Petra Justenhoven
recently sat down in Frankfurt with Dennis Nally, Chairman of
PricewaterhouseCoopers International Limited, to get his views on a range of
issues and events related to the past year.
Petra: Dennis,
as people look through the 2015 Global Annual Review, despite some challenges,
it seems like it was a very successful year for PwC.
Dennis:
Overall, it was a very strong performance for PwC. The environment that we are
dealing with today is challenging – whether it’s the global economy, the
geopolitical issues, or the stiff competition. PwC performed really well with
revenue growth of 10% putting us over the US$35 billion mark for the first
time. We’ve got great momentum going into FY16, with much to build on. There’s
a lot to be proud of across the PwC network.
Petra: You
mention solid growth overall – do specific areas stand out?
Dennis: As we
look at the results for the last 12 months, all of our lines of service showed
really positive growth – led by Advisory which is up 18%, Tax up 7% and our
Assurance business – notwithstanding some really difficult competitive market
pressures – up 6%.
And when I
look across the globe there are a lot of positives. I start with the US, the
largest firm in our network, revenues up by an impressive 10%; our UK firm, a
robust performance, up 9%; South America a strong result in a very challenging
region – up 8%.
Growth in the
Eurozone is challenging, as you well know, but I look at practices such as
Italy up 11%, Germany 8% and France 6%, doing well in a very difficult
marketplace
China is going
through a lot of adjustments to its economy but our firm, the largest of all
professional services firms in China, grew 8%.
And India, the
fastest growing firm in the PwC network, up 17%.
And so, as I
say, it gives us much to build upon as we head into FY16.
Petra: Coming
back to Europe, you know that here the regulators are focused on audit, and
even more on tax advice. What kind of impact does that have on PwC?
Dennis: Well,
the regulatory environment continues to be very challenging, not just for us
but for our clients. One of our biggest challenges is that the regulatory
environment is not always aligned in all parts of the world. Also, the movement
to mandatory firm rotation here in Europe is going to generate significant
change for everyone – not only for the profession, but also for our clients as
they implement the new rules.
Having the
highest quality audits is the key to success and the foundation of our brand.
Whilst we support reforms that will enhance audit quality, we don’t believe
that mandatory firm rotation is going to achieve this. But the rules are the rules,
and we will work with our clients to deal with these changes, whilst ensuring
our quality remains of the highest standard.
As for tax
reform, I think everyone agrees that in many cases tax regulations were written
many years ago for a different type of global economy.
So we need tax
rules that are really fit for purpose. With PwC having the largest tax practice
in the world, we feel that it is a part of our responsibility to engage in that
debate and to share our points of view and perspectives. And, of course, we’ll
do so. But it is a challenge.
Petra:
Eighteen months ago, PwC made history with our largest acquisition, Booz &
Company, now known as Strategy&. How has that progressed?
Dennis:
Without question it’s an incredibly strong move for PwC. The marketplace is
continually telling us that the need to move from just providing advice to
really dealing with solutions is an absolute must. The capabilities that
Strategy& has brought into PwC allow us to do that.
But this is
not just about advisory. The whole notion of going from strategy to concrete
solutions is applicable to our assurance business and our tax practice. So we
are very excited about Strategy&. We are well on our way to making this
transaction a real success for PwC across the world.
Petra: In
addition to acquisitions, PwC continues to develop joint business ventures and
alliances – the most recent being with Google. Can you talk about that?
Dennis: Yes
it’s a great point Petra, because I would say whether it’s Google or some of
our other alliances with Oracle or Microsoft, we need to think about new ways
of doing business.
The idea that
as a professional services network we would house all of those capabilities
within PwC is a model that’s really outdated.
We are working
with Google in a number of areas, like cyber security, to co-create solutions
for our clients. We bring in the content, they bring in the technology. So you
can expect more of those types of arrangements in the future.
Petra: You
just mentioned technology driving client services. What does technology mean
for us?
Dennis: The
whole issue of technology is clearly one of the most significant megatrends
that we’ve seen. It’s transforming everything – whether it’s the digitalisation
of business or the use of big data.
We have an important
role to play in terms of how we help our clients, and obviously the alliances
that we talked about will help facilitate that. But if this is disrupting our
clients’ businesses, it’s going to disrupt PwC’s business as well. So we now
think about the use of technology in a very different way, to provide better,
more efficient services across the whole PwC network. Our aspiration is to
become much more of a technology-enabled organisation.
