On the imminence of business transformation and the changes in process at Deloitte
Andriy Bulakh, Managing Partner, Deloitte
You were studying to become a diplomat but became an auditor. Why did you choose this career path?
I don’t think I chose audit, it chose me. One day, young and progressive representatives from Arthur Andersen [editor’s note: an accounting firm, and until 2001 one of the Big Five accounting firms] came to our Faculty of International Economic Relations, at the IIR. They talked to us about their work, about what they do, and that was a real eye-opener. They inspired us with their enthusiasm. And later I discovered the salaries paid there… By that time, I was already beginning to understand that becoming a diplomat was probably good, but it would not be plain sailing getting to this high status, as it seemed earlier. First, you need to get into the Ministry, “sit it out” there until you are sent to another country and only then—if you are lucky—real life would start.
And yet, what was so appealing to you in auditor work?
Accounting and auditing were clearly not my favourite subjects at university. But the guys from that accounting firm seemed to be from another world, maybe even from the future! They were speaking in a completely different and incomprehensible language. They had a different vibe and different initiatives. It was 1998, and there they were. At the time, I wasn’t aware of the existence of Arthur Andersen, and I probably wouldn’t have known about it had they not visited. In addition, to get into the firm, I had to pass a competitive selection exam, with over than 10 people vying for each position. It was another incentive to try my luck. And that’s the story of how I got “stuck” for life)
Did your perception of the profession change over the course of your work as an auditor?
Some describe auditors as dull, boring accountants. In my opinion, it all depends on your attitude to your own work, on the skill of “switching on” your interest to what you’re doing. I remember once, while working on a project, I found a mistake made by a client. I felt like a true detective! There was excitement, I was interested to see whether I could find something else. Then I was possessed by the search for answers to different technical issues, analysis of standards—and there were many—finding the logic in them, and building an accounting transaction. Each time it was a new detective story. As a result, I was a technical auditor for almost 10 years, and, believe it or not, I loved it!
Until one fine day, when my superior and mentor said to me, “That’s enough with the technical stuff, try to sell and develop the business.” It was a turning point when I left my computer and went out into the world. And it turned out that talking to people, understanding them, and building relations was even more interesting than finding answers in any item of the standards.
When you became a managing partner, what were the challenges that you came across?
I became the head of the company in June 2014. It was a difficult period when we faced completely new problems, external threats and challenges. Many of them had nothing to do with the business side of the job, but rather related to life issues—people’s safety on business trips or an office evacuation plan. So, a strong emotional involvement prevailed from day one. No one had any idea of what might happen next, how all of those events would affect the business, whether we should expect workforce reductions, and what would become of the projects. People didn’t know what would happen to them the following day. This complete uncertainty was probably the key challenge for all of us. Yet, I was then sure that it would be wrong to turn a blind eye to a problem. On the contrary, I was seeking to bring people together around it.
This was how we came to finding values that unify us and a common vision for the company’s future development. With all those problems around us, we needed to see the light in the end of the tunnel, so we asked ourselves: ‘what is good in us?’ And the answer was fast to come: we were a wonderful team of talented and bright individuals, who did, in fact, have a lot of things in common. We looked at each other and realised our strength! Together, it became much easier to respond to external challenges.
It was then that you started to speak about values for the first time too…
What else can you use as a foundation to unify people? The work itself, as a way of earning money, cannot unify because there’s no emotional involvement. Only values, only finding qualities that are inherent to most of us can help us understand ourselves as a single whole and make us stronger. It was a revelation: we are all different, but we have something in common that is inside us and pulls us together.
What changed in Deloitte after you became Managing Partner?
You know how you find a sign on the doors of some research centres that reads “Caution! Test Underway.” In my opinion, we should put the same inscription on the doors that lead to Deloitte. I believe that growth requires experimenting, so experiments are in full swing in Deloitte now. This revolves around our internal processes, communication, hierarchical structure, interaction between different departments, and approval procedures, i.e. everything in the company is questioned and modelled. For example, the level of transparency both within the company and with the outside world. I think that openness is a powerful tool that can be used for control as well. Instead of building a protection system with thousands of approvals, it is enough to make all the processes and expenditures transparent and open. It will allow people to prove themselves, and this is, in my opinion, much cheaper for the company than investing in their development without letting them show their worth.
How did you change during this time?
Perhaps one of the most important changes has been the revision of my personal perception of the whole team, my level of trust in people, and my own attitude to imperfection. I have even changed my attitude to mistakes. It is difficult, because I am a perfectionist by nature, and so certain imperfect things make me feel uneasy. But I am fighting that. Sometimes people need to make a mistake to understand what to strive for.
Also, there is more involvement and communication now. In our pyramidal structure, I seek to build a dialogue not only with partners and my immediate environment but also communicate more with all levels. It all started with the breakfasts with seniors and managers. Later, I created a consultative council that included people in non-managerial positions. Overall, there have been many changes and transformations, but our colleagues and clients are in a better position to talk about them. All I want to add is that we are far from the end of this road, and I am certain that growth is a lifelong process.
Deloitte underwent rebranding last summer. How did it affect you and what values are you cultivating?
