Profile - Enterprise transformation

Globalisation has meant that Deloitte & Touche Consulting Group has had to take some of its own medicine and follow a full-blown strategic culture change programme – and that includes its name change.

Touche Ross Management Consultants became Deloitte & Touche Consulting Group in February 1996, bringing it in line with the other consulting arms of parent Deloitte Touche Tohmatsu International elsewhere in the world.

The name change, though, is just the tip of the iceberg. The firm believes its strategic transformation programme is necessary for it to become a global player, truly recognised as an advisory consultancy and implementor, and remain in the top consultancy bracket.

Five years ago the firm was a mass of stand-alone practices, with partners only chasing the business they knew. John Everett, managing partner of Deloitte & Touche Consulting Group says: “We actively did things that we knew about, and things we didn’t know about we didn’t do.”

The bird in the hand approach was fuelled by the firm’s performance measurements, where partners were rewarded for their individual efforts rather than the team results. Today that has all changed.

Since October 1995 Deloitte Consulting has overhauled the organisation, and stripped away baronies and princedoms. The firm has changed its approach to its clients and become more user-friendly: clients are now aware that it offers both strategy and information technology consultancy.

Everett says that previously the firm approached all industry sectors: “What industry weren’t we in,” he says wryly. But now, he says, the firm has moved away from the opportunist approach.

“We discovered that 90 per cent of our revenues came from 10 per cent of clients, which suggests you need to focus more. The first step was to create industry groups, in parallel with a global structure,” he says.

“By June last year we had gone through the first phase of culture change and become virtually financially and managerially integrated with our US colleagues.”

The practices working towards globalisation include those in the UK, US, Canada, South Africa, Australia, New Zealand, Malaysia and Singapore.

The process will not be completed until 1998 but operational integration is already well underway. What is taking the time is the financial and legal integration.

The buzz word that underpins Deloitte & Touche’s change programme is enterprise transformation, which covers strategic, process, technology and people transformation.

“You have to change the processes and culture of your business and the way people work. That means you are talking about service lines, where you start with strategy, through to cultural change, reengineering and technology change,” says Everett.

“In the past a traditional consultancy would probably have a few components of enterprise transformation, but they wouldn’t have been interlinked, nor holistic.”

The firm’s new, holistic culture and structure is based on a three-dimensional matrix, which links up industry sectors; service lines, which include change leadership, change management and operational transformation; and human resource groups.

Industry sector offerings have been slimmed down to six: manufacturing, consumer business, government, utilities, telecoms and financial institutions.

Divisions that were previously separate have been interlinked.

“The way it works is that when we go to market we go in teams and through our industries,” says Everett. “If the project involves significant change management, then the industry partner would most likely maintain the client relationship, but the technical delivery would be through the service line partner.”

The second part of the matrix comprises service line offerings. The firm believes the Change Cycle Model used by its change leadership team has given it a framework for its own leadership alignment, team building, workforce transition and new employee skills.

“One of the first steps in our cultural transformation programme was to address personal transformation, introduce a common language, the right skills-sets and teach people where they are accountable,” says Tricia Bey, partner in charge of the change leadership group and heavily involved in the firm’s change programme.

Culture and skills change has been made possible by the third arm of the matrix: eight human resource groups. Their role is to encourage employees to behave in a similar and consistent way.

“We had to make sure that we moved from the old structure to the new structure in a sensible way, so we had to ensure that the performance management framework in the new world encourages people to behave in the way we want them to behave,” says Bey. “There is an old adage that people behave in the way they are measured, so we have to make sure that the measurement systems for the new world are appropriate.”

Previously partners were individually rewarded, now performance measures are linked to industry and service line team targets. This has brought about a change in values and competition among partners has been replaced by mutual dependence.

“Performance management has been one of the most powerful levers in culture change,” Bey says. “If your leaders reinforce culture change by being role-models, and if comunications, education, job descriptions and performance measures point in one direction, then you have to be extremely pig-headed not to give it a go.”

