Listening to our Directors and Principals

Listening to our Directors and Principals

LISTENING TO OUR DIRECTORS & PRINCIPALS REPORT

Apr-June ‘21

2 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

CONTENTS

PRIDE IN BDO

04

CULTURAL EVOLUTION

06

COLLABORATING FOR SUCCESS

08

THE IMPORTANCE OF GOOD PEOPLE MANAGERS

10

WHAT DOES SUCCESS LOOK LIKE?

12

WELLBEING AND STRAIN

14

WORKLOAD AND RESOURCE

16

WORKING PATTERNS AND AGILE WORKING

20

INFORMATION MANAGEMENT

22

OPERATIONAL EFFICIENCIES AT SCALE CONNECTING INTO GLOBAL EXPERTS AND SUPPORT SPECIFIC REQUESTS MADE OF OUR PARTNERS OUR THANKS TO OUR DIRECTOR AND PRINCIPAL ATTENDEES

24

26

28

30

3 BDO LLP | LISTENING TO OUR DIRECTORS AND PRINCIPALS

AN INTRODUCTION

Between April and June ’21 – as BDO was operating predominantly as a fully- remote but fully-connected workforce and the UK began to ease out of its latest C-19 lockdown – our Managing Partner, Paul Eagland, wanted to hear about the experiences of our Directors and Principals. 80 Directors and Principals, organised by Stream or PMD cohorts, spent 90 minutes each sharing their views with Paul on post- COVID recovery, agile working, career development, wellbeing and our culture. This report summarises the themes of the listening events, as well as actions and ideas to be explored as a result. The Directors and Principals listening events are part of an ongoing series of Managing Partner listening events. Recent topics have included Gender Balance, with some of our female managers and above, and BDO’s Social Impact with our partners. Paul’s next listening event is with some of our trainees.

4 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

PRIDE IN BDO

Whether they had been at BDO for five months or 35 years, our Directors and Principals felt positive – and strongly so – about BDO’s culture.  Many of the groups cited that our culture helped us through C-19  Attendees tended to open the events by highlighting how well the firm has weathered the storm of the pandemic – including recognition of our Leadership Team’s handling of the crisis  When asked if they felt listened to when they raised matters through their day jobs, the collective response was ‘yes’. Our culture is definitely different and refreshing and we should be proud of that. We’ve shown how well we have adapted, which means we know we can adapt again. “

5 BDO LLP | LISTENING TO OUR DIRECTORS AND PRINCIPALS

6 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

CULTURAL EVOLUTION

We discussed the implications on our culture of being a growing firm.

 Some Directors have been at BDO for 20 years and have seen teams grow from four people to 200 people. Culture plays a big role in why they’ve stayed – and they appreciate that business and team growth naturally evolves that culture over time  They want to ensure we guard against becoming ‘a faceless, corporate monolith’ as we grow  The groups were keen that we give people confidence that we aren’t trying to become a Big Four, that we’re proud of who we are and that we don’t worry about who we aren’t  They highlighted that the firm plays a role in this: knowing what we want to protect about our operating model and culture as we grow, and what we accept needs to change as we grow “ We need to recognise that there aren’t easy fixes to big commercial, cultural challenges.

 For example, one Director highlighted: we pride ourselves on our entrepreneurial legacy and mindset, but the risk management and policies that come with being a bigger firm could counter that  They discussed that they personally played a role in ensuring people don’t become a number on a timesheet of a larger firm. For example, by listening to the individuals and giving team members confidence to speak out  They debated whether cultural evolution was such a big topic because of our recent growth, a year of remote working or looking ahead of agile working. They agreed it’s probably all of these

7 BDO LLP | LISTENING TO OUR DIRECTORS AND PRINCIPALS

 The groups recognised that it’s challenging to know when to apply bespoke solutions that meet individual needs whilst also needing to operate consistently as a growing firm  They value ongoing clarity about where local teams can flex central policies to ensure they can respond at the right moment to appreciate or respect people’s personal circumstances. How/when we were opening up our offices post- lockdown and why people couldn’t work overseas during lockdown were cited as common conversations that were challenging in teams.

NEXT STEP FOR DIRECTORS AND PRINCIPALS

 Consider your team’s culture and your role in listening to them and encouraging them to speak up.

NEXT STEP FOR BDO  The U Board to reflect on the points raised.

