Business Enterprises: Deloitte

The illustrious business that has been defying the stereotypical image of tedious number crunchers

            When most people envision the lifestyle of a career accountant, their minds instantly get lost in visions of a dusty desk light, a cramped wooden two-by-two desk—taken up mostly by a oversized calculator—and lost somewhere in the corner, a frail, slightly balding man hunched over in his swivel chair. Of course, it is preposterous to think that this man is anything short of anti-social, but then again, there is always the very real possibility that someone could mistake him for a mute.

            Unfortunately, in recent years, this frightening, and downright exaggerated, depiction of accountants, and thus accounting, have disillusioned the minds of college students and the naïve general public alike. While the image of accountants as dreary, lackluster, introverts have served as a comforting image for Americans to perpetuate over the past few decades, the truth is, practitioners of accounting and finance are growing in both importance and authority. Today, accountants make up many of the prominent men and women who stand at the front lines of some of the most successful businesses around the world. With this introduction into the commercial and strategic realm of the business world, accountants now find themselves in constant partnership with brand managers, