John Ormerod: Guiding Andersen into a new age

Oxford beginnings

The list of famous alumni of Oxford University who went on to become political leaders is endless. Names such as Margaret Thatcher, Bill Clinton, Tony Blair and William Hague all spring to mind.

Other success stories include Olympic gold medal rower Matthew Pincent, comedian and traveller Michael Palin, and one name you may be less familiar with – Andersen UK managing partner John Ormerod.

Although it would be unfair to compare the achievements of the above mentioned, they all have one thing in common. They are all winners in their chosen fields.

Ormerod, a relaxed and young-looking 52, recalls with pride how he read physics at Oxford University before deciding to move into the accountancy arena.

‘My father thought accountancy would present me with a safe and exciting job,’ enthuses Ormerod. ‘At the beginning numbers, physics and accounting were completely mysterious as far as I was concerned, but over time the mystery unravelled,’ he adds.

Joining Andersen
He joined Andersen in 1970 ‘when the firm was still tiny in the UK’.

He chose the firm as it ‘was and still is an exciting place to work, the whole culture and energy is inspiring’.

He went on to qualify as a chartered accountant in 1973, before spending two years from 1978 to 1980 on secondment to the National Audit Office.

He returned to the firm and gained admittance to partnership in 1981.

‘It was fascinating to work over at the NAO, as it was a once-in-a-lifetime opportunity to view how accountancy issues are dealt with from the other side of the fence – to see how the government faces up to these issues.’

Ormerod is still new to the UK managing partner role having only replaced Philip Randall in March. Randall was invited to become managing partner of global operations by new CEO Joseph Berardino in January – a role designed to oversee and develop the progress of the firm across the world.

Prior to his recent promotion, Ormerod had been head of Andersen’s technology, media and communications industry practice in Europe, Middle East, India and Africa – a role he had held since 1995.

Changes at Andersen
So how does Ormerod feel his first few months have gone? ‘Do you know what?’ he adds. ‘I had been at the firm almost 31 years when I was offered the role and have seen an enormous amount of change. But I was amazed that, despite being well-connected within the firm before, there was a lot to learn.

‘For example, the work of Andersen Legal and the technical skills and speed of growth enjoyed by the consulting department have come as a surprise to me.’

A recent example of the speed at which the firm is evolving, was the surprise move by the firm’s consultancy division to acquire in April, e-consultancy Xpedia.

So did that acquisition herald the start of Andersen becoming an e-consultancy itself? ‘I don’t believe that to be the case at all. It wasn’t the moment we executed a plan. We had been on that route already. We had already decided a move in that direction was essential, in order to remain competitive.’

Impact of US slowdown
Despite it being widely accepted the US economic slowdown is beginning to bite both sides of the Atlantic, Ormerod does not believe the firm’s consultancy division has yet been affected.

‘Major projects are arranged months in advance and so we continue to move forward and have not stopped peddling. The investment cycle is not a problem at the moment. But who knows, maybe in a month or so we may not be getting the contracts so quickly. What is for sure is that we are not concerned at the moment.

‘We have a clear path to growing the business in the network economy, which will require us to continue to work with our alliance partners. We believe we are different from our rivals as we have consulting skills to go alongside the traditional tax, corporate finance, legal and IT skills. We are looking to bring all of our skills together.’

It would seem that although the firm was embroiled in a long-running arbitration case with Accenture – then Andersen Consulting, which finally ended last August – it feels it is now on the cusp of new and exciting times.

‘There is now a real sense that we know where we want to be, and we have the energy and direction globally to achieve our goals. There is now a sense that newer parts of the firm have blossomed.’

Despite the high-profile split, Ormerod maintains that it is now in the past and he believes the two firms now enjoy ‘a good arms-length relationship’.

A new direction
He adds: ‘We happily work alongside Accenture, but are very much focused on our own direction, and we have got the right business model in place.’

Ormerod says the firm is in the process of reviewing how it should present itself in the UK and globally. The Big Five firm began the review process in March, and no concrete decisions are expected until October.

He says: ‘We are looking to find out what is driving the market and what our clients need. One method for moving forward may be to look for partners and alliances if it is found merging is a way of meeting our requirements.

‘To achieve this it will be important for us to continue to invest in the training and career development of our own people,’ says Ormerod, who also warned any potential mergers may be difficult to carry out.

He adds: ‘We will not embark on a merger strategy purely for superficial reasons. We are determined to maintain our culture and in fact, we recognise we are not a natural merger partner because of our own strong culture.’

Meanwhile, Ormerod says the firm’s decision to drop Arthur from its brand as of March, has been well received and that the new brand is ‘easier to understand’.

‘We want to be seen to offer far more than accountancy services. Although accountancy is an important area for us and growing, it is not the major part of our business. We felt the need to sharpen our focus on what we do. Arthur Andersen gave us the image of the accountancy firm formed in Chicago in the 1920s.’

Far more than an accounting firm
He adds: ‘Andersen is more than accountancy. For example, we have 500 people in human capital alone, and that is only the tip of the iceberg. Arthur held us back, but now we are eager to let people know we have retained our maverick zeal but have the confidence and the people to grow all areas of our business.’

Indeed, a recent report found the vast majority of accounting firms around the world feel they should be allowed to offer clients a wide range of professional services, and not just audit work.

A recent survey by Summit International found that of its 104 member firms, more than four-fifths were in favour of offering clients corporate finance, business advisory and consultancy services.

Despite the recent splits at Andersen and Ernst & Young, the IPO of KPMG Consulting and the future sale of PwC’s consulting arm, Summit still believes firms should be able to offer additional services.

A spokesman for the alliance of firms says: ‘Clients want these services and will benefit by receiving them from a professional and trusted business adviser.

‘It is an insult to suggest accountancy firms are only interested in selling unnecessary services to clients at double or treble the normal audit fee – ultimately, this approach would be counter-productive.’

Another area Ormerod has already recognised as an area the firm needs to ‘get smarter’ about is the training of its people.

Traditionally employees attended few courses during their career, but that is fast changing. ‘Our attitude to training has shifted from “just in case”, to “just in time”. We now provide more frequent courses and new ways of providing new ways of mentoring.

‘I strongly believe the big firms have to take the lead in this area in order to continue to make the CA qualification one of the most prestigious and commercially relevant, in order to safeguard the future of the profession.’

Ormerod is still getting his feet under the table, but clearly has a firm eye fixed on the future as he fights to make the firm’s post-Arthur period a success.


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