What can derail a succession plan even when a firm has people who could eventually lead it?

In part two of Rob Brown’s conversation with Ira Rosenbloom of Optimum Strategies, they dig into two places succession often gets stuck: the expectations current partners place on their successors and the way partners are compensated.

Ira explains why future leaders need room to learn on the job, why partner compensation has to reinforce the firm’s priorities and why staff benefit from understanding the business behind the firm.

They also look beyond internal succession. Ira shares when firms should start assessing gaps in their leadership pipeline, why five years of planning is good but 10 is better and how operations and HR professionals can play a larger role in building the next version of the firm.

Missed part one? Start there for Ira’s case for beginning the succession process long before retirement.

IPA will host a live Q&A on Sept. 24. Rob and Chelsea will answer questions about the 2026 data and the leadership issues explored throughout the series. Set a reminder by clicking “Notify me,” then leave your question in the comments.

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Welcome back to part two of my conversation with Ira Rosenbloom. If you haven't listened to part one already, make sure you check that out as well. Now let's jump straight back into the conversation. One of the challenges is partner consensus, Ira. I I interviewed Mark Koziel, who's now head of the AICPA, as we know, and very outspoken, smart individual. And he said the managing partner model, the traditional partner model, is dead because partners cannot be managed. And it is really difficult to get agreement because they get stuck.

when talking seriously about things like succession because there's economics, there's authority, there's comp, there's timing, there's client transition. where do you feel they get stuck the most?

I think they get stuck the most in two places. One, the aspect of what does it really take to handle a book of business? What are those expectations? Many of these people hold people to a standard that they couldn't pass the test themselves. That, you know, they feel that after having been a partner for 25 years, they're as close to perfect as possible. Well, that's not true. There is no perfect.

practitioner, but there are great practitioners. And they just hold people to standards that are unrealistic. And you can't people learn through failure. They certainly learn through things that are not failure, but you have to permit people to fail. And accountants historically have been so critical that that criticism invades the ability to see potential. And that is a huge problem

To deal with in terms of creating the internal succession model, you have to give people the opportunity to grow and evolve and make mistakes and remember what it was like for you. I think the longer you go in this process, the more corrupt your memory becomes. And you think you were also an all-star on day one. You never were. And so I think that that is number one the thing that bogs them down. Number two, I think what bogs them down is the whole comp structure.

There are so many firms that are challenged by what's the best way to handle compensation and how do we get everybody rolling in the same direction. And I think that that issue has to be resolved before you move into any type of succession. We all have to agree on what the priorities are for the firm to achieve.

recognizing that everybody can contribute to it. It's it's almost like a baseball team. The goal is to win the game. But the shortstop plays a different game than the first baseman does. And you can't win without having both of them on the field. But we all have the same goal, which is to win the World Series. So getting them to row in the same direction, money matters, and people feeling that there are there's equitable

Concepts at play matters, and too many firms are not doing a good job with that. That is a fundamental issue in terms of creating that. And if the and if someone is unhappy as a partner, I'm sorry to say this, they tend not to keep that to themselves. They wear their feelings on their sleeve, and then the manager and the senior, why is that person so unhappy? And then ultimately he or she says, Well.

You know, we I just came out of a comp meeting and you know, I'm not that happy. Comp is key. That's what I see.

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the link in the show notes. Now back to Rob and Ira.

Yeah, that makes sense. We often think of succession as a people issue, but you rightly draw in a straight line between the people and the commerciality, the the profitability and performance. That some managing partners don't see that and it's all about the people.

Correct. Look, we're all in this business to make money. We make money by taking very good care of people. People on both sides are internal people and the external people. But the idea is to make money. And some years we make more money, and some years we make less money, but that's the beauty of business. Business is a continuum. It's not just a transaction, it's an ongoing life in and of itself. And I think that

Too few people who join accounting are introduced to the concept that this is a business. And there are many smaller firms, firms that are, you know, between two and ten million, who are apprehensive about sharing data with their personnel for all kinds of reasons, some of which are solid and some of which are not. But there is some data that you can share so that you can get people to recognize.

That this is a business and there is a continuum. And this is where you should want to be. Whether we're the right business for you, well, maybe there's a different firm that's the better business for you. That may be where the personality component comes in, because different folks have different chemistry. And that's why there are a lot of different businesses out there. They're they're not the same.

