PWC breakthrough HR

PwC's transformation journey raises the bar for employee engagement.
Unique programme at PricewaterhouseCoopers (PwC) China aims to develop the PwC Experience culture throughout the firm, from  partners to the most junior Gen-Y associates.

The recent launch of the PwC Experience—A Breakthrough (Breakthrough Programme) and its integral Audit Transformation Programme (ATP) has lead to one of the most unique programmes in the history of PwC. Launched in Hong Kong in October 2010, the Breakthrough Programme is aimed at driving organisational-wide behavioural changes to maximise interaction and communication between staff at all levels in the practice. Staff in Beijing, Shanghai, Guangzhou and all of the firm’s chosen markets also engaged in the programme soon after, in November 2010. The programme boldly encourages Gen-Y junior associates to provide feedback on the behaviour of partners in the workplace. It is designed to strengthen internal communications and interactions and to help with staff retention.  It also gives partners at the firm feedback on their behaviour—be it positive or negative—a practice not undertaken in the past. HR Magazine interviewed Raymund Chao, PwC’s Assurance Leader in China and Ewan Clarkson, PwC’s Human Capital Director, Assurance in China to discuss this unique programme.

People paramount
Chao began by pointing out that, “PwC at all levels is a people business, so the people management agenda is always a top priority. Hiring the best and brightest is key to our success and the biggest challenge is getting the people agenda right.” A view mirrored by Clarkson who said, “At the end of the day all we really have is smart people with lots of intellectual capital property and laptops—so people are of paramount importance and without them we can’t deliver for our clients.”

Retention strategies
PwC has experienced, like most companies, constant turnover within their Firm, even though they deliberately over hire fresh graduates each year—especially in their China-based offices. Clarkson noted that it is becoming increasingly more challenging to find qualified talent in the region. He added that where it usually takes two to three years for new employees to qualify at the Firm in the UK, passing the same examinations can take up to six years in China, due to significantly lower pass rates. Clarkson explained, “This presents challenges around people management, retention, compensation, progression and experience.” The issue of hiring and retaining the right kind of people within a resource-constrained environment are the top two challenges facing PwC.
Other key challenges include: localising practices for different markets, building effective rewards strategies and engaging partners and staff within the Firm. Despite this, PwC remains a very youthful Firm hiring in excess of 2,000 graduates each year aged around 21. The average age of employees within the firm is only 27 to 28.

Chao pointed out that the Firm’s culture is to deliver the distinctive PwC Experience to its people and clients, which is centred on developing a strong working relationship, sharing and collaborating with each other, putting yourself into other’s shoes and creating value.  A key strategy to not only enhance communication, but also increase engagement is to encourage the younger workforce contingent to give feedback on the performance of their seniors and to help point out any inconsistencies that they see from a practical perspective in living the PwC Experience.

The Breakthrough Programme
To meet this ambitious goal, all partners, directors, senior managers and managers within PwC’s assurance practice initially participated in a ‘Day of Change’ event—with leadership taking centre stage in front of all the staff to express their chosen behaviours to improve on. Each also wrote a ‘public commitment’—for display in their office or on a specially established blog—that clearly defined items they are intending to improve upon. Clarkson explained that the commitments are aimed at addressing unacceptable old and rigid behaviours and instead encouraging ones that optimise engagement in living the PwC Experience.

The Breakthrough Programme comprises three key aspects: public commitments, a performance improvement plan (PIP), and—most notably—encouraging younger staff to review and provide feedback on the performance and behaviour of partners. This has created something of a challenge for Chao and his team. He noted, “This is a journey for everyone at PwC and one of the biggest challenges is to ensure everyone in the practice embraces the Programme, particularly the partners. I want everyone to be part of the team and everyone to join the journey.” Three months into the scheme, and he seems to be achieving his goal. Clarkson commented on how the partners were embracing the novel scheme, “They [the partners] understand the fact that without people they can’t deliver their business…We just can’t afford to lose top talent. Our partners are very smart to make that connection, and therefore they’ve been driving this programme at the very top.”

Eradicating dinosaur practices
Clarkson said that the transformation programme was established with the aim of turning an already very good firm into a truly great firm, rather than being a knee-jerk reaction to any underlying problems. As such, a key aim was to identify and transform practices that could be improved. “It’s not the case that we have any serious problems. It’s simply looking at the fact that as humans, all of us, including myself, have off-times or off-days when we may not demonstrate the most constructive behaviours,” he explained. Four key areas, common to many large organisations, were identified where further enhancement was possible:

• Avoiding responsibility
• Holding onto the old ways
• Treating people as objects
• Being too busy to add value

Chao and Clarkson’s challenge has been to translate these needs into a system which nurtures positive behaviours such as being fully accountable, open to new ideas, having respect for others and being able to prioritise to create value.

