What does Accenture’s Chair and CEO Julie Sweet believe is the company’s primary job? “We are a talent creator,” she told the audience at Signal 2023 in July. “I think it’s our core competency.”
Building new abilities, and teaching staff how to master them, is applied through an AI platform the company developed. The AI can mine the skills of its more 700,000 employees to find those who can be trained for a new role in just 20 hours. Not one to be proprietary, Accenture has shared the database with Workday so other brands can take advantage of the module and train their staff to stay competitive too, says Sweet.
“The only way we as companies can ensure that we bring our people along the journey is we have to be able to retrain them,” she says. “I really believe it’s a core responsibility as a company, and it is your competitive edge.”
You can hear more from Sweet in her conversation with Signal360’s John Battelle in the video below or read the lightly edited transcript.
TRANSCRIPT
John Battelle
I’m very excited to bring out a woman who leads a company that has its ear to the ground of not just corporate America, but really the whole world. That’s a great way to kick off a morning is to hear what’s on her mind and on the minds of her clients. So please join me in welcoming Julie Sweet CEO of Accenture.
Thank you so much for coming, and helping us kick this off. I want to start with the theme that we discussed with Jon [Moeller], “Resetting the Bar.” In researching your work, it struck me that we managed to have come upon a theme that is very consistent with things that you’re advising your clients to do. You have a phrase, “Total enterprise reinvention.” That’s even bigger than resetting the bar. What does that mean? What is unpack that for me?
Julie Sweet
Thanks, John. I do want to say thank you for having me. It’s very exciting. P&G is really one of the most innovative companies in the world. So to be here talking about reinvention and resetting the bar is super exciting. When we first met, I was struck by just how similar the theme of “Resetting the Bar” is for what we see. So for a moment, let me just take you back to 2013. In 2013, we said, and we were the first to say, “Every business would be a digital business.” Pretty much no one believed us. They argued. Now of course, today, no one argues.
In 2021, we looked across the globe, we looked at what had been happening since the pandemic, and we said there will be five big changes in the next decade that companies to succeed would have to harness and the first is total enterprise reinvention. Think about this today. About 90% of companies are transformers or what we call transformers. You know that. They have big transformation programs that’s driving our business, the technology business. There’s a difference between being a transformer and a re-inventor, and a re-inventor has three big characteristics. First, they believe that they have to continuously reinvent every part of the company using tech, data and AI. Transformers often do big programs and they think they’re done. P&G is a re-inventor. They have continuous innovation, and it’s across the enterprise.
The second big thing is that you think about the total enterprise. Oftentimes, transformation is about a function. The real opportunity is the connection. For example, we worked with a Brazilian automaker, that was digitizing manufacturing and connecting it to the end consumer so that they could do 100 iterations over four car models, which has to be embedded in the production line to that. The third builds the core competencies of reinvention. So it’s a culture that embraces change and innovates, like the constructive disruption. It has a very strong change management capability, and has the ability to continuously rescale and upskill talent, because in order to continuously reinvent, you can’t have to go outside at all times to hire.
You gave me a good segue there. Talent. One of the pillars of Signal is the employee value equation. When we spoke about this earlier, you really lit up because you’ve implemented something. First of all, I had no idea that Accenture has 700,000 employees. Which is a lot. You know, I mean, we have Morgan [Flatley] from McDonald’s later, she’s gonna she’s gonna top that. But generally speaking,700,000 is a big number. So if you want to reinvent how you create an employee value equation, that’s a big job. But you’ve done that. So I want to ask you about management of talent and in particular, this approach you’ve taken, the database you’ve built and how you use that.
Let me start by saying, we said there’s five big forces of change, talent is the second one, and you have to be able to access it. So great consultants, a good way to access talent. But more importantly, things like diversity, having diverse talent, you need to be able to create talent. That’s where being able to reskill comes in. Then you have to be able to unlock the potential of that talent.
We are a talent creator, I think it’s our core competency. We spend over a billion dollars a year on training our people and developing them. But the future of HR and something we started approximately five years ago is all about skills. So stop thinking about roles, start thinking about skills. For over 700,000 people, we have a database of their skills. We have algorithms that we run to say, do we agree with what they say their skills are. If someone says they’re proficient in an industry, we’re able to evaluate that. But even more important, we can run algorithms to see who is best able to be upskilled or rescaled.
After the pandemic, we suddenly needed people in security and cloud and being able to use collaborative tools like Zoom or Teams. We had to train them. We wanted people, we could train in 20 hours to do something different. And our algorithms were able to look at the skills people had and say, these individuals could be best upskilled in 20 hours. That database we built five years ago. We’ve now essentially built it for Workday, because we said, we don’t want it to be proprietary. We don’t want to keep it up ourselves. So now Workday has it as their module. And they’ve made it open so that you can connect into success factors in HCM depending on what you do. Part of the reason I’m so passionate about it is that we all see the changes in technology and how skill needs are changing. The only way we as companies can ensure that we bring our people along the journey is we have to be able to retrain them. I really believe it’s a core responsibility as a company, and it is your competitive edge. Just to give you one example, when I became CEO on September 1 2019, the first thing I did in my webcast was to announce that all of our 700,000 people would be trained in what we call, TQ. So core competencies, including AI, this was back in 2019. We said these are the core competencies of a modern worker, and our ability to do that, and then see the training and know what skills our people have, has been enormously impactful as you think about the last few years.
The idea that you could put a query into a corporation as large as yours, saying, “Okay, I want X number of workers to be ready to use this set of tools within 20 hours. Tell me how many there are, and let’s get started.” That strikes me as something that might take a few months in a traditional company to get an answer back. The fact that you have the flexible database and the ability to ask that question, I think the ability to ask questions of an enterprise as complicated as yours that is a competitive advantage. So let’s move on, because we talked about this with Jon, but a key pillar of Signal is the supply chain. It’s something that you’re also quite passionate about. What changes do you see coming in that field over the next year or two?
First of all, all my friends who do supply chain got really cool in the pandemic. They used to be like, “Oh, it’s supply chain.” And suddenly they were the stars. I have a friend’s son, who’s now studying supply chain, and I’m like, “You have entered one of the coolest areas.” So that’s a big change.
When we think about supply chain, we think there’s really three things companies have to focus on first, the ability to be proactive. We saw that in the pandemic where there wasn’t enough data, it wasn’t real time data. And as Jon talked about, when they saw the opportunities that between the demand and then the gap and filling that demand, it’s a huge growth opportunity. We’ve spent a lot of time over the last few years helping companies create the right data, access the data in real time and be predictive. Right. That’s, by the way, before Gen AI. So we haven’t talked about that yet, which is an amazing, sort of miracle that we’re as far without it. So being proactive.
The second is all about security. This is another area that a lot of companies have woken up to is that their supply chains aren’t as secure. We still see a surprising number of companies whose separate sort of enterprise IT security and the security of their operations, and don’t look at it holistically.
Then the third area, so you’ve got security. After security and productivity and sustainability, which Jon just talked about, embedding sustainability in the supply chain. Just to give a plug, because a lot of companies are spending a lot of money on it, including in supply chain manufacturing. I have a very simple advice to CEOs. If you spend more than $5 million on any technology project, make sure that the people in charge of sustainability at your company, know what the project is, and someone has intentionally said, is there an opportunity to embed sustainability and improvement in what we’re doing, rather than spend money later. Because we’ve seen so many companies do these as separate things. You really can save money by having that, and that’s what Accenture is doing. We’re trying to embed it in what we do, as opposed to saying here, you know, go put in your new ERP system, and then now let’s think about reporting for sustainability. Right? So it’s a really important thing. Like, Jon, I think it brings so much value to companies to really lead and sustainability.
Let’s dive in from the bigger view to specific to Accenture, your company. You’re leading a pretty significant transformation of Accenture. Can you tell us about that?