As the structure has changed, so have the demands on staff. So all the assessment, appraisal processes and training procedures have been completely revamped, with staff also going out much more to the US for common global training.

The human resource groups support the personal culture change, address performance measures, appraisals, assessments, training, recruitment, needs and problems.

A “Programme of Clausures”, the firm’s personal transformation programme, has been set up to teach people to prioritise work and new skills. Geared towards teaching employees to work for many different bosses, it is all part of breaking down the barriers and creating the global Deloitte & Touche.

“It focuses on moving minds away from the command and control structure, to a situation where they understand that they are personally accountable to more than one person for their job,” says Everett. “Consultants may be working in the US and you have to get people into a mindset on how to do that.”

Sarah Carroll, a manager in the programme leadership group, is a prime example of how Deloitte & Touche’s global approach works. She looks after relationship management with one client and heads financial projects for another through one of the service lines. She mentors and appraises staff in her HR group, and has set up business taskforces in the overall HR group. Carroll has worked on a project in Pittsburg for six months, followed by a three-month stint in Dublin on another. She stills reports back to her HR group in London.

Each part of the culture change programme has helped Deloitte & Touche to change from a domestic firm to a global firm, but its new technology programme with its allocation system and knowledge network has both speeded up its response time and provided a common global language.

The allocation system is a fundamental change in strategy for the firm, says Everett, because it allows its partner firms from other continents to access consultants where and when new jobs require this via a global database. It lists all consultants’ skills and features a host of new project opportunities.

Everett points out that two years ago the firm was quite slow to respond to market and client needs because people had to first find out who the right person was for the job. Now with the three-dimensional matrix and the allocation system that information is very easy to access. Partners immediately know who is right for the project.

Global interaction is enhanced by a weekly Monday afternoon meeting over the Net between Deloitte & Touche’s six industry global partners from North America, South Africa and Europe.

“Now you are bombarded with opportunities and leads from all over the world, so there is a downside to the speed of access, but the personal transformation programme helps you filter out all the things you can’t really contribute too,” says Bey.

Carroll points out that the personal transformation programme means that saying that you are not sure that you can do something is OK.

Completed and current assignment work, methodologies and tools are updated by project managers and service line leaders, on the new knowledge network, a global Lotus Notes database that is structured by service lines and industry sectors. It is not yet fully rolled out but can already be accessed in North America, the UK and continental Europe by 70 per cent of the group’s consultants.

“You can look at it by service lines and industry lines, you can find out what the the existing opportunities are. If you are going to talk to Coca Cola you can check if something is currently going on,” says David Owen, partner in charge of Deloitte & Touche Consulting Manufacturing Industry Group. “Two years ago we might not have known what we were doing with a client, now there is much more consistency.”

What all four partners and managers insist on is that a common language, skills and framework worldwide, has not made the firm full of clones, but people with very diverse skill-sets who now have clearer frameworks to follow.

“Clients want us to supply all those different service lines together, so you have to cope with that type of diversity. You need all sorts of personalities if you are going to achieve what clients want,” says Everett.

In its aim to become a global consulting business, Deloitte & Touche has attempted to transform every part of itself, from strategy, processes and technology to what its people believe.

“If you just change the structure, or just change the targets, or just pay people more, or just change the communication in isolation, or just do two of those things together it will not give you culture change,” says Bey. “If you scratch the surface you will find it is the same underneath.”

Like the personal transformation programme the underlying core values of collegiality, mutual trust and collaboration, dedication to client collaboration and teamwork and commitment to ensuring its people excel so that its clients excel, are central to Deloitte & Touche’s culture change.

“We decided that if we wanted to become truly global from a strategic point of view, we would have to have a mission, future vision and strategic objectives, and shared core values,” says Everett. “And what we see as differentiating ourselves in the marketplace does flow back to our core values.”