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Rich Karlgaard: Welcome to Forbes Innovation Rules. Today’s guest is Julie Sweet, the CEO of Accenture, the global technology consulting and services giant with about $45 billion in revenue and 500,000 employees. Julie was born in Orange Co., California. She has an undergraduate degree from Claremont McKenna, a law degree from Columbia University, and was only the ninth female partner at Cravath Swaine & Moore, New York’s bluest of blue chip law firms. Julie left Cravath to become general counsel of Accenture in 2010, and in 2015, CEO of Accenture North America. In September 2019, Julie ascended to the top of Accenture. Welcome to the show, Julie.
Julie Sweet: Thank you, Rich. It is great to be here.
RK: I have to tell you, I won a bet with someone who guessed you would not be the next CEO of Accenture, succeeding Pierre Nanterme. I said, "Well, please don’t tell me you think this because she is a woman." He said "No, it’s because she is a lawyer. Lawyers do not become CEOs of big companies like this." So Julie, tell me why being a lawyer – both your partnership at Cravath Swaine & Moore, and then your general counsel role at Accenture for five years – was excellent preparation for becoming Accenture’s CEO
Sweet: Such a great question. I think there are three really important reasons why being a lawyer is absolute great training, not just for this job but for this era. The first is, being a lawyer is all about serving clients. If you think about even this post-COVID time, there is something I call the "proximity imperative" and that is being really focused on what your client's needs. The heart of being a lawyer is about client service.
The second reason is that lawyers consume huge amounts of information and the need to act on it. If you think about the changes that were happening pre-COVID, the exponential changes in technology, which are not just about technology, but about how you have to change the way you make decisions, the way you operate, the way you collaborate, it requires so much learning. Being a learner is at the heart of being a lawyer. That is absolutely critical and I would argue even more critical today post-COVID.
Then the third reason that I think being a lawyer is really important is at the heart of being a lawyer is about integrity. It is about doing the right thing. As we think about the opportunity we have today to rebuild economies, industries and to re-imagine companies, having a strong moral compass, so that we rebuild for the benefit of all, is absolutely vital at this time.
RK: I want to come back to this new style of leadership you talk about. But first, let’s talk about the accelerating rate of change. At the beginning of 2020, prior to Covid, I would’ve said that the most important story in business was the accelerated rate of digital evolution. In January I tested this theory with Scott Guthrie, who heads Microsoft Azure. I also tested it with Pat Gelsinger, the CEO of VMware. Both agreed that digital technology was now evolving at two, three times the rate of Moore's Law. What are you seeing at Accenture?
Sweet: Scott and Pat are both great partners of ours and I have a lot of respect for their views and I would agree with it. If you go back to 2013, that was the time when Accenture was the first to say, every business is a digital business. And at the time, there were people who actually fought us on it. Sort of fast forward today, and no one questions that. In January of this year, we announced, that we thought we were at an inflection point. That 2020 was beginning. Much of what you have been seeing since 2013 was a lot of experimentation. A lot of investment, but not wholesale transformation. So I would agree with Pat and Scott that change is accelerating. And then of course COVID came …
RK: In your recent earnings call, you said, "What COVID has done, we thought it [digital transformation] would take a decade. It is a shortened to what we think is more like five years.… We are in a ‘once in a digital era moment.’”
Sweet: It feels like our Henry Ford moment. Think about the Industrial Revolution. It was going on for a couple of hundred years and then Henry Ford, came along and actually created the modern corporation. If you look at the digital era, it has been going on since the 50's.
But now is the moment. If you start with Cloud, business is twenty percent in the Cloud today but we think we are going rapidly to eighty percent. Prior to Covid, I thought this would take a decade across Industries. We now estimate it will take five years. Think about what this means – the difference between being twenty percent in the Cloud and eighty percent in the Cloud. We are platforming global business.
That offers tremendous opportunities, but also deep change. You will see us announcing next week that we have a new brand that reflects our commitment and work around helping companies. Make the change and embrace that change to create new opportunities.
RK: Well, this interview [note: which took place on October 8, 2020] will not run until near the end of the October. Can you give us a hint?
Sweet: Absolutely. So our new brand is, "Let there be change." And it is grounded in our new purpose which we are also announcing, which is to “deliver on the promise of technology and human ingenuity.” Our strategy is to help companies do that in the post-Covid environment. That means re-imagining everything about your business, rebuilding industries and economies for the benefit of all. And so right now many companies and people are focused on this unprecedented crisis, but because it has literally changed everything about our behavior and how we operate, it is decisively ended a debate about whether technology is good or bad. Technology today is our lifeline. It has created the opportunity to accelerate the benefits by rebuilding differently.
RK: Let’s talk about rebuilding differently. Do you think Covid has permanently changed work? I ask you as the CEO of a 500,000-person company with thousands of clients. You’re seeing it firsthand.
Sweet: It is a great question. There are three different levels to think about it. The first level is almost tactical. It is literally different ways of working. Which work will stay remote? Companies are experiment, but we all know there will be less people in the office than pre-Covid. The trend is clearly there. I would argue that was inevitable over time but accelerated. But in some ways that is not the most important change.
The second level is really a mindset. We did a study last month, and seventy percent of workers think that their companies will operate more sustainably and think about society more than they did pre-Covid. Even pre-COVID, about sixty percent of consumers cared about what their favorite brands said, what they stood for. That is increasing, right? And you also have a mindset shift in CEOs, who are asking what we have to change and how we embed things like sustainability into what we do. For example, we introduced a couple of months ago a product Green Navigator. It measures how much you reduce your carbon footprint when you move to the cloud. This mindset shift, I think, is here to stay.
The third level is the widening gap between digital leaders and the laggards. So back in 2019, we published a study that said that measured companies by technology breath, depth, leadership and culture. The top ten percent were performing twice as well as the bottom twenty-five percent. When COVID happened and everything went online, this gap between the digital leaders and laggards widened immediately. What we are seeing right now are the digital leaders are investing to make the gap even wider.
RK: And the laggards?
Sweet: They are falling into two camps. Some say, "I need to do things differently in order to leapfrog because I am behind." Others say, "I am going to try harder." All right, so they are trying harder but they are not changing fundamentally how they are going to get to the destination. And so, I think twelve to eighteen months from now, you will see these three categories of companies emerging and you can guess which companies we think are going to be the most successful.
RK: And the stock market is already beginning to sort it out. The leaders, including Accenture, have had a hockey stick recovery since the March market bottom. But let’s switch gears and talk about this new style of leadership that I think you and I both think is ascendant. It wasn’t long ago that shareholders, employees and customers would put up with “Jerk CEOs" if they were effective. Silicon Valley has had many of them. But even before Covid, I felt the Jerk CEO was waning because of LinkedIn, Twitter, Glassdoor, etc. Then came Covid, which created a new urgency for the CEO to articulate moral purpose and compass to their stakeholders. They can’t do it at big conferences right now. They can’t do it by wandering around the office and talking to employees. They need a message that inspires people’s purpose, and they have to convey this message mostly on video calls. What are your thoughts about this emerging leadership style?
Sweet: I agree, and it goes back to a little bit your question about what do you think has changed. I think separate from the Jerk CEO or not, if we just think about what we have all experienced. Every person in the world has been touched by Covid and it did not matter who you were. I mean, people who had more or less economic security were affected differently, but there is no one that has not had to change their behavior. So when you think about whether it is CEOs or other leaders, there was this leveling and this human connection among everyone that has been created. And then you add on top of that, within a company we’ve had to all think about how do we sustain our people.
Because we are all working hard, under pressure, in difficult conditions ... frankly if you do not invest in sustaining your people in providing them inspiring messages and thinking differently about the support, they will not be able to deliver the outcomes that you need. So whether you are compassionate by nature or by necessity … I talk to CEOs day after day. We exchange views on how we sustain our people. And I really do believe that this leveling, this human connection and this focus on how do you sustain people, things like mental wellness, will be part of what is here to stay as we look forward.
RK: Accenture is a pretty high-touch operation. I would guess that in normal times travel expenses of Accenture employees, on a per employee basis, is pretty high. You typically have consultants and technology integrators on the road a lot because they need to be with their clients. In this Covid environment, how do you replicate high touch of in-person collaboration?
Sweet: Well, I actually have a slightly different view about who we are as a company. Not a lot of people realize this, but we have not had a headquarters in three decades. Right now, my CFO and I are in the same office. It is the first time in three decades. So at Accenture we actually have a global leadership team that has operated remotely and so when the crisis happened, running the business did not change. Now, we typically got together once a quarter so that is been different but actually running the business looks familiar. And then one of our great strengths of Accenture is that we have remote teams and skills from around the world.
We are actually Microsoft's largest user of Teams. We are over 500,000 users. And so again, we have a lot of experience in remote Teams. But what I would say is that even with all of that, we always valued the getting together. Having my leadership team together in person, having innovation hubs. We have a hundred innovation hubs around the world where we would bring teams together to have that in-person innovation. Sometimes as a team and sometimes with clients.
I have been advising client CEOs who’ve said, "I think I need to get rid of all my real estate." And I said, "Wait, do not move too fast." Because while there are lots of ways to work remotely and collaboratively, you still need the human connection. Now, we’ve proven we can innovate remotely. We helped a hospital in Brazil go from four hundred to five thousand telemedicine calls in forty-eight hours. We innovated remotely and spun them up that fast, right? We pioneered some contact tracing work n Massachusetts. That work was not being done in person. It was done remotely. But at the same time, over time, we believe in-person collaboration is critica. So it is important to get balance right and not fall in love with the decreased costs in smaller real estate footprints.
RK: That is the perception of Accenture once was, to quote you, “a safe pair of hands.” But there are no safe spaces in global business today. What does that mean in the way you go to market? And how does that tie into the sort of the, your view of partnerships acquisitions, and the importance of scale?
Sweet: It is a great point. We’re still a safe pair of hands. In fact right now, we just closed the books for seventy public companies and we did so on time a hundred percent and all remotely, right? That kind of safe Pair of Hands is the exact kind of reputation that you want. Right? We deliver massive savings while transforming digitally in a world where dollars are even more rare. Clients absolutely want that certainty.
What clients also need to be innovation leaders. And so our competitive advantage is that we have decades of serving enterprises. Decades of deep relationships that allows us to be innovation leaders, but with the certainty of delivery. And your point about partnerships is absolutely critical. If you think about the move to the cloud, you cannot do that without the likes of the public clouds and other partners, whether it is Scott Gurthrie at Microsoft, Pat Gelsinger at VMware or HPE. Cisco is a critical partner. Palo Alto Networks is a critical partner. These ecosystem are what is required by companies to move fast.
I will tell you, Rich, when I talk to a CEO or a chief digital officer, I ask them about their innovation strategy and who they partner with. If they do not have clear partners, I know they are not really being innovative, because innovation cannot be done alone. It has to have organizations and partners outside of your own company.
RK: Pat Gelsinger, and ServiceNow’s Bill McDermott have described the size of the digital transformation industry as being around $3 trillion of in annual revenue. Going to $8 trillion by 2030. When you think of every player from semiconductor companies, hardware manufacturers, telecoms, software and services, there is no single company, not even Microsoft at $140 billion or Accenture $45 billion that is even a small percentage of $3 trillion. So that explains the need for ecosystems and partnerships. So is this the new competitive landscape – a battleground of ecosystems? My ecosystem, is bigger, smarter, better at analyzing data, faster than your ecosystem is?
