Matching Your Organization’s Capabilities to the Times — Julie Sweet, CEO Accenture
The Industrialist’s Dilemma — March 4, 2021
In our six years of teaching the course, only a few of our guests have attended multiple times. In the case of Charlie Scharf, he visited once as the CEO of Visa and once as the CEO of BNY Mellon. Thomas Tull came once as the CEO of Legendary Pictures and once as the CEO of Tulco. Anne Wojcicki (23andMe), Patrick Collison (Stripe), Mark Fields (Ford), Wilko Stark (Daimler), Julia Cheek (Everlywell), Walt Bettinger (Schwab) and Beth Comstock (GE) represented their companies twice while in the same position in their respective organizations.
But our session this year with Julie Sweet was an interesting study in the evolution of both her role at Accenture and also the ongoing changes in the organization. When she first joined us in 2019 she was the CEO of North America for Accenture, and seven months later she was named CEO of the entire company. Whereas her last visit focused on rotating Accenture’s business to new, digital technologies — as well as investing in its people in the skills and technologies to create value for clients operating in a digital wold, in this session we saw how that mindset has allowed the company to accelerate its continued and ongoing evolution to their advantage in even the most challenge times of the Covid crisis.
Flex Capacity Works in the Cloud and Also for Accenture
One of the advantages of cloud computing is the ability to add or remove technology capacity on demand. If customers require additional resources the ability to flex servers and processors at services such as AWS, Azure and Google Cloud is fairly straightforward.
In some ways, Accenture as an organization offers the same benefit to its clients. The secular tailwind of digital transformation is driving the needs of companies to partner with organizations like Accenture as companies change their operations, internal systems and cultures. When Sweet last visited she discussed how Accenture had added capabilities in security and cloud services for their clients, but with digital technologies now at the core of Accenture’s business and embedded across all of its services, the company is strongly positioned to bring capabilities for their clients at a time when every organization is challenged to speed up its digital transformation. The global pandemic has shown that those companies that had begun their journeys of transformation have been able to move quickly to serve customers more effectively, and those that were behind in their digital journeys are seeking not only to catch up but to leapfrog the competition.
As companies furiously work to change the ways in which they operate, often they are unable to internally add the resources and competencies required to confront the times. This challenge is where Accenture is providing that capability and capacity for their clients, and in a time of a global pandemic is why the company has demonstrated strong performance and market leadership. In short, they are delivering the needed tools for their clients at a time when it matters the most. And like cloud computing, Accenture is allowing their customers to “burst up” or “burst down” with competencies and capacity as needed.
And right now, these competencies are critically needed.
What’s Better: Product or Service?
We had a very engaging discussion on whether it is better to be a product company or a service company. Silicon Valley conventional wisdom, as articulated by several students, was that products are better because you can scale up more easily by selling the same thing over and over again, whereas a service company can only scale linearly by adding headcount.
While the biases of the students came out as we discussed market capitalizations of different companies, Sweet pointed out an astute insight: she stated that broadly Accenture doesn’t do software. They are a service organization built on relationships and competencies that are needed by their clients. They have a clarity in focus on their areas of expertise and also in what their clients need. It’s hard to argue that a company with nearly $45 billion in revenue, a market capitalization of over $160 billion, and that is growing faster than the market isn’t a great business. Sweet highlighted that even when new digital products get introduced, organizations will need high value-added help to achieve their objectives in using these new digital tools. Sweet argued that the debate is really a false choice: both products and services can be profitable and operate at scale and both can be great businesses.
As Sweet demonstrated, Accenture’s clarity on what they do is what is allowing them to stay focused on where they can bring value to their clients and in ways that others are unable to do.
Back to that Word “Trust”
Sweet stressed that one of Accenture’s real value-added competencies comes from its relationships with its customers and clients. She pointed out that the exponential changes in technologies are going to continue and not slow down going forward (ergo Accenture’s new brand positioning of “Let there be change”). Sweet stated that she believes every business is a people business, and transactions do not enable long-term ongoing relationships in and of themselves.
In times of uncertainty, size has become an incumbent’s advantage — we saw how during the last year “the big got bigger.” This trend played to Accenture’s already strong momentum: Sweet highlighted that the company’s clients know they can trust Accenture to help get them through the pandemic and to the other side — to whatever that “new normal” becomes. Sweet asserted that as long as Accenture can provide scale, speed and specialization, their clients should have no reason to look elsewhere for help and support.
While while going forward it will be a critical requirement that Accenture continues to keep driving change internally in its >500,000 employee organization to stay at the top of its game, Sweet’s visit showed once again that incumbents are not doomed as long as they can act with the same urgency and clarity of purpose in times of extreme disruption.