The final years of the ’90s will be interesting times for the Big Six consultancies and, as the old Chinese curse points out, this could be something of a mixed blessing. On the one hand, the firms are at the height of their powers: consultancies had a better recession than most, thanks largely to the huge upturn in public sector work, and are facing the end of the decade with full order books and respectable, if not exceptional growth.
But all is not rosy: there is a widespread acceptance among the Big Six that the end of the recession does not simply mean a return to business as usual. High growth rates are putting a strain on recruitment, and no-one wants to repeat the experience of the ’80s when over-enthusiastic recruitment compromised quality and bidding wars over salaries put pressure on fee rates. The pace of globalisation is also putting pressure on the Big Six. Although they are theoretically in a good position to take advantage of this trend through their branding as international partnerships, in fact the term is something of a misnomer. A background in tax and audit under radically different legislative and accounting regimes meant there was little historical pressure to standardise internationally, and the term “partnership” referred purely to the governance regime. As one (non-Big Six) consultancy principal put it: “Partnership meant a row of wooden doors, all shut.” Partners ran their practice groups as feudal fiefdoms, and true partnership, in the sense of sharing and co-operation, was notably absent.
Over the next few months we will be looking at how the Big Six and their rivals are reinventing themselves for the 21st century. We start with Price Waterhouse, which embarked on its journey in 1993, and decided the key to its future lay in a complete renewal of the company’s culture.
“Culture change” is one of the trickiest words in consulting: it can be a weasel-word, implying a crack-papering exercise that generates a lot of mission statements and value lists but fails to address the real issues. Equally, it can indicate that the client company has successfully got its hands on one of the most powerful levers of change there is; indeed, some might argue, the only one that really counts.
I visited Price Waterhouse and talked with individuals of varying levels of seniority and length of service about their experience of the culture change. So far this has taken the firm through the integration of the European practices, and the underpinning of that integration with a worldwide database and messaging system based on Lotus Notes. Reward and appraisal systems have changed, career paths have been revised, and the whole strategy has been enshrined in a “culture wheel” graphic which is literally impossible to escape wherever you go in the building (I didn’t inspect the toilets, but I wouldn’t be surprised).
The kick-off for the change programme came in 1993, when the firm instituted its annual staff attitude survey, a no-holds barred questionnaire which attempted to dig out the real issues facing the firm. A number of problems were highlighted, with technology and training coming out strongly as “hotspots”.
Charles Keeling, now change integration operations partner at Price Waterhouse, has been a partner since the culture change process started.
“The staff attitude survey is held every year in the same format, but as new issues emerge we load on new questions. This year, lifestyles, business ethics and diversity were added as a result of comments from last year. There’s now less focus on technology and training,” he says.
This, he explains, is because the technological infrastructure is now institutionalised. Previously, staff would have to make a business case to get their hands on the technology they needed. Now it’s supplied automatically.
“In 1993 only 15-20 per cent of the staff had laptop PCs,” says Keeling.
“Now everybody has access to a laptop from Day 2 after they join.” Technologies like Lotus Notes have been allowed to prove their worth in retrospect.
“I’m running an engagement for a global client in South Africa, Australia and Europe, and literally could not do that job without the technology,” says Keeling. The sheer logistics of consultancy assignments demand it.”
Breda Robertson, senior manager, change integration, says that the firm is now approaching the status of a “virtual organisation” as issues like staff availability, product development knowledge databases, sales management and skills databases are brokered through Notes. An open information policy allows the technology to be used to its full potential to achieve the corporate goal of “sharing”.
“Five or six years ago this was a cottage industry: local enthusiasts and experts reinventing the wheel,” she says.
Prior to this, “sharing” was what you did once your personal billing and sales targets had been achieved, says Keeling. Now all work goes through a bid review process to decide the most appropriate staff to be assigned to it. “Any opportunity that comes up I have to share with my boss, who will decide if I am the most appropriate partner, or if it should be a joint project and so on. It’s also totally explicit.”
Now, according to Keeling: “The whole business is based on the networking element. The first network is made up of the group of people who join the same Monday as you.” Further networks are created during client assignments and the firm’s revamped training programme, which had been allowed to run down during the slow motion days of the recession. This was another key issue highlighted in the staff survey.
Robertson says: “Training is one of the most highly visible elements of the culture change.” In terms of PW’s own change methodology, this is a way of changing culture through the “surround sound” of the firm.
A vital part of this is a revamp of the appraisal system.
“It’s now a peer recognition process,” says Keeling. “All senior partners and managers give recognition to those who’ve helped them on an issue.
Was it regular? One-off? Background? And peer recognition forms the basis of reward.”
Adapting to this system has been hard for some partners, for whom a coaching system has been instituted.
Says Robertson: “The coaching programme is an immensely strong signal, it’s not optional. It means you have got to think about your personal operating style.”
This has resulted in a major change in the status and accessibility of partners, who are now expected to be far more open and egalitarian.
In many ways, the major burden of change at PW has fallen on the partners.
This was a direct fall-out of the staff attitude survey, which revealed a major schism between the attitudes of partners (who generally thought everything was fine and dandy) and junior staff (who had a few things to say).
Says Keeling: “This has been most difficult for partners: staff can talk to us and expect a mature reply. Not everyone who was in the partnership at the time could take that step up: hopefully the people left are able to respond to that challenge.”
