The secret to Grant Thornton's new-found strength

02 May 2017 -


Accounting giant Grant Thornton is transforming itself into a ‘shared enterprise’. The aim? To unlock the potential of every employee by freeing them from inflexible hierarchies and fostering a sense of shared purpose. And it all starts with changing the mindset of middle managers…

Dina Medland

Sacha Romanovitch, the first female CEO of a major accountancy firm, is very clear: reaching and engaging the middle-management layer within an organisation involves a deliberate, orchestrated ‘blurring of lines’ that empowers all our people.

At Grant Thornton, programmes focused on changing the working environment have been rolled out rapidly since 2015, when Romanovitch became CEO. Her personal journey on the thinking behind it actually began in the run-up to the financial crisis, and since then she has grown in her conviction.

“It took me a while to get it: ‘It’s your people, stupid.’ How people perform is fundamentally part of the environment you create for them. It is about creating an environment that makes them flourish, rather than curl up and die,” she says. A restructuring programme necessitated by the financial crisis gave her hands-on experience in attempting just that. She found herself elevated to a high-performance leadership role at the firm that took her into the boardroom.

“I realised we just hadn’t equipped people for sudden change. There were too many people for the work we had to deliver. As we knew we hired smart people, we decided we should start by asking them what to do,” she says. Having involved them in their future, she found that they came up with ideas of their own, such as merging roles through flexible working and unpaid three-month sabbaticals.

“If we trust human beings to be sensible and do the right thing, they will respond,” says Romanovitch. “It’s not a Cinderella story: we did lose 125 people, although we avoided 275 of the redundancies we were potentially facing.” The exercise evolved into a determination to get the business moving in a different way, with communication and tone the key to a major shift in how employees were treated.

The shared enterprise

In keeping with her approach, this CEO interview turns out not to be with the CEO alone. We are joined by Laura Stuart-Berry, who became the right-hand person to the CEO in 2015, and recently took on the role of ‘shared enterprise lead’ for the firm as a whole.

“We wanted to start with an experimental culture,” says Stuart-Berry. “The message was that it is okay to fail, but fail fast and get on with it. It has become a model of shared enterprise,” she explains. The firm summarises the model as: “sharing ideas + sharing responsibility = sharing reward”.

The John Lewis Partnership, the UK’s largest employee-owned company, is the role model for shared enterprise. In adopting and adapting that model to fit a global accountancy and business advice partnership, Romanovitch has described the key objective as “to optimise the intelligence, creativity and know-how of all our people to work towards a common goal of creating value for our clients”.

Read more: Employee-owned companies are more ethical

Today she describes the model as “a way of unlocking potential, of moving away from leadership models that depend on hierarchy to ones that evolve from a sense of shared purpose”.

This evolution is very much a work in progress, admits Stuart-Berry. While the firm as a whole has been encouraged to come up with new ideas, these have tended to come from associates at the one end and senior executives at the other; middle management tends to be slower to adopt change.

One new idea Grant Thornton is implementing is to appoint ‘people managers’. These are middle managers who welcome the role of looking after six to eight people. “At the moment, managers have to do this as part of their role and are sometimes not keen. So now we are looking for those who are; those who get selected are trained first,” adds Stuart-Berry.

Recognising that not all managers revel in the responsibility of managing their direct reports, Grant Thornton is focusing on putting some consistency and structure into that process. By investing in building a community and a peer group, it aims to ease the burdens of people management by sharing them among those who might be better equipped – and who are keen.

“Shared enterprise won’t work unless you have trust. Now we are much more transparent, for example, about the financial performance of different units in the business, and how different sectors are doing – the information that used to go only to the partners. And no-one is running off to the competition with it,” says Stuart-Berry.

Online platforms and social media are used extensively within the business for sharing information and ideas. Six months after their launch, more than 2,500 people – or half the firm – chose to be involved.

Because traditional leadership models are built on a hierarchy, you have to change systems, processes and behaviours throughout a firm to shift patterns of behaviour, Stuart-Berry suggests: “You need to create a genuine sense that others have ideas that you might value, and to build trust that you can generate better ideas this way.”

This is far from easy. For one, it means being accepting of ideas, even when they seem inconsequential. “We certainly haven’t got it right all the time. We have to be very careful about how to handle those ideas, and not rush them. There’s always the danger, too, that you ask ‘Have you taken that good idea to your superior?’ only to be told ‘No, because if it isn’t perfect it will just get trashed’,” notes Stuart-Berry.

Throughout the interview, the importance of honesty to the future success of this endeavour is clear. In part, it’s about acknowledging that middle managers are prone to love the safety of a hierarchy – of knowing where they stand and of the recognition that comes with having achieved a position after having worked very hard to get there.

Oxygenating the organisation

“If middle management has been likened to the clay in an organisation, it is critical for that clay to remain oxygenated and full of life. This life must then feed through to the rest of the firm,” says Romanovitch. CMI’s research around the vitality of middle management also suggests the importance of diverse teams in this process.

An important way to revitalise any organisation regularly is to take people out of the office, treating them as individuals rather than as merely office role players, suggests Grant Thornton’s CEO.

“We have gone through a lot of work to activate people throughout the organisation. Now we are also equipping people to have different relationships in the market, to identify opportunities across private and public sectors, and to widen their horizons,” says Romanovitch.

Grant Thornton has been holding a series of forums in major UK cities over 18 months as part of its Vibrant Economy programme, looking for solutions to the diverse and unique problems that are thrown up in each instance.

Tables at these events are facilitated by individuals from Grant Thornton who have gone through a leadership programme and are at manager level or just below. The first three events were held in Sheffield, Reading and Manchester, with Romanovitch herself involved in these and a pilot event in London around supply chains in the food industry.

“There is always a complete mix of people in the room,” she tells me. “It is very good for the accountants and the tax managers. It is about going out with an enquiring mindset to see what happens when a diverse group of people get together.”

Early disclosure of ideas in these forums also helps to start building trust, and Grant Thornton employees have reported back that the events help them to “start the agenda and come up with ideas”. There is no preset expectation on outcome, and Romanovitch is open about the fact that some city events have worked better than others.

Essentially ‘learning by doing’, this initiative has also led to a ‘Challenger Leadership’ programme, working with local Grant Thornton offices to identify those who might be interested in doing more. “When you get people to relax and let go, they find new strengths and ideas,” says Romanovitch. They also market well – she notes that some events have been very successful in attracting new business for the firm.

Changing any organisation can involve a struggle with learned behaviour, and also resistance to any change that threatens what’s familiar. This is one reason, it seems, why Grant Thornton has, since 2015, been trying a multiplicity of initiatives with the same goal: a new way of thinking and a new form of shared leadership for the firm’s future.

Read more: The 5 greatest examples of change management in business history

In the years since the financial crisis, trust in business has stayed steadily at the top of public and private concerns. In order for that trust to be earned externally, it’s clear that it must first exist within the business itself.

“Middle managers who trust their organisation to a great extent are more likely to be found in organisations that are growing,” says CMI’s own research. Under Sacha Romanovitch, Grant Thornton clearly sees itself as just such an organisation.

Dina Medland is an independent writer and former Financial Times journalist and contributor, who writes about leadership and governance for Forbes online

Photography: Rob Whitrow

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