TechTalk ep1: The One with the CEO of PwC Luxembourg

Paramita: Hello and welcome to a brand new season of PwC TechTalk. Today's guest is a very special one. He is the CEO of PwC Luxemburg, John Parkhouse. And we will talk about technology enablement.

Paramita: Hello everyone. Welcome to the new season of PwC TechTalk. As promised I'm joined by...

Luis: Luis Salerno. Hi everybody I'm super excited. I'm a little bit nervous too.

Paramita: My illustrious co-host. And as promised again we have our CEO.

John: Hello everyone. My first ever podcast so we'll see if this will be my last. I'm looking forward to having a good conversation.

Paramita: Yes that is what TechTalk is all about.

Luis: We promise it will be very good. So what's the topic?

Paramita: So the topic is something that is very hot these days. It's technology enablement and we thought of you because you are you know somebody who could give us the CEO's...

John: Somebody who embodies technology enablement at PwC, is that right? Which is a scary thought in itself.

Paramita: It's scary and promising...

So basically I wanted to start with... You know when Bob Moritz our global chairman he came and you remember you were taking questions up there on the stage.

John: Yes I remember it well.

Paramita: It's basically about you know we have the CEO survey every year. And this year we saw that most of them, most of the CEOs they're quite concerned, they're quite worried about the skills gap that's happening because of the technology revolution. I just wanted to ask you as a CEO what is your take? Do you agree with your counterparts? What do you think?

John: Yeah I mean I think maybe firstly if we if we start off with the survey itself. So I think this was the first time that we'd really drilled down on the question in terms of the skills gap. We've had over these skills questions before. And it was quite dramatic what you actually saw from around the world. Didn't matter where the CEOs were. Really it was one of sort of the top three issues on the agenda of CEOs... was the growing skills gap that they're seeing within their organizations both in terms of serving the business today but especially in terms of making sure the businesses are being future proof for tomorrow. So actually you know when they're looking forward, CEOs are looking forward and looking at where their businesses are likely to take them, what their client needs are and then they're looking at the skills that they actually have within the organization, they're really seeing some major challenges. And the challenges are there because you know obviously the workforce today hasn't been trained on the technology side.

They've got challenges in terms of how they source different types of skill sets and you see differences depending upon the region. So I think in the U.S. it's very much focussed on relying on the institutions, the universities etc. to start to help replace that skills gap. In Europe, it's much more in terms of OK we need to do it ourselves. And there's the stuff that we need to do here. In Asia, it's just a massive challenge. So clearly this is something that's on the agenda of CEOs and anytime I'm talking to a CEO this is one of the top things that they want to talk about and how we see things at PwC. So if I look at how I see things here within the firm I mean clearly if we look at our business, our business just like all other businesses is in the process of being disrupted, is in the process of being transformed. Technology is really becoming core to how we actually deliver to our clients, how we serve our clients and also in terms of what we can bring to our clients. And as a result you know we've got to make sure that the skills that we bring on board and the skills that we keep on board are the skills that we develop here are matching that evolving need. One of the challenges when you look at that is we don't know what our needs are going to be in two three four five years time. So actually sort of preparing our people for that is something that is very difficult for all CEOs. But one of the things we do know is that all our people are going to need to be more digitally enabled, that they're going to need to be more tech savvy, more comfortable with how we're working with technology to solve our clients' needs. And one of the advantages I think we have at PwC is that we have a very young population. So our average age here in Luxembourg is 28.

Paramita: I feel old...

John: Imagine how I feel... I was out at an event a couple of weeks back which is our go senior event. So our promotion celebration event for seniors. And I was talking to some of the seniors about when I actually moved to Luxembourg. So not even when I started in the profession. But when I moved to Luxembourg and the response was oh I wasn't even born then. And you're sort of like OK...

But what that does mean is that we've got a fantastic group of young talented people in terms of tech. So much more tech savvy than you or I would have been when coming into the workforce and people that are very familiar with learning new things and are very open to learning new things.

And our challenge is to make sure that we can take that pool of talent to start with as we're bringing on new talent and make sure we develop them in the right way so that the technology skills that they have sort of help them to succeed within PwC but also then help them to be more ready to succeed outside of PwC.

I mean many of the people that we recruit won't stay with the firm for the rest of their career. So that's one aspect but maybe I'll just close on the second aspect which is important which is then also looking at the skills we have within the firm because we have a lot of very technical people in the firm very good at what they do, very good at the technical expertise they bring to their clients but not that open to change. And what we're talking about here is really a change in culture, in readiness to unlearn, to relearn and curiosity to actually sort of try things and explore things.

