Technical Brilliance Isn't Enough: Building Real Leadership Capability in Accounting Firms

Mark: Hi everyone and welcome to another episode of Accounting Industry Insights with Mark Holton. It is indeed my pleasure today to introduce you to Kylie Denton. Kylie is a highly experienced financial consultant, bestselling author, dynamic speaker, and the founding director of Performance Advisory Group, specialising in leadership and sales within the financial services industry. With over 33 years of experience in the financial services industry and formal qualifications in organisational psychology, Kylie brings a unique blend of expertise as a former financial adviser and professional certified coach. Kylie is one of Australia's most trusted thought leaders in sales and leadership within the financial services industry, renowned for her ability to influence and embed lasting behaviour change. She has successfully guided thousands of financial professionals and senior leaders to achieve outstanding results. Passionate about driving growth and success, Kylie is dedicated to helping leaders excel in the financial services sector. Welcome, Kylie.

Kylie: That was far too long! I actually thought that after 30 years I was stopping counting, because that would really show my age.

Mark: I tried that line too, Kylie. In my case, it didn't work. So Kylie, what are you seeing in leadership in professional services firms right now, especially those in the accounting and advice game?

Kylie: It's interesting. I was actually on a panel for CA a couple of months ago and was sharing some of the things I'm really seeing in the accounting space. What I'm seeing at the moment is a real leadership breakdown. There are technically strong people who are great at what they do being promoted into leadership roles because of their technical capability, not necessarily their leadership capability. We drop them into that role and expect them to know how to lead people. We expect them to know how to manage underperformance, lead change, build engagement, and drive innovation, but none of them have actually been developed. What that creates is a whole lot of overwhelm for those leaders. They are really good at their job, but they start to feel genuinely incompetent at leading their people. They are operating like a high performing individual as opposed to leading a team. So technically we have these really strong teams, but we do not have strong leadership.

Mark: It is really interesting. I have often thought that in an accounting firm, the way to become a leader is to just hang around long enough. And if you are good enough, that opportunity will eventually arise. But have you been trained? Have you been developed? Have you had time to practice? Have you learned from previous experiences? I was with a firm just recently who said their managers are very good at communicating with their clients, but not so good at communicating with their own teams. So I think it really is a challenge. Why do you think technically strong people, and let's be honest, in our industry the technical side of things is well and truly covered, why do they still struggle when they step into a leadership role?

Kylie: It is an entirely different skill set. As an individual contributor, as someone seeing clients, the client needs you to be technically strong. As an individual it is about execution, control, and delivering an outcome based on what that client needs from you. It is quite straightforward to achieve. But when we step into leadership, we are actually dealing with people who all need to work together, to row in the same direction. People are complex. We come from different backgrounds, different cultures, different ways of communicating. As a leader, that means I need to be a good communicator, strong in emotional intelligence, a good influencer, and someone who can help drive the right outcome. They are two very different skill sets. Leaders have the technical skills, which is great for guiding, developing, and coaching. But in a leadership role it is about driving the boat in the right direction to achieve that north star. That requires an entirely different set of competencies.

I actually think it is not just a skill shift either. It is a mindset shift. When I work with leaders moving up the ladder, from manager to senior leader to GM to CEO, the shift is that it is no longer about the doing. It is about guiding and influencing, getting people to do the things that you no longer should be doing yourself.

Mark: Leading on from that, to be an effective manager in an accounting or advice firm requires a whole host of skills that many people have never practised or been educated in. What skills do you think this industry generally struggles with when it comes to leading people?

Kylie: The research on this is really interesting, and my background in psychology means I love that part of it. What we know is that when you move from a technical role into a leadership role, you actually need around 25 different core competencies. You need to be able to communicate with clarity, conciseness, and conviction. You need to be able to lead change, because that is something organisations are constantly dealing with. You need to know how to delegate effectively, how to hold accountability, and how to build a high performing culture within a team. You need to be able to provide feedback and manage underperformance.

These are the things we expect leaders to be able to do, yet no one has ever shown them how. Most of us have grown up in business by simply observing what our managers did. We either liked it or we did not, and we copied it or we tried something else. Sometimes it worked and sometimes it did not, because people are different.

The good news is that there are tools, models, and frameworks for every core leadership competency. There are proven approaches for managing underperformance, leading change, communicating with clarity, providing feedback, and building high performing teams. We would not put a doctor, a dentist, or an accountant in a role without giving them the technical expertise to do it. Yet we put leaders in a role and say, well, you should just know how to do that because you are now a leader.

Mark: I see it all the time. Most organisations do not handle that transition well. It is either a sink or swim approach, or they say the person has only been in the role six months, let's just give them time. But what support have you actually given them? What tools, training, or development have you provided? Most will say none. So are we just waiting for them to fail? We would not put an accountant in a role and say, let's just give them time to figure it out without any training. It is a different mindset shift for business owners too, to ask how do we actually set people up for success. Many see leadership development as a cost rather than an investment.

Kylie: We absolutely need to see it as an investment. You touched on delegation as well. I actually wrote a book a few years ago on how to delegate to empower employees, and it became a bestseller within 48 hours because so many leaders want to delegate but do not know how. Many say to me, I can do it better myself. And I say, yes, but you could not when you first started. Delegation is not about getting work off your plate. It is about building and developing your people. It is about empowering them, building capability, and helping them feel more engaged and more productive. There will be some short term pain to get the long term gain, without a doubt. But in order for a business to be successful, leaders need to be focused on the things they should be doing, not the low impact work. And not only that, delegation means you no longer have a single point of failure. It is not just one person who knows how to do something. It becomes something the whole team knows how to do.

