Accounting for Success

With Jim Wall, the 2002 HR Executive of the Year, at the helm of Deloitte & Touche's people practices, the company shed its "churn-and-burn" reputation to become a recognized Employer of Choice.

Sunday, October 6, 2002
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Within 10 minutes of watching a plane fly into the north tower of the World Trade Center, Jim Wall was setting up a call center in Deloitte & Touche's midtown New York office at 1633 Broadway.

Staffed around the clock for about the next 60 hours by employees trying to confirm the whereabouts and safety of their colleagues, "you couldn't tell a senior partner from a mailroom clerk, because they were all there," says Wall, the national managing director of human resources for the global financial and consulting firm.

For those three days, "I don't believe Jim's head touched a pillow," says CEO James E. Copeland Jr.

Through the emotional upheavals and subsequent logistical nightmares, the employees of Deloitte & Touche held together, helping one another cope, supporting their communities and seeing to it the firm got back to work. It's not surprising they responded this way. Theirs is a company that prides itself on its people -- on caring about them and leveraging their talents to keep the business expanding rapidly in both size and prestige.

However, it wasn't always that way.

James H. Wall, this year's HR Executive of the Year, is a huge part of the people focus that began changing Deloitte & Touche's culture about 10 years ago. Described by friends and associates as enthusiastic, caring, persuasive, determined, cool under pressure and visionary, he painstakingly convinced the firm's partners to adopt a Women's Initiative in the early 1990s -- a move that began a Deloitte & Touche cultural revolution, if you will, and a doubling of revenues during the past five years. A company that once took twisted pride in almost daring its employees not to break under pressure is now recognized as an employer of choice.

During Wall's reign, the firm went from a "churn-and-burn" atmosphere to one that is collaborative, friendly, supportive and inclusive, says Copeland.

The way employees pulled together during and after Sept. 11 and through the tough economic times of the past year is a tribute to the strength of the firm's new culture. It's also a testament to Wall's leadership and the culture's resilience.

Although the firm's headquarters, where 3,000 are employed, is now located in the World Financial Center, across the street from Ground Zero, it had been in the World Trade Center until the company moved after the first terrorist attack in 1993. In last year's attack, the company fared better than some.

All but one of the 125 employees who had been inside the WTC escaped with their lives while 25 employees, in the city and throughout the country, lost loved ones.

At the HR helm, Wall remained true to the company's commitment to its people. His message via e-mail, voice mail and phone to employees was: Go home. "Take care of your family. Take care of yourselves."

Wall was part of the executive team created to respond to the crisis -- and he is a man who excels in a crisis, his colleagues say.

An HR Hotline was established to provide employees with up-to-the-minute information and an 800 number was set up to scroll along the bottom of TV news reports so employees could check in. Once the firm had a handle on the safety of almost all of its employees, "then we had to take care of the walking wounded," Wall says, referring to employees who suffered psychological trauma, such as those who "could tell what people were wearing when they fell out of the Towers."

Employee counseling programs were put in place almost immediately, offering on-site group sessions and one-on-one counseling. Information was sent to workers about how to deal with the attack and its aftermath.

Housing was also found for employees who temporarily did not have access to their homes, transportation was provided for workers stranded by the ban on air travel and the search was on for work space.

Helping to steer it all was Jim Wall, a man known for going the distance for others, the kind of man who stops on his way to a business meeting to help an accident victim. Two years ago, Wall, a trained emergency medical technician, helped save the life of a child after he and two others pulled a 4-year-old from the bottom of a pool and performed CPR until emergency crews arrived. He's the kind of man, Copeland says, who he himself would want to raise his children if he died.

HR's Mission

Wall is under no misapprehension of his purpose as Deloitte & Touche's HR leader, however. He didn't get to be in top management in order to enjoy the view or to pursue abstract, well-meaning HR strategies. He's there to help drive the firm to be ever better at what it does: serving and exceeding the needs of its clients and creating profit.

