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As CEO of Accenture, Julie Sweet is plugged into how the world’s CEOs are responding to the current moment. Accenture is one of the world’s largest consulting and professional services firms, and its clients include 91 of the Fortune Global 100. Sweet, 52, spends her days as something of a CEO whisperer, talking to chief executives around the world, both downloading and sharing key insights into how companies are adapting to the new reality. And much of what she is hearing (and advising) is surprising.
For one, she warns that companies planning to save money on office space by permanently having some portion of their employees to remote work may be making a big mistake. “Personal engagement remains essential for long-term success,” says Sweet. “Don’t fall in love with the savings on real estate.”
And despite anti-China national political rhetoric and Beijing’s tightening grip on Hong Kong, Sweet says there is a rush to invest in China and Asia, where the crisis hit earlier. “China is being very resilient,” says Sweet. (Accenture has 15,000 employees there and most are back to work.) “We have a lot of companies who are stopping investment here and trying to do more investment there. You see countries like South Korea, Singapore, and Taiwan address the crisis much better. This could be a real boon to the Asia markets.”
Also, she worries about the economy and how much the stimulus spending is masking the extent of the pain. “There’s this thing that’s coming around the corner where unless you believe the economic recovery is going to be fast enough, the stimulus money is going to end before there’s been a recovery, and we cannot predict how that is then going to affect things.”
Sweet grew up in Orange County, Calif. As a student, Sweet was a star debater and went on to Columbia Law School and became one of the early female partners in a New York law firm’s corporate law department. She worked on deals and advising boards, until joining Accenture in 2010 as general counsel. Lawyers are trained to be learners, she says, and each quarter Sweet sets herself a learning goal. Please read on to find what she is teaching herself now.
(This interview with Accenture CEO Julie Sweet has been condensed and edited for clarity).
You talk to a lot of CEOs. What is the one thing you are consistently hearing from them about the path forward?
It’s how do you outmaneuver uncertainty. Every CEO would tell you right now that what is driving them crazy is real uncertainty that we can’t control.
So that’s the hardest thing for you right now?
The uncertainty. I was just talking to a CEO this morning in Europe. Right now, people are lulled a little bit because of the stimulus. A lot of it really smoothed things both in Europe and in the U.S. because the unemployment has been very generous. He was like, “Look, Julie, soon this is going to end. And people are going to start being laid off.”
Pivoting comes up a lot now, with companies rightly proud of how quickly they have pivoted. Is there a danger in moving too quickly or is this an overdue correction?
On balance, this is good because there are many companies and industries where their survival long-term really required them to be moving faster than they were. So I think that’s great.
So fewer meetings and layers of approval will be one aspect of the new normal?
[CEOs] are saying ‘Wait a minute—my organization, when we were all together, they’d do five prep meetings before they came to talk to me. Now we’re not doing that anymore.’ So the organization is taking out layers and hierarchies. In a distributed workforce, it’s not as easy to say I’m going to have all these different meetings.
Any worries about the current speed of business?
Here’s my concern. We weren’t ready pre-crisis globally to address the re-skilling need that automation is going to bring. As a reaction to what’s happening, you’re going to have hyper-automation because you have to. If you have to bring your supply chain, your manufacturing, home because you’re now at risk, or for regulation, you’re going to do so in a way that’s highly automated. We are at 15 to 20% of what could be automated. We’re going to see the speed of that rapidly ramp up, and the worry I have is that we weren’t ready beforehand for re-skilling, and we now need to pivot. How are we going to bring government, companies, and not-for-profits together to address that, with equal speed? We’re not seeing that.
Reskilling is hard.
It’s really hard. And no one’s talking about that yet. We have to globally get real focused on this very fast.
Will the consulting model change? When will your teams start working for weeks on end in client offices again?
With density in offices going down, it’s very unclear how fast clients are going to want to be co-creating with their outside partners versus needing the space for their own people in a world where they can’t have as much density.
Will that be a lasting change?
I do think it will be permanently changed. In our mental model, we believe that for a prolonged period of time, what we’ve managed to do quite successfully, which is remote innovation and collaborating with our clients remotely, will continue, with the ability at times to get together. Our business is being changed because patterns of travel amount will be changed.
So remote work and a smaller real estate footprint is the future?
I say this to anyone who will listen, personal engagement face-to-face remains a critical part of success. And we should all be careful to not tilt too much: Don’t fall in love with the savings on real estate. While it was an incredible insight that you can innovate remotely, it is not a long-term answer. Personal engagement remains essential for long-term success.
So you are not ripping up your leases?
No, in fact, we went too far [cutting back on office space] in the ’90s in certain countries like the U.S., and over the last 5 years, we have steadily added to our real estate footprint in order to create innovation spaces with our clients.
