MS. SWEET: Thank you. Thanks for having me today.
MR. IGNATIUS: So, Julie, let’s begin with the part of your business. At Accenture, your job is advising the world’s biggest companies about their market, the technology and transformation. When you sit down with a CEO today and talk about moving forward despite the pandemic, what’s the first thing that you recommend?
MS. SWEET: It’s a great question. The first question on most of our clients’ minds is how they move forward faster, because speed has become an issue. And it’s tied to the topic today, which is digital acceleration.
And what I’d say, you know, consultants, we love two-by-twos. And I would say there’s two truths and two facts that are important in understanding the current context. The two truths are that, first of all, every business today is a technology business. We believe that was true before COVID. The debate is over. Technology became a lifeline for governments, companies, and society. And we see that being completely embraced across industry.
The second truth is that the exponential change in technology that was happening pre-COVID is only going to continue, and that places an enormous pressure on companies, both leaders and those who are lagging, to really think differently about how they run their business. Now the two facts which are quite interesting is that we’ve been doing a pulse survey since COVID began across 10 major markets all around the world with a c-suite. In July, 80 percent of the companies surveyed said they are going to significantly increase digital transformation, which was up from 50 percent in May. And you’ll have to have me back to tell you what we find out in December, but we think it’s only increasing.
But perhaps an important second fact is that 62 percent of those executives said that as they transform, they are going to embed more responsible business practices, which is also up from about 50 percent in May. So, it’s an interesting time today. You’re seeing digital accelerated because it is the lifeline of businesses and it’s a path to even greater success for the leaders and to survival for the laggards. But there’s also a huge opportunity in how you digitally transform.
MR. IGNATIUS: So, let’s talk about the specifics of this acceleration and what it means for companies. You’ve made a focus on the importance of cloud computing in your recent articles and your advice to companies. Explain why the cloud is so important in this period of, as you say, digital acceleration.
MS. SWEET: It’s a great question. And there’s really a couple of things you have to understand about the cloud. First of all, cloud sort of table stakes is its--it has better costs and it makes you more resilient. And right now, cost and resiliency are very important, and it’s part of what is accelerating what we thought would take a decade in terms of the replatforming on the cloud of global business and will probably take more like five years.
But the more important reason to move to the cloud which is also absolutely critical is the way that you can then use data and innovation. So, I’ll give you two quick examples. We’re working with a government in Europe, building out a platform for their health analytics. And today for researchers, doctors, health providers, it takes about 12 months to get access to the data they need. When we have fully deployed what takes today 12 months will literally happen in minutes, right? A huge difference.
We’re working with another client that is trying to move to drive growth today, and they don’t understand that much about their customers. So, they have a customer coming in buying one thing, but they really want them to be able, you know, to buy a larger basket. And cloud is enabling them to take the data from their customers much more quickly and give real time insights into the customers so that they can both adjust and personalize their offers but also change their products. What is behind that takes a computing power and the ability to actually access your data at scale so that you can apply technologies like artificial intelligence. Those are just real world examples of things that we’re doing right now that you need to have that kind of power behind it in order to achieve.
MR. IGNATIUS: Let me just ask, Julie, the obvious question. As companies push more of their proprietary data into the cloud, is there any danger to them or to their customers of all that data being, in effect, more centralized, less in the company’s immediate control?
MS. SWEET: Well, you know, one of the reasons to move to the cloud is, in fact, security. I remember, we’re now 96 percent in the cloud, and one of the biggest drivers for us of the move to the cloud was actually the improved security. And what you’ve seen actually during COVID is the vulnerabilities of many of the systems that companies have. They have so many different systems. And so, cloud is actually more secure with respect to data.
MR. IGNATIUS: So, you spoke earlier, Julie, about your analysis of industry leaders and laggards. I noted that you did some survey work at the end of last year saying that the leading 10 percent of companies had--if I have this right--essentially twice the revenue growth of the bottom 25 percent laggards. And I’m curious whether with this digital acceleration that rewards for the leading companies that move quickly, are agile, adopting technology, we’re going to be heading even faster toward what might be called a winner-take-all economy, where the leading companies grow, and grow and those that fall behind fall further behind. Do you think that’s a danger, widening the inequality and distribution of rewards in our economy?
