Knowledge Center: Article
Becoming a talent magnet through culture: An interview with Grant Thornton CEO Mike McGuireSubscribe to Financial Services 1/11/2018 Brian Lowenthal and Regina Salvucci
The following is an edited version of the interview. Scroll below for video excerpts.
How does a company that provides services similar to those of its competitors stand out and gain advantage? In an industry with high turnover and a steady influx of college graduates, how does that company become an employer of choice to attract and retain the most talented people and keep them highly engaged? These were thorny questions that challenged leaders of Grant Thornton LLP, the US member firm of Grant Thornton International, one of the world’s largest independent audit, tax and advisory firms.
The US firm had grown sixfold in 15 years, in part through acquisitions. As a result, there was an inconsistent culture across its many offices. Clients’ needs had also shifted. More were choosing firms in part based on culture fit; ability to provide stable, long-term relationships with highly engaged and accountable teams; and innovative thinking. Add in the shifting world of work, generational workforce changes, digitization, and other disruptions, and it was apparent to CEO Mike McGuire and the leadership team that Grant Thornton needed to transform itself. This would require a culture shift to instill the passion, curiosity, and fresh thinking that would distinguish Grant Thornton to clients as a firm that goes beyond status quo approaches to do whatever it takes to move clients forward.
McGuire had championed culture change in his previous leadership roles at Grant Thornton, but it became his top priority when he became CEO of the firm in 2015. The senior leadership team set clear business goals for the culture shift, including improving the quality of the firm’s work, increasing client quality and satisfaction, enhancing brand reputation, and improving employee recruitment, engagement, and retention.
The culture-shaping journey, named “CLEARRly1,” honors the firm’s vision of creating a single, unified firm culture that is anchored in the company’s values of collaboration, leadership, excellence, agility, respect, and responsibility (which the company refers to using the acronym CLEARR). At its heart is a “bring your whole self to work” philosophy intended to inspire an atmosphere that empowers the firm’s more than 8,000 employees to be their authentic selves because they know that their unique contributions are valued.
It was not just corporate speak. The firm began implementing policy changes to foster the culture. In November 2015, Grant Thornton became the first large public accounting firm to replace its historic annual paid time off policy with a more progressive “flexible time off” policy. By balancing client responsibilities with personal passions, employees take time off as needed, which allows them to return to work refreshed, with better ideas and solutions for clients.
The investment in the culture generated tangible results even faster than McGuire had expected. In the past three years, overall voluntary turnover has decreased 500 basis points. The number of interns who chose to become associates has more than doubled. Other results include improved performance, client satisfaction and revenue, and employee engagement scores. Furthermore, Grant Thornton has been recognized in Universum’s top 100 rankings for most attractive employers globally, Crain’s Chicago Business list of best places to work in 2017, and Vault’s list of best accounting firms for firm culture.
Heidrick & Struggles’ Brian Lowenthal and Regina Salvucci recently met with McGuire to discuss Grant Thornton’s culture-shaping journey.
Heidrick & Struggles: Why did you choose to focus on culture?
Mike McGuire: When I joined the firm in 2002, I felt that Grant Thornton had unlimited potential, but for us to be successful, we would have to be collaborative and work together as one unified culture. It was really not a franchise operation in terms of legal structure, but it was very much an independently office-managed organization. Each individual office had its own culture. What we wanted to do was bring the best people to serve our clients, irrespective of their location. It would require a lot of collaboration and trust throughout the entire organization to say, “Look, I’m in New York, but the best person to serve this client is in California. We are going to make that person available, even if that person is not under my direct responsibility.”
We knew we were going to be growing a lot. We were also going to be transforming our firm. It was really important for us to declare what it means to be Grant Thornton so everyone in the organization can rally behind that and really grow our business.
Heidrick & Struggles: What specific business goals did you think you could improve through culture change?
Mike McGuire: When we started our culture journey, a lot of people thought that culture is the softer side of our business. I thought there were a lot of business reasons for us to do it. This is an industry where there is high turnover. For many people we hire, it’s their first job right out of college. We wanted to be able to retain our people. We wanted to be able to increase our employee engagement, because if our employees are very engaged and they’re very happy, then the service we deliver to our clients is really at an absolute premium.
Heidrick & Struggles: Were there barriers to overcome in getting people aligned around the culture shift?
Mike McGuire: The first thing I worried would be a barrier for us would just be the scale of it. How were we going to roll this out to thousands of people? Obviously, there’s a cost involved in conducting our two-day culture sessions and in moving people around to take part in these. We’re an organization that bills by the hour, so that was quite a commitment. I was afraid there would be some pushback on cost and how much we were taxing the organization to go through that.
Once we got the leaders of the firm―we started at the partner level―through the culture sessions, they saw the value in it. The other thing that happened was we started seeing results that were a lot more immediate than I would have ever imagined from the business side.
Heidrick & Struggles: What are some of the results the firm has experienced?
Mike McGuire: So far, the results have exceeded my expectations in terms of what has happened and the outcomes, but also in terms of the time frame. We started seeing results in about two years. It was really around the brand, the way our people show up, the comments from our clients, the retention of our people, and our employee engagement, which is at an all-time high.
