Why so many top executives start in accounting, consulting

Some of Australia’s most prominent business executives, from Telstra chief executive Vicki Brady, to AMP chief executive Alexis George, are alumni of the major professional services firms.

The McKinsey alumni includes former CEO of Star Entertainment Group, Matt Bekier, former CEO of Coca-Cola Amatil Alison Watkins, the former ASX CEO, Elmer Funke Kupper, SEEK CEO Ian Narev while outgoing Virgin Australia CEO Jayne Hrdlicka came from Bain & Company. The former Bank of Queensland CEO George Frazis and former Australia Post CEO Ahmed Fahour were from Boston Consulting Group (BCG).

Among C-suite executives of ASX 20 companies today, 43 are alumni of either the big four accounting firms, or four of the big strategy firms: McKinsey, BCG, Bain or Accenture, research from executive search firm Heidrick & Struggles shows.

Among the big four accounting firms, KPMG is a previous home of the largest number of C-suite executives from ASX 20 companies, the research shows. KPMG, with 10 former employees now sitting in the C-suite of the top 20 companies, is closely followed by PwC, with eight, according to the data, which was provided exclusively to BOSS.

Among the major consultants, BCG is the biggest training ground for senior ASX 20 company executives, followed by McKinsey.

The BCG numbers are enhanced by the fact that five alumni of the strategy firm sit on the Woolworths executive leadership team, including chief executive Brad Banducci.

Elsewhere in corporate Australia, Cochlear chief executive Dig Howitt, Dan Murphy’s managing director Agnieszka Pfeiffer-Smith, Who Gives a Crap co-founder Jehan Ratnatunga, federal MP Kate Chaney, former Optus boss Kelly Bayer Rosmarin and Peter Wetenhall, co-founder of beauty retail chain Mecca, are all BCG alumni.

Stakeholder management

KPMG alumni include Brady, Sian Lewis, group executive, human resources at Commonwealth Bank, and Antonia Watson, chief executive of ANZ Bank in New Zealand.

Graham Kittle, the Australian managing partner at Heidrick & Struggles, attributes the career success of former professional services firm employees to the range of industries and companies they gain exposure to, the complexity of the problems they can be asked to solve, the communication and stakeholder management skills they develop and the scope to gain international experience.

“Where the real training comes in is stakeholder leadership and communication,” he says.

“They’re getting complex problem-solving skills as well. The analytical mind can take you so far, but the ability to communicate to win the hearts and minds, to bring people with you along the journey, or face into headwinds and have tough conversations [is critical].

“When you get that incredible exposure, you know what good looks like. You know what headwinds are going to produce in terms of problems and bumps along the way.”

Ongoing training

Dorothy Hisgrove, national managing partner, people and inclusion at KPMG, adds that employees of the accounting firm gain access to senior executives and face challenges from an early stage in their careers. Formal training programs teach young staff members how to communicate, listen and present. Training and development is ongoing.

“We bring a lot of thought leaders in. I think they are development opportunities that you rarely get, listening to brilliant leaders. It gives you the opportunity to see different leadership styles,” Hisgrove says.

Michael Ackland, chief financial officer at Telstra, points to a similar experience to WiseTech’s Hall.

Ackland is a BCG alumni and found himself working in India for about 18 months in the late 1990s. He was part of a team advising a petrochemical plant in southern India, a sector he was unfamiliar with despite holding an undergraduate degree in chemical engineering. Like Hall, Ackland was able to rely on his fundamental skills.

“We turned up with the approach that they would describe their problem to you, and you can start to step through from a first-principles point of view,” he says.

“For most businesses, that comes back: Am I getting the price for the product that I need? Where are my challenges on cost? What’s happening on supply chain? Where are the where are the people issues that are occurring?

“You step through all of those things. In most cases, businesses [need to understand]: How much do I need to invest? What’s my cost of operation? Can I get a return on my original investment based on the cost and the revenue? Then you go to the next set of drivers.”

Jane Danziger, chief transformation at Woolworths, is also a BCG alumni. In addition to problem-solving tools, Danziger learnt a lot about leveraging the strengths of different team members to find optimal solutions, which put her in good stead for her current role.

“[It is] the familiarity and comfort with working in an agile way, although we never called it that,” Danziger says.

“It’s about coming together as a group of talented people and figuring out how to team together to solve a problem. If you look at the way we work increasingly across businesses today, it’s bringing multidisciplinary teams from different places together to solve a problem and leverage each other’s strengths.”

Kevin Corbally agrees that the professional services firms are great training grounds for senior executives. The chief risk officer at ANZ Bank spent seven years at PwC.

“You never asked to do anything on your own. You’re always asked to work as part of a group.”