Junior associates have key role
Following the Day of Change, there was a six hour Cultural Change Forum (CCF) focusing on individual behavioural change and commitments. To ensure support structures were in place, Clarkson noted that PwC had implemented a ‘Breakthrough’ Performance Improvement Process (PIP). After partners, directors and senior managers have made their public commitments to improvement, and stuck them on their office doors, several things occur to make sure they ‘walk-the-talk’. Four weeks after the CCF, they engaged in reinforcement forums, where in groups of 15, they examined their progress made to date in achieving the goals laid down in their public commitments.

The most interesting aspect of the whole scheme is the way that junior associates have been actively encouraged to take part and help support  the behaviour of their seniors—to determine if they really are living up to their promises. Clarkson concedes this has been far from easy, particularly in China, and to make staff feel comfortable about commenting on company practices and the level of commitment from their immediate and senior management teams. To help elicit feedback, confidential e-mail and voicemail systems have been set along with an internal blog. He added, “This provides a tool for business leaders to respond to feedback and has proven an extremely effective means of enhancing transparency without retribution…We’ve had more constructive conversations about behaviour today than we’ve ever had before.”

Chao also echoed these sentiments, “In the past there was a certain distance between the partners and the rest of the staff at PwC. Increasing the level of engagement between partners and staff is critical to building a stronger sense of belonging and team spirit.  Since the ‘Breakthrough’ we have seen a much greater level of communication and interaction between partners and staff. We’re closing the gap.”

Increasing accountability
One important element of the PIP is to ensure that public commitments are ‘strong’ in that they are clear, achievable, timely and focused. And follow up PIPs are regularly held to help guide staff towards positive change. The programme also put great emphasis on recognising the ‘heroes’ of change, and provides regular updates and feedback from different business teams.

Chao explained that, to date, although the vast majority of partners have been able to rise to the challenge to improve, one or two had found the journey difficult. For those who fail to deliver on their commitments, he said, “They will first get further support and encouragement and if they still fail to live up to the PwC Experience, their poor behaviour will ultimately impact their annual assessment.” He also believes it is essential for the top management to set a good example, adding, “That’s why my executive team and I were the first to publicise our public commitments.”

On the challenge of how partners could effectively maintain the commitment at the busiest times of the year, Chao turned it around and added, “This is the very time when partners are dealing most with their people. So it’s the best time for partners to really put their commitments into practise—pushing right down to individual level in their work teams.”

Future change
Key areas identified for enhancement include sharing best practice and tools for people to deliver their commitments, as well as promoting positive changes in behaviour. Moving forward, commitments will be updated again and there are plans to let senior associates also make such commitment to further enhance engagement. The practice is encouraging ‘advocates’ who can represent the views of staff in their business units. The blog will be extended in its coverage through further engagement with staff. The practice has also set up national webcasts of interviews in which fresh graduates, who have recently joined PwC, candidly interview some of the senior leaders. The whole scheme is aimed at promoting a culture of ‘teach don’t tell’ throughout the organisation by giving the right tools to staff at all levels.

Demonstrating ROI
Staff turnover is an obvious indicator which can be used to measure the success of the Breakthrough Programme, and Clarkson estimated turnover among senior grades in PwC had been significantly reduced in the last year, partly due to the positive cultural change that was sweeping the company at all levels. The Firm also participates in global satisfaction surveys every six months to help gauge: staff levels of commitment, advocacy for the brand, intent to stay, and ability to go above and beyond the normal call of duty. They also have a brand health index, where PwC is currently number one, which helps measure how well PwC is differentiated from other organisations, in addition to conducting exit interviews to obtain more qualitative data on why staff may be leaving the company.
The Programme is still in its infancy, and as staff embrace the Programme for the first time during peak season audits, this will prove to be the real test of its resilience and success. To date, the signs look extremely positive, and with the number of returnees continuing to grow, it seems like PwC is raising the bar again in what it takes to become a world-class employer of choice.
Clarkson shares the PwC story at HR Magazine’s next HR Conference at Cliftons in Central on 14 April 2011. Register now, to make sure you get a seat and put your questions to one of the most accountable men in the world.