MS. SWEET: I don’t, based on what I’m seeing. And the great opportunities you have with technology is that you can actually leapfrog even if you’re a laggard. And so, it’s more about leadership and mindset. What do I mean by that? We work with a great company that has been investing in digital for years and years, and they had curbside pickup before COVID, so they thrived. We have another company, also a great company but hasn’t been investing. And they have now been able to implement it very rapidly because they had the humility to learn from others. They took an attitude of progress over perfection, and they rapidly deployed technologies, partnering with the ecosystem to do so.
And the difference there was a decision. You know, I--we talk a lot about Accenture as to what are the most important leadership qualities today, and after always do the right thing is leaders with competence, confidence, and humility, because they’re learners, they build better teams, and they partner naturally. They’re naturally collaborative. And that’s what you need today.
And that is, in fact, what we’re seeing happen, is that leaders are doubling down, but laggards are actually in some cases leapfrogging. So, it’ll be very interesting. We’re going to redo that study in January, and I think what you’ll see is those leaders had an immediate impact on their competitiveness, you know, the gap becoming what I call as a chasm. But I think 12 months and 24 months from now, you’re going to see some of the best companies who were behind changing a mindset.
And one of the most important things that I am talking to our clients about now is mindset and what are you changing in how you operate, because companies who want to move faster and what to maintain the speed that they had at the time of the crisis, you can’t continue in crisis mode. And so, you have to challenge yourself. What am I going to change about my culture, about my ways of making decisions, and about my processes to industrialize speed and learning, and I would say humility into how we operate in order to succeed?
MR. IGNATIUS: So, I’m curious, Julie, as you look across the range of industries and businesses in the U.S.--we’ll talk in a moment about the international landscape--what industries do you think are most in need of the kind of technology acceleration that you’ve been describing?
MS. SWEET: You know, it’s really interesting because while certain industries are more behind--if you take, you know, banking’s really ahead on the front end but not on the back end. Now they’re moving to cloud. Insurance has been behind in many places. You have the energy industry, always an analytic-driven industry but not a digitized industry. But in every single industry you actually have leaders and laggards. So, it’s--there’s no industry where there aren’t leaders.
And if you kind of go back to the fundamental truths I began with, all industries today need to transform in order to, you know, deal with contact lists, to find new sources of growth, to get more efficient cost pressures there. So, it’s why when we talk about this being a once in a digital era global replatforming, it is not linked to one industry.
MR. IGNATIUS: I get that. And you’ve talked about this moment of the pandemic as the great reset for business. But not everybody is going to successful reset. And I’m curious whether what we’re going to see over the next months and years is a shakeout in our economy, where companies that adapt quickly will grow and thrive and others just aren’t going to make it. Is that--is that a reasonable picture of what’s ahead?
MS. SWEET: I think it is and--but it’s actually--it’s not new, right? If you look back over the last 50 years on the Fortune 500, I think only about 50 percent still remain from 50 years ago. I may have my stats wrong there. So, I don’t think what we’re seeing now is going to be different than the fact is, it is really hard to have a sustained business.
And so today I do believe those who embrace new mindsets--so I look at Accenture. I ask my own self, what am I going to change--right?--about how we’re operating. We set our strategic goals this year--our fiscal year began September 1st--and my five--top 500 leaders out of 500,000 people will have five strategic goals. Two of them are not 12-month goals. For the first time we set six-month goals that will be reset, and one of them is a pilot. And what did that do? It’s a mindset of how in this world, where things are moving fast, where reinvention is required, we have to move differently as leaders and so how we’re measuring ourselves and the signals we’re sending to our organization are different. So, you know, to your question will there be winners and losers, absolutely. And--but there’s--in many ways, technology can be the great equalizer. There are more tools today than there were in the past.
