Your team is waiting for you to lead.

"Companies must put their people first * Yes, even before their customers. There. Now I've said it. I know it's controversial. It makes most people nervous just to hear it, but it works. Of course our clients are the reason for our existence as a company, but to serve our clients best we have to put our people first. We're not saying choose your people over your customers. We're saying focus on your people because of your customers." -- Hal Rosenbluth, CEO, Rosenbluth Travel, from his book, "The Customer Comes Second"

CAN YOU LEAD ANTS TO A PICNIC?

It's easy to identify the attributes of a great leader, but it's much more difficult to be one. You may be so technically competent at your job that you make heads spin all around you, but you still may be unable to lead ants to a picnic, let alone develop a superior vision that your team would actively follow.

In his book "The Contrarian's Guide to Leadership," University of Southern California President Steven Sample concludes that of all the different kinds of human capital, leaders may be the most rare and precious.

Rare and precious indeed! With leaders, the world can be changed. Without them, you might as well be drifting on a rudderless craft.

Leadership is an art, not a science. It's about moving people from where they are--in their comfort zones--to where they ought to be.

Leadership is soft and mushy. It requires people to deal with people--and people are messy. True leaders understand that people are not resources, especially in a knowledge economy.

Leading firms generate a buzz about them based upon the way they invest in their people. Their leaders are focused on developing, enhancing, improving and facilitating their people.

These focused firm leaders know that when they take care of their people, their people will take care of their business.

INVEST IN YOUR BALANCE SHEET

The No. 1 issue for CPA firms, according to all Management of Accounting Practice surveys, remains the acquisition and retention of people. This is as much a marketing issue as it is one of firm leadership.

Why should someone invest in your firm? What return on investment does your firm provide?

If you don't have solid answers to these questions you need to institute an effective leadership program.

Do you want to attract the best talent and enhance the quality of your professional and personal lives? Then risk leaving your comfort zone and risk being presented with your personality flaws to make your company a better place.

Being a leader means putting yourself and your skills on the line for everyone to see. By so doing, you-and those around you--may realize it is your leadership skills that need improving, but you're showing the firm and the team that you're willing to work on those skills.

Leadership requires you to invest in your balance sheet. Your income statement represents what you already have done; your balance sheet represents where you are going.

You can't change your income statement, but you can change your firm's direction by investing in your balance sheet of skills, attributes and abilities, as well as your intellectual, social and human capital.

STRUCTURAL CHANGE

One of the first steps in implementing a leadership program is to recognize that the pyramid structure of the professional services firm is dead.

CPA firms no longer sell hours or leverage people. That model evaporated about two recessions ago.

Today, leading firms recognize that they leverage and sell intellectual capital, which is comprised of the firm's human, structural and social capital.

Human capital is your employees-their bodies, minds and abilities. As a leader, you must find those people who can bring the right combination of qualities to move your firm forward.

Structural capital is all those things that stay behind at the end of the day, such as equipment and client lists. Think of structural capital as the tools your team needs to succeed.

A good leader knows that investment in this type of capital is just as important as an investment in human capital.

Social capital is made up of the connections your firm has made with the community through your customers and networking. This network is something that good leaders can tap into when problems need to be solved.

Good leaders need to recognize who in this network can do what and then match those people with the problems that need to be solved.

But these problems don't necessarily have to deal with the organization.

These connections, leaders realize, are part of the firm's package that it offers existing and new clients. So, if a client has a problem that a leader may not be able to resolve, that leader can tap the firm's network of connections to find a solution.

When most firms convert their competitive structure from the old model to the new model they recognize that their leadership development lags. Yet, these same firms cannot afford the luxury of a long-term leadership development program. Nor can they generally afford the premier consultancy houses that can jump-start a leadership development program.

Therefore, most firms succeed by instituting a mentoring program that is combined with personal development and a change in the firm's performance measurement processes.

So, rather than simply rewarding your team members based solely on the number of billable hours they record, reward them for other things they are doing--such as helping others--that advances your firm.

Think about mentoring this way: If you read every one of Tiger Woods' articles and books, you'd probably improve your game. Or, you could play a round with Tiger. Which way would you learn more?

It's the same thing with our profession. We can read all we want about a topic, be it how to handle an IRS audit or how to answer customer questions, but our understanding of the issues improves when we watch experts perform.

IT TAKES TEAMWORK, INVESTMENT

Don't be mislead, though. Mentoring is much more than allowing less-experienced professionals to tag along with partners and managers.