Mark: Absolutely. So Kylie, we spoke about human connection. What does that actually look like in the high pressure, performance driven environment of accounting and financial planning firms?

Kylie: This is probably one of the most misunderstood concepts, and I will talk about it from two angles, human connection with clients and human connection with our people. We often think that connection takes time, but in reality it is not about quantity, it is about quality. We often think that the more knowledge, advice, and technical concepts we give to our clients, the more we will connect with them. But what clients actually want is connection. They want trust. They want us to ask better questions, to listen, and to genuinely understand them. Whether you are a leader or in front of a client, the question is whether you are really connecting in a way that allows them to feel heard, understood, trusted, and connected, and to have their fears addressed. It is not about the time you spend. It is about the quality of that time.

Mark: Kylie, how are multigenerational teams changing the way firms lead and communicate? I mean, it was always better in my day, which is the dinosaur approach to management, of course.

Kylie: We are now leading four generations in our workforce, and within the next few years millennials will make up more of our workforce than any other generation. That is anyone roughly from 29 to 44 years old. Millennials and Gen Z want to be led differently. They want leadership that meets their evolving needs. It is not like when we grew up in business, where you came in at nine, worked hard, listened to the boss, and went home. The younger generations want different communication, more collaboration, more empathy, and more understanding from their leaders.

Rather than dividing people by generation, the opportunity is to understand that we have this rich tapestry of wisdom, knowledge, and experience that we can blend together and learn from. In the accounting industry, we have an older generation who may be content where they are, and a younger generation who want to move up. The question for organisations is how do you create that blend where the older generation mentors and adds wisdom, while the younger generation innovates and drives efficiency? When we understand and leverage what each generation brings, we are stronger together.

Mark: Something that has interested me over the years, and through our Young Guns events with Smithink and the upcoming Fearless Leaders workshop, is that we see a lot of young people who are very innovative and dynamic. They are not sitting back waiting until they are certain they are right before they speak up. They seem fearless, and also a little impatient. The old model of hanging around long enough to become a manager, and then longer still to become a partner, is not necessarily attractive to them anymore. Have you found that with the younger leaders you have worked with?

Kylie: There are two parts to that. The younger generation do want to climb the ladder faster than we did when we started out. I think that comes from the fact that we grew up in very hierarchical environments, where you started at the bottom, moved through the ranks, and waited your turn. What we know now is that people want a succession plan, and the younger generation want that clearly mapped out. That is critical.

The second part is that in order to attract younger talent, firms need to offer diversity, inclusion, flexibility, growth opportunities, and clear succession planning. We have to update our employee value proposition if we want to attract and retain the people who will help us innovate and grow. If we are not moving in that direction, we will not be able to build and sustain the kind of firm that thrives in the future.

And Mark, I sometimes wonder whether we got it wrong. Did we really need to work those long hours, five days a week in the office? Or have the younger generations actually got it right? There is a natural shift happening, and the question for every firm is, how does our business look in the future? Do we want to grow and scale, or are we happy to keep doing what we are doing and eventually pass it on?

Mark: That is interesting, Kylie. I remember the first firm I went to work with in Sydney. I was told where I would sit, which professional body I had to join if I wanted to remain an employee, and no one left until the senior partner left. I would challenge every day of the week how productive some of those people actually were in that last hour, simply waiting to be seen as committed. It was an authoritarian management style, and very early on I realised that was not the way I wanted to do business. But at that point you cannot really influence what happens. You either accept it or you move on. If you were advising firm leaders heading into the next two or three years, what would you tell them to focus on first?

Kylie: Can I give you two? The first is to make sure you have very clear goals and very clear strategies and initiatives to achieve them. So often I find that business owners know what they want, whether that is a certain level of revenue or a certain number of clients, but there is no clear plan for how to actually get there. How are we going to build our book? How are we going to drive that revenue? What strategies and initiatives are we going to put in place? So first, get clear on your north star. The second is to start building leadership capability, not just technical capability. How do you build that leadership capability so that you can lead into the future and get the very best out of your people? North star and people leadership capability. Those are my two.

Mark: Thanks Kylie, that is wonderful. We are just about out of time, and I have really enjoyed this conversation. I could easily go for another half hour on this topic. For anyone listening today who wants to get in touch with Kylie and have a discussion about their leadership style, structure, or how to make their practice smarter and more productive, how do they reach you?

Kylie: The quickest and easiest way is through LinkedIn. You can find me under Kylie Denton. You can also visit our website at performanceadvisorygroup.com.au.

Mark: Wonderful. Kylie, thank you so much for joining us today and sharing your insights with our listeners. I am certain there are accountants, partners, and emerging leaders out there who will find real value in this conversation, and I would encourage anyone wanting support in this area to reach out to Kylie. Thanks again, Kylie.

Kylie: Thanks Mark. Always a pleasure.

Mark: Thanks everyone for listening this month. Keep your eyes and ears open for the next episode of Accounting Industry Insights with Mark Holton, and also for the upcoming Fearless Leaders Program on the Gold Coast in October, where you will have the chance to hear from Kylie in person. Have a great month.