Petra: You’ve
talked about the focus on technology, but we are a people business.
Let’s step
into the shoes of our future colleagues. So what would you say to persuade
potential employees to join PwC?
Dennis: The
world is such a dynamic place today – there are so many tremendous
opportunities out there to help clients – it’s an exciting time to be part of a
professional services network, and particularly PwC – so come join us!
I think PwC is
unique because of our special focus on talent – not only attracting the best
and brightest but how we help develop their careers, and give them the right
kinds of experiences.
I like to say
we help them build their résumé, we help them build their balance sheets. What
we want to do is help individuals set goals that meet their needs, their
timetable and their aspirations.
We want them
to be part of a culture that allows everyone to succeed.
Petra: Has
anything changed in terms of the kinds of people or skills we are looking for?
Dennis: Well,
obviously the world is changing pretty rapidly, and so our talent needs to keep
up with that. I talk about the necessity of every one of our people continually
reinventing themselves and having a focus on progressing their own careers. We
have talked a lot about technology, and having the ability to continually adapt
to new technologies will be, I think, a real skill for the future.
But the world
is so complex today, we need people who know how to work with teams, people who
know how to collaborate, and who know how to listen. The whole issue of
diversity and being able to work with different people with different
backgrounds and cultures is a critical skill set. We help our people develop
these skills and capabilities – that’s why I think it’s so exciting to be a
part of PwC today.
Petra: You’ve
mentioned diversity and I know PwC is involved in many programmes promoting
diversity. Just this year we saw PwC joining a UN initiative called HeForShe. Could you
talk about what we are doing in this area?
Dennis: I’m
absolutely convinced that when we bring people together from different
backgrounds – whether it’s gender or diverse types of capabilities – there is
no question that the quality of our thought process is significantly enhanced.
And so creating an environment where all of our people feel that they can make
a contribution and that we value that contribution is critical for us.
We think HeForShe is a
unique way to approach the diversity agenda – getting men across the PwC
network to think about the issue of gender diversity in a different way.
Sometimes I get a little frustrated that we are not making as much progress as
we want to on the gender diversity issue, but PwC has a real focus on it –
starting from the very top.
Petra: Many
organisations are deliberating over their purpose. How would you define the
Purpose of PwC?
Dennis: Given
the world that we are operating in today, I believe every institution needs to
have a clearly defined and articulated purpose.
For PwC, it’s
about building trust in society and solving important problems. It starts with
a fundamental premise that as an organisation that is over 160 years old and
that’s providing substantial comfort to the capital markets, we believe we have
an important role to help build trust in our society.
Secondly,
there are some pretty challenging and difficult issues out there and resolving
those problems is a real focal point for PwC.
A good example
is our work in Norway to help develop a new
clinical pathway for patients with acute stroke.
I see Purpose
as our guiding light, who we are and what we are trying to get accomplished.
Petra: What do
you think PwC will look like in 10 years, in 2025?
Dennis: Well,
2025 may be a little bit of a stretch – the world is moving so quickly. But we
all know this global economy is so interconnected today, and to me that
presents a lot of exciting opportunities. So at PwC we need to continue to
evolve to deal with those issues and challenges.
That includes
becoming much more of a technology-enabled organisation, and continuing to
anticipate the solutions our clients will need in this ever-evolving business
environment.
That
translates into a lot of opportunities for all of our people, and to me that’s
really the exciting part of the journey to 2025.
Petra: One
last question before we close.
You will step
down as the Global Chairman next year. Is there any final thought you would
like to share?
Dennis: Well,
first off I have a lot to do here over the next eight months or so, and I’m very
much focused on what we are trying to achieve within the PwC network. But as I
mentioned at the outset, we have a fabulous foundation to build upon, and I’m
really excited about the momentum that we have in terms of what we are doing
for clients and other stakeholders, and where we are trying to take the PwC
network.
And I would
sum up by saying it’s just a tremendous time to be in professional services
and, more importantly, to be a part of PwC – it’s a chance to make a
contribution that is value added and to really make a difference as you shape
your career.
Petra: That’s
a great message. Dennis, many thanks for your time and for sharing these
insights with us.
Dennis:
Thanks, great to be with you Petra.
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