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Getting it right

John B Veihmeyer, global chairman of KPMG, believes the most valuable asset the firm has is its clients' trust.

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"Culture is everything. If you get the culture of your organisation right, you don't have to worry about financial results, or anything else. It goes to the values of the organisation. And how you demonstrate those values is through the behaviours of your people. That's how you build a great culture: getting consistent behaviours reflecting the shared values of your organisation."

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From left: Tham Sai Choy, chairman, KPMG Asia-Pac; John B Veihmeyer, chairman, KPMG International, Ong Pang Thye, KPMG S'pore's new managing partner at the KPMG 75th Anniversary Diamond Jubilee Celebrations last month.

I want our people to be viewed as highly ethical: doing the right hard thing, as opposed to the easy wrong thing, says John B Veihmeyer.

Not just a fashionable platitude, nor a punchy slogan, nor even merely a bold claim from the chairman of the global professional services firm, KPMG International. It's instead a deep-seated set of values that Mr Veihmeyer lives and breathes in both his personal and professional roles in , which is one of the Big Four auditors in the world. The 61-year-old American is a well-regarded and much-respected authority on the subjects of ethical leadership and corporate governance, and he has worked his knowledge into tenets guiding the behaviours of his people all around the world. "The most valuable asset that KPMG has is the trust that the market places in us. It's essential to every decision that companies make in whether to work with KPMG. They not only have to inherently trust KPMG as an organisation, they also need to feel the same level of trust with the people that they're going to be working with in KPMG." He explains that achieving this has to do with building the right culture within the firm, where he has spent his entire worklife of some 40 years and of which he became its global chairman in 2014.

"Culture is everything. If you get the culture of your organisation right, you don't have to worry about financial results, or anything else.

"It goes to the values of the organisation. And how you demonstrate those values is through the behaviours of your people. That's how you build a great culture: getting consistent behaviours reflecting the shared values of your organisation."

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Demonstrating just how serious they are about establishing such consistent behaviours, KPMG has developed a set of key performance indicators (KPIs) to measure how closely its staff are keeping to the tenets that the firm espouses.

These KPIs tell Mr Veihmeyer how effectively his people are contributing to the building of what he calls the "three pillars" of KPMG's goals: "Clients seeing a difference when they work with us; our people being extraordinary; and the public trusting us."

"These are areas that are important to the business, so we should measure them and be accountable to each other," he says.

Another key component of having the right culture is ensuring that the firm is inclusive - not just diverse but inclusive. "They are very related, but the more important thing is building an inclusive culture; if you get that right, you'll have the results you want from a diversity standpoint. I don't think you can attack diversity challenges without relating it to the culture of the organisation."

An inclusive culture, to Mr Veihmeyer, is an environment within which everyone feels they can accomplish anything they want to, in both their careers and their personal lives.

"How do we know when we get there? It's when we don't have anyone leaving KPMG because they feel they can't bring their whole self to work, that there are ceilings in place keeping them from achieving their ambition; or because it's not an environment that's flexible enough to allow them to achieve both their personal and professional goals."

He stresses that one cannot view inclusion as "some initiative that sits off to the side of your organisation, and you (only) do it because it's the right thing to do".

"It is the right thing to do, but it's also fundamental to every dimension of our business strategy.

"Clients seeing a difference when they work with us, our people being extraordinary, and the public trusting us - we won't get any of these three right if we don't have an inclusive culture."

Having an inclusive and diverse workforce enables KPMG to assign diversely talented individuals to priority client engagements - bringing a range of experiences and skill sets which Mr Veihmeyer says has been very efficient in tackling client issues.

"We want our clients to have a different experience when they work with KPMG. One of the elements of that is our clients being able to work with diverse teams when they work with KPMG. And that's not just about gender or ethnicity; it's about skill sets, age demographics - all of the things that are critical to us bringing innovation and creative thinking to the challenges our clients are facing."

He says KPMG also has the ability to truly understand its clients' needs. "What clients like about KPMG is that we are concerned about what their challenges are. We really listen to what their issues are, and then help them to work through towards a solution; as opposed to just dropping what looks like a good solution on the table and then thinking our job is done.

"That's how you build trust: working in a really collaborative way."

Being able to truly understand its clients' challenges and needs comes also from the firm, and its leader, having their ears to the ground.

KPMG's 2016 Global CEO Outlook, released earlier this year, found that just under half of the 1,268 CEOs surveyed, from 10 key markets, believe they will be leading a dramatically different organisation in three years' time.

