Building Value in People

He spoke recently with the JofA about the path to partnership, leveraging the skills of the younger generation and how he learned the hard way about the value of transparency.

JofA: What was your worst career move, and how did you recover from it?

Salzberg: I don’t know if it’s a career move, but an interesting experience, if you will, maybe a mistake—I once, on a very important engagement as a young partner, failed to share something critical with the senior advisory partner on that client. And I remember it distinctly because that partner was in a meeting with the client and was caught off guard because he didn’t know of what had occurred.

Interestingly, what had occurred was positive, meaning that I was given very positive feedback from the client for handling a very difficult and sensitive matter. However, I used poor judgment by not advising the senior partner, notwithstanding the fact that it was good stuff.

The senior partner was upset and called me on the carpet for not having the appropriate protocol and communication. I recovered from that. I learned that that’s not the way to handle the internal hierarchical leadership of an account, but rather I needed to be more communicative, more transparent with good or bad information. I think that today my partners would say that transparency is a hallmark of my leadership. I don’t like surprises.

JofA: What was your smartest career move?

Salzberg: As a partner, maybe as managing partner, some of my finer moments, I think, were handling the Arthur Andersen situation—hiring a number of people from Arthur Andersen—and, separately, the reintegration of Deloitte Consulting.

First there was the strategy of convincing our senior leadership that hiring some of [the Andersen] folks was the right thing for us to do and handling the cost that would be associated with it. There also was the difficulty of actually accomplishing it. We hired 2,000-plus people one by one through a resume and interview process. Once these people accepted our offer of employment, we actually brought them all on physically into our firm on the same day. So the Andersen situation was big for me.

As for Deloitte Consulting, it was separate from the rest of the firm, served a different client base and was culturally different as well. We needed to make some wholesale changes in order to comply with [the Sarbanes-Oxley Act]. This involved creating a financial discipline and redesigning the market space and strategy for consulting, and this was coming from a guy who had no prior background in that business, nor much association with consultants given the nature of the technical work that I did as a client-service partner. So it was a very tough integration.

Both those things happened within a year of each other, and I was in a very senior leadership role and had been tagged with successful execution against both of those events. Today, I think that they’ve contributed to the respect that people have for me and the confidence that people have in the decisions that I make.

JofA: Talk about your top priorities for this first year in your CEO role.

Salzberg: My priorities, as I outlined them for my partners, essentially fell into four categories. One is clients. One is people. The third is how to make it easier for us to conduct business, and the fourth is with respect to the marketplace for our firm.

And it’s important to know that all four of these priorities are founded on ensuring a continued focus on quality and on innovation. With respect to clients, the goal is ensuring a level of client service that rises to a standard of excellence.

In terms of people, it’s a talent agenda really focused on ensuring that our people’s careers are enhanced, that we’re creating the right kind of environment for them and adapting to the shifts in employee values and thinking.

Easier to do business would be in terms of our organizational structure and, as we’re getting bigger and larger and more complex in the broader footprint, being able to better migrate our organization internally, and as we engage with clients externally to ensure that the processes—in terms of engagement letters, contractual relationships, alliances and the like—are more effective.

And then, of course, in terms of the marketplace, my focus is on ensuring that we are creating eminence, that we are building our revenue base and our market share and the like.

JofA: How will you measure success on those priorities?

Salzberg: We have what we call a balanced scorecard. And in essence we measure a lot of the things that we do that support each of the four priorities I just mentioned. The metrics are communicated to our partnership, and quarterly we assess the performance of our firm in connection with 14 different measures of success that support our priorities.

You treasure what you measure, and in essence we decided to make sure that we are not just measuring it, but communicating it to our people so that we can hold ourselves accountable for it. The measures include tenure of our people. And we measure the retention rate for our highest performers, for example. The measures also include things such as continuous improvement in employee engagement, market share and revenue growth, to name a few.

JofA: What are some of the challenges of working with the younger generation of CPAs?

Salzberg: I think the biggest challenge is that every generation is different than the one preceding it. And I think that this particular generation has a more demonstrable set of different priorities, different expectations than the generation that preceded it.

They are uniquely focused on a completely different opinion of how, when, why work has to be done than prior generations. They tend to be super-achievers and demand a much greater work/life balance. They demand a much greater role in interesting and challenging work. They kind of want leadership responsibility from the get-go. And they’re a technologically savvy bunch. They’re a multitasking bunch. They’re a very open and communicative bunch.

And so the biggest challenge is coexisting for generations of people and creating an environment that adapts to each but doesn’t dilute the singular culture and commitment to a standard of excellence.

I think that we are dealing with those challenges right now. It’s about adapting to a generation’s needs and wants. If you don’t adapt to it, they’ll adapt by walking away and finding a job elsewhere. When such a supply and demand gap exists, it is critical to address generational issues, learn to take advantage of differences, and work together to achieve success.

JofA: What advice would you give a young CPA on successfully traveling the road to partner?

Salzberg: A couple of tidbits. One is stay on the right of right. Make sure that you’re always thinking about what’s right and never losing sight of that in terms of your morals, your ethics and your work performance.

Two, I would advise a young CPA to “work hard, be strong.” I would say that both of my sons learned this as they were going through their black belts in tae kwon do. “Work hard, be strong” is the phrase that was their motto. I would tell young folks today to work hard and make sure that you’re putting in the best that you can to every project, every situation, no matter how tedious or challenging it is. And really learn from every experience so that you can leverage your foundational strengths.

Beyond these two main pointers, I would tell young people to broaden their interests, never put their eggs in one basket too early. Learn about the world, become educated outside of the area of competence that they’re working in—business skills and the like.

I would tell young folks that they need to broaden their strengths—not just technical, but people-related skills—learn how to network and socialize, learn public speaking and interaction-type skills, whether that’s negotiating skills, sales skills or problem-solving.

And finally I would say that—I have mixed feelings about this, but I believe it—while it’s very important to be generalists in terms of your core competencies, I think it’s also extremely important to be a specialist. I don’t know how broad a specialty can be, but sometimes being a generalist is a specialty. I think that having that core thing that you’re famous for—whether it’s a product, a competency, or a particular belief, I think is important.

JofA: You’ve spent years in a segment of the profession known for high pressure and long hours. Has it all been worth it?

Salzberg: I’m going to have to answer that question unequivocally yes, because of where I am right now. I love what I do. I love the firm that I’m with. I feel respected. I feel that our people—at all levels through partner—appreciate the leadership that I’m providing.

While you’re working crazy hours and under lots of stress, both of which are still true for me today, you always question whether or not it’s worth it at times, no doubt about that. But now, in hindsight, I’ve got a wonderful family. I haven’t in any way impacted that negatively and I, myself, am sort of at a peak in my career. So when I put both of those together, that hard work has to have been worth it.

JofA: What would have been your second choice of careers?

Salzberg: I taught for four or five years. I grew up in Deloitte, teaching many courses here in Deloitte, but also teaching at the master’s level at a university here.

I love the exchange with students and the fresh thinking. I love the challenge of having to be on top of your game in every one of those interactions with students and [having to] make sure that you’re educating them and helping them understand something that you obviously personally love and know. And seeing the growth in the students from the day before they take my course to the day after.

So that’s a huge passion of mine, and I think education, learning and development is something that I’m going to devote a lot of my energy to here at Deloitte for the balance of my term.

And when I subsequently retire, whenever that might be, that will be the career I assume again, in whole or in part, and go back and teach at the university level.