8 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

COLLABORATING FOR SUCCESS

 One Principal highlighted that we need to be alert to the continued encouragement of communities and collaborative relationships – particularly the creation of smaller communities that help people feel they belong and help them with their learning  We all agreed this would require a lot of proactive effort to get it right – but people had faith that we could do it. NEXT STEP FOR DIRECTORS AND PRINCIPALS  Reconnect with some of the people who attended the Listening Events with you to keep building relationships  Consider your role in tapping into existing, or encouraging new, networking communities  If you are interested in rekindling the Directors’ Network as a networking forum, please contact Sasha Molodstov who was one of the original architects. NEXT STEP FOR BDO  Openly encourage and support cross-stream collaboration, networking and relationship-building  Factor this desire for networking into the format for the next in-person Director and Principal Conference (tentatively scheduled for December ’21).

There is a hunger among the group to work cross-stream on client opportunities.  They have a thirst to get to know the right people in BDO, both UK and globally  They believe our culture is set up for them to achieve that; it was highlighted that our collaborative culture is a differentiator, as people genuinely want to give their time to each other to help others succeed  They discussed the importance of peer-to-peer connectivity; they mentioned reinvigorating the Directors’ Network that was set up in c. 2015/16  And acknowledged they each had a responsibility to build up their own network, and that – whilst the business growth plans will give transparency on what each part of our business is focused on - ‘the firm’ couldn’t build personal relationships for them  They shared many examples of how their part of the business is already working with others to help demystify what they do  They also shared stories where remote working has helped them work with people in the firm they wouldn’t have done before, for example from different regions  And they recognised that they’ll need

to pivot how they build relationships again in the coming months as we emerge from lockdown

9 BDO LLP | LISTENING TO OUR DIRECTORS AND PRINCIPALS

For me, BDO’s culture is all about relationships. That’s what keeps me here. And our clients want relationships too. Growing our firm shouldn’t change that – as long as we encourage the right behaviours to build and share relationships. “ We need to remember that the more we network, the more opportunities there will be. And we’ll then need to prioritise those opportunities once again. “

10 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

IMPORTANCE OF GOOD PEOPLE MANAGERS

 Some of the attendees felt that their partners will only get involved if something happens on the commercials or billings and wouldn’t have noticed all the people management that was happening behind the scenes  As a Director and Principal group, they said they feel the pressure of focusing on commercials, productivity, utilisation and recovery whilst simultaneously delivery on people, culture, quality, risk and client service  It was discussed that this is a tough skillset to have – and needs to be encouraged and recognised as just as vital as the major client wins  One group wondered if everyone is clear on the difference between a People Manager and a Line Manager.

The key question was: how can we better support our People Managers, giving them the skills and relevance to help their team succeed?  Every group raised the amount of time they do, or need to, spend on being a good People Manager  But that they didn’t feel their partners recognised how much time it can take to do this well – particularly given C-19 wellbeing matters - and the overall value it brings  Their perception is that recognition and progression is down to billings – but that the real risk to the future of a team is poor people management. Is there a dislocation between the imperative to be a good People Manager and a recognition or progression model that is based on chargeability or productivity? “ The value that’s put on our people versus the value that’s put on the people who look after those people is different.

11 BDO LLP | LISTENING TO OUR DIRECTORS AND PRINCIPALS

NEXT STEP FOR DIRECTORS AND PRINCIPALS

 Continue to dedicate time to your People Management responsibilities  Engage with the People Manager Support programme that will be launching later in 2021. NEXT STEP FOR BDO  Utilise upcoming People Manager News to reiterate the support available for this group  Finalise the People Manager Support programme to launch later in 2021  Evaluate a follow-up idea from Ben Heaton, in which Senior Managers and above could be given two performance ratings: one on business performance and the other on people management  Remind People Managers of the role description in an upcoming issue of People Manager News, specifically addressing the ‘what’s the difference between a Line Manager and a People Manager’ question.

12 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

WHAT DOES SUCCESS LOOK LIKE?

 Our Transfer Pricing colleagues shared an initiative where they are looking at 1) Financial Objectives (e.g. number of chargeable hours) and 2) Quality Objectives (e.g. number of pre- allocated hours attached to BD, training, knowledge-sharing, people development)  We also wondered how we can get comfortable that some of the important attributes can’t be easily measured. Measuring the micro, such as the number of meetings you set up for someone else, can take your focus away from the macro, for example building trust and collaboration. Don’t think that Directors or Principals are just about a financial game: we don’t want to do a good deed just to get recognition or a pay rise. “ Look after your good people and the good profits will follow. “

 They recognised that Performance Development – and particularly Objective Setting and Performance Reviews – need to be anchored around what the firm, client, team and individual value the most  This means that we need to make it very clear to people what we value the most in advance  One of our Directors had left BDO for a period and then returned. During her time away, our AMP framework was introduced, which she saw as having had a marked difference on the quality of career conversations and production of good SMART objectives  One group highlighted that our Values must help us here: can these behaviours have equal recognition to financial and quality contributions? The groups discussed at length how to balance qualitative and quantitative contributions – and how that might change in our new way to work.

13 BDO LLP | LISTENING TO OUR DIRECTORS AND PRINCIPALS

NEXT STEP FOR DIRECTORS AND PRINCIPALS  Individual conversations: say an authentic thank you to your teams for the equal as well as the quant contributions  Engage positively in the upcoming Performance Management period and encourage your teams to do the same. NEXT STEP FOR BDO  Debate how our objective-setting can be anchored in some clear but broad concepts that factor in a number of priorities (e.g. quality, behaviours, business performance, people management). This will form part of a Performance Management Engagement project that our HR team is running  Consider introducing a ‘Success Conversation’ for Autumn 2022 objective setting, in which we consider not just annual contributions or career development but what success overall means for that individual, including wellbeing, workload, lifestyle and citizenship  Maintain a balance between thanking everyone for their role and rewarding high performers for their exceptional work  Note: in the early sessions, we asked the Directors for their thoughts on how BDO should approach a C-19 bonus; their thoughts were taken into account by Paul and the Leadership Team for their decision-making.

14 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

WELLBEING AND STRAIN

 They acknowledged a rising number of more serious Wellbeing issues coming out of the pandemic amongst their teams  They also recognised that this puts added pressure on People Managers, needing to be attune to this and knowing when the individual needs more professional wellbeing help  How can we be better equipped as People Managers to deal with mental health now and in the future – both in skills, in time and in value? How do we ensure people don’t just speak up when they’re at breaking point?  The Directors in particular voiced concern about managing multiple aspects of the team – from client delivery to people development to commercial management  They raised that, when workload is high, people can become blinkered to deliver to deadline rather than be able to make the time for the people or cultural aspects of their role. NEXT STEP FOR BDO  Maintain wellbeing as a cultural priority, including workload management and mental health  Continue to train Mental Health First Aiders to be a support to People Managers  Share Nadine Thomas’ personal story on Insite of how she faced up to a wellbeing event to change her behaviours, mindfully balance her habits and put them into practice.

 They recognised there is a dilemma between having positive Wellbeing messages and campaigns with the reality of people’s workload or intensity with which they are working  They agreed that BDO has definitely dialled up the message on the importance of Wellbeing in the last year which has been very welcome  One group had an active debate about how to balance our focus on wellbeing against a drive for profitability; the majority vote was that wellbeing needs to continue being a business priority  In particular, people feel they can be more open talking to partners about where people are struggling; this openness is a significant and welcome shift Each group raised wellbeing, workloads or resource within the first 20 minutes of the conversation starting. NEXT STEP FOR DIRECTORS AND PRINCIPALS  To continue being open about your own wellbeing; there are people and resources available to help you  To link in with one of our 60 trained Mental Health First Aiders to support you or a team member in their moment of need  Talk to your partner and/or HR Manager about wellbeing concerns you see around you.

15 BDO LLP | LISTENING TO OUR DIRECTORS AND PRINCIPALS

We all signed up to work in our service industry. That’s because we want to be helpful and keep our clients happy. What good and bad working habits have we created as a result that we need to reconsider? “ ourselves that hard work shouldn’t automatically mean long hours; it’s time for us all to adjust again. “ As an auditor, I feel constantly under review by a regulator or internal check-and-balance. Whilst that’s got to be right for quality reasons, it is ever more pressure on me. “ I definitely think we can be a successful growth company that’s grounded in wellbeing and work-life balance. “ We each need to learn how to decompress again for ourselves. Remind

16 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

WORKLOAD AND RESOURCE

The firm’s success and growth does come with both opportunities and challenges. All groups recognised there is a positive but very real challenge: we have a great brand with great people doing great work – but that gives us a number of resource dilemmas.

 We also need to calm and inspire the people who aren’t leaving rather than just focus on those who are. Those who stay will start to reflect on their next step whilst also managing workload concerns caused by attrition  Attendees also flagged that ‘capacity’ isn’t about just taking on new work. It’s also about having the capacity to service existing work, as we’re having to put in more effort to deliver on what we’ve currently got for either COVID or Quality reasons  One attendee said that one of our biggest challenges is knowing what we can do with the capacity we have, and that under-charging is part of the culture in the industry not just BDO  They shared examples where capacity issues were very real, for example, one team who recently used Flexi Force to buy in more time from another part of the firm that was higher than their own team costs.

SUPPLY SIDE: OUR PEOPLE, RESOURCE AND RECRUITMENT  We acknowledged there are capacity issues across the whole profession, not just at BDO  We continue to hunt out quality talent to boost our teams; we have 600 vacancies at the moment with c. 50 job offers made each week  Flexi Force is a challenge because the spare capacity has now lessened  We highlighted that the job market is very active at the moment, and that this will increase as the world opens up further. We need to be ready for this  So we need to keep considering how we make ourselves attractive – which links to the firmwide priority of our People Proposition  Some raised that there’s a perception of a significant pay gap between BDO and other competitors; our competitor benchmarking needs to be accurate and transparent

17 BDO LLP | LISTENING TO OUR DIRECTORS AND PRINCIPALS

DEMAND SIDE: HOW DO WE TEMPER THE DEMAND SIDE?

 Despite the above, we still want to take on new business because of our personal long-term ambitions and perceived partner behaviour  All agreed that more effort is needed to address that demand side, given there are obvious challenges on the supply side  There were then many stories shared of steps that teams are actively taking to Frost are looking at how to release more time to help people deliver quality work – Leeds: identifying 10% of the portfolio for time input against recovery rate, giving us c. £1m of time back that we want to walk away from. This (‘Project Heartsink’) is a powerful message to assistant managers upwards; they are being firm on this particularly to support the managers address the resource challenge: – LAG: Simon Brooker and Julian

– NRES: the ‘Soul Stoppers’ programme to identify which jobs people don’t like working on and then apply the 4Rs – Southampton: produced an Independent Business Review pack on our 20 watch-list jobs and are then tracking the delivery of these; turned down a £1m job on 100% recovery for the team’s Wellbeing, which they publicised internally – Financial Services: policy in place that senior agreement is needed to take on a job of more than £50k  This helped the group reach the conclusion that one size wouldn’t fit all when it came to workload and resource management. Instead, decision-makers need to keep being encouraged to reflect fully on any opportunity for the firm, as well as the specific teams or offices  Paul confirmed that this is also the LT’s position: we are telling partners to be strategic; not to worry if we end up being short of work for a small period; please do the 4Rs; and concentrate on the quality resource.

18 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

WORKLOAD AND RESOURCE

 There is also a sense in audit that – even though less than £20m of our work is PIEs – the PIEs hijack the agenda because of the consequential impact on resource on mid-market clients  They raised that the firm needs to do all it can to guard against this ultimately having a consequence on quality. SPOTLIGHT ON SUPPORTING EXPERTS  We discussed how to ensure all our capabilities were in sync: ensuring we have sufficient so-called ‘back office’ capability of technical experts, as well as operational infrastructure, so we can deliver to the client needs  The group highlighted that this is getting more professionalised, and specifically called out Anthony Appleton for his work here since he joined. NEXT STEP FOR DIRECTORS AND PRINCIPALS  To continue discussing workload challenges and solutions with your partner group  To be alert to, and have confidence in, Paul’s principle: wellbeing of our people and quality of our work are both imperative. If that means turning down new work opportunities, we must do that  To ensure your teams are aware of internal job or development opportunities, for example internal secondments or new roles, so they don’t think that their next move has to be outside of BDO.

SPOTLIGHT ON AUDIT  The resource discussion was particularly hot for the Audit Director group  For example, one Director highlighted that her sector has 50 people at manager level or below and none of them have more than one-year qualified experience  They wanted to hear from Paul how partners are incentivised when it comes to taking on new work, and who can ultimately make the decision to stop taking on any new work until we can deliver what we have on our plates now  Paul highlighted c. £30m worth of audit work that he personally knows of that we have turned down for Wellbeing or ESG reasons – a principle that he actively supports and openly promotes with leaders and partners  There was a sense that there’s a difference in partners saying they want to do the right thing – for example a 4Rs programme – with the reality that they are still driven to hunting out new work  The Directors also feel a drive to grow their own portfolio to bank their future success, which means driving business development and relationships that they doubt the firm can currently deliver on  One attendee recommended that we need dedicated routes to upskilling our manager population to take on these complex jobs. They said that they currently look to the same good ten FS audit managers to deliver the hardest jobs, which isn’t sustainable

