by Leo D’Angelo Fisher
Buoyed by a record jump in revenue, the recently appointed CEO of Deloitte Australia is determined to build a bright and diverse future.
It doesn’t get much sweeter for a new CEO than to be able to announce a bumper financial result. Unless, of course, it’s an all-time record high. That’s precisely the happy place Deloitte Australia boss Cindy Hook CA found herself in when she announced a 15% jump in revenue to A$1.34b for fiscal year 2015.
The impressive result for the year to 31 May cemented Deloitte’s hard won No 2 ranking among the nation’s top four professional services firms – behind the PwC powerhouse – a status achieved just last year under long-time CEO Giam Swiegers FCA.
Swiegers was appointed CEO of Deloitte Australia in 2003 with the task of turning around the country’s perennial No 4 accounting firm. With a focus on strong leadership, a firm grasp of the trends that were reshaping the landscape for the big accounting firms and the clients they serviced – such as the impact of technology, the digital economy, globalisation and the little-understood concept of “disruption” – Swiegers not only turned Deloitte around, he all but reinvented it.
Swiegers didn’t sound like a conventional CEO of a Big 4 accounting firm. He stressed the importance of innovation and diversity, he talked about “design thinking” and “strategic architecture” and he applied a “granular” approach to identifying market opportunities and creating the internal business models to aggressively pursue them. Believing in the accountability of leadership, he publicly announced his ambition to turn the then A$515m a year Deloitte into Australia’s No 2 accounting firm. When Hook became CEO on 1 February, becoming the first woman to a head a Big 4 accounting firm in Australia, she knew she had big shoes to fill. And said so.
“Filling the shoes of my great mentor and friend, Giam Swiegers, will be no easy feat,” she said at the time. Like her mentor, Hook also has conviction and ambition and was quick to nail her colours to the mast of the good ship Deloitte. “Building further on our success is a challenge I accept with confidence, determination and fierce ambition for the firm,” she vowed.
“My mission is to lead Deloitte to even greater things.”
US-born Hook is a career Deloitte executive. She joined the firm in San Francisco as an auditor in 1986, was made a partner in 1998 before moving to Australia in 2009 as head of Deloitte’s NSW assurance and advisory team.
The same year she was appointed national managing partner for assurance and advisory, leading a team of 1,000. In 2013, Hook’s group won both Accounting Firm of the Year and Audit Firm of the Year in the Australian Financial Review CFO awards – the first time a firm had taken out both awards in the same year.
Against this impressive career backdrop, Hook has a lot to live up to. Which might explain why she is mindful of managing expectations while also sounding a bullish.
She says the 15% increase in revenue for 2015 – compared to the 6% increase that garnered Deloitte the No 2 spot the previous year – is unlikely to be repeated in 2016.
“I have a realistic plan [about growth for the year], I think we have lots of positive things happening in the market, but I’m certainly not putting 15% out there as a stake in the ground for next year.”
The economic outlook is not without challenges, Hook says, but she is more cautious than concerned.
“Weaker commodity prices and the slowdown in China are having an impact, but there are some good things happening too. I don’t want to paint a completedoom and gloom picture,” she says.
Deloitte’s main growth has come in the areas of financial services, the public sector, consumer business and transport.
While the increasing prominence of data analytics and technology is changing the face of professional services, Hook says Deloitte continues to invest in “core heritage” services. She says Deloitte experienced “outstanding growth” in its consulting and risk advisory business lines, with “solid growth” from the heritage services of assurance and tax, financial advisory and its mid-market and private company practice Deloitte Private. The public sector also holds promise for the year ahead.
“We are seeing robust demand federally and within state governments for Deloitte’s strengths in technology and digital consulting as well as advisory and risk capabilities across all major areas in the public sector, including health, transport, education and defence,” Hook says.
“Government agencies are trying to achieve more efficiency, they’re trying to change and adapt as well [as business].”