MR. IGNATIUS: And how are American companies doing in this reset, in this process of coping with a global pandemic compared to companies in other parts of the world as you look at the global marketplace?
MS. SWEET: Well, I think a couple things are important. So, first of all, the trends I’m talking about are true across the globe. So, this really is a global replatforming. And whether I, you know, am talking in Singapore, in China, or Europe, the trends are there and business are seeing the trends. I would say that U.S. companies have long been great innovators. And so, I think that there’s a--you know, a great success, you know, that can be ahead. But at the same time, and many of the best companies in the U.S. are global companies, these are trends everywhere. And so, the question is, will you move faster?
I think there’s real implications for the U.S. in terms of how public and private come together. For example, we know that R&D is lagging behind in terms of investment in the U.S. against other--some other parts of the world. In the U.S. we’ve got a very significant digital divide in both rural and urban areas that have huge implications for small and medium-size businesses for our diverse populations, and in particular in the urban environments, and for talent. So, we have to be careful.
Now if you kind of go take a step back, though, the way that the pandemic is being dealt with has been different. And so, we have businesses in Singapore, China, and Japan, and it’s a very different picture than Europe or the U.S. right now. And I think over time, what we all have to watch about is what are the impacts on competitiveness by how--you know, how we’ve handled the pandemic and how quickly we get people back to work. And I would say, again, remember these trends and these opportunities are identified and companies are acting on them in every part of the world.
MR. IGNATIUS: So, on that theme of the effects in the real economy, the financial markets continue to paint a rosy picture about adaption, expectation of future earnings growth. It’s really striking to see the upturn in financial markets. But there’s a real question out there about whether that reflects the reality that people are experiencing on Main Street, if you will, in particular what minority communities, people who’ve been hit hardest by the pandemic, having the hardest time sometimes adjusting, are experiencing.
So, look at--look at those two in sequence, if you would. First, do you think the financial markets have basically got it right about future earnings growth? And second, how do you think about dealing with the people who are being left behind in this acceleration?
MS. SWEET: Sure. So, you know, I’ve learned over time to never pay attention to the markets every day. But let’s just take a step back and look at confidence among CEOs. There’s been a number of surveys out, including the Business Roundtable this week, that tell you that CEOs have high confidence in the medium to the long term. We’ve obviously got some tough months still ahead. And so, I kind of anchor on what is CEO confidence the we’re seeing in these surveys, and then it’ll get reflected in the markets how it will get reflected in the markets, right?
So, but your second question, I think, is important. And let’s go back to that second fact I stated with, which is 62 percent of companies believe that they need to embed responsible business into their transformation. I believe there’s a much more significant commitment, and you’re seeing it in the numbers.
And let me tell you, what does that look like? Let’s take Best Buy, an incredible company. We announced together that they are going to be investing in more technology innovation, so increasing their competitiveness. They’re already a leader. And they’re going to be adding a thousand people, a thousand new jobs. And they’re committing that 30 percent of them will be diverse, and we’re going to be helping make that possible. We are a leader ourselves in diversity. By 2025, we’ll be 50-50 gender equality, and we set ambitious goals for leadership among our African American and Black employees and our Hispanic and Latinx, both at the leadership level as well as overall representation.
Another work that we’re doing, Takeda, a global pharmaceutical company that also has significant operations here in the U.S., we announced with them a partnership where they are moving to the cloud to create cost and resilience, to create an innovation platform--all the things we’re talking about. And they’re doing it also by upskilling their people, which we’re helping them with, and in addition, measuring--by moving to the cloud, they’re reducing their carbon emissions. That’s what responsible business embedded into transformation looks like. This is a focus of Accenture. It is actually core to our strategy, and it’s there because that is what the great companies of the world want to do. And so, it’s a mindset. Again, it is possible to transform and to do so in ways that are going to be better for the planet, that are great for the country and our people.