I became CEO, September 1 2019, six months before the pandemic was declared. Great timing. Within those first six months, I with my leadership team put in the largest change in our history. That comes off of having back in 2013, from 2013 to 2019, rotated our entire business from less than 20% digital cloud and security to 70%. Within the context of having just replaced the core of our business, within six months, we designed and implemented a new operating model that changed the P&L of our company in the middle of the fiscal year, eliminated an entire part of the matrix, dissolved our digital unit, because digital was everywhere, rotated 200, out of the top 300 leaders in a single day.
How did that go?
Really well actually. Going back to that, having changed management as a core competency. We use it tool that is data driven. I knew going into that change that I had 90% of our 5000 Managing Directors who believed in our strategic direction. And the quarter that I announced what we were doing, and most of those leaders were the ones running our P&L, we had our highest sales ever, which meant they believed in the direction. Now I want to share that with you, because that was the quarter that I was going to announce. And then March 11, the pandemic was declared, and earnings were March 19. I never got to talk about that great quarter.
So we did this transformation. It was meant to serve our clients better have our leaders closer to our people and to be faster. So if you think about that we had 500,000 people at the time, 99% of them had something change. We operated, designed it and implemented in six months. So March 1, it went live. In September, we created another group, it was called Cloud First because the pandemic was making Cloud explode. We had told our people, when we put this model in, we’re going to be faster and more agile. In the past, if four months later, we’ve made another operational change, people would have said, “Oh, it’s too much change.” Instead, people said, “Well, she was serious.” When we created Cloud First, it was a $12 billion business. 12 months later, it was $18 billion dollars. If we had not been agile enough to make that change, we would never have captured the opportunity. When we look at what we’ve done since September 1, 2019, we’ve added had $55 billion in market cap, we’ve grown incremental revenue twice the size of our competitor. We’ve gone from 50% renewable energy to 100% renewable energy. And we had 45% women and 500,000 people in September 1, 2019. We have 730,000 people today and 47% women. So the ability to be agile to continuously disrupt which I love, we call it actively innovate and have the courage to change is really important to succeed.
As long as we’re talking about change let’s get into AI. You’ll find me both enthusiastic and skeptical at the same time as it relates to this particular technology. So I’ve covered technology since the introduction of the Macintosh, if any of you know what year that is, do not shout it out. So I seen the Silicon Valley-driven hype cycles. This is the fastest one I’ve ever seen. Except maybe threads, Nicola. But these hype cycles are real. And they can get in the way of significant and lasting impact and outcomes that can be driven by AI, which, as you point out has been happening for many years. Your company, you announced, a significant investment recently in artificial intelligence. How are you advising your clients to think about it, and to implement it?
I like the idea of balance.The number one and number two advice I give is that AI is about outcomes, not about technology. Outcomes means it’s not implementing AI, it’s are you able to change the processes, so the change management, do have the rigor in terms of what’s the business value, because guess what, it’s pretty expensive right now in terms of the cost of running it, and it’s highly inefficient from an energy perspective. So first, it’s about outcomes.
Second, is avoid the hype cycles of the past. What do I mean by that? We remember when data and analytics was really big and digitalization and all of a sudden, you’d wake up as a CEO, and you had 1000 projects, which didn’t scale, were really expensive, you ended up with IT that had you know, all these different tools, you had a lot of different consultants and very little to show for it. That has really resonated with our clients. Because beyond all the things about risks and uncertainty, is they want to make sure that they’re not jumping on a bandwagon with a lot of proofs of concept and no value. Once you get past that, I go right back to total enterprise reinvention, right? Since 2021, what we’ve said is tech, data and AI are going to continuously reinvent. For many of our clients, so doing Gen AI makes no sense.
I was just talking to a CEO yesterday, whose data is a disaster. They don’t have hardly any digital first mindset and products. So I said to them, wait six months, I’ll bring you some Gen AI solutions from others in your industry, you need to stay focused on building your digital core.