In 2016, our retention improved by 500 basis points year over year―something that’s unprecedented in our industry. I think that got people’s attention.
We do an employee engagement survey every three years. We’d never had participation above the low 70s[%]. This year, we were at 80% participation. We have a lot more employees than the last time we did this three years ago, but our results were off the chart. We had areas that were 500, 600, 700 basis points higher in some pretty key markers of employee engagement for us.
Again, when I look back at the retention that we’ve had and just how engaged our organization is, it’s really had a very high ROI for us. We need to have that retention in order to fuel the growth we’ve had.
Heidrick & Struggles: What else is different?
Mike McGuire: Some very positive things have come out of it that I wasn’t really expecting. Our net promoter scores and client satisfaction scores have always been very high. I think our culture journey has been able to enhance them. We’re getting a lot of our business from referrals from satisfied clients. I think that difference is really in our culture. I hear more and more from our clients that they see a difference. In fact, I’ve had CEOs tell me, “We’re going to give you the work, but one thing I want in exchange is to have dinner with you to understand how your team shows up so differently. What’s the secret sauce that you follow at Grant Thornton?”
Heidrick & Struggles: What has changed in terms of people’s mind-sets?
Mike McGuire: One of the areas . . . is embracing change. Most industries are being disrupted digitally, so as an organization we have to expedite change and change management. People need to be able to embrace change and design thinking and be able to fail fast and experiment without fear. Now I look at our people and see they’re ready; they’re curious. They’re not fearful of what disruption is going to do to the industry. They actually think about how we can become the disruptor in the industry, rather than being the disrupted. It is an outcome of our culture journey that I didn’t expect, but I’m very happy we are where we are.
Curiosity is something that’s embedded in our organization as part of our culture. It makes a real difference, and it matters to the kinds of solutions that we deliver. From a client’s perspective, our people show up as curious. They want to make sure that they’re asking questions and trying to learn.
Heidrick & Struggles: What results are you seeing in terms of brand reputation and attracting talent?
Mike McGuire: We didn’t get into this to win awards, but I am starting to see us win awards all over our firm―we’re being named best place to work on lists where we weren’t even mentioned before. Now we’re in the top 10 in a lot of these categories. We may be the only accounting firm in the top 10 that’s mentioned. A good example is Vault, which rated our firm number two of all accounting firms in terms of culture in 2017. I never even knew that there was such a rating for culture. These outcomes are like mileposts that tell me we’re on track.
Heidrick & Struggles: You’ve taken thousands of employees through the culture sessions. How do people keep the culture alive?
Mike McGuire: In terms of process, once we had the top of the organization aligned, then we had to figure out how we were going to scale this for thousands of people. We’ve got interns starting and new campus hires and lateral hires coming into the firm all the time. We thought it was important that we have programs designed to “unfreeze” or unlock people’s thinking and be able to [help them] personally reflect on whether they are stuck in their way of thinking or open to new ideas. It’s really about being what I call a “Grant Thorntonite.”
One of the decisions we made was to take large groups of people who were at different points in their careers through these sessions. It was a way to demonstrate that Grant Thornton is not about what your rank is in the organization. I think if you put everyone at the same level together in the sessions, that might prevent them from having new discoveries and new findings.
Beyond these culture sessions, we reinforce our culture throughout our training and also through the culture conversations we have. We lead every major meeting―every partnership board meeting, every senior leadership team meeting―with a culture conversation. And we encourage our engagement teams and our project teams to have culture conversations once a month.
I have a laminated sheet of our culture principles pinned beside my phone. When I am on a call with someone, regardless of what the topic is, I’m scanning all of my culture principles. If there is a teachable moment, I try to weave a culture principle into the conversation. The fact that everybody has been through the training and understands the principles allows you to coach, mentor, and develop people in a very nonthreatening way.
Heidrick & Struggles: What advice would you give to other CEOs who are going to embark on a culture-shaping journey?
Mike McGuire: The first thing I would say is go into it with a long-term mind-set. It is a journey, not a project. Because if it becomes a project or an initiative, people start wondering when it is going to be done.
One of the key fundamentals of our firm is stewardship. I look at our culture as being a legacy for my entire leadership team and the leadership team in the organization. It is important for us to build this into the fabric of our firm for many years to come. I think it does differentiate us. We all feel emotional when we pass the torch to the next generation that we’ve actually left it in a place that’s much better. For that, I’m grateful.
Mike McGuire is the chief executive officer of Grant Thornton LLP, the US member firm of Grant Thornton International, one of the world’s largest providers of independent audit, tax and advisory services. He previously served in leadership roles at the firm including national managing partner for operations and national managing partner of markets, industry, people, and culture. McGuire serves on the board of directors of the Bechtler Museum of Modern Art, the Charlotte Chamber of Commerce, and Queens University of Charlotte. He serves as chairman of the board for Advantage Carolina.
About the authors
Brian Lowenthal (firstname.lastname@example.org) is a principal at Senn Delaney, a Heidrick & Struggles company; he is based in the Huntington Beach office.
Regina Salvucci (email@example.com) is a partner at Senn Delaney; she is based in the Huntington Beach office.