So you've got the two dimensions. It's grooming the new people and grooming them not only in terms of you know helping them develop but in terms of the sort of people we want to recruit the talent pool we want to go to but then a key part is actually developing the people we have.

Luis: You know I read recently that this is a bit contradictory because we need skilled people like technology savvy people but at the same time we need soft skills. And develop them more because the precious time together, the human interaction will be priceless. And these moments when we are interacting among ourselves should be really enriching. That's what I read. It was kind of surprising but I guess what it meant is prepare your people to be adaptable because that's the only truth... as you said we don't know what is coming. What we know is we need to change all the time.

John: Yeah. So I think there is a point there in terms of helping our people to become more agile, more ready to change and evolve as things develop. But what you said was also a really interesting point because what we're not looking to try and develop and I don't think many businesses are looking to try and develop is an army of tech gurus or digital gurus. That's not what we're about. That's not what PwC is about. What we need to basically look at when we're upskilling our people making sure that we've got the right talent pool going forward is that they are tech savvy enough to be able to leverage the technology and use the digital resources that we put at their disposition. But their commercial, relationship, business skills are also grown because the great thing about technology in my mind is that it's really getting back to the heart of who we are at PwC. Where we've moved to over the last few years is that there's been an enormous focus on technical correctness and compliance and that takes a huge amount of time. And it also means that the people you develop they need to be good at that. And that's a that's a different skill sets. So now with the use of technology where we start to go is that that technical expertise and the compliance nature of things should be more and more taken by technology. And what we actually need our people to be able to do is to take the output of that and have the right conversations with our clients and to really bring value through those interactions.

Luis: We are trading time with the robots...

John: Yeah. Basically yeah. And it's also part of the challenge we have as a business because our business historically has always been time and materials.

Whereas a reasonable sized chunk of what we would do today in terms of time would be taken up by technology. What we need to do is to reinvent that so that our people are bringing different value to our clients.

Luis: When researching to prepare the podcast, we found this article on the European Business Review and what it states is that the CEO should be the Chief Enablement Officer. So the responsibility you have behind according to this publications is pretty big... What do you think about that?

Is it really a CEO's role? Does the CEO need a team? What do you think about this?

John: Yeah. So I mean you hear lots of you know Chief Empowerment Officer, Chief Enablement Officer... but I think they all go along the same way. As we're moving through the period of rapid change and transformation that we're moving through at the moment in the business world as well as in in society as a whole, you know to be an effective CEO you need to be somebody that is clearly the person that is leading that change, is at the forefront of that change. And what do I mean by leading that change. I mean I think if I'm if I'm looking at what that sort of Chief Enablement Officer should be should be bringing I would summarise it in three captions.

So the first one clearly is that the CEO needs to be laying out a vision and a purpose. So vision as to where we're actually going with this transformation. And we're talking much broader than technology here. You know technology is a key part but it's much broader than technology. So a vision in terms of where actually we're going as an organization. And you know where that's going to basically take the organization and take the people within the organization. And what that's going to mean in terms of transforming what we do with our clients etc. And linked to that is a purpose. So a purpose in terms of we're not making change for change's sake. We're not introducing technology for technology's sake to say that we've done it. We really have a purpose behind what we're doing and a key part I think of any change agenda is making sure that the people that need to be part of that change agenda understand the why, understand what is behind the change that is required and therefore they can start buying into how we make that change effective. So I would say that's the first mission critical objective of the Chief Enablement Officer as you put it.

The second one and that's where we talk to the team is providing the right ecosystem for that change.

So essentially making sure that we've got the right framework within the company to encourage people to develop within the set strategy, to encourage them to be part of it, to be able to invest their time, to look at the right incentive models, to make sure that we're not being blockers. So for instance if one of the things that we really need to drive is innovation and effective client facing innovation we need to make sure that that we are providing an ecosystem whereby people are encouraged to try things, to try new things and develop new things and if they fail that's OK. And actually one of the measures isn't how much you've succeeded but how much you've tried. And that's a very different culture from many that we would be familiar with and frankly from what we would experience day to day here at PwC. And that's one of the things that we need to make sure we get right as we move towards that more agile change minded organization.

And then I do think that the third thing that's really critical when you look at the CEO's role in in transformation and change is setting the tone at the top.

