Lessons in leadership: Edward Nusbaum
22 November 2010 Edward Nusbaum
Despite three decades with Grant Thornton, Edward Nusbaum readily admits that he still has a lot to learn. The CEO tells Phin Foster why development programmes are essential, irrespective of seniority, and how a culture of learning will only ever become embedded in an organisation’s DNA if it is led from the top.
After becoming a chief executive, there is a temptation to believe that the race has been run. Following years of graft and overcoming challenges, knowledge has been acquired and the student has finally become the teacher.
Having spent over 30 years working his way up the corporate ladder with the same company, Edward Nusbaum has certainly paid his dues. Installed as CEO of Grant Thornton International in January of this year, the genial American is responsible for the leadership of more than 30,000 partners and staff in over 100 countries.
Past successes suggest he's already well on top of his game: tripling the size of the accountancy giant's US member firm, Grant Thornton LLP, during his eight years there as chief executive; increasing revenues from $400m to $1.2bn; growing at more than twice the size of any of his US competitors; and seeing his organisation become the first accountancy firm outside the Big Four to take first place in the Public Accounting Report audit rankings. What can there possibly be left to learn?
This line of enquiry receives short shrift from the 55-year-old: if there's one thing three decades in the company has taught him, it's that an insatiable appetite for knowledge is essential if you want to keep moving forward, and an environment that actively encourages such hunger is a great enabler.
"Our philosophy is that no matter how senior you are in the organisation, there's a need to constantly develop your leadership skills," Nusbaum declares. "I'm not just talking about staying in touch with the latest buzzwords or the current hot topic, but looking beyond what's going on within our four walls, or even our industry, and really expanding our horizons. There's so much out there and no way to ever know it all."
The problem can be that not everybody in senior directorial positions is as enthusiastic and open-minded as Nusbaum. Unfortunately, for anyone so inclined under his charge, they don't really have a choice. "Everyone is different," he acknowledges. "We have some who display a constant desire for knowledge and other leaders who, shall we say, don't take to it quite as instinctually. I see it very much as my role to give those in the latter group a friendly but firm push.
"The tone needs to be set from the top. Some people might think it's not important, but it's not their call to make. Those that report directly to me have personal and leadership development objectives to meet and it's something that I take extremely seriously. This is non-negotiable."
The reason that some can be cynical about training for the most senior levels is that there comes a point when programmes are no longer process or industry driven and begin to take on a more 'holistic' and 'blue sky' approach.
Speaking from personal experience, when you have witnessed 20 senior executives painting in time to an ambient dance track, the temptation to roll one's eyes is difficult to resist. Nusbaum laughs off the suggestion of 'New Age' development programmes, but is certainly not dismissive when it comes to bringing in outside help. "If you're looking to exclusively develop and train your people in-house, it eventually becomes akin to inbreeding," he begins. "Of course you need to do a lot internally as well, but I'm a great believer in sending our guys to the world's leading business schools and making sure they come into contact with genuine expertise.
"That involves bringing in academics from Harvard, Oxford, Cambridge and all the other big guys, but we also work with professors drawn from smaller universities – North Carolina, for example. It's really a question of looking more at the quality of the individual rather than what institutions they've come from, but, of course, places such as Harvard bring a certain cachet and credibility. Using equivalent business schools elsewhere around the world also gives us a great global perspective."
Global courses developed internally look to polish top brass and nurture emerging leaders. The Grant Thornton Leadership Institute is comprised of milestone programmes to support leadership development and other nontechnical skills for managers and partners and Nusbaum cites its Advanced Manager Programme, launched in 2008, as a great example of how learning and development can create a far more cohesive company.
"It's for those who haven't quite made partner yet but are on their way," he explains. "We stage three one-week courses over 11 months, held in locations around the world. This year it's Miami, Sweden and Shanghai. The same 60 or so people attend all three and moving it around means we can bring in a real array of experts and perspectives.
"In terms of training it involves a mixture of internally and externally-led sessions, but, almost more importantly, these people are building a strong and cohesive network. An essential component of running a successful global organisation is that your high-level talent is able to work with, and feed off, one another. There are not many opportunities to bring people together from such disparate geographies, so any opportunity has to be fully seized."
Similar in scope, although with a more senior alumni, the International Partner Development Programme is in its sixth year. The Leadership Institute also runs even more focused seminars geared towards managing partners with overall responsibility for running offices.
