lot more questions than you would otherwise necessarily need to get. So take that time to learn the audience. I appreciate that.
Well, Kathy, let me ask you this as we wrap up: When you’re thinking about empowering young leaders and new decision-makers to be even better, are there any resources that you would recommend, whether it’s a book, an article, TED Talks, anything like that, that come to mind that you think every young leader needs to use this resource?
Well, there are a couple that were referenced by Sam Allred early on in our relationship with Upstream Academy that I found very valuable. One is Getting Naked by Patrick Lencioni and also his other, The Five Dysfunctions of a Team. That’s more about teamwork than it is about decision-making. And the reason I think Getting Naked is a good tool for decision making is because it does talk about the importance of being a helper and not necessarily having to know all the answers. The other book that I’ve read to the point where it’s falling apart is a really old management book called True Professionalism by David Maister.
Ah, classic.
And that gives a lot of insight, even in today’s world, into how a CPA firm runs and what you need to do to really understand how to work with people in that type of an environment. I mean, it gets into some of the operational metrics of a CPA firm as well, and I think it’s a good resource for that sort of information.
Yeah. All three of those books—spectacular reads. They’re on my shelf. I think I have more of those little sticky tab things, right, that you can mark pages in True Professionalism, than every other book I have combined. Like, it’s one of those, I have so many things marked I’m not even sure that, it’s like every page.
I opened my copy up the other day and realized that the highlights I put in there the first time I read it are fading.
Good reason to go read the whole thing again with a new highlighter.
Yeah, read the whole thing again. Yep.
Oh, goodness. Well, Kathy, thank you so much for joining us on The Upstream Leader. This has been such an enjoyable conversation. Lots of great takeaways for helping leaders in their decision-making and also in helping leaders understand how to delegate and allow others to improve their decision-making. So thank you so much for joining us.
Yes, thank you, Jeremy.