So as things are being developed, as things are being pushed out it's making sure that the CEO and his leadership team or her leadership team are really walking the talk. They are demonstrably you know supporting the initiatives that are out there.

If there's new technology in place that everybody's supposed to use they should be using it. And making sure that people are looking at that and saying yeah OK they're doing it. It's good for them. It should be good for me.

So really taking the responsibility to be seen as the ambassadors for that change concretely day in day out. This isn't something for everybody else.

Luis: And John what to do with the detractors because they're always people that prefer past times. Let's stay as we are now because it's comfortable. I wonder all the time especially in big companies or large companies like this one, what to do about that?

John: The detractors the whole the whole issue of blockers and everything is going well at the moment so why do we need to change type thing, I mean that's clearly one of the crucial challenges that any business has in terms of transforming. And so I think there the approach that we try to take here more and more is to basically say two things. So firstly it's laying out that vision and the purpose. It's making it clear that that you know this is where we're going and this is why we're going there. And this is the ecosystem that we're going to be putting in place to make it happen. And that includes the metrics, the sort of the incentives etc. So that first piece is crucial and that first piece basically captures the three points I said about the enablement. So vision, the purpose, the ecosystem and making sure that everybody, detractors and people on board, are seeing the fact that top management are bought into this and doing it.

The second thing is basically to really start moving down a line of saying OK this is where we're going opt in or opt out. But be clear opting out means that your future development in the organization is unlikely to equate to your past development in the organization. This is where the organization is going. And we need you. We want you to opt in. We think you're a valuable employee. We think you've got great potential but let's be clear. You need to be part of where we're going. And if you're not then that's your decision. And I think that's sort of a bit of a shift in terms of certainly how we've managed things at PwC in the past and obviously that needs to be done with care and we need to do that properly and we need to make sure that we're giving our people all of the opportunity to get on that train to be part of that journey. But if you have people that are firmly against getting on that train that's fine. But then they're not on the train. And I think that's the approach that now we start to really look at here at PwC to make sure that we are moving down to the right path at the speed that we need to move because it's not something that we can sit here in four years time and say yeah we're trying to get there. I mean the level of change that we need to start to execute on is significant and we need to make sure that that everybody's on board with that pace of change.

Paramita: And talking about detractors do you think that probably organizations that are experiencing let's say failures in their transformation journeys, they're not really focussing on one of the most important things that's the cultural aspect of a company you know to get everybody on board that train?

John: What I think you know as you know but as the people on the listening may not know I've just started my second term as CEO at PwC Luxembourg. And my first term we had a very big focus on transformation. Very big focus. We appointed somebody to the board that was really responsible for transformation. And you know really we'd recognized back then the need to change.

But what I would say is that whilst we did an awful lot in terms of bringing in transformation programmes, technology and focus on technology and some great things like the Experience Center etc. what we didn't do to the extent that we needed to was the cultural change. So the change in terms of leadership, in terms of the culture that our people feel and that sort of that that that messaging in terms of the need for change. And you know what I've already said to our people in the town halls is you know that's something I recognize we got wrong. We should have had at least as big a focus on the cultural element as we had on the technology element. And that for the coming term is shifting big time.

End of the day, I think that you know if people are listening for a sort of a message I think for me the cultural aspect is actually more important than the technology aspect because if you've got the right culture in place, you've got the right sort of drivers for our people, you're bringing on board the right people, you're developing them properly, they're in that right sort of ecosystem to work and succeed then then you'll make it work. The technology will work. The client experience will work. Everything will work. But it all comes down to making sure that you're evolving that culture in a way that that really is going to take you where you need to get to in terms of your strategy.

Luis: You know in my function I'm kind of close to technology topics. And once we wrote on the blog an article on data democratisation. It is a big thing now and it means basically giving power or everybody will have access or has access maybe already to data. And they can manipulate that data which means I mean to me being democratic is a sort of system where you need governance because the more you ask people to make decisions or the more they have the power to make decisions the more someone needs to kind of organize these decisions.

So the same happens in a company I think if a lot of people have access to information or key people have access to that is the power of the decision maker diminishing? Do we need more horizontal institutions, organizations than vertical?

It's something I wonder actually in the same article we referred to before what it says is that CEOs don't know everything and actually is good. What is your take on this?

