As Arun M. Kumar completes a successful five-year tenure as Chairman and CEO at over 32,000 employees-strong KPMG, ETHRWorld brings out his major learnings and achievements.
KPMG in India, under Arun M Kumar’s leadership, has overcome several challenges over the last few years, while in parallel, elevating its game across all its functions.
The multinational professional services network has executed its plans consistently, meeting or exceeding goals as a firm, in four out of the five years of Kumar’s tenure and is poised to continue building on its momentum along a well-thought-through strategic trajectory.
As Kumar completes a successful five-year tenure as Chairman and CEO at over 32,000 employees-strong KPMG, ETHRWorld brings out his major learnings and achievements. Edited excerpts:
What do you think are the biggest challenges the professional services industry will face in the next five years in terms of attracting and retaining the “best” leaders?
The demand for professional services is increasing at an unprecedented rate, spurred by a variety of factors. A challenge the industry faces is the availability of the right leadership talent. The business is one of the knowledge workers who build relationships with clients and deliver value to them. Increasingly, they work as large teams with multiple areas of expertise that have to be woven together seamlessly to solve complex problems.
Leading such teams, and firms made up of such teams, calls for a new ethos. Professional services leaders must understand the dynamics of teams and team performance: how does one lead teams effectively? This is a team sport. Leaders and team members must understand collaboration. They must substitute individual competitiveness, wanting to be the smartest in the room, with a commitment to making the team win.
For smart professionals who have risen through an academic system that has valued individual ranking, this is not always an easy move. I believe, in the hiring process, one must seek out a candidate’s experience in team sports, understand if they have the instincts to help teammates, celebrate their successes and pick them up when they falter.
The revered US Supreme Court Justice Oliver Wendel Holmes Jr, said about President Franklin Delano Roosevelt, “A second-class intellect, but a first-class temperament.” FDR is acknowledged as one of the great US presidents. Temperament often trumps intellect when it comes to leadership talent. Today, we talk about emotional quotient and empathy, elements that go with a good temperament.
Professional services firms are the ultimate peopleorganisations. Leaders in such firms have to be energy generators, creating and cascading energy and passion.
The scale of professional services firms has grown enormously over the last decade. Leaders in the business must therefore have the propensity to think big, think scale. They need to have the instinct to seek needlemoving innovation more than incremental approaches.
Finally, leaders need to understand the technology and its implications, both promises and pitfalls. There is no business today that is not affected by technology.
How does one find, develop, and retain such leaders?
We look for individuals who are self-motivated and can infect their teams with their passion, and be multipliers. We want learners, the “learn it alls” rather than the “know it alls”, who are curious and are always looking forward and around corners.
To retain such leaders, it is imperative to nurture a culture that promotes the qualities of learning, collaboration and the satisfaction of teamwork. Our approach is to offer a healthy working environment, challenging opportunities, an abundance of learning and development and priority for overall employee wellbeing.
Along with this, we look for flexibility, for instance, the use of hybrid working models.
The recent examples have shown that in the postpandemic era, it’s the human-centred CEO that is the need of the hour. But how can the present CEO/CXOs develop that approach while dealing with people and related issues?
It would seem strange that it has taken a pandemic of this magnitude to strike home the fact that the human experience is imperative for long-term business success. It is particularly relevant in the professional services industry, which is primarily a people business.
No business idea or innovation can succeed without adequately providing for human needs and ambitions – these could be a company’s own people, but equally important clients and the broader stakeholder ecosystem.
Empathy and soft skills are key management capabilities that will only increase in importance.
Leaders have to inspire with purpose, have the ability to envision business five or ten years into the future, and be focused on wellbeing and inclusion, not just because this sounds nice but is the right thing to do. Today, and in the future, leadership in organisations will be an opportunity to be earned rather than an entitlement that is given. Leaders will need to embrace impermanence and learn to give up control to empower people rather than micromanage.
Each leader must find his or her own approach. In my view, being authentic and leading by example can be powerful ways to lead.
Increasingly, in the business world, we see humility as an important aspect that goes with strong leadership. Being humble goes with being a better listener, as one does not assume to have all the answers. Mahatma Gandhi used the power of humility and respect to win over others. As he said, “The first condition of humaneness is a little humility and a little diffidence about the correctness of one’s conduct and a little receptiveness.”
Do you think CEOs have some advantages available in understanding people issues?
CEOs are well equipped to see the big picture, the layout of the battlefield as it were. This happens because they are often out of the office, with clients and stakeholders, and get to experience a wide canvas.
But they may not be in the best position to understand people issues at the micro-level. A CEO may see the results of a people survey, but it is equally important to get a first-hand feel of issues by talking to people at all levels. This is an area that the CEO must intentionally address.
My own approach is to have an open door; anyone at any level can reach out to me. I also use most opportunities I get to talk to people at all levels. I ask them about their work, and I learn a lot from such random encounters. Many of these have happened at airports when I see young people from our firm travelling to a client site. I learn about the client problems they are working on, about what excites them and what frustrates them. Such first-hand information has helped shape a lot of my thinking and actions.
What, according to you, helped the firm grow in terms of people in your tenure? What do you think made the difference? Can you please share an example?
In India, KPMG has the second largest workforce for KPMG anywhere across the world. We have grown over 50 per cent in our headcount over my five-year tenure.
First, we have tapped into the growth of the Indian economy by adding new sets of talent and by developing the people we had. Our growth mantra has been Focus, Think Big, Collaborate, and Act Fast.