That's relevant, Ira, because for some firms there isn't a viable internal path for succession. So when should those leaders begin exploring some external succession options?

I think there's a couple of pieces to to that response, Rob. I think number one, you look at the architecture of your farm, and if you have staff and seniors and you have a need for managers and you can't see the seniors moving quickly to manager, you need to use that as the prod. Now that's the people part of it that you're looking at the

the the landscape and saying we're we're just not we have a void that's one part of it and whenever that is that is the second thing is you've got to look at when the partners themselves are thinking they would like to be able to slow down or retire and then move the needle five years back. So if people are saying I'd like to be able to do this in five years you got to start now. Ten years

even better because people will want to slow down. People will want to transform. And why not? I will tell you this that I have seen many founders of firms who have merged into other firms later in their career flourish in the last chapters of their career because they didn't have the obligations of hunting for staff, scheduling the work,

They just became more brilliant at their technical area and they were happier people. So the aspect of wanting to slow down, yeah, because I'm now slowing down. I'm going to eliminate all that admin, but I can now just work on clients. Tell me where to sign up. And I think that that is the role change. That is something that we have to be able to create. So you're looking at your team and you're also looking at yourselves and saying, what is my timeline?

It takes a while to do it and the buyers will be changing, you know, every couple of years there's gonna be different kinds of buyers out there. So if you know what would potentially make sense for you, you wanna entice that buyer now, because five years from today that buyer may not be there.

One of the biggest takeaways I've got from this conversation is that firms have more options when they start planning earlier. And you're I know you're an advocate on rethinking succession and getting into the game earlier because whether it's developing future leaders, preparing for some kind of internal transition or maybe even looking at those external opportunities, succession seems to be strongest when it's part of a long term strategy, not a last minute event. That's what we're learning here, isn't it?

There's no question that crisis does not produce a good result. be a miracle. I think the more time you have, the better. And again, look at that business. It should be something that you love. Your firm should be something you love. You've helped build it. Now, what do you want to see its future be and and how robust do you want it to be? And will you be open-minded about that? I think one of the beauties that we now have.

in this time period and probably over the last five years is the ability to turn to people who could be the director of operations who are not CPAs. Turn to people who could be your HR person who has been a school teacher or a career coach or an industrial psychologist and have them on your team. But most importantly, make them partners in the firm so that they can enjoy the ride

And we can create the 2.0 or the 3.0 version of the firm, which is not the same old. It's something new, preserving the good things from the old, but adding the new features to it. And I think that that is something that again, you can't do that overnight. You have to ease your way into it. But those type of nuances will create even better options.

For that firm as it moves forward. So it's not just starting sooner, it's making smart business decisions. That is essential. The accounting firm is a business and it's a great business, but like any other business, you got to take care of it. We know many of you this podcast on the go. Driving to work, working out,

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the app store. Yeah. And these firm leaders they've got to be thinking about things before they become urgent. They might be important now, but they'll become urgent down the line. And these things, these important things, they've got a significant impact on the firm's enterprise value, that continuity, that long term success. So important before urgent, right, Ira?

There's no question, important before urgent. And I think the the more that these leaders speak to other people like themselves who may not be CPA firm owners, like I encourage people to participate in entrepreneurial support groups so that they can change trade ideas with a manufacturer or a distributor of a similar size company. The ability to have that perspective.

Isn't just important to help your existing clients, it's to help you grow as a professional in and of itself. Because entrepreneurs typically get it faster than the CPA farm ownership gets it. The the entrepreneur sees that value in the continuum. And the history has been more so in the past that the entrepreneurial businesses have have been sold at a greater clip than CPA farms. Now in recent years, CPA farms are really catching fire.

Yeah. You're watching or listen Ira Rosenbloom of Optimum Strategies here on the INSIDE Public Accounting Podcast. Thank you to all of you for checking into this episode. Be sure to subscribe so you don't miss future conversations on our 2026 practice management data series. Ira, I want to thank you so much for sharing your passion and your insights and flying the flag for thinking about succession a lot earlier. We appreciate your time today.

Thank you so much. Always a treat. Thank you.

And in our next episode, we're gonna turn our attention to talent strategy and explore how firms are attracting and developing and retaining the people who are gonna shape the next generation of leadership. Until next time, thank you for watching and listening. If you're enjoying this podcast, then click below to subscribe and check out more from IPA.