Leadership, strategy and implementation – all three needed to drag Grant Thornton forward

Leadership, strategy and implementation – all three needed to drag Grant Thornton forward

Kevin Reed, engagement and communications consultant at Foulger Underwood, discusses how the fortunes of Grant Thornton can be turned around.

In the last few days we’ve seen more developments in the ailing fortunes of both Grant Thornton and KPMG. The former has seen 12 partners leave, while the latter is going through a zero-based budgeting plan named ‘Project Zebra’.

They do say that it’s ‘darkest before dawn’, and leaders in both the firms will hope that such measures will set about momentum to improve its partner profits and move into the light.

This isn’t the first time that either firm has gone through cost-cutting measures, but let’s focus on Grant Thornton in particular, and the leadership and management required to turn it around.

Recent history has shown that vision and charisma aren’t enough to steer a major accounting firm forward. Sacha Romanovitch’s spell as CEO at the firm was certainly high profile and headline-grabbing. In particular the so-called ‘shared ownership’ model that was initially espoused drew a lot of attention towards the firm, alongside a purpose-led approach to support a ‘vibrant economy’, certainly drove differentiation and a strong brand.

Multi-pronged approach

However, in reality it wasn’t so much shared ownership but instead a more democratic profit-sharing approach. And while the image of Grant Thornton, focused laser-like through Romanovitch, was impressive, driving meaningful change through the firm appeared to hit an impasse.

Such change within a partnership requires a multi-pronged approach. Strategy must be built at the top but inclusive of as many partners as possible. The skills of diplomacy and persuasion are paramount.

And then comes organisational change and project management. Investment in change requires a strong resolve – particularly if partner profits are hit in the short-term. Such change will inevitably have a cultural aspect as well – certainly in terms of Grant Thornton’s recent direction of travel.

It requires setting the tone at the top – but in the case of GT, this had to cascade down beyond Romanovitch. Altering the firm’s fundamentals while seeing profits squeezed was always going to be risky. Adverse headlines around its Patisserie Valerie audit work has certainly hurt the practice as well.

Come through tough times

As I suggested at the start, Grant Thornton has come through tough times before. The two-term tenure of Scott Barnes saw dual efforts – integrating RSM Robson Rhodes into the fold, and then setting an ambitious set of revenue targets. Barnes’s background in turnaround saw the firm achieve its goals.

It is therefore no great surprise that new CEO David Dunckley has a background in turnaround.

Making tough decisions, setting a clear set of goals alongside strategy and leading their people are all things practices must face. But not many will succeed in their own practices, let alone face the task in a £500m firm.

Kevin Reed is engagement and communications consultant at Foulger Underwood

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