The breadth of services offered by modern professional services firms heightens the need to maintain skill sets across diverse practice groups. The acquisition of businesses is one way that Deloitte has been able toexpand capabilities and capacity in such areas as analytics, informatics and business advisory. (One of the most successful was the 2011 acquisition of Access Economics, the public face of which is the respected and highprofile economist Chris Richardson, who is now a partner of Deloitte Access Economics.)
Deloitte made six acquisitions in fiscal year 2015 and more are expected under Hook’s stewardship. One factor that gives Hook the confidence to pursue further acquisitions has been the success with which Deloitte has been able to integrate the businesses and their employees into the firm.
As she points out, Deloitte advises clients on acquisitions and integration strategies – it stands to reason that it should benefit from its own expertise.
Although Hook’s chequebook is at the ready, she insists that Deloitte will continue to be very selective about the acquisition opportunities it considers.
“We have limited capital, so we have to make good choices, and I think we have made some really good choices.”
Hook says one of her main priorities as CEO is creating a rich and diverse talent pool so Deloitte can continue to lead in innovation.
This involves recruiting people with attitudes equal to the challenges that a modern professional services firm must encounter in a complex and ever-changing environment.
“Once the focus would have been on a person’s technical ability in accounting or tax. But we need people who can work together, people with collaborative skills, collaborative thinking and the agility to adapt. People who work together can solve complex problems.”
The latest intake of partners at Deloitte reflects the importance placed on professional diversity. In fiscal year 2015, 58 new partners were admitted through internal promotion and an additional 51 joined as “lateral hires” or via acquisitions.
The academic and career backgrounds of the new partners include information technology, engineering, mathematics, education, aviation and law enforcement. Several new Deloitte partners have also lived and worked overseas, a trend that Hook believes will increase as cross-border activity, collaborations and capability exchanges continue to grow throughout Deloitte’s global network.
But what about that other key diversity metric: women?
Under a policy spearheaded by Swiegers, Deloitte introduced targets aimed at increasing the proportion of women appointed to partnerships. He took it as a personal failure that the advancement of women into partnership and senior management roles did not reach desired targets. Although Hook will not disclose the desired target, she is also disappointed with that figure.
In the latest partner intake, 31% of the partners promoted internally were women, increasing the overall proportion of female partners to 23%.
Leadership development programs, mentoring and networking programs introduced over the past decade have failed to attract the desired number of senior women to pursue partnership opportunities, she says.
“I know it’s something that frustrated Giam and I’m equally frustrated. It’s not moving fast enough and I’m determined to change that.”
“I’m spending a bit of time with [Australian Sex Discrimination Commissioner] Liz Broderick and hopefully there are things we can do.”
But there is one thing she will definitely not do.
“I don’t believe in quotas. I believe in targets, but not quotas. I think it hurts women to have quotas,” Hook says. Hook also believes it’s important to look at diversity in the workplace beyond gender. She has made ethnic and cultural diversity at Deloitte a priority, but in doing so makes a distinction between diversity and inclusivity.
“You can have the most diverse workforce, but if you don’t have an inclusive environment, you’re not going to get the collaboration and innovations that come from an inclusive workforce,” she says.
“If I’m at a staff meeting I can see that easily half the room [comprises] Asian and Indian people, but when I go to a partner meeting, that’s not reflected. How do you change that dynamic? As a leader, this is something I need to understand. What does it mean to be an inclusive leader? How do I create an inclusive environment?”
While Hook is plainly her own person, she is in many respects in the same mould as her mentor, with many of the same sensibilities, priorities and challenges.
But what of the future, which Swiegers seemed to navigate so presciently? What does she think Deloitte will look like in 2025?
“I can’t sit here and say ‘ten years from now this is what we’re going to look like’. But I can say, ‘let’s set a direction, what do we think it might look like?’,” she says.
“As a leader, I can’t just wish things stay the way they are. I have to take alonger-term view, which means we have to start on a journey and adapt and shift along the way as we need to.”
The market which Deloitte – and everyone else – will be competing in will not only continue to change, “but very likely it’s going to keep changing at an even faster pace”, Hook predicts.
Leo D’Angelo Fisher is an Australian journalist, writer and commentator.
This article was originally published in the August 2015 edition of Acuity.