LYCEUM: Chet Wood on Leading and Managing Change
In response to the question during his February Lyceum presentation, “How do CEOs effectively lead and manage change?”, Chairman and Chief Executive Officer of Deloitte Tax LLP, Chester (Chet) J. Wood asked a question himself: “When things happen out of your control, and indeed they will, how are you going to deal with it?”
He offered this piece of advice that he says he follows diligently, “Focus on what we can control, so that when the world around us shifts in ways we didn’t expect, we are in a position to actually be proactive and not just responsive.”
Deloitte was challenged recently when the Sarbanes-Oxley legislation took effect. As the single biggest piece of legislation that impacted professional service firms, Wood admitted that his firm was unprepared in a few ways.
“We couldn’t have anticipated the enormity of the cultural impact it would have on an organization,” he explained. “All of a sudden we couldn’t socialize with our audit brethren, or tax revenue, or consulting folks. Personal relationships we had in the past were not only discouraged, but we were told they were inappropriate and illegal. The fabric of the cultural organization was intense and instead of coming together, it started to pull apart.”
To address these changes, Wood said the firm did what they do best: asked a lot of questions. Over the course of six months Deloitte gathered data from the people in its global network, from peers, clients, and from the marketplace.
“The problem with asking questions,” he said, “is that you get answers. And you may not always like them, but you put yourself in a position to have to act on those answers. And so we did.” As a result, Wood said the organization is more disciplined.
Surprisingly, Wood said there is not a lot of difference between what he, as CEO, encounters, and what his clients are facing when it comes to dealing with change.
“We both spend a lot of time worrying about the outside market and figuring out the right strategy to navigate, as well as dealing with social, and human resource issues,” he said. “But wrapped all around it is the reality that change keeps moving pretty fast on the outside.”
Wood offered an observation to his audience regarding dealing with change:
“You were given the gift of intellectual curiosity,” he said, “Take advantage of that gift. Don’t allow it to atrophy as you go through life. Do what it takes to discipline yourself to always be provocative for the sake of always questioning ‘what’s next?’ ”
“That’s important because there’s an old saying that when the pace of change on the outside is greater than the pace of change on the inside, we usually get run over. That is an absolute certainty in the profession and the industry in which you will join,” he added.