19 BDO LLP | LISTENING TO OUR DIRECTORS AND PRINCIPALS

In a world where we want to do everything, what gives? “ Huddle. We run through what work has come in, what time people have within their working pattern and what skills each individual has or is developing, and how we can therefore share the workload between everyone. “ In Service Charge Accounting, we gather our 16 people together in a Daily It feels like our current resourcing strategy is to move resource day-by- day and week-by-week based on whichever client shouts the loudest. “

NEXT STEP FOR BDO  To ask our partners what further support they need in managing the workflow – current and new - across their teams, including supporting functions, with a ‘one firm’ mentality  To continue our focus on our People Proposition, which is now a firmwide priority  Within this, recognise the importance of retention and meaningful 1:1 discussions and engagement with everyone about their career, workload, health and wellbeing  We are embarking on a number of projects related to our People Proposition. These include a review of how we reward and recognise our people, robust competitor benchmarking, and hiring a strategic workforce planning expert to help us plan our long-term resourcing strategy  The LT has identified Succession Planning as an area of focus. This should go beyond just succession planning for senior roles in the partnership but also to which individuals will form the next generation of Directors and Principals.

20 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

WORKING PATTERNS AND AGILE WORKING

There was appreciation of BDO’s flexibility and ‘no pressure’ approach to the C-19 roadmap, as ‘people don’t want extra pressure placed on them.’ There is also eagerness to get into the details of how agile working will work – and a keenness to see the framework and guidance when it is ready.

 In the meantime, the groups discussed that they can start to do their personal reflections and continue team conversations about this, as it will be a long process of behaviour change and experimentation  All groups acknowledged the role that our culture and trust has played in team success during lockdown  People have had diverse experiences: some have had a wonderful experience working from home; others have had the opposite  People have become honest about the bad habits they’ve adopted  The Directors and Principals discussed that their role as team leaders is to give team members permission and encouragement to address that. For example, asking them how they ‘book-end’ their days so they switch on and off from work whilst at home  The groups said that we all need each other’s help and thoughts to keep dealing with this. It’s both personal and collective responsibility for how we each adapt and help others adapt again to work out what our ‘productive patterns’ are and, if they feel they need it, that they have the permission to build new routines

 And that – as Directors and future partners of the business – they can role model the right behaviours by showing good behaviours, who they really are, and their vulnerability  We also need to keep close to our clients to understand how they want to be worked with  It currently feels that every interaction we have is scheduled due to Microsoft Teams meetings. There is recognition that this will start to shift in the next phase which will ease some of the intensity  The Principals in particular called out that they had missed the ‘photocopier/watercooler’ moments – for relationship-building, business development and socialising  There were concerns shared about people’s skills development in a remote world, with a specific example shared where individuals’ development has slowed because of a lack of face-to-face coaching or ‘learning by osmosis’  The group discussed how we can help seniors to understand the need for them to play their part in agile working to help develop the trainees.

21 BDO LLP | LISTENING TO OUR DIRECTORS AND PRINCIPALS

The trust that teams have built up is phenomenal. We must do all we can not to destroy that with the simplest of wrong word, decision, policy or behaviour. “ We were respectful of people’s time before C-19. We were respectful of people’s time during C-19. And we’ll be respectful of people’s time after C-19. “ In C-19, personal dynamics have changed and we’re recalibrating what’s important to us. My child’s school teacher now knows who I am; I’d never normally meet them in a ‘normal’ year as I’d be commuting every day. “ We have proved that we’re capable of making it work – but now we don’t know how to slow the treadmill. “

NEXT STEP FOR DIRECTORS AND PRINCIPALS

 To actively and positively engage in the Agile Working framework and guidance when it is released  To acknowledge that Day One of Agile Working is just the start; it will be a period of change as we each get used to what it means for individuals, teams, clients and culture  To familiarise yourself with material available on Workday learning, for example there are courses to support you with team-management and self-management  To sign up, and encourage your team to sign up, to the Succeeding Through Change programme of webinars that are running in July and August. NEXT STEP FOR BDO  Allow time for people to digest the Agile Working framework – and to encourage partners, directors and principals to have plenty of conversations with individuals and teams as they work their way through it  Consider creating an etiquette guide about how to work in the new world, for example using headphones on Teams calls when in the office (‘I don’t want to hear both sides of a meeting that I’m not even in’) and how to use each Agile Working space in the Hubs.

22 LISTENING TO OUR DIRECTORS AND PRINCIPALS | BDO LLP

INFORMATION MANAGEMENT

Some of the attendees referred to the overwhelming amount of information, >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32

www.bdo.co.uk

Made with FlippingBook HTML5