"We are really here for a business purpose," he says. "We are here to advance the purpose of the enterprise just like everybody else. Our specific mission is to attract and retain and develop [employees] and attract and retain our clients."

The firm's mission has been successful these past 10 years. In August 1992, its revenues were $4.8 billion compared to $12.4 billion in May 2001 (during which time the number of employees grew from 56,000 to 95,000).

With Wall's initiatives, Deloitte and Touche went from being a "laggard" in the Big 6 to being the firm that "redefines [what is considered] blue chip," says James Emerson, head of the Emerson Cos., a Bellevue, Wash.-based analyst following the professional-services field. "They have taken the best brand and redefined what's best," he says. "I don't care what any other firm will tell you, they are all following Deloitte. ... What better way to define a leader than by being followed?"

As the HR leader, Wall surrounds himself with experts in various HR disciplines. Everything he's learned about HR has been either on the job or in self-directed learning. He's rarely in his office, and he believes every program is better for having been a team or collaborative effort.

He goes out of his way to find the positive aspects of a situation, says Paul Guerin, national director of benefits and risk management for the firm. Instead of looking to place blame, Wall coolly looks to solve the problem.

"One of the phrases Jim likes to use," Guerin says, "is, 'Let's use this as a teachable moment,' particularly when things are heading south and other people's instincts might not be quite so generous in spirit.

"The terms [to describe Wall] that come very readily to my mind," he says, "are a mentor, a coach, someone who really creates an environment of empowerment, someone who always provides positive feedback. I don't think he's ever said an unkind word about anybody."

Wall, 50, who lives in Wilton, Conn., with his wife, Susan, and two children, Maggie, 14, and Mike, 12, never expected to end up in the corporate world. His background is in higher education.

He was 29, working as dean of student housing at Michigan State University, where he earned his master's degree in higher education administration, when Susan was offered a promotion within Hyatt Hotels. Moving to Boston in 1984 so his wife's career could advance, he took a recruiting job with Touche Ross, secure in the knowledge, he says, that there were 85 colleges and universities in the Boston area in case it didn't work out.

He never had to seek out another job within the firm. Its leaders consistently came to him, offering promotions and seeking his talents.

Ten years ago, just before taking on the firm's top HR position, which entails overseeing more than 450 HR professionals and a $175 million budget out of the firm's Westport, Conn., office, Wall was serving as director of HR in the Boston office and was part of the team that worked on the merger of Touche Ross and Deloitte Haskins Sells, which formed Deloitte & Touche.

It was a difficult time, says Copeland, who became CEO in 1999. The employees and partners had "just come through the travail of a global merger and we had done that in the midst of a recession in the United States," he says. "It was a very, very tough time. I think the partners were demoralized to some extent. I think they had a limited sense of what we could achieve."

A Leaky Pipeline

It was then, in the aftermath of the merger, that Wall, in his new position, began working on the Task Force on the Retention and Advancement of Women, which resulted in a series of programs and initiatives he and others credit with being the genesis of the firm's cultural shift.

For about 20 years before that, Wall says, the firm had recruited men and women equally, but by 1993, less than 7 percent of its partners were women. Overall turnover was about 28 percent, a rate shared by an industry once commonly referred to as a sweatshop.

A year's worth of research -- during which more than 3,000 current and former women employees were interviewed -- revealed that the firm's male-dominated business culture and its formal and informal systems worked to the advancement of men over women.

"We didn't have a glass ceiling," Wall says. "We had a leaky pipe."

And that pipe was leaking money. Using the standard cost of turnover -- three times salary -- Wall started to make his case to the firm's partners, directors and senior-level executives that they were decreasing their own profits and marginalizing the firm's prospects by not keeping capable women on staff.

At one point during his relentless crusade to persuade the firm's partners to change their HR strategy, Wall actually brought a calculator into a meeting, punching in the numbers as he showed them how the firm could earn an additional $22 million profit just by cutting 1 percent off the turnover rate. Dropping it by 3 percent, he says, would add $44 million to the bottom line.

