A discussion with Lynne Doughtie, Chairman and CEO, KPMG LLP.
In 2016, KPMG released a survey of 400 U.S. chief executives. What were the 2-3 most surprising results to you?
Lynne Doughtie: I was surprised – and encouraged – by the high degree of confidence expressed by CEOs despite the pace of technological change and disruption and the myriad of risks they see. Many CEOs believe they can successfully navigate this landscape and transform their organizations to stay competitive and thrive. They’re confident about the long-term growth prospects of their companies, the US economy, and the global economy over the next three years. That bodes well for investment and innovation.
The findings around innovation also were eye-opening. For instance, only a quarter of CEOs said that innovation is embedded into everything they do. Thirty-six percent feel their organization’s approach to innovation is either ad-hoc, reactive or occurs on a siloed basis. And less than a third believe their organization is highly capable of creating a safe-to-fail environment.
The good news is that innovation is squarely on their radar as a strategic priority, second only to strengthening their customer focus. We’re starting to see companies take a more strategic, holistic approach to innovation across their entire organization.
With the rapid advance of automation in the accounting profession, what do you see as the future state of auditing in the years ahead? What steps should professional auditors take now?
Doughtie: Technology – in the form of data and analytics advances, cognitive capabilities, and robotics – provides a new, exciting array of opportunities to automate how our profession gathers data and audit evidence on which to form an audit opinion. We are staying ahead of a quickly changing landscape by working with technology providers – such as IBM, Microsoft and others – to read and analyze structured and unstructured data. That way our partners and professionals can use machine learning to make accounting and financial reporting judgments, as well as continue to train systems to assist in the audit. This changing landscape will also provide new opportunities for providing assurance on an expanding range of information used to make important decisions.
At the same time, our clients are encouraged by our investments in research with academics that will inform the development of future AICPA standards or determine the benefits and challenges of utilizing unstructured data from the internet to improve the risk assessment on an audit engagement. Our robust programs collaborate with universities and the academic communities to put KPMG professionals in classrooms, bring professors into residence in our research and professional practice facilities, and provide constant interaction on the profession’s future needs by offering our view on future coursework.
Also, recognizing that there is a shortage of professionals who have the data-and-analytics expertise that today’s businesses need – and seeing a clear skills gap in the market across all industries – our firm launched the KPMG Master of Accounting with Data and Analytics Program in 2016. Through this first-of-its kind program, KPMG is partnering with two leading business schools to provide our data and analytics tools along with case studies and data sets to prepare an emerging workforce for the data age.
Audit professionals – and those coming into the profession – should be prepared. They need exceptional accounting skills and a strong commitment to integrity and professionalism. They also need to accept change, embrace a “continuous learning” model, think critically, and be able to coach, manage and lead widely dispersed teams who will need a variety of new skills.
How are you approaching and cultivating innovation at KPMG? How are you advising clients on contending with disruptive innovation?
Doughtie: At KPMG, a true spirit of innovation exists within our culture. Our people know that it is safe to experiment and fail here. We have always believed that the most successful solutions reflect a diversity of skills, thinking, experiences and outlooks.
We suggest that leaders who strive to foster cultures of innovation may want to keep the following principles in mind — principles that underscore how we harness innovation at KPMG:
- Have a long-term vision and a holistic, enterprise-wide strategy around innovation, with mechanisms in place that allow you to activate rapidly when disruptive opportunities arise.
- Build a capability to sense weak signals of change before they turn into major trends. Economic, political, demographic, social, and technology disruption can emerge quickly and upend the best-laid plans.
- Craft an agile business model that regularly rebalances your portfolio of innovative ideas, knowing when to build, buy or ally to implement them.
- Redirect your leadership and full organization to make innovation a core skill. Set up processes through which your people can develop as innovators as well as be accountable for their contributions.
As a leader, how are you personally contending with mission critical issues previously not encountered by your business?
Doughtie: Business leaders are managing and monitoring incredibly complex issues and ecosystems that extend far beyond the walls of their business. You can no longer “go it alone.” At KPMG, we are pursuing a collaborative growth strategy that includes external partnerships and alliances. We continue to expand our alliance ecosystem and pursue strategic acquisitions so that we can keep delivering innovative solutions to address our clients’ evolving needs.
Getting to know Lynne Doughtie
What advice do you have for other female professionals to overcome obstacles and reach the top of their profession?
- Be confident.
- Don’t wait for someone to tap you on the shoulder. Make your goals known and proactively develop relationships with those that can help get you there either in the form of mentors or sponsors.
- Take risks. Don’t be afraid to pursue a position that you might not feel ready for.
What has been an instance in your career where you turned a negative into a positive?
Early on in my career, I was able to develop deep industry experience and expertise in one of our core businesses. I worked very hard and established what I thought were ‘best laid plans’ to achieve my goal of becoming a partner at KPMG. Market disruption occurred, and the vision I had of my career had to shift along with it. When one door closes, another one opens – and at an organization as large and diverse as KPMG, opportunities abound if one is willing to seek them out. I ended up working in another one of our core businesses, which presented additional growth and learning opportunities. In my 30+ years at KPMG, I have had the opportunity to work in numerous areas of the business and this would never have been possible if my career path was not re-directed.
What was a book you found particularly insightful or inspiring, and why?
Over the years, I’ve read dozens of books that moved or inspired me based on a certain circumstance or point in time, but there is one book I consistently go to for inspiration, encouragement and leadership direction. My “go to” is the Bible – it provides the brief insight or guidance that is needed at the right time.
Who has been a role model in your life, and what did you admire the most about that person?
My mother – a business woman and entrepreneur who constantly encouraged and supported others. She was not only a mother, but an incredible mentor who taught me what it meant to make a difference. While she may not have had a large platform, she made a huge difference in the lives of others. She impacted hundreds of people – including me – and I am now able to continue her legacy of encouragement and building confidence in others.
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