PW has tried to remove some of the mystique from partnership. “We see partnership now as the top of one ladder but the bottom of another. When we were looking at leadership positions it used to be, who’s been climbing the ladder the longest? Now it’s people who can demonstrate their contribution to all faces of the culture.”
With the de-emphasising of the position of partner comes the end of the “up-or-out” culture.
“Now, if they just want to be an industry sector guru, they can,” says Keeling. “We used to expect our partners to be supermen: sell work, deliver the greatest assignments and also cope with the management and development of staff.”
Now, the pressures are more realistic. “There are ways of getting on in PW and being a success that are not about being a partner.”
“It really is a very different context now,” he says. “Then I’d be working on five projects simultaneously, all in the South-East or South-West.
I’d be attached to a local partner and a group of 20 people. Every project was a blank sheet of paper in terms of technical skills. Very long hours that still never quite added up to your chargeability target. Now I’ll have one, maybe two clients in a year. It’s unlikely to be just in the UK, maybe Europe or a project team with the US.”
This has also expressed itself in the way that staff relate and report to partners.
“I used to own 20 people whose chargeability I was responsible for.
Now I have 20 people in my counselling group. I create the environment in which they develop their career so I want them to get a diversity of experience.”
According to Robertson, in the “old days” an individual’s early months at PW could be fraught with difficulty, due to the lack of an infrastructure and the large amounts of power vested in partners: “I came in from another consultancy, so I liked the freedom to roam, the lack of control, the fact that people expected me to sort myself out,” she says. “For me, the last reason for coming into consultancy was because you were interested in the place you worked – you were interested in every other organisation.”
However, this very environment could be intimidating for newcomers to consultancy: “People who came in from line organisations suffered: there were no desks, no secretaries, the relationship with your partner was make or break. If you’ve lived in an organisation with a infrastructure then the lack of those things is rather overwhelming.”
Pam Robinson recently joined PW as a consultant from a background in retail.
“I spent a lot of time researching the move into consultancy, and did a lot of homework on the Big Six,” she says.
“I felt PW was somewhere I could feel comfortable. People were talkative, they weren’t scurrying around, they had the time to talk. I felt there was an element of infrastructure, that there was a strategy, I felt they knew where they were going.”
She also feels freer to develop her career: “Albeit I have this specialist knowledge there isn’t this parochialism that holds you.”
Robertson comments: “Before it was the individual’s problem to broaden their career but the home partner might not be happy.”
One of the offshoots of the programme has been a strengthening of Robinson’s awareness of culture change as a client issue. Says Keeling: “Breda and her colleagues trade in culture change: as a financial management specialist who would have been frightened of those issues I now feel comfortable talking to them about the complexities and challenges. We’re also more upfront with clients: we can talk about our culture, and ask: what are you doing about these challenges?”
Robertson comments: “The group of people whose thing is culture change no longer have to explain to partners what culture change is all about.
There’s also greater empathy with clients when they know you’ve been on the receiving end!”
MEET THE BOSS
While culture change can be seen as a growing discipline, with new techniques and knowledge being added daily, there is one element that can never be part of the consultant’s box of tricks and must always be added by the client and that is leadership. This does not seem to be much of a problem at Price Waterhouse, where Peter Davis, director of management consultancy services, Europe, has been the driving force behind a programme with which he is very much personally identified. Culture wheels adorn his office, together with the metrics charts that record his own personal progress as a manager in the new appraisal system. And he has literally put his money where his mouth is: in the early days of the culture programme he agreed to fine himself #10 for being late for meetings, and ended up #170 out of pocket.
Now he is seeing the initiative blossom into a global project, as Price Waterhouse takes the step of combining its global practices.
The firms have already been working for a year to align their business perspectives, and now stage two of the culture change begins.
“We had a big partners’ meeting in Madrid with all the partners from the US and Europe and Japan where we talked about the global culture change plan. Everybody was 100 per cent committed.” But he adds: “We’re not saying we’ll take what we have done in Europe and implant it everywhere else. Shared values relate to a number of things and we’re trying to build the right shared values.”
Davis is confident that globalisation will build on, rather than compromise the European experience:
“If I had any worries I wouldn’t do it – I’d bank what I have here. We feel at home now because the business imperatives are in place,” he says.
“We can’t afford to get this wrong. Clients are proving the case for us – 50 per cent of my time now is spent on global issues.”
The staff questionnaire has now gone global (in seven languages), and this has naturally brought new issues onto the agenda.
However, Davis is wary of second-guessing the results.
“I remember our first culture change question: ‘Do you think there’s been too much change?’,” he says. “The staff said there hadn’t been any!
But all the partners said there was too much change – that’s why I concentrated on changing the attitudes of the partners.”
Whatever the final outcome on the global stage, Davis is clearly intensely proud of the European achievement:
“It’s the best project we’ve ever done internally on ourselves. I didn’t anticipate that it would be so successful,” he says. “I would have settled for less, and not because I’m a compromiser. Getting people to buy into the programme was worth its weight in gold – the only thing that could have knocked it off course was if we didn’t follow it through.”
Interviewing someone as passionately devoted to a cause as Davis is to the PW culture change can be an exhausting experience, and you quickly learn to start questions with “ifs” instead of “buts”.
What would have happened if he hadn’t got the culture change accepted?
“I would have resigned – the upside is so good.” And if a client asked you to take on a similar project?
“It would have to be someone like me.”