"Lessons can't be exclusively drawn from our sector," Nusbaum declares. "We can learn from what GE, IBM or a big advertising company is doing, but, in order to get that information and insight, one has to bring in people from the outside. My guys are also encouraged to attend seminars. I was at an event recently in New York where the speakers included Jack Welch and other leading global CEOs. To hear what they're thinking is not just beneficial for me; it has value for a range of leaders across our organisation."
The chief executive sees leading by personal example as an essential component of creating the right culture at the top. But, even if this was not the case, the culture within the company is such that he, like his executives, would have little choice in the matter. "I report to our international board," he explains, "and its members certainly push me on how I plan to develop myself. I have a gameplan in place to make sure that I stay on top of that, attending an array of courses and seminars.
"Listening to other CEOs is hugely beneficial for getting a perspective on other organisations and leadership techniques. I also try to consult with academics regularly on a one-to-one basis. Furthermore, there's a fair amount of internal training involved, staying up to speed with new processes and developments across the organisation."
We speak the day after Nusbaum has returned from visiting the Australian practice. He spent much of that time meeting with the board chairman, an academic, and seeking a fresh perspective on the organisation.
"Learning is by no means restricted to the classroom or conference hall," he explains. Having spent so long working his way to the top, it is interesting to hear the CEO declare his belief in the value of recruiting external leadership: quality will always trump quantity of years served.
"It's not how long you've been here," Nusbaum explains, "we focus far more on leadership qualities and an ability to get things done. I certainly benefited from that; I was in charge of our automotive practice while still in my 30s. Grant Thornton is founded upon a culture of constantly tying to improve and evolve: the worst viewpoint any company can take is that things should be done a certain way only because that's the way it's always been.
"Many professional service firms tend to be rather insular and don't want to bring in leaders from the outside. Adopt that approach, and you can quickly become stale. Recruiting a managing partner, practice leader or senior partner who can look at every aspect of the business differently can be extremely beneficial and we encourage that level of critique and honesty."
Grant Thornton prides itself on an ability to tell its clients hard truths – "A major part of an accounting firm's work revolves around delivering bad news," Nusbaum acknowledges – but equally important is an ability to see where fault lies in-house. Over the past few years, a huge emphasis has been placed upon increasing the level of diversity across the organisation, with particular focus paid to bringing a higher proportion of women through to senior leadership positions.
"When you look at who will be running our clients, both today and into the future, it's a pretty diverse group," Nusbaum explains. "We have to match that within our ranks and it's an ongoing, intensive process. Of those entering the accounting profession straight from college, some 50% are women.
"At the partnership level, however, the figure is unacceptably low. Fixing that involves having the right policies in place, but it also demands a cultural shift within an organisation. I have to lead, and my partners have probably become bored of listening to me bang on about the issue, but one must keep hammering it home."
Such an approach is clearly paying dividends. The Women at Grant Thornton initiative, which focuses on developing programmes and activities that enhance gender diversity, has seen the organisation ranked among the ten top employers of working mothers in the US by Working Mother magazine and cited as one of PINK magazine's 'Top Companies for Women'.
"A lot of progress has been made but we're still pushing hard across the world," Nusbaum declares. "There's pressure from the top, but people also need to be held accountable. A lot of focus is paid to promotion lists and a lack of representation is a clear indication of where we are falling down. Sometimes diversity needs to be imported; we cannot simply promote exclusively on the basis of gender or ethnicity, but pressure filters down to all levels and real momentum can be generated."
But can such noble aspirations and momentum be maintained when the markets turn and one's priorities suddenly shift? In tough economic conditions, the temptation can be to focus on consolidation rather than aspiration. Talent management often takes a back seat.
"The CEO must ensure that the development of leaders and retention of top talent remains a cornerstone of our business practice," Nusbaum responds.
"In a downturn, it's easy to think that people can be replaced. That's a formula for disaster: strong talent is always difficult to find, irrespective of market conditions. We've seen some redundancies, and that's always a painful process, but I must ensure that we're driving the right blend of keeping the best people onboard and continuing to develop their skills.
"As the market picks up, we need to have leadership in place that can take advantage of the opportunities out there and help us grow. A downturn offers the chance to diversify, but that's only possible if you have retained the people capable of making it happen."
He may have plenty left to learn, but Nusbaum is clearly making a good fist of putting what he already knows into practice.
Edward Nusbaum was attending CEO Connection's CEO Boot Camp.