We focused on areas of growth – ranging in diversity from special situations to do with stressed assets to cyber security. We targeted changing business models, the clients’ needs for managed services, for instance. We saw that our skills could serve markets in proximate areas from Africa to East Asia. We set ourselves big goals. We stepped up the level and motivation for collaboration within our firm and with alliances and KPMG network firms.
And we are working on promoting a propensity to make quick decisions and move fast. Opportunities do not necessarily get better with time, in fact, one will miss them if one is slow.
In thinking big, we have promoted an aspiration to be consequential to our clients – and for our clients to be consequential to us. We need to be impactful, make a difference to our clients. And when we do so, the business and the relationship mean that much more to us.
In my view though, the most defining factor which drives success is culture. The elements of collaboration, of ambition, are all part of that cultural journey. Collaboration has been a key focus of that journey. For collaboration to be successful, we recognized the importance of Trust, Teamwork and Transparency. We have worked on each of these elements.
As a result, our collaboration quotient across service lines, sectors and teams has improved tremendously. Our win sizes have grown and learning avenues for our people have expanded.
Culture is founded on Values, and at KPMG in India, we aim to be guided by our values of Integrity, Excellence, Courage, Together, For Better.
In fact, our Covid response, official and voluntary, was a great symbol of #Together #For Better. We decided at the outset of the pandemic, in the face of great uncertainty to not let go a single employee. We are proud of that decision.
The resulting increased trust has helped us steer together in the pandemic, enabling us to emerge as an even stronger firm.
Today, our talent base is substantially enhanced, is future-focused in talent, organisation, and attitude.
What were the steps taken to attract talent and build capabilities during the initial years as CEO and during the pandemic years? What were the major achievements?
In a rapidly growing and disruptive market, it is critical for firms like ours to be shaping new markets and ideas, creating long-term value for clients through transformation and opportunities for our people to learn and grow.
In this regard, we took several consequential steps.
First, we made some forward-looking bets very early on in my tenure, investing in areas where the market was nascent but showed potential. We are seeing the results of those investments now. For instance, we set up a Special Situations Group to focus on stressed assets. Today, we have a strong work portfolio — with Government/PSUs and Development agencies — on financing and monetization programmes, and several billion dollars of debt restructuring.
Another example is our bet in Managed Services. Increasingly, companies want to change their cost structures and focus their investments on their core activities. And this is another area that is bearing tremendous success and showing promise.
Yet another example is our enhanced play in the area of cyber security where we created a JV with our Singapore firm to capture the market in the region.
Our India Global initiative to deploy our market-facing skills in proximate markets resulted in big wins in places ranging from South Africa to Vietnam.
Many such bets paid off nicely in the last two years – as the pandemic struck, we were fortunate to have made these investments in advance.
All through the pandemic, we executed on our Purpose of ‘Inspiring Confidence, Empowering Change’ – reinforcing Trust with existing clients by supporting critical initiatives on several fronts and creating growth for our firm and its people.
How is KPMG building a leadership pipeline in India? Are there any changes in the way you build the company leadership pipeline? What have been your achievements so far?
Professional and leadership development is key to our success. We have a host of learning programmes conducted by world-class faculty to ensure that our people have stimulating developmental opportunities. In addition, we learn from our work with clients – who are often innovating and addressing very special opportunities.
Professional services as a career model are all about what I call the “practitioner coach model” – you learn from the teams you work with through a 360 view of others’ skills and ideas and in turn you give back by investing your mind space in developing others. At critical career stages and transition points, we are also looking to accelerate this process at scale by institutionalising mentoring and coaching programmes for our people.
We constantly induct talent from the market; this helps us continuously enhance our capabilities with new knowledge. About a fourth of our partners come in at that level, the other three-fourths are promoted from within. We foster learning and growth: young people join us at the entry-level, get rich experiences working with a variety of clients, and grow up rapidly to positions of expertise and responsibility.
As Chairman and CEO, can you please share your views on why it’s important to build an organisation’s culture in order to build strong teams?
Peter Drucker has been quoted so often but it still bears repeating: “Culture eats strategy for breakfast.” I believe if you get the culture right, you will get strategy and success right. Conversely, any plan can be derailed if you do not have the right culture.
I became a big believer in the power of culture as I was fortunate to learn from the legendary Professor Edgar Schein at the MIT Sloan School. He was one of the first scholars to see the power of culture in organisations.
Culture is the unique fabric that represents an organisation’s collective personality, which steers the way an organisation functions, impacting employee engagement as well as financial performance.
But, most of all, culture directly influences emotional and motivational wellbeing – and therefore productivity. It holds people together. Strong cultures hold people together through good times and bad – and is a strong contributor to employee motivation and retention.
Since the start of my tenure, we have been on a culture journey, some of which I have alluded to in one of my responses earlier.
On our 25th Anniversary in 2018, we introduced the jOSH agenda – to depict the energy, excellence and enthusiasm of KPMG India and its people. We have seen a heartwarming response to it – both from our people as well as our clients. It has been a unifier to generate pride. jOSH is one of three pillars of our strategy, along with Growth and Trust
Along with culture, I believe we have to aim to be consequential – to our clients and stakeholders which includes communities and the country. This ambition and ethos make for a greater sense of partnership, an explicit commitment to stakeholders that we want to matter to them, and we want them to matter to us.
As a firm, we are at a great place in terms of momentum and the transformation journey we are on, and it is in large part because of our strong culture and our commitment to become consequential.