Getting that base so that then you can leverage the tool.
That’s right. And yes, you’ll be behind, like a P&G who’s been building a digital core has great data. P&G can go fast. For those who are in have not been making that investment, they’ve got to make sure they get there and then they’ll move faster. By the way, ultimately, they may be able to leapfrog because lots of other companies will be experimenting, and they’ll be able to learn from it, if they’ve built the core competencies, embrace change, good change management, agile organizations.
I’m really glad we have enough time for me to ask this question. I see a question from the audience as well. So I’m going to work that in next. But I didn’t get a chance to talk to Jon about this. Besides AI and talent, one of the things that every single prep conversation I had for this conference that came up was the changing environment external to the company, and the conversation in the country and around the world that Jon referenced around some topics that had been previously seen, as okay to talk about and okay to support. There’s been a backlash, for example, to ESG investing, and a claim that, you know, companies are now “woke. So you’re either woke or not woke, I’m not sure what the opposite of not woke is, but asleep? But but this this is we are now entering a political cycle where we’re bashing companies that have a point of view on this or at least express a desire for diversity and inclusion that is going to be part of the political dialogue for the next 18 months. How do you respond to that? And when CEOs ask for your advice, what do you tell them?
Well, first of all, I’m going to shamelessly borrow the line the opposite of woke is asleep. I think that’s brilliant John. So let me just share a story with you for a moment. So I once had a client who was doing a real estate development, a mixed use where you have entertainment, sports, shopping residential. I was in a meeting, I was the only woman in the room that were 11 men. They were really excited to show me because we were going to be their innovation partner. They were showing me the development and pictures and had this fabulous par with families. This is going to be a family destination. I looked at that, and I said, “Where’s the bathroom?” There was dead silence in the room. And they were, “We don’t know.” No one knew. I said, “Well, you have all these families, right?” You would bring kids. They had to go ask, and it turns out that the nearest bathroom to this beautiful park was a football field away. I said, “That’s not going to work.” You’re not going to have families with small children. Why is that important? And actually, the CEO said to me, “Julie, so I guess that’s why some diversity on my team might have been helpful.” Because this was a mixed use, families, all this, and they didn’t have anybody who reflected whole segments of those who were going to use that facility. This is something I think P&G is so great at understanding, you must reflect those who you are serving. It’s not about woke, asleep. It’s about business value.
For Accenture, we have a sustainability practice that’s growing double digits. Why? Because it brings value to our clients. We attract some of the best talent in the world. Our people care about sustainability. So we have to care about sustainability. Diversity, we are innovation-led, there’s lots of studies that say, if you don’t have diverse teams, you are not as innovative. So all of those things. This is about business value. And it’s about one more thing. And this is where, I just love the values we share as companies with P&G and Accenture is we are stewards and we have to do the right thing. Pay equity, protecting the planet and making sure that everyone has an opportunity, that is the right thing. I will never apologize for being a company that always does the right thing. I don’t think anybody should apologize for that.
Last question, from our audience member. AI was mentioned. What are some of the other core skills or competencies that Accenture measures in its employees?
So we currently have TQ. We have 11 assessments and they range from everything from AI, Cloud, data, agile ways of working, and sustainability. Those are some of the big ones. Probably the most important thing that we think about like when we’re hiring, for example, is we asked one simple question, we say, “What have you learned in the last six months?” And that really shows you what we’re looking for. We don’t care if you learn how to make paella.
It is not easy.
It is not, that’s what my husband says, that’s his specialty, except I have to chop everything up. But that’s another story. The sous chef.
Being a learner is the most important thing that we measure in the people that we hire and that we invest in. If there’s one thing that, I know we have some young people watching, those who take away is, be a learner. It is a lifetime activity. I’m a great example. I was a general counsel the knew nothing about technology and now I you know get to lead one of the greatest technology companies in the world. That was only because I was willing to be a learner.
Julie Sweet, thank you so much for coming to Signal. It was a pleasure speaking with you.
