Frank Vettese has just taken the helm as the new managing partner and chief executive officer at Deloitte Canada, one of the largest professional service firms in the country. With roots going back 150 years, Deloitte is a powerhouse in audit, tax advice and consulting, and it employs more than 8,000 people.
Is it hard to manage a company that is full of experts in managing companies?
It presents a unique challenge trying to manage a firm like this. It is a partnership model with a group of owners, and everyone certainly has a strong sense of where we should be going, and also a sense of ownership over it. So it is a pretty intricate co-ordination exercise in terms of how you move the firm forward in a collective way. It is an all-hands-on-deck kind of approach.
Companies can’t be democracies, but are consulting firms run more collaboratively than other businesses?
There is a high degree of collaboration. Obviously I am empowered through the partners, who are the stakeholders as well as the owners and the ones driving the business. But they are good at allowing me the latitude to do what I need to do.
How has the consulting/accounting business changed since you got into it?
If you go back many years the business would have been essentially auditing and tax. Over the last 10 or 20 years that has changed quite dramatically to become much more balanced between our audit practice and our advisory and consulting business. Secondly, our clients are becoming more and more global, so they are seeking our assistance to help them with that. The other big impact is regulation, which has become much more pervasive. Regulation is driving a number of services and has become a big part of our advisory capability.
Are companies looking for different kinds of advice than they were a few years ago?
There is a fundamental change in the way organizations are seeking assistance. Historically, advisory firms would be hired to do a strategy consulting exercise, or address finance or compensation issues, or invited to come in to look at areas around tax, forensics, due diligence or governance. Now, advisory firms like ours are being asked to help provide answers to significant problems or significant opportunities in an integrated way.
[We might be asked for] a full life cycle approach to addressing mergers and acquisitions, from setting the strategy through to execution and how to integrate what was purchased. Clients are looking for those kinds of solutions in a much more holistic way, with broad strategic advice.
Is it getting harder to hire experts who can offer that complex advice to your clients?
There isn’t a shortage of people, but there is a much higher premium on individuals who are true game changers – people who can provide transformational advice. We are looking for a much higher level of capability and expertise. The war for talent is around the absolute top talent, the differentiating talent.
Where do you look for your advisers?
When you go back 20 years, most of the people who worked in an organization like Deloitte would have come through a traditional accounting and tax route, with a chartered accountancy designation, and then moved into some specialty areas. Today, our work force is much more balanced between people who follow that traditional route and people who have come out of diverse educational backgrounds like humanities or other areas. We are also hiring people at senior levels who have been the chief transformation officers within an organization, or leaders in the corporate world.
Is international experience crucial for both executives and consultants these days?
Yes, it has become part of the talent agenda for the corporate world. Most organizations that work cross-border have very deliberate mobility plans. There is an expectation that you will have had postings or will have worked in various international markets in different roles. Our profession is no different.
Are Canadian companies competitive enough on the world stage?
The issue really comes down to two things: productivity and innovation. We are seeing very considerable challenges with respect to both of those.
Some of the problem stems from the fact that we have become quite reliant on our resource base, and have been able to leverage that. That has maintained a certain standard of living for us. But going forward, productivity and innovation are clearly issues for Canada.
What are some specific areas that need to be addressed?
Our investment per worker on machinery and equipment is about half what the U.S. level is. Our investment in communications technology per worker is just slightly above one-third of U.S. levels. Private spending on R&D is about half of the U.S.
We are also concerned about the education system. Not that we don’t have a strong one – we have incredibly bright people. But it is not fostering entrepreneurship and innovation, in addition to technical capability. And the immigration system needs to be retooled so we attract the highest levels of skilled immigrants and the top talent from around the world. We also need to improve the effectiveness of research and development, and bolster the amount of risk capital so that we actually have start-ups and we are incubating companies.
In the current sluggish economic environment, are companies neglecting issues of innovation and productivity?
Yes. Since 2008 companies have been spending time trying to navigate volatility and figure out where the market is going. That makes it very difficult to think about the investment necessary to sustain long-term performance and success. That is a challenge.
What should governments be doing to help?
It helps to have a taxation scheme that encourages new start-ups, and that rewards research and development. Those can be catalysts for companies to do the right things in the longer term. Governments also play an important role in making sure that the public sector is receptive to change, and is exploring new viable alternatives.
When you compare ourselves to emerging markets where there is a higher degree of co-ordination and connectivity between government and the corporate citizenry, you start to worry about whether this will impact our success.
Audit firms have been implicated in some of the recent corporate accounting scandals. Is that fair?
Whenever you go through situations such as global financial crisis or some of the frauds that have occurred, it leads to the question of “where were the accountants and where were the auditors and what should they have been doing.” But ultimately, I think there is really no evidence to suggest that accounting firms and auditing firms are complicit.
Is the corporate obsession with social media justified?
It is a revolution you can’t ignore. Although any particular application can come in and out of favour pretty quickly, there is no question that the next generation of talent does work differently and processes information differently. They expect real time information, and much more connectivity. We’re not going to turn back the clock on that, and if anything it will accelerate. Companies absolutely have to adapt to that.
Managing partner and chief executive officer, Deloitte Canada
PersonalBorn in Toronto; 49 years old
EducationBBA and MBA, Schulich School of Business, York University
-Co-founded valuations firm Rosen & Vettese Ltd. in 1990
-Joined Deloitte Canada in 2002
-Was managing partner for Deloitte’s national financial advisory business from 2005 to 2012
-Led Deloitte’s global financial advisory business from 2007 to 2011
-Named managing partner and CEO of Deloitte Canada in June, 2012