It requires your entire leadership team to be dedicated to the principles of mentoring, which include, but not limited to, time and resource investment, and being able to measure how mentoring is working. Without this dedication, programs usually fizzle.

And for smaller firms, mentoring is not limited to the DNA of your firm. Allow people to go outside the firm to find their mentor, if necessary, to allow them to reach their fulfillment.

Establishing a mentoring program requires an investment in time and resources, both from the mentors and the mentees.

Mentoring sessions need to be regularly scheduled to provide consistency, but mentors also must remain somewhat flexible. You never know when mentees will need to talk or will seek some guidance. If you don't make that time available, that sends a message to the mentee that the situation is unimportant to you.

The amount of time invested in mentoring will be different for each mentor-mentee relationship. When the relationship is established, the mentor and mentee can arrange a schedule that works best for each of them.

And because true mentoring relationships cover both professional and non-professional aspects, trust between those involved is paramount. Mentees need someone to bounce ideas off of, to talk about life, to shoot the breeze. You'll find that topics will cover everything from buying a house to issues with kids.

Because of this, a mentor is someone a mentee can trust and talk to about everything that's going on in his or her world. Violating this trust will destroy a mentoring program. This trust can be broken in a variety of ways, including disclosing the information discussed without the approval of the mentee, using information learned in these discussions for your personal gain or not making time for the mentee.

MENTORING EQUALS COACHING

Mentoring is like coaching. And coaches are not jealous or envious of the success of those they coach. In fact, the best coaches are the ones who derive tremendous pleasure from seeing their players succeed.

The best mentors and leaders realize that their job is to help their mentees succeed, so when that success comes, they step aside.

A good leader realizes that a mentee's gain is also the leader's gain--and the organization's gain.

Also like coaches, mentors are tough when they need to be and are soft and caring when necessary.

For example, the toughness may come into play if the mentee is having trouble with something or did something wrong. A good mentor will acknowledge the mistake, but then will work with the person to fix the problem.

But sometimes, the mentee just needs to talk with someone about his or her children, or about other personal issues, and the mentor will have to be there to listen, to care and to help.

Coaches articulate the dream and help their students visualize the possibilities. Coaching is 10 percent teaching and 90 percent emotion. Why? Because humans are emotional animals and there is personal and emotional involvement in the mentor-mentee relationships.

Take away the emotion and you weaken the relationship between the people involved.

A mentor focuses on:

* How can I make things operate better?

* How can I create opportunities for people to better use their skills?

* How can I help people save time, increase their ability to accomplish tasks and move obstacles that are interfering with their success?

Mentors dare their charges to become the best they can be and to take risks to create a better future.

If you haven't had the joy of being well-coached, search for it, Knowing that a caring person is thinking of how to assist you to become the greatest that you can be is a feeling rarely duplicated in our lives.

EVERYONE PLAYS A ROLE

Establishing a mentoring program does not guarantee success. For success to occur, every team member must actively participate in the mentoring process. The more senior your team members, the more their compensation and promotions should be based on their active development of other team members.

If you reward employees based on technical competency and objective criteria, such as billings, your lip service to the development of people will be as clear as the noon day sun in Death Valley. Without teeth to demonstrate that the firm is serious, your program is doomed to fail.

MAKE IT REAL

A fast and inexpensive method of developing your team's leadership abilities is to invite them into the thought process of how the firm operates. Help them understand the decision-making processes and the challenges associated with determining the firm's direction. Bring team members into decision-making meetings where they can understand why and how decisions are made. This will provide them with insight and also help them feel like they are a part of the mission and vision of the firm.

Otherwise, they will come up with their own conclusions as to why decisions are made-which will likely be different from the actual reasons-and they will not have that personal connection to the firm.

Some people will understand better and contribute more than others, but if you start investing in their development and reward them for their efforts and improvements, your firm can improve its function and profitability because communication barriers will disappear. Accordingly, process improvements that you thought time management and new hourly billing programs would deliver will show up. Not because your team is necessarily working more efficiently, but because they are working more effectively.

Leadership is tough. It is even tougher in difficult times. Yet, forgoing the development of your team places you and your firm on the lower end on the profitability and happiness scale. Lift up your firm by becoming a catalyst for change.

Prepare your firm for a future that rewards the right things, for the right reasons.

Daniel D. Morris, CPA, is co-founder of the Bay Area-based VeraSage Institute, a think tank dedicated to promoting value pricing and values integral to human capital development. Morris can be reached at [e-mail].