MR. IGNATIUS: That’s a good moment to ask you about something that struck me, reading literature about Accenture, and that’s your idea of responsibility by design. We’ve been talking a little bit about that, but say a little bit more about how companies can build in the kinds of change that are going to make a difference for the companies themselves but for our country and the world.
MS. SWEET: Sure. Well, you know, first of all, maybe just start with how I think about responsible business, because that’s sort of like, what does that mean by design, right? So, companies who have a clear purpose like why they exist in the world. At Accenture it’s to deliver on the promise of technology and human ingenuity. There is--they’ve embraced that as a company we serve all of our stakeholders. We call it shared success. So, it’s our shareholders, our employees, our partners, our communities, and of course our clients and customers.
And then we have a strategy, an action plan that brings the purpose to life that is the how, right? And it intentionally says we’re going to operate following the best practices, the best ESG practices and as well as the U.N. Sustainable Development Goals. So that’s how we look at responsible business.
So how do you, then, embed it into your business? Well, for example--right?--if you were--if you’re redoing your supply chain, the question you ask yourself is, who should be at the table as you think about it. So, you have your compliance folks who are focused on anticorruption and stopping the use of child labor in certain industries. Are they part of it? Because I will tell you that when we’re building data lakes that provide better data and analytics to look at your supply chain, we can add third-party sources to that that allow you to run algorithms that will also be able to identify better corruption risks or their use of child labor.
That’s embedding it by design. When every company right now is under cost pressure, what we’ve added to--we’ve been doing, you know, cost analysis for decades. What we’ve now added is a lens that says when you’re looking, for example, at saving energy costs, are you also looking at what it would cost to switch to renewables? When you’re looking at consolidating suppliers, is the result of getting better--you know, better rates mean that you’re stopping using small- and medium-size businesses, or the diverse businesses that many of us have invested in our communities?
So, you put that social lens, and then you find the ways to get a win-win so that you’re not inadvertently hurting these other very, very important goals as you think of your total responsibility. That’s what responsible business looks like. It’s not just words. It’s different. But it requires you as CEO to say I want my compliance people at the table, and it requires the compliance people to be business leaders with compliance expertise, to deeply understand the business so that you can get to win-wins, right? It requires us to ask different questions and then to hold your partners like Accenture accountable for investing in helping you achieve those goals.
MR. IGNATIUS: That’s powerfully said, and it is a takeaway for me. One of the things that’s on everybody’s planning horizon is the arrival of a new presidential administration with President-elect Joe Biden. And one of the questions that we had is whether there may be a corporate tax increase during a Biden administration. What effect would that have, an increase in corporate taxation have for your clients, for American business? In particular I’m curious about what effect you think it might have on the kinds of investment that you said earlier that you think are needed.
MS. SWEET: And, David, it’s so hard to speculate. You know, look, we think that there was a lot of progress made over the last four years with the tax reforms to make the U.S. more competitive from a tax perspective. And sort of any decisions around tax have to be thought through in terms of the impact on competitiveness, the use of the taxes.
You know, what I would say is as the president-elect comes in, there are two really important things at the top of all of us as companies. First, how do we--how do we stop the pandemic, and how do we deal with that? And it’s been encouraging to see those plans. And the second is the fiscal stimulus. Again, the Business Roundtable, I’m on the board there. We just published our quarterly survey, and 83 percent of companies said that is the absolute top priority. And that is what we’re hearing as well from the president-elect. We’re very hopeful that fiscal stimulus will happen soon. We’re all reading with eagerness the discussions and the bipartisan proposals that seem to be coming out of Congress now. So, let’s hope we don’t have to wait until the president-elect is in office.
MR. IGNATIUS: We’ve been talking throughout our conversation about the technological change, the accelerated pace of change. These technological processes often mean the elimination of jobs. Machines, in effect, are able to do work, replace humans. That’s part of what the AI revolution is all about. Are you concerned about major job loss due to automation as an issue for the economy going forward? Obviously, our economy adapts, creates new jobs. But there is a more fundamental concern that you hear from a lot of thoughtful people that it may be difficult to deal with the rate of job loss in the future. How do you think about that? How do you advise your clients?
