Since she is in the headlines on a daily basis, there must be great merit in studying the Prime Minister in an effort to improve our own businesses.
First and foremost, and this is probably the only indisputable statement in this article, Theresa May is a woman. Therefore, in an industry where equality is often little more than a vague aspiration, the gender-oppressed half of profession might gain hope from the fact that this country has at least as many female Prime Ministers as female managing partners of major firms. Indeed, depending on your definition of a major firm, we may have more female Prime Ministers.
The big question is whether we should run our partnerships in the same way that she is controlling the country? That is a moot point. It is not the lady’s fault that she has inherited a system where the board of management is divided between opposing factions. Arguably, the fact that even her own faction is deeply split is another matter.
Somehow, rather than taking back control (now there’s a phrase) and picking one side or other, the PM has chosen to offend the whole of the board by walking a tightrope while sitting on a fence to mix metaphors.
Then we come to the planning and negotiating elements of the job, where one could compare her efforts with accountants attempting to run their businesses effectively.
It might be helpful to use a couple of examples. First where our firm’s lease is about to run out and we either need to negotiate a renewal or find another property. Then a fee negotiation with our largest client.
Mrs May would probably introduce the following strategy when a practice is about to decide on a 10-year lease of premises from which to operate.
Initially, the managing partner would approach the current landlord and say that unless they halve the rent, we will give notice. She would explain that she has not discussed this matter with her fellow partners but was sure that they would come on board. After some argy-bargy, she would then sign a legally binding agreement to vacate the property and pay significant compensation to the already indignant landlord.
Only at this point would she approach the executive team running the partnership, let alone the partners at large, to determine their views. Having done so, and discovering that they regarded her plan as wholly unacceptable, she would revert to the landlord and tell them that we would now vacate the property but not pay any compensation at all.
Through all of this, she would make no plans for alternative accommodation.
This sounds like a brilliant strategy. Can anyone see a problem?
The Major Client
Using the same underlying principles, a managing partner could do a fantastic deal with her biggest client. Let’s assume that the work in question involves full service, including audit and tax compliance plus agreed charge out rates for consultancy.
As an opener, the managing partner would initiate a meeting with the client’s CEO or CFO at which she would agree on terms for all of the above at a massive discount to standard rates and embody this in an engagement letter signed by both parties.
Only after that, would she discuss the terms with her executive committee. Much to her amazement, even though she knew that colleagues were far more hawkish, the good lady would have the terms agreed rejected. She might then be obliged to revert to the client and explain that rather than the fee rates agreed, the firm would be charging 50% more. Therefore, the parties would have no choice but to tear up the engagement letter & a new one.
Yet another brilliant solution.
The good news is that the way things are going at the moment, Theresa May could be on the market before the end of next month and there is likely to be a frenzy as firms of accountants sack their existing managing partners and seek to recruit somebody with these unique skills.
Before anyone claims that this article is anything other than politically neutral, its writer would have exactly the same reservations about Jacob Rees-Mogg or Jeremy Corbyn, let alone anyone of a varied assortment of political leaders in far distant lands.
About The Imprudent Accountant
Someone who should know better, but can't resist the occasional rant about the more exasperating aspects of the accountancy profession.