The rebranding was really apropos. One of our goals by 2020 is to become the driver of transformation in the Ukrainian economy. In my opinion, being a driver includes taking people out of their comfort zone, changing established habits and approaches, and challenging them. This means that sometimes we need to tell people things they don’t like. The risk management system in companies such as Deloitte is often aimed at smoothing out rough edges. I think that it would be difficult to be a driver with such an approach. The new Deloitte branding is black-and-white, and it is not about colour, but philosophy. According to the concept formulated by Deloitte Global, we take an explicit position on different issues and avoid ambiguity. Sometimes it can differ from the opinions of others or can be in the minority, but that’s normal. I think that in our over 150-year-long history we have earned the right to have a personal opinion.
Was it difficult for you to readjust to a black-and-white mode?
I am often reproached for sometimes being harsher in my speech than my position requires, and I completely agree. I often say black is black, and for me, rebranding is more of a “green light” from global Deloitte. Although I consider myself a fairly even-tempered man, there are two things that put me out of temper: incompetence and indifference, especially when they are combined… I’m yet to learn to deal with this calmly. Everyone has a right to make mistakes. But if a person doesn’t understand a thing about his work, and doesn’t even bother to spend a single minute of his time to learn about it out of indifference, what’s the point of wasting your own time on such an individual?
How do you motivate your subordinates to achieve results, and what tools does the company use for this?
For those who do care, an important element of work is involvement, participation in something new and big. My role is to give them such an opportunity: to choose what to do and what results to achieve, to feel a part of a team and be a team. I believe that such an opportunity is the primary motivation for people who are competent and who are not indifferent. Of course, encouragement is also important, and I continue to work on that. However, so far I have been better at criticising than praising for the initiatives, results or ideas. I would like to see this index increase to 80/20 or 90/10 in favour of recognition and to spend less time on after-action reviews.
Speaking of ambitious projects that are interesting for the professionals, what is Deloitte doing in this area?
We have created a group on innovation which develops incredibly innovative projects. They focus on the functioning of cities, the state, and the society. This is a chance not only to have an impact on the prosperity of an individual client but also change the world around us. For those who take part in such projects, this is usually something completely new, capable of transforming their mindset. For those interested and ready to leave their comfort zone, this is an opportunity to find fulfilment beyond the boundaries of customary.
The projects with our clients have also become more diverse. I am personally involved in the development of strategy and operations consulting. These areas lie beyond the specialized literature and relate to administration philosophy. That is why these projects are always interesting because they involve transformation from the current state into the future, preferably better than the present. Such projects always result in the transformation from the current state into the future state. And this is always exciting.
What do you think are the the qualities of a successful manager, especially in turbulent times?
When it comes to turbulent times, the quality of keeping calm comes top of mind. There are two types of calmness: hiding in your shell and confidence. Confidence that the company functions as an effective entity, that there is a plan for strategic development and that new information from the market won’t be left unnoticed. The second thing is unifying the team, and finding a new common mission. Lack of unity in a team makes work considerably harder—when your ship isn’t whole, but rather a set of separate parts, it should be solidly glued together. The third point is speed. When something doesn’t happen for the sole reason that the manager did not take a decision in time, when there are questions like “why didn’t I know?” and “ why wasn’t it coordinated with me?”, this can not only hinder but also stop the development of a business altogether. On the other hand, uncontrolled speeding ahead can also lead to unfortunate consequences. In my opinion, the key challenge is to strike a balance and not to be a leader who always has his foot on the brakes. On the contrary, it is necessary to allow the organisation to move even faster, with an additional drive that will add fuel.
What is the secret? Is it a professional team and trust in it?
Trust and a team made up of people who care. People in the team who share the company’s mission, vision, and values, who are competent at what they do. Plus, mutual respect, trust, openness, and transparency. Everyone should see what is going on.
And yet, are there things that you believe should be controlled?
I have to make sure that people overcome their old habits. I regularly check the status of these changes. It is easier to do this in groups, by, for example, making public commitments. Any obstacles become easier to overcome when they are tackled by a large number of people that support each other, as evidenced by the numerous Run Challenges, Swim Challenges, etc. Besides, if we are speaking of payments, there must be a system here, certain limits and authorization. But to be honest, few payments go through me. I have trust in the people I work with.
What do you expect for business and the country in the short and long run?
I anticipate transformations in all areas. First and foremost, the transformation of mindsets, regardless of the fact whether it is a businessman, a state employee or a citizen. I often speak about the values crisis, about the Soviet heritage and our internal limitation. The Ukraine we see today is in our heads. That’s why I count on the internal transformation of each person. To me, the internal transformational changes, once started inside one shareholder of the company, will one day reach everyone who works in the company. And it seems to me that such processes are already underway. The understanding that it is our life and that we have to do something to change things is slowly sinking in. This is not a quick process, but I believe that these small and individual parts will over time combine into one strong force.
What should happen for you to recognise that the transformation has taken place? What are the criteria?
When people let go of the past and look to the future. You can’t continue to chase the ghosts of the past, you need to let them go and draw the line. Let’s live by new rules. We may blame a bad system, but its parts are the individuals allowing it to function in this manner and not otherwise. Therefore, the change should start with each one of us, with ourselves, our environment. Transformation starts on your porch, on the road, with a smile, and then the entire system will function differently.