MS. SWEET: First of all, my number-one concern is the fact that we are not educating and training our people to deal with the digital world. Automation is a fact, and it is going to continue. You have examples like Best Buy, where they have invested in technology. They use AI, they use automation, and they’re creating another thousand jobs, right?
The point is, are Americans able to take those jobs? Are we having graduates from high school with the basic skills in digital literacy? And the answer in many cases is no. And we know that. We have admired for years that we have incredible colleges and universities, and yet we are leaving many people behind when you look at K-12 education. And we have got to stop that. We have got to change.
We also, as companies, have a huge responsibility to reskill. And that’s what exciting about what we’re seeing. In the Best Buy example, we’re also reskilling. In the Takeda example--and I can give you many, many more where companies are saying we want to reskill. And part of the impetus for that is, as you accelerate digital transformation, they’re going to the market, they can’t find people with the skills. But this is going to take education to be a priority. It’s going to take everyone at the table willing to do things differently.
And you know, I think that there’s a lot of appetite for that. We just launched our strategy. We call it the 360-degree value that we’re delivering. And the core of our strategy is that our clients want more than the financial case and the capabilities and the experience, they want us to help upskill their people, bring them inclusive and diverse teams, and partner with them around inclusion, diversity, and sustainability. And we’re now measuring ourself on how well we’re doing that for our clients.
And our strategies always start with our clients. So, I have optimism. But we need to focus less on the impacts of technology--we know technology’s our lifeline--and much more on how are we going to educate. We have an apprentice program that we started in 2016. We now have 700 professional apprentices from high school and two-year universities--two-year colleges at Accenture. And we need to together do that at scale.
MR. IGNATIUS: Something I’m sure many of our viewers would love to know your opinion about is how long this work from home economy is going to continue as we head into next year and hopefully widespread vaccination. Are we going to in effect keep working from home in many cases, or do you think we’ll return to a workplace like the one that we remember pre-March?
MS. SWEET: I think we are living in a new reality. That reality is--means that there isn’t something around the corner that says we’re going to go back. I think we’ve learned a lot in the ability to work remotely. I get this question a lot. The first--oftentimes I get sort of who should work remotely, and the first answer I give you is that it’s not about a role. It’s about a task, right?
And we’ve learned that there are some things that can be done remotely. But I would tell you as a company that for decades have had--because we serve global teams and we have teams who work remotely--you know, every day pre-COVID this was a huge part of how we serve our clients, is that you do need to bring people together. And innovation, we absolutely are doing it now remotely. But that’s not the best way, right? That’s not the easiest way. And so, as you kind of look forward, focusing less on, you know, roles and more on tasks.
The other very practical advice I would give you is that if you believe that someone really doesn’t ever need to come into the office, then I would ask yourself three questions. Are they doing something that could be automated? Second, is it something that you as a company need to do, or is there someone better, like could be Accenture, but many others who’s maybe doing it better because they obviously don’t need to be as integrated into your teams and showing up at your office every day? Or third, should they be doing it from a lower-cost location because they don’t need to come into the office? And when you start asking your questions like that, it really helps kind of make sure you, you know, are focusing on what, in fact, are people doing, what’s the value, and how should they be working.
MR. IGNATIUS: So, our thanks to Julie Sweet. We’ve run out of time. Julie is one of the world’s 100 most powerful women, according to Forbes magazine. If you listened today, you can understand why. Thank you for joining us, Julie.
MS. SWEET: Thanks for having me, David.
MR. IGNATIUS: So, we will be back. Joining us Friday at 11:00 when my colleague Karen Tumulty will continue our Race in America series with a discussion with the first two Native American women ever elected to Congress: Representatives Sharice Davids of Kansas and Deb Haaland of New Mexico. You can always head to Washington Post Live for content. Please join us the rest of the week, and thanks so much.
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