Sweet: Okay, this is Accenture’s big opportunity because one of the roles we play is actually helping companies put together that ecosystem in a way that makes sense for their business strategy. And I will say that a part of that goes back to our earlier conversation about leadership in both pre and post-COVID, because shared values are really important. When you are selecting a partner, you need to select partners who share those same values. Who care about sustainability, diversity, who understand that as companies we serve our shareholders, our employees, our partners, our customers and our communities.
That is an increasing part of the discussion, and when you think about the massive amounts of change that are happening now and the need to move much faster, selecting partners who share those values, who have that commitment is really important.
RK: You call it three-sixty value, correct?
Sweet: Absolutely. That is part of our strategy in terms of the mindset shift we talked about. And then they saying that, I believe in they what gets measured gets done, right? And so, even though we have decades of being a responsible business, we’ve had to upskill 300,000 of our own people. We spend nearly a billion dollars a year on development. We are a leader in sustainability. In fact, I am announcing in just a day or so that we are going to be leading in our industry with net carbon that zero carbon emissions by 2025.
All of those things are really important. Since our job is to look forward for our client, we need to measure things in addition to the financial case behind the work that we do. Are we bringing our clients an inclusive and diverse team to help them further their own objectives around inclusion and diversity? Are we upskilling their people in addition to simply the normal training that we do? Are we helping them achieve their sustainability goals? Are we helping them change their employee and customer experience? And then finally, of course, there are things that will be specific to each client.
We call that the 360 degree value meter. Accenture’s purpose is to deliver on the promise of technology and human and human ingenuity. That is how technology will benefit all. And so our strategy to say we will focus on 360 degree value is critical to delivering on that purpose.
And then finally our new brand, Let There Be change. It’s an inspiration that we can use the incredible change that was happening pre-COVID and now it is happening as a result of COVID even faster to transform for the benefit of all. And so it is a very unique time for me, a relatively new CEO, to be able to bring this new purpose, a strategy that really delivers on that purpose and to introduce a new brand all at once. It is a very unique opportunity.
RK: Let There Be Change, to my ears, almost has a religious connotation. I can almost imagine Martin Luther King Jr., saying it. People today are afraid of change on so many dimensions. I hope you give a bonus to whoever came up with that brand slogan. It is a really good one.
Let me switch gears and talk about the person who is leading Accenture. Starting with, if one looks at your background, Julie, one sees this woman who went to Claremont McKenna and then Columbia Law School. Then she became a partner at the blue-chip law firm, Cravath. Surely that person grew up in an upper-middle class or wealthy family, with long pedigrees of education and professional careers. But that wasn’t your experience at all.
Sweet: Sure. Look I had an amazing and loving family, but I did not come from the background that you described.
My father did not graduate from high school. He painted cars for a living and worked at a body shop. My mom actually went to college when I was in middle school, and she graduated during my freshman year in college. I really like to think of my upbringing as being, I lived the American dream. Two parents really focused on making a better life for their kids. They believed in education. I had my first full-time job when I was twelve years old. I was babysitting in summer from seven in the morning till five p.m. Two children ages three and eighteen months, for fifty dollars a week, by the way.
And so, that experience of working, the values my parents had, and also their belief that if you worked hard, you could achieve great things, has impacted my entire life and career.
RK: One leadership lesson you learned early was when you had a job working in college and found yourself responsible for $200 in theft. Describe what happened and how it taught you something invaluable about leadership and accountability.
Sweet: Absolutely. I was in college and I had this great man John Paul who hired me for summers, and he did it throughout my college experience. This helped me, frankly, to be able to afford college, which is a lesson in itself, right?
One of my first summers working gave me the opportunity to hire a receptionist. I was 19 at the time, I had never hired anyone, and so I hired a woman who work for us for two weeks. One day she disappeared after lunch and never came back, having gone through my purse and taken $200 which you know back then was a lot of money. It was like my whole life savings. I went to John Paul, explained what happen but he did not pay me back. He said, "You have to learn a lesson. This was your decision and you need to be accountable for it." It was a really important lesson for me. He did not allow me to have excuses.
