PracticeAccounting FirmsOverview: Is Connolly out of time?

Overview: Is Connolly out of time?

Deloitte’s chief exec has little time to rejuvenate the firm

What does John Connolly do next? The senior partner and chief executive of
Deloitte has just reported the worst set of results since he took over leading
the firm. He’s reached some major landmarks in a remarkable career. So now, in
the time he has left at the top of the firm, he has to forge a way forward.

What happened?

Two weeks ago Deloitte reported their results for the year ending May 2009,
the first Big

Four firm to offer such a current insight. The news was not good.
Year-on-year the firm had shrunk 2% to £1.97bn, a clear sign that the recession
was hurting. The industry expects the other firms to be suffering too, but
Deloitte’s results are especially poignant because the negative growth comes
just a year after Connolly managed to pilot Deloitte to his own personal target,
set in 2006,of pushing the firm through the £2bn revenue mark.

The recession has dragged Deloitte backwards pulling the revenues below that
level.

Connolly will dismiss the target publicly even though he acknowledges it has
been hard times. But he did make a big thing of £2bn internally,even going so
far as to have miniature ‘two in two’ statues made for the partners to keep them
focused on the goal.

What happens next?

Connolly has until 2011 to turn things around, when his term ends, though the
current year is certain to be difficult as well.

It’s worth bearing in mind that Connolly already has major achievements under
his belt – not least the merger with the UK practice of Andersen, the firm
brought to its knees by the Enron crisis. He is held in some admiration by
senior partners in other firms for bringing Andersen on board and catapulting
the firm’s revenues overnight from £800m to £1.5bn, and taking the number two
slot in the UK.

Connolly is also remarkably resilient. He survived censure in 1995 by the
accountancy profession’s disciplinary body for his role in work connected to the
Barlow Clowes scandal.

Deloitte described the verdict as ‘unjust’ but he was forced to pay £40,000
in costs.

Privately there are many in the profession who will speak of their admiration
that he managed to navigate a way back from that episode and go on to build a
highly successful career. Compared to that, steering the firm’s performance back
on track should not be too stressful.

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