Let’s talk about the new sexiest topic in business: supply chains. Do you think we took just-in-time, keeping inventories at low levels, too far? And how do you see that changing?
I don’t think we were wrong in just-in-time. What you now have is you’re going to have much more automation.
What changes are businesses going to make to ensure that they can get the parts and materials they need to make their products?
You basically are going to have four things happening. You’re going to have regulation that forces companies to bring certain things back. The second thing is you’re going to have a different relationship with the smaller suppliers, where you see more financing and more help with security because by definition, if you have to move to suppliers who are near your factories, and they’re not the scaled ones, they have security issues, they have financing issues. The third thing that’s going to happen is you are going to see an acceleration of what were kind of emerging technologies to address different ways of manufacturing, and change those supply chains. 3D printing is a different way of doing just-in-time, right? And the fourth thing that you’re going to see, I believe, is a revisiting of the trade alliances. Mexico became a very important place to manufacture. All the U.S. companies—it’s been there for years but they were using China. Now the conversation is, “We need to go to Mexico. Not move from China.”
What is your CEO network saying about the future of globalization and global trade? Is this a setback for globalization?
The pandemic just emphasized the critical interconnection of our economies, which no one believes is going to truly be unwound.
Where does China fit in?
China is being very resilient. We have a lot of companies who are stopping investment here and trying to do more investment there. You see countries like South Korea, Singapore, Taiwan address the crisis much better.
This could be a real boon to the Asia markets and people having to pivot to growth and do more investment there. To take advantage of the consumer base there. And so a lot of CEOs—we’re having discussions on what might be some underlying competitiveness changes, and how do we make sure that Europe remains a viable market, right? That the U.S. stays on top of innovation.
You speak Mandarin. You’ve done a lot of business in China: What are you hearing from your sources on the ground there?
We have 15,000 people there. Our operations there are almost completely back to normal. That being said, there’s been a big shock to the system and China manufacturing is heavily dependent still on demand outside of China.
It’s certainly been resilient, and we are seeing demand to access that market.
How do you manage in this stressful, anxious environment?
Calmness is absolutely critical. At the end of the day, we can’t control a lot, and so I’m very direct: “Here’s where I need you to do this because it is within our control.” And then I respond to the other things as “You’ve got to be calm when you get the bad news that you can’t control because it doesn’t help to add more stress.”
Do you get discouraged at being the only woman in meetings? Are you in the room a lot where you’re the only woman in a meeting?
It very much depends on the country. It’s just vastly different in Japan versus the U.S. versus various countries in Europe. Right? So, in the U.S. I’m often not the only woman. The only time I get discouraged is if in fact no one’s talking about it.
How are you doing on gender balance at Accenture?
We set a goal for 50-50 (of the total work force) by 2025, and we’re on track. We set a goal for 25% of our managing directors to be women by 2025, which is industry leading, and we’re on track. And remember, we’re tech. This is not a walk in the park.
You were a champion debater as a student. Did you like arguing for or against a proposition?
I did like negative more than affirmative. It was more fun. When you’re doing the negative, you have to respond on your feet because the affirmative lays out the case and I just loved the challenge of having to quickly digest and respond. And it’s probably a bit of my DNA, and why I became a lawyer and why I’ve thrived in a world of so much change because I like that challenge.
Speaking of learning, I understand that you assign yourself a learning goal each quarter. What have you focused on previously and what is your current focus?
My first quarter was all about digital manufacturing. The second quarter was 5G, which is a very important technology that just got more important. And right now, I’m going deeper on Cloud because the crisis has so accelerated the journey to the Cloud. I’m learning about hybrid Cloud.
What was your life like growing up and what lessons from your parents do you still find yourself relying on today as you lead a big organization?
I grew up very modestly. My dad did not graduate from high school. My mom graduated from college my freshman year in college. My dad painted cars for a living. But they had an amazing optimism and belief that if you worked hard, you could do anything. And I think that sense of optimism, with a work ethic, has been a really big part of my life. I once coined the phrase, “fearless but prepared.” You don’t just take risks for risk-taking. I’d say that though as a leader today, one of the most important lessons was the one my father gave me when I left school to go to college. I grew up in a very different environment and my dad said, “Don’t be afraid you’re leaving us behind and you’re going to go experience these things. That’s what I want from you. But never forget where you came from.”
And the way I translate that today as a business leader is that we all have to go into these new places: We’ve got to digitize. It’s going to have tough effects on our workforce, on our communities. But we have to do that. But the equivalent of “don’t forget where you came from” is “you cannot forget our people.”
BUSINESS BOOK: Colin Powell’s It Worked for Me: In Life and Leadership. It’s one of my favorite leadership books.
AUTHOR: Martin Gilbert.
APP: Waze. I am terrible at directions.