— Kevin Corbally

Corbally points to the formal training program that graduates are first put through and the emphasis placed on team work from day one.

“The nature of the exercises that you do as part of that training program are heavily driven around teamwork. You are never asked to do anything on your own. You’re always asked to work as part of a group,” Corbally says.

“You are encouraged mix with different people, to understand that most of what you’re going to do is not going to be driven just by you. You’re going to rely on other team members.”

From the get-go, Corbally, who has been at ANZ since 2009, learnt what teamwork meant.

Corbally’s graduate cohort included a trained gynaecologist, whose financial skills were weaker than those of the commerce graduates. Corbally was in the same team as the gynaecologist during one exercise and realised he needed to coach her to help her get up to speed.

“You realise that you’re only as strong as the weakest link in your team, so you’ve got to help others in your team, get them up to where they need to be so that we can all get that pass mark.

No choice

“It might sound silly, but the fact is that it was 30 plus years ago but I still remember it,” Corbally tells BOSS.

Teamwork, he adds, is critical in his current role.

“Unless you want to work as someone who’s self-employed, you have no choice other than to work in a team environment. If you understand the importance of that, and ways in which to get the most out of those who work with you, I think that’s critical to anyone’s success,” Corbally says.

Receiving and giving feedback are also skills that professional services firms learn early in their careers.

Almost as soon as they have completed initial training programs, young employees can find themselves in front of clients. After those meetings there is invariably an internal de-brief, where staff are critiqued.

“There is constant feedback on how you performed, how you showed up, how you did things, how you behaved,” Ackland recalls.

Then, within a few years, those same executives, often still in their early 20s, are giving feedback.

Corbally says that after every job he did at PwC he had to write a performance assessment on the individuals who worked on the same project.

“You have to write it down and then you have to take the person through it. You couldn’t just write it and walk away,” he says.

[Now] I have to have difficult conversations quite frequently, both with customers and with staff. That trained you early to do things in a way where you have to get your message across, but you have to do it in a somewhat empathetic way.”

Permission to be bold

Grant McCabe, BCG managing partner in Australia, points to a focus on communication skills and using stories to relay dense and complex ideas or recommended actions.

“It’s the art of having people convinced and having them drive change. Succinct messaging is a huge part of the learning,” McCabe says.

“There are lots of ways we think about storytelling, such as how it is constructed in novels or how it’s constructed in movies.

“Another important lesson for BCG alumni is to be bold. BCG is in the business of driving significant change in the businesses of their clients.

“So you have that permission to be bold, and look for ways to make big steps in thinking about the latest innovations that might drive that, or pushing hard decisions that organisations haven’t been able to make yet.

“Finding ways to be bold and, and tell the truth in a very respectful way, that’s how we can drive impact.”

Despite the valuable experience and skills alumni of professional services firms gain from an early stage in their careers, moving to a company can come with its own challenges.

For starters, no one is paying thousands of dollars to listen to the executive spout their ideas about how best to fix complex problems. Once inside, the executive, like everyone else, needs to learn how to use their voice and contribute ideas.

“The Red Sea doesn’t open when you turn up,” laughs Ackland.

On the other hand, colleagues can be more appreciative of your ideas because they are no longer paying tens of thousands of dollars for them, argues Hall.

Ackland also says there is more than just the one chance to influence people in a company. Company executives have multiple opportunities to make their ideas known

“You’re not a one-trick pony when you’ve got the set moments to convince them of this strategy or recommendation,” Ackland says.

“Now I can go back again and again, I can change my mind and I can evolve it with different interactions. That longevity of the interaction feels different. I don’t have to come up with a new idea every day, and I don’t have to justify my existence every five minutes,” Ackland says.

The Telstra executive adds that rather than coming up with ideas all the time, company managers spend a lot of time reacting to events and people, while those people tend to be far more diverse.

“Depending on the place you work, there is a much broader range of individuals who have very different backgrounds – from store staff to field staff to healthcare professionals – compared to a law firm or an accounting firm or a management consulting firm,” Ackland says.

Hall says he appreciates the opportunity to implement ideas, taking responsibility for seeing them through.

“What I’ve found that I’ve really enjoyed being inside is the ability to actually make a difference to people, and therefore to the business,” he says.

Danziger says one of the major differences between working for a company and a professional services firm is breadth of issues and activities she needs to be across.

“I was always busy at BCG and I had a lot on, but I didn’t have as many things that were simultaneously moving at the same time that I needed to be across.

“In my current role, the thought of having an uninterrupted couple of hours to really dive into one problem feels like a luxury. It’s quite challenging to make the time to do that. You have to consciously make the time to do that,” Danziger says.