"It's really hard," says John Barch, director of leadership and management development for the firm, "particularly in a partnership, to build consensus. Everything here is really done by consensus. It's so different than a corporation. There, leaders can do things by fiat and here, you really can't.

"No matter how good the ideas were, no matter how self-evident the benefits seemed to [Wall], his dogged persistence, his willingness to hammer at this year after year after year after year, without losing hope, without losing patience, never giving up on anybody, even the most hard-core skeptics, is really what did it," Barch says. "He turned a lot of agnostics into true believers."

As Copeland says, "[Wall] is tenacious certainly, but I think as much as anything, his personal courage and character come through. He puts himself on the line for those ... things he believes in and people know he's going to hold himself responsible and accountable for the results."

The Women's Initiative, which started the Deloitte & Touche revolution, was never a politically correct HR effort. Wall's initiatives were, then and always, based on the bottom line. "You have to understand what is the business ... and then understand, as HR professionals, what value do I bring to that business, to make value for that business," he says.

At Deloitte & Touche, "Our only assets are the minds and commitment of our people," he adds. Making sure the firm attracts the best minds -- and keeps them -- undoubtedly has a direct impact on its ability to attract and keep clients, as well as on its bottom line.

"It doesn't matter what your particular view on gender issues is," Copeland says, "if you see that there is a compelling business reason to deal with the problem."

In 1993, Wall convinced the firm to spend $8 million on mandatory two-day "gender dynamics" workshops with managers, partners and senior-level executives -- about 5,000 people in all -- to begin a dialogue on gender issues within the firm.

The HR department began reviewing and analyzing current programs to decide if they should be updated or disregarded in favor of newer programs that would benefit all workers equally.

Wall created an Advisory Council on the Advancement of Women, chaired by former Secretary of Labor Lynn Martin, to offer suggestions and review progress, which Emerson calls a "brilliant move."

"I would say she had an impact because she was a power player and it made everybody take notice of what they were doing. ... It's not only a matter of substance, but it's partially a matter of perception. Does the marketplace and your [workforce] really believe you care about this or is it a smoke screen, and she made [the Women's Initiative] believable," Emerson says.

In 1994, at Wall's behest, Deloitte & Touche launched its formal flexible work arrangement program, including reduced hours, flextime and telecommuting options -- and utilizing those options do not in any way hamper an employee from advancement in the firm. Deloitte & Touche also began affiliations with emergency backup centers and care providers to offer in-home, on-site or near-site care of sick children or other dependents when needed as well as care of healthy children on Saturdays during the firm's busy season.

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At Deloitte Consulting, employees benefit from a "3-4-5 Policy," which allows consultants to spend three nights and four days at a client site and then work in their home office on the fifth day. Consultants also can, with the approval of the head of the office, post a "no-travel status" for periods when the employee needs to be close to home for a defined period of time.

Beginning in 1995, the firm began annual reviews of client assignments to ensure women received high-visibility engagements, which were critical to advancement. The goal is a proportionate representation of women at all levels of the organization, and a set of benchmarks was created to provide a measuring tool for progress in the area. The goal for 2005 is for 35 percent of all new partners and directors to be women.

By 1996, Deloitte & Touche had added between 60 and 80 new HR programs -- all of them conceived under the framework of their cost, the ROI and their impact.

Today, women partners and directors make up 16 percent of the firm's leadership, and its programs and initiatives have resulted in it being named one of the "100 Best Companies to Work for in America" by Fortune for the past five years and one of the best places to work by Working Mother for eight consecutive years.

In the firm's most recent Global People Commitment Survey, 92 percent of the employees stated: "I am proud to tell others that I am part of the firm." Turnover is about 16 percent.

A difficult transition? "You bet," says Copeland. "You are talking about a massive cultural change in how you think about people," but one of the key results of that effort was the awareness that such programs and initiatives were "attractive to bright people no matter what their gender."

