Highly accountable featuring Jim Redpath and Mark Gibbs with HLB Tautges Redpath

Written by John P. Palen for Minnesota Business Magazine December 2012

Jim Redpath, managing partner at accounting firm HLB Tautges Redpath, recalls the day that audit partner and shareholder Mark Gibbs called him out in front of the team for being late to a meeting.

"You're 10 minutes late, Jim," he said. "How can we start this meeting if you're not here?"

Gibbs wasn't fired. In fact, this episode was part of the paradigm shift that has helped the accounting firm realize a 21 percent increase in revenue since 2008 while most accounting firms have remained flat.

But let's back up a few years. In 2003, the White Bear Lake-based firm made a bold move as one of the few public accounting firms in the country to convert to a 100 percent employee-owned business structure. The ESOP structure solved partner concerns about succession, but was also the first step in rethinking how performance and accountability tied to compensation.

In theory, everyone loved the idea of becoming owners. But when the reality of new responsibilities and processes set in, the road was bumpy even at the top. Jim Redpath wasn't the most consistent rule abider; in fact, he preferred leading from the hip. While this style garnered respect and results over the years, the wake-up call from Gibbs helped Redpath see that good leaders must walk the new talk.

"I had reprimanded the team about missing meetings and showing up late and unprepared," Redpath says, "but if I couldn't model that behavior myself, then we weren’t going to succeed."

Success also couldn't come solely from the rainmakers, Redpath added. "We have balanced the focus between rainmakers and producers." Rather than just reward the rainmakers, the firm rewards other team members for getting and keeping clients through marketing and excellent client service.

The firm also encouraged employees to stick to personal marketing plans that hold them accountable to nurture leads and increase firm visibility. Non-billable activities such as speaking, niche service how-to articles and sponsorships are highly valued to "be with customers where they hang out," Redpath says. Throughout the process, turnover has been surprisingly low.

While this strategy is not rocket science, it's a paradigm shift from complete reliance on referrals to proactive, whole firm business development. "It's an all-about-the-client attitude," that extends to how clients are billed, says Redpath. Rather than being on the clock, the firm has moved to a project-based fee arrangement with clients in order to show a higher value for their services.

To expand the paradigm shift, the firm has systematized many expectations and processes so that new employees quickly buy into roles and expectations.

Gibbs, who also serves on the board of directors, noted that maverick Redpath is a convert: "He is a rule follower regarding accountability to internal operations and procedures. He's big on systems. No one misses a team meeting anymore."

This doesn't downplay innovation, however. As one of the first public accounting firms in the country to go paperless in 2000, HLB Tautges Redpath has retained key professionals who can work remotely from the firm's headquarters without missing a beat.

Getting complacent with the status quo, after all, seems to be the commodity death knell for professionals, evident in firm consolidation. "When you're finished changing, you're finished," says Gibbs.

In fact, that's strong advice for anyone in business to keep on the break room bulletin board - and model it.

Tips for Accountability

1. Document individual roles and expectations for clarity and tie them to the firm vision.
2. Every principle and partner should be able to recite the status of the sales pipeline.
3. Create personal marketing plans for key employees, accountable to the marketing department and endorsed by senior leaders.
4. Share and distribute compensation among the entire team that contributed to obtaining or cross-selling new business.
5. Never come to a meeting unprepared to contribute.