But he also helped me think about, how do you improve? What did not you ask beforehand? How will you handle this and how are you going to learn to be better? I did not ask anyone before I hired her. I did not know how to hire. I will tell you that never happened again. I studied and I learned how to hire people. That learning has been a lifelong part of who I am, and I think critical to my success.
I still have a quarterly learning agenda. When I became CEO thirteen months ago, my first official video message to employees was to tell them that I had a learning agenda. I said I would make available what I am learning in the form of a CEO learning board which is accessible. Within six weeks we had a hundred thousand people go on my learning board. I wanted to be clear that the most senior person at the company had to learn, right? I think it is super powerful as a leader to admit to the need to learn, because that is how your people will become learners.
RK: Before you landed at Accenture, you were a lawyer at Cravath Swaine and Moore. You made a partner at the law firm after seven years, only the ninth female partner. Share what happened to you on the eve of becoming a Cravath partner.
Sweet: Yeah, it was life changing and I remember like it was yesterday. It was two weeks before I would be elected as partner. It was 1999 and the firm was introducing unconscious bias training for the first time which was really leading at the time, and I remember I went up to the conference room which had one of those big, very lawyerly long tables with about thirty people. I think there were only two women in the room besides the facilitator. I really did not think that much of it.
As we got into the training at one point, the facilitator woman turned to me and said, "You are the most senior woman in the room. And one of the only women in the room. Have you ever experienced what we have been talking about?" I went to open my mouth and answer, and I started sobbing. I actually could not get myself under control. I had to get up and leave. I went back to my office and I shut the door. A little while later there is a knock on the door and Susan Webster, who was our first woman corporate partner and only our third woman partner ever, comes in and she shuts the door and she said, "The men have met and they sent me in. You’re a partner."
RK: Were you worried that you had blown it?
Sweet: I was not worried. I was embarrassed, because I really was not able to get it under control and I was surprised. Susan knew that I was not crying because there was some scandal at Cravath. It was really about being a woman at the time in corporate America. It was really difficult and we just accepted it. Right? At that moment when I made partner, I said to myself, it is my job to change this. We should not have young women who have to suppress and deal with these things to make partner.
At the time I was very focused on gender, but over time I learned about the challenges of diversity and it is why it is so important to me as a leader. It is the, how we lead? One of the things that we are now measuring and we are starting this idea of a 360-degree value meter is we are measuring, "Are we bringing diverse teams?" And that is super important because it also holds ourselves accountable to do so. In 2015 when I became CEO of North America, we became the first Professional Services and still the only one to disclose all of our numbers around Blacks, Hispanics, Asians, veterans, Persons with Disability and gender. We did not do it because we had great numbers. We did it because transparency builds trust and it holds us accountable for making progress.
RK: What would be your top three diverse-culture lessons that you can share with other CEOs?
Sweet: First is about transparency.
The second is pretty simple. Treat, inclusion and diversity like every other business priority, which means you set goals, you measure, you have have data, you have accountable executives, and you have an execution plan. Too often, we find that companies have a lot of commitment, but they do not have the things behind that commitment that you would expect for every other business priority.
Third is, do not do it alone. There are so many great studies and things to learn from. McKinsey does a great study every year. We do studies. Lots of these things have been figured out. So learn from what is out there and collaborate. You may have seen the Business Roundtable has come together around fighting racism, because scale and collaboration matter. So do not do it alone.
RK: One last question to you, where will Accenture in five years?
Sweet: An industry of one. That is what we are going to be, an industry of one.
RK: Well, Julie Sweet, CEO of Accenture. Thank you so very much for your generosity of sharing the time you spent with Forbes today.
Sweet: Thank you, Rich. It is great to see you again. The one thing I forgot to tell you was that Droga5 is part of Accenture and they are the ones who helped define our new brand and our purpose. When you said well whoever did that that is fantastic. Well, that was Accenture.
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