John: It's an interesting way of putting it. So I think absolutely you know we're now moving very rapidly into a world where you've got this democratisation of data, of information. And you know you've got lots of different sources, you've got lots of different channels to receive information and to spread information and so you've got a real empowerment at the level of each individual in terms of what they receive, what they choose to receive, what they choose to understand. And I think you know there are many or a number of challenges that come out of that. But I would say probably the single biggest challenge is around the way that we communicate. And therefore the way that we actually go through decision making processes. So if I look at the way we communicate today it's still very much top down.

We'll send out messages to everybody and we'll do our town halls, we'll do our videos for our people etc. But it's really a push. And as a result we're taking decisions with that in mind. We take our decisions, we then explain our decisions, we try to give it the vision and the purpose etc. But people will listen to what they want to listen to. What we don't do today is we don't engage.

We don't really have a conversation and basically share the challenges, share the solutions and essentially not necessarily you know take decisions to the vote of everybody. That's not that's not what I'm saying. What I'm saying is that as we're basically moving forward as a firm bringing together the different perspectives of people in as much smarter way using the sort of the techniques that we have at our hands today to make sure that as we are taking decisions they're socialised, they're discussed, they're debated and then you know we're much clearer on what it is that we're doing, why it is that we're doing it regardless of what that might be. I mean that might be anything from a technology development to a bonus discussion. So it could be anything but essentially making sure that people feel like it's not a them and us. So in your parlance a much more horizontal type approach to how we are sharing, engaging and moving things forward as opposed to what it is today.

Luis: And that improves the sense of belonging.

John: Yeah exactly. You feel part of the dialogue. You're not you're not just being talked to. You're really part of a discussion...

Luis: There are things that I guess should be decided by the board and things that can go together. I understand not everything can be I mean decided by everybody but there are things that might be...

Paramita: Yeah like seating arrangements in our offices.

John: Oh yeah yeah yeah. For example. But I think and I think actually we start to have the tools in place. You know I think actually it's not been a very easy integration in our in our organization but the whole implementation of Workday and the project that went around that which started to really establish those teams and I know we've still got a long way to go before that's successful brings a different proximity and I think one of the challenges that we've got in terms of engaging effectively across our organization using technology much more effectively is leveraging things like those team units in terms of how are we having those conversations differently. How are we taking that feedback and making sure it's a virtuous loop rather than a vicious circle.

Paramita: We spoke a lot about the challenges already and you said what leaders can do and should do and giving out the vision and the purpose, what about countries? What about States? How can they be enablers in that sense?

John: I mean when you when I mean this is this is out of my purview. But I can maybe give a couple of thoughts that I might have when you look at the impact of technology on States. I would maybe summarise it in two captions. The first caption and this is something I'm not sure many countries have really understood the real implications of at the moment is the skills issue, the skills gap. And I I really believe that that that there is a significant risk that there's going to be some big societal issues coming up in the next decade or so maybe shorter if that skills gap doesn't start getting closed and that's where you know we've been working closely with the government here with the Digital Skills Bridge to help society look at that skills gap. That's why at PwC globally we're basically launching an initiative to upskill 150 million people around the world over the coming years, coming five years I think it is. So there's really a major societal need to address the skills gap and especially when you look in in certain economies where you know already you've got the working population coming down down down. As the aging population going up up up you know your ability to basically bridge that gap if you have the right skills is mission critical. And at the same time you know you've got countries where there's massive populations that are unskilled. And if we're able to really put something in place credible that's a   huge opportunity, huge opportunity. And it's I don't know how much time we have left but I always remember just a concrete example that was from the banking system in the US whereby back in the early seventies they introduced ATMs. And at that point in time everybody was predicting that the cashiers would be out of a job. Fast forward 30 years, you've got far more cashiers today than you ever had back in the 70s. But you know what they're doing a different job. They've been up skilled. They've got a much more meaningful job, better paid. And it's transformed that that side of the business. That's the challenge that we have in terms of the societal thing that we have. And that's not to be underestimated. I think the second big issue for nation States that you obviously see now is the social media political agenda and how that is impacting you know politics, the populist agendas etc. but also society as a whole. You know that the increase in mental illness, inability of people to really deal with things because everything's on technology. I think you know this is a challenge that we're only now starting to see the edge of and you start to really question how does democracy work in in the world that we move into. And how do we look after our people, how do we know how to people function effectively in that in that brave new world that's going to take somewhat... But you know what we've been through issues like this before as society. And one thing we've always been good as human beings is is adapting, changing and succeeding...

Paramita: Thank you very much, John it was it was lovely.

John: Pleasure.