Change Agent

CAN INTELLIGENT AUTOMATION TRANSFORM A BIG FOUR ACCOUNTING FIRM? DAVID H.W. TURNER, KPMG’S CHIEF FINANCIAL OFFICER, BELIEVES THE ANSWER IS “ABSOLUTELY”

– BY JULIE BARKER –

Read the article as part of the whole issue via flip book. The full magazine to come out next week!

Disruption — business disruption — became the new normal about five years ago. Enabled by technology, new competitors arose to challenge established businesses. The old guard had to keep up with technology’s exponential rate of change, or lose. The looming irrelevance of companies and whole industries (taxi services outfoxed by Uber and Lyft) made anticipating and understanding emerging trends a survival skill for every organization. At KPMG, David H.W. Turner, the Chief Financial Officer, calmly points out that “change is something that has to happen all the time. In fact, it’s a CFO’s or senior leader’s most important job to enact change.” The CFO’s role, Turner goes on to say, is not to hold the wheel steady and steer through calm waters, but to turn the steering wheel and approach forthcoming obstacles while thinking about how to do things ever more effectively.

Turner is watching the heightened interest in Intelligent Automation, which is a game-changer for businesses. Intelligent Automation encompasses Artificial Intelligence (AI) and the field of Robotic Process Automation (RPA), which uses specialized software to automate repeatable functions. He sees Intelligent Automation’s use accelerating “in a huge way. So, in my view, any business that does not adopt an approach of embracing robotics and Intelligent Automation capabilities, and trying to deploy them everywhere, is going to find themselves falling behind very, very quickly.”

KPMG, with practice areas in audit, tax, and advisory, and a team of support professionals in Human Resources, Marketing, Finance, and other areas, relies largely on knowledge workers, graduates of the best colleges and universities, who don’t do the repetitive jobs that would be natural targets for automation. But machines with Artificial Intelligence could provide the help they need to do their best work. At KPMG, that could mean surging ahead of the other Big Four accounting firms, PricewaterhouseCoopers, Deloitte Touche Tohmatsu, and Ernst & Young.

“I think Intelligent Automation is going to be at the heart of the way all businesses change in the future,” says Turner.

Among other initiatives with digital helpers, KPMG is introducing bots in its tax practice area that would handle relatively time-consuming tasks, like filing for tax-return extensions. Scale is at the heart of most moves toward digitization, and at a firm as large as KPMG, “extension bots” could save thousands of hours a year for its team of tax professionals, allowing them to devote their skills to less-routine client work. Another large bite could be taken from time devoted to the work of preparing summaries for boards of directors, the firm realizes, with the result that “board visualization bots” are being deployed, to shave the roughly two hours per summary down to 15 or 20 minutes.

“Intelligent Automation is really all about enabling people to create more value for our clients and the marketplace at large,” says Turner. “By reducing the administrative burdens, our professionals can redirect their time and attention to higher-level activities that drive success for their clients.  At the same time, our people are more engaged and energized in what they are doing.  So, I view IA as a tool that enhances human capacity.”

Turner, 60, is the U.S. CFO and Office Managing Principal for the Montvale, NJ, office of KPMG, which is the home of over 2,000 business process group professionals. Besides overseeing finance and accounting, he has direct reports from the areas of real estate, procurement, events and meetings, and integrated operations. He has asked each of his teams to bring him a strategy for robotics and Intelligent Automation. “Every single one of our teams ran through with me their view of how they could pick up this technology, use it in their areas, and make a big difference in driving firm growth,” he says.

Tomorrow’s Training

For that future enhanced by Intelligent Automation, KPMG is constructing a state-of-the-art learning, development, and inno-vation center on 55 acres in Lake Nona, FL, a planned community inside Orlando’s city limits, where the company will bring waves of employees to upgrade their skills. Existing and cross-functional teams will practice collaborating and innovating. Partners and professionals will have classroom training as well as simulated in-field environments to develop the skills they need. And new and potential hires, including those who are still in college, will form their initial impressions of KPMG on this campus.

Conceived as a center not just for the transmission of information and skills, but also as a hub for infusing and reinforcing KPMG’s strong culture of always acting with integrity and its commitment to highest values of personal and professional behavior, this facility is set to open in early 2020.

Turner points out that many of KPMG’s partners spend their time out at client offices, interacting with those clients and helping them meet their goals. “So the ability for our people to be outstanding in how they interact with other humans, how they help problem-solve, how they help choreograph innovative thinking is critical. Those are things you learn by interacting with other people who do it really well. To me it would be crazy to think of a world where you could just do technical training remotely, because you’d end up creating a workforce that didn’t have those fundamental people skills that are called for in everything we do in our interactions with clients.”

The Man Himself

A child’s drawing from Take our Daughters and Sons to Work Day, thank-you notes from employees he mentored over the years, and pin flags from the 18th hole of the U.S. Open and PGA Championship mix with photos of family in Turner’s office décor. Clearly, he enjoys his work and the opportunities it opens up to be of help to those he comes in contact with (see sidebar).

Raised in Manchester, U.K., he graduated from St. Andrews University in Scotland and spent his early career in audit at Price Waterhouse in London. Turner says he tended to look two or three years ahead, but he didn’t really have a map to his present position. “I just believed that if you kept pushing yourself and kept building on your experience — pushing the boundaries of that experience — the career takes care of itself.” That seems to have been the case.