Ironically, as Wall worked hard for acceptance of the Women's Initiative, his own wife quit her job, then as a vice president, to take care of their children, whom they adopted from South Korea. Outside of work, Wall spends "almost all of my time with them," biking, rowing, sailing, ice skating and pursuing other family activities.

He also remains connected to higher education, serving as chairman of the Board of Trustees of St. Michael's College in Vermont, where he earned his bachelor's degree in sociology.

He is active in numerous civic and professional organizations including the Conference Board's Council of Human Resource Executives, the Society for Human Resource Management and the National Corporate Leadership Council of the United Way of America.

HR Failures

Quiet time, or down time, however, is important to him, and it's important to him that all of the firm's employees have that benefit. Batteries need to be recharged, or as he says, the pitcher of water needs to be refilled, if the business is to prosper.

Such consideration being tendered to employees, he thinks, possibly could have prevented some of today's ethical and financial problems in corporate America that have stained companies such as Enron and Arthur Andersen.

"I think one of the things that is likely to be found [at such organizations] is that these were not particularly people-friendly places to work and the leaders were consumers of people rather than developers of people; that they were rough on their subordinates.

"I am not talking about demanding. ... I am talking about abusive behavior. That might be a strong term. I'm talking about tough, unnecessarily tough behavior, that causes people to become motivated by fear and anxiety rather than by principles and by doing the right thing."

Deloitte & Touche has tried to hold true to its ethical standards. In June, it was fired by Adelphia Communications Corp., after the firm refused to sign off on financial reports, saying the cable-television company had withheld information and that it couldn't rely on the statements of some of Adelphia's financial and investor-relations executives. (Adelphia has since filed for bankruptcy and some of its executives have been charged with criminal offenses.)

Emerson recalls an old business magazine article from the mid-'90s that referred almost disparagingly to Deloitte & Touche as the "audit king" because it had remained constant to its "ethical conservative behavior."

"Now what was viewed seven, eight years ago as not in step with the go-go '90s, has come full circle and there is no brand that is better," he says.

Other companies these days often ask Wall about the firm's HR programs, and while he gladly shares them, he cautions them: "Programs are necessary but they are not sufficient. The culture in which those programs are implemented and the leadership of the organization -- not of the HR function but of the entire organization -- " is the key to success.

Many challenges remain, including the firm's Diversity Initiative, which was launched on the heels of the Women's Initiative. "That's a tougher nut to crack," Wall says. "The issues around diversity are far more complex than the issues around gender," specifically, what type of diversity: race, religion, linguistic, cultural or sexual.

But as the firm begins responding to the issue, it needs to make sure that its definition of "diversity" is not so inclusive that it excludes no one, he says.

As Copeland notes: "Everybody has a different idea of what diversity is and that's because diversity really is as different as two people sitting next to each other."

Before rolling out a $15 million diversity education program which mandated the participation of every employee, HR spent a great deal of time conducting research and "listening" to employees and experts to "really understand what the issues are," Wall says. The one-day diversity seminar explored the business advantages of "differences and commonalities," how to identify biases and how to use awareness to improve organizational effectiveness.

A diversity coordinator program and diversity leadership network were among the initiatives, and the firm "will clearly make accountability for results a foundation [of the program] earlier" than it did in the Women's Initiative, Wall says. The company offers health benefits to domestic partners, is involved in a variety of minority professional and student organizations, and has begun reviewing assignments to make sure high-profile assignments are offered to diverse employees.

Although he believes much remains to be done on that issue, the firm has already been named by as one of the top 50 companies for diversity and one of the top 10 companies for diversity recruitment and retention.

"Jim has been absolutely focused on that issue," Copeland says.

"I think the value that Jim has really had over time is that he's made [HR] a part of how we do business.

"We believe that every one of our people is responsible for our human resource behavior," Copeland says, "and Jim is the coach of our team on those issues."

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