When Ernst & Young Global Managing Partner of People Mike Cullen’s now 19-year-old daughter Madeline was 4, she drew a picture as an assignment for school. In it was a tall woman, a little boy, little girl and three cats. When Cullen asked her what it was of, she said it was a portrait of her family. When he asked where he was, she looked at him unsympathetically and said, “Work.”
Cullen has hung Madeline’s drawing in every workspace he’s had since, and the organization’s 167,000 employees might owe their company’s employee value proposition to her.
A self-professed geographer at heart with a degree in the subject from the University of Cambridge, Cullen was recruited by Ernst & Young while working in the financial services advisory group for PricewaterhouseCoopers.
He joined the company in 1992 to set up the insurance and retail banking advisory business and has held a variety of global leadership positions, including Europe, Middle East, India and Africa managing partner of accounts, industries and business development; U.K. head of financial services advisory; U.K. managing partner of markets; area managing partner of people; and global managing partner of markets.
“Where I started and where I am now aren’t very different to me because we see people and markets as two sides of the same coin,” he said. “People are your brand in the marketplace when you’re in a professional services industry — a people-centric business. The only differentiator you have is centered around the quality of your people.”
In 2011, he took on a role new to him as global managing partner of people. Madeline helped him understand what that means.
“We were an $8.2 billion business in 2000 and are currently a more than $24 billion business with 167,000 people around the world,” he said. “My job is to decide, if we want to be a $50 billion business within the next 10 years, what it means for our people dynamic.”
Focus on the Big Picture
For the past two years, Cullen and his team have been redefining Ernst & Young’s employee value proposition to encapsulate a “whole of life” approach. The plan focuses on how to attract and empower Ernst & Young employees and connect with them after they leave.
“That’s why our talent motto is, ‘Whenever you join, however long you stay, the exceptional Ernst & Young experience will last you a lifetime,” he said.
During the next 12 months, Ernst & Young will recruit more than 40,000 people, but retaining good people is a challenge. Turnover rates at the Big Four accounting firms have historically been high — roughly 15 to 20 percent leave each year, compared with as few as 5 percent in some other industries. Cullen says he estimates about 30,000 people will leave this year.
“The significant majority of the people who join us on campuses as Gen Y recruits will not draw their pensions from Ernst & Young,” he said. “We want their experiences to count while they’re with us, and we’ll stay in touch with them long after, but we know the workplace of the future means we’re preparing employees who will leave.”
Cullen’s team provides a development framework called EYU — Ernst & Young and you — that provides employees with the skills, knowledge and confidence they need to take ownership of their careers. The structure balances formal learning, coaching and hands-on experiences for all employees with certifications and programs that are role-specific.
“This organization and others like it have traditionally been about management and control, as opposed to empowerment, which is about unleashing the talents of people,” he said.
Cullen himself has been mentoring Justine Campbell, partner of global people strategy development and organizational change, for the past 18 months.
“He is not only my boss, but also my sponsor, recently putting me forward to partnership, championing me throughout the whole process,” Campbell said. “The importance of role models and active sponsorship for women cannot be underestimated so that more reach the top in the corporate world.”
Flex Work for All
It doesn’t stop with sponsorship. To enable employees such as Campbell to succeed in their global roles, Ernst & Young also has developed a flex-work strategy which encourages people to make flexibility a reality by integrating it into their regular team planning meetings and discussions. Cullen believes when people participate in determining how, when and where they can provide high-quality service to clients, they are more motivated to achieve success.
While this and the company’s policies about additional vacation time, extended parental leave and adult-care policies appeal to employees, Claudia Goldin, economics professor at Harvard University, said they come with a career risk.
“The question is always ‘At what cost to the worker?’ There is no information on the take-up rate and what happens to women who take advantage of flexible arrangements and men and women who do not,” she said. “I have spoken with HR people at large accounting firms, and they have not provided any information that would allow any assessment of their programs. If a company said they had a remedy for some disease, you would expect information on how well it worked. Where’s the beef?”
Blair Murphy, tax partner for Ernst & Young, said the policy works as long as it is based in a team structure.
“For the majority of my career here, I’ve worked closely with one of our working moms. She leaves each day by 5 p.m. to pick up her kids,” he said. “I help her out with her schedule if something needs to be covered from 5 to 7 p.m. for example, but she may be back online later to take it from there. Just because my colleague is adjusting the time she works doesn’t necessarily mean she’s scaling back.”
Cullen said empowerment, especially flexible scheduling, depends on execution at a local level.
“A staff in New York doesn’t care what I write about empowerment and engagement in my office in London,” he said. “Engagement for me is winning the hearts and minds of partners on the ground who are running teams of 10 to 1,000 people around the world. The vast majority of our people will only see one or two partners, and how those partners implement strategies in their offices is what local teams care about.”
Survey for Success
Every couple of years the company asks all employees to complete a global satisfaction survey. The company also runs a global brand survey every few years to see what clients think of Ernst & Young. Cullen said he has found a direct correlation between the engagement index in the people survey and brand favorability in the brand survey.
Further, there’s a direct correlation between the engagement index and employee retention numbers. In 2011, the turnover percentage varied by 11 percent between the highest- and lowest-performing business units.
Cullen’s team also claims to have found a correlation between the engagement index and financial performance of business units, indicating a difference of tens of thousands of dollars in performance between most engaged and least engaged business units.
“If I want to drive change in the people agenda to 9,000 partners around the world, I have to be able to link their hearts and minds to their wallets to prove that correlation to make it a business imperative rather than, ‘Isn’t it just really important that you’re nice to your people?’” he said.
Of Ernst & Young’s 170,000-plus employees, some 30,000 are regarded as being in core business services — internal people who run the business. Cullen said these professionals were a neglected population in the past, but he has made sure they’re included in the people strategy as much as those who are on the client side.
Still, some markets were not buying into the company’s updated employee value proposition when Cullen and his team presented it in May at the company’s Global People Summit. Sophisticated business markets told Cullen they were ahead of the global strategy, and those in emerging markets said that while the new people strategy was on point for most of the company’s population, it was written with an Anglo-American mindset not appropriate for some markets.
To combat this, Cullen’s team has developed a maturity framework for the business. Each element of the people strategy has a best-in-class benchmark either from an internal unit or from the external market. There is also a baseline parameter each Ernst & Young unit must meet. Those that don’t meet the baseline have two years to progress to it; those that meet the baseline should spend the next two years becoming best-in-class, and those that are best-in-class must develop strategies for achieving best-in-class tomorrow.
“We’ll provide whatever development is needed,” Cullen said. “We have an ambition of being a $50 billion business, and we’ll work with our entire staff to figure out what work environment people have to be given to deal with generational, business and technological changes and work successfully in the workplace of the future.”