Accenture’s CEO on how to stay relevant: “Change every day.”
Pierre Nanterme has spent 32 years working for Accenture, culminating in his current role as CEO of the global professional services firm. And yet, that longevity has done little to make him fixed in his ways. Maintaining the status quo, he says, drives him “nuts,” and he describes his own generation as “quite boring and simple” compared with today’s new hires.
Proof of his appetite for change is Accenture’s decision to eliminate rankings and annual performance reviews for its more than 300,000 employees starting in the fall, which Nanterme disclosed in this interview.
This conversation has been edited for length and clarity.
What are the biggest challenges of leading a firm in the consulting industry today?
The industry of professional services is in the midst of a massive revolution. Massive. When you think about consulting, you typically think about advisory services. You think about delivering papers, Power Points, ideas. I think the revolution is that consulting is shifting from ideas to outcomes. More and more, our clients expect not only relevant advice, not only setting a road map or helping them plan, but being committed to business results.
Is that your biggest leadership challenge as CEO?
One would, indeed, be how you are staying relevant to your clients. The second challenge relates to the size of the company. We are 330,000 people operating in 120 countries and covering 19 industries. So managing the size is an issue. I am personally working a lot on building more organizational agility into the giant. That’s probably the No. 1 challenge.
How do you make an organization that size more agile?
This is the big question, and it’s an everyday challenge. You need to avoid, if you will, the big D-Day when you’re going to drive the “Big Transformation.” That’s very hard given the size. It is very risky, and it might be very disruptive and quite dangerous for the organization. Rather than waiting for the big day, let’s change every day. Delegate authority to the people on the ground. It’s not going to come from me or from the top.
You served as Accenture’s chief leadership officer at one point. What’s your philosophy on the bestway to train employees to be better leaders?
For many of our clients, whatever the industry, they all are coming to me saying their No. 1 challenge is getting the right talent. So first I figured out that leadership and talent is the name of the game. Second, it’s all about how you motivate people, how you’re making sure they’re going to stretch their own boundaries.
It’s about selecting, hiring the best people, but that’s not enough. Performance management is extraordinarily important. Do you feel good in your role? If yes, that’s the perfect time for you to experiment with something new, to get out of your comfort zone. This willingness to learn is probably the most important thing for leaders of today and tomorrow.
When you looked across your leadership training programs or other such investments, was there anything you cut because you weren’t seeing results?
Oh, yes. Many. Like many companies, we wanted to set the right objectives for our people, but very rapidly we got to a list of five, 10, 15, 20 objectives, which started to be extraordinarily conflicting, confusing and difficult to evaluate. They created a maximum bureaucracy and, at the end of the day, blocked people. Instead of motivating or evaluating people, it just became piling tons of metrics and objectives on them.
What I learned is that leadership is about letting it go. Trust people. The art of leadership is not to spend your time measuring, evaluating. It’s all about selecting the person. And if you believe you selected the right person, then you give that person the freedom, the authority, the delegation to innovate and to lead
with some very simple measure. So has that translated into simplifying the performance-evaluation process?
Yes, so if you are to scoop from me: We’re going to get rid of it. Not 100 percent, but we’re going to get rid of probably 90 percent of what we did in the past. It’s not what we need. We are not sure that spending all that time on performance management has been yielding a great outcome.
And for the millennium generation, it’s not the way they want to be recognized, the way they want to be measured. If you put this new generation in the box of the performance management we’ve used the last 30 years, you lose them. We’re done with the famous annual performance review, where once a year I’m going to share with you what I think about you. That doesn’t make any sense.
Performance is an ongoing activity. It’s every day, after any client interaction or business interaction or corporate interaction. It’s much more fluid. People want to know on an ongoing basis, am I doing right? Am I moving in the right direction? Do you think I’m progressing? Nobody’s going to wait for an annual cycle to get that feedback. Nowit’s all about instant performance management.
When will you change to the new system?
Our fiscal cycle is September to September. So we’re going to put in place this new performance management process for fiscal year ’16, which for us is going to start at the end of ’15.
It’s a massive revolution. Imagine, for a company of 330,000 people, changing the performanceprocess — it’s huge. All the credit goes to Ellyn Shook, our HR officer.
So will there still be ratings or will there just be feedback?
At the end of the day, you need to give some evaluation. You need to give a compensation increase. But all this terminology of rankings — forcing rankings along some distribution curve or whatever — we’re done with that. We’ve totally done too much effort for a limited outcome.
We’re going to evaluate you in your role, not vis-a-vis someone else who might work in Washington, who might work in Bangalore. It’s irrelevant. It should be about you. How are you performing now, and do we believe you are prepared to move to another role? We are getting rid of all this comparison with other people.
Deloitte is likely also getting rid of such rankings. Do you expect these moves will have a ripple effect among other global companies, given that many of them take cues from consulting firms?
Yes, I hope so. The process is too heavy, too costly for the outcome. And the outcome is not great. My philosophy has always been very simple: You need to be relevant to your clients, not the other way around. It’s the same thing with your people. You need to be relevant to them. I’m not going to impose on the millennial generation something that is not the environment in which they want to develop and grow.
It doesn’t mean that we’re going to be easy — that we’re not going to measure, to evaluate. We’re going to do all of this, but we’re going to do it in a very different way.
Speaking of younger generations, what are some of the standout traits that Accenture is most interested in these days when hiring? Is the profile changing?
Yes. The generation we’re talking about is just great, is just fascinating. I mean, my generation — when I was applying 32 years ago — was quite boring and simple. You wanted to have a good job. You did your best. You were recognized. You worked hard. You moved up. You were pleased.
That’s gone. The generation we’re talking about, they are prepared to work hard, but at the same time, they want the authority and ability to organize their work. They are more forwardlooking. They are innovative. They are more digitally native. And to answer your question: I like them. I like them much more than I like me. I wouldn’t love to find another Pierre with 32 years’ background. Thank you, Pierre. Go!
What’s the best piece of advice someone ever gave you?
The best advice would be one I received from my mother: Do your best every day and don’t have any regret. Never come back home and say, “I should have done this or that instead.”
“You need to avoid, if you will, the big D-Day when you’re going to drive the ‘Big Transformation,’ ” says Pierre Nanterme, CEO of Accenture, the global professional services firm.