The finding demonstrates the sheer force and speed with which technological and regulatory changes are disrupting businesses today. The finding may have surprised many, but it didn't take KPMG's global chairman by surprise at all.

"We clearly anticipated it. I spend a lot of my time meeting CEOs of the world, and that's what I hear every time I sit down with them - we end up talking a lot about the disruptors they feel are affecting their business and how much they feel they need to change their operations to get ahead and be the winner in this world of a lot of disruption."

KPMG has been reshaping its own business in the last few years, to keep pace with the new challenges facing its clients. "If you look at a lot of the growth that's fuelling the success of KPMG today, it is in this transformation agenda. We have been investing heavily in a number of the areas that are creating much of the disruption for companies," Mr Veihmeyer says.

This can be seen in the acquisitions KPMG has made and the expertise it has brought in over the last three to five years - in the areas of data science, predictive analytics, and cyber capabilities; in the engineers, medical professionals and architects that the firm has hired.

These are skill sets the public accounting firm did not have 10 to 15 years ago, Mr Veihmeyer points out.

"One of things that's really changed in the last five to 10 years is that clients are not looking for silo-ed solutions. They have broad challenges today that require very broad solutions."

And he believes the firm has grown to meet those demands, by increasing the breadth of its expertise. This does not mean, however, that it is doing away with or playing down its traditional core capabilities in the areas of audit and tax; instead, the new investments build upon these core capabilities.

"I think the mistake people make, when they see our acquisitions of data scientists, or the alliances we make with companies like IBM or Microsoft, that has to do with our non-audit business - that we're just trying to grow our advisory and consulting capabilities. That completely misses the mark. "For example, we are investing very heavily in artificial intelligence and cognitive capabilities. And it's because we believe the way we do audits in three to five years is significantly impacted by our taking advantage of such artificial intelligence and cognitive capabilities.

"We cannot do a high-quality audit of a complex multinational organisation without having those kinds of skills and capabilities."

Beyond KPMG and work, Mr Veihmeyer is equally passionate when it comes to his personal pursuits and causes.

He has many, to begin with: he's a member of the Business Roundtable - a grouping of CEOs of major US corporations that promotes pro-business public policy - and of the University of Notre Dame Mendoza College Business Advisory Council; he serves on the Governing Board for the Center for Audit Quality (CAQ) and the board of the US-India Business Council; he's a board member on the Committee Encouraging Corporate Philanthropy (CECP); and he's the co-chair of CEOs Against Cancer, just to name a few.

But he's especially proud of the work done by KPMG's Family for Literacy (KFFL) programme, which was founded jointly by his wife, Beth, and Susan, the wife of former KPMG global chairman Timothy Flynn.

Along with Beth, Mr Veihmeyer is now a driving force behind KFFL, which has in its six-year history provided more than 2.5 million books to children in need in the US. KFFL has also since expanded to eight countries around the KPMG network.

"It is a programme that is simply trying to put books in the hands of kids who have no access to books. What we're trying to do is tackle the huge literacy challenges around the world.

"One of the biggest responsibilities I have as a corporate leader is to look at some of the broader challenges faced in society and say, 'What role can we play?'.

"And there is nothing that concerns me more today than the issues of income and equality, and the impact they have. One of the root causes of some of the social issues that we're seeing manifest all over the world these days is due to education, and it's been proven in a number of studies that the biggest inhibitor to education is literacy."

The programme is also dear to his heart, says the father of three, in that it is "spouse-led".

"The more we can get families involved in the firm, the more that will contribute to the culture that we're trying to create at KPMG."


JOHN B VEIHMEYER

Chairman, KPMG International

1955: Born in Washington, DC, USA

1977: Graduated with a BBA in Accounting from the University of Notre Dame - Mendoza College of Business

Career

1977: Started work with KPMG in the US

1987: Made partner

2002: Appointed Partner-in-Charge of Audit in Washington and Baltimore

2003: Appointed Washington Area Office Managing Partner

2005: Appointed Deputy US Chairman

2007: Appointed Chairman of the Americas

2008: Appointed US CEO

2010: Appointed US Chairman

2014: Appointed Global Chairman of KPMG International

Other key appointments

Board member, Committee Encouraging Corporate Philanthropy (CECP)

Co-Chair of CEOs Against Cancer

Board member, Wolf Trap Foundation for the Performing Arts

Member of the Business Roundtable and the University of Notre Dame Mendoza College Business Advisory Council

Serves on the Governing Board for the Center for Audit Quality (CAQ) and the board of the US-India Business Council

 

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