In 1991, at age 32, he was offered his first CFO position, over UK and Ireland operations at Reuters, the international news agency. Five years later, he was named CFO of its American operations. He took the job for the international experience. “I thought it would be a great opportunity for me and my family,” he says. The Turners — David, his wife, Rosie, and daughters, Helen and Jenny — planned to stay in America for two years. But year two went by, and years three and four.

After five years, the family’s plan of returning to the U.K. was turned on its head when, in 2001, Thomson Financial, a division of information provider The Thomson Corporation, made Turner an offer to become its CFO in New York. Eight years later, Thomson subsequently bought Reuters, putting Turner in “a great position to be playing a big role in that merger because of my history with both companies,” he says.

When he was tapped in 2012 to fill the CFO position at KPMG, it felt like “the crescendo to my own career because I joined KPMG to be part of something very special, as we try to take one of the world’s great brands and make it incredible. I think we’re doing that.”

What Turner heard in his early talks with KPMG interested him a great deal. The firm, with 100+ offices in the U.S., was in the process of building out its business in order to accelerate growth. At the same time, it was predicting that cloud technology and other rapidly moving innovations would substantially affect business models — its own and clients’. From a work standpoint, Turner saw an opportunity in a growth-focused business
to be involved with strategy decisions and with the challenges and excitement of doing acquisitions. From the standpoint of feeling comfortable and fitting in, Turner got the answers he wanted from KPMG’s former Vice Chairman Shaun Kelly and former U.S. and Global Chairman John Veihmeyer, who described the accounting firm’s culture and a higher purpose that motivates its workforce.

Higher Purpose

In the firm’s long run as a U.S. entity, leaders in what is now KPMG managed the Lend-Lease program to help defeat Nazi Germany. The firm also helped resolve conflicting financial claims so as to gain the release of 52 American hostages who were held in Iran for 444 days until January 20, 1981. Clearly, there’s impor-tant and inspiring work an individual can do in public accounting.

In 2014, KPMG launched an initiative to have employees articulate their own stories about how their work made a difference. The initiative substantially reinforced the firm’s culture. And now, employees in all roles at KPMG can say how their job is making a difference. Turner says these employees are part of creating the trust that the public must have in the financial markets in order for the markets to operate. “When you come in and create capabilities for clients, you’re not just coming in to do a job. You’re coming in to help the organization and clients of the firm itself make a difference in the world,” he says.

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It felt like “the crescendo to my own career because I joined KPMG to be part of something very special”

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“We’ve been pushing hard to become what we call the clear choice for our clients,” says Turner. “In order to be that clear choice we have to make our values known and live by them — we need to lead by example, seek the facts and provide insight, and above all, act with integrity.”

Intelligent Automation may also inspire stories of higher purpose. In a few years, we may begin to hear such narratives from KPMG personnel. If the firm can become a market leader itself in the implementation of Intelligent Automation and cognitive technologies, Turner contends, its people will be empowered to do greater, more meaningful work for clients.

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Community Commitment

Playing an active role in the community is an important part of anyone’s growth. As CFO of KPMG, David Turner understands that his job involves prioritizing available resources to support the firm’s commitment to community. He directs the Montvale office’s efforts in support of KPMG Families for Literacy, a charity that the company developed to bring books and literacy to underserved communities. In addition, he sits on boards of not-for-profit organizations including the Intrepid Sea, Air & Space Museum, the Fisher Center for Alzheimer’s Research Foundation, and the United Way of New York City. “I think you learn from those activities and from the interaction with other board members in a way that is invaluable,” he says. The work with boards “is among the most fulfilling things” he does. “Some of the quiet, behind-the-scenes help that businesspeople can give in a community sense is really empowering,” he adds. “I don’t think any person in business should miss out on the benefits that come with real community engagement.”

Turner says he advises those he mentors to volunteer, get on committees, and do what they can for communities in need. “If they can throw themselves into it, then they’ll find their passion, and it’s a three-way benefit: It helps the community, it helps the charity, and it helps the individual as well to build their contacts, their networks, and their capabilities.”

His Greatest Challenge

Working with many “incredibly smart, energetic, ambitious people,” says David Turner, CFO of KPMG, means these people have thousands of great ideas. And they want them all to come to fruition. As Turner puts it, “The challenge to that is that you have to choose between them” and focus on “the art of the possible.”

“The biggest obstacle is, in a sense, disciplining our organization, disciplining ourselves to narrow down the [ideas] that are most impactful, and then to deploy our enormous capabilities to executing on those ideas, rather than diluting ourselves by doing too many things.”

If the CFO is not careful, Turner says, “you can be perceived as the person who says no all the time, when actually what you’re trying to be is the person who says yes all the time — but yes to the right ideas, not yes to everything.”

At KPMG, Turner says, he and a number of people on the leadership team have been involved in turning that challenge around: “Trying to narrow it down to 10 or 11 things that we’re going to really throw ourselves behind in a sort of supercharged way, so you don’t get alternative cottage-industry investments that dilute the effort.”

In this way Turner has helped innovation thrive. Although some partners and others won’t see their ideas turned into opportunities, “Your job as CFO is to help the organization make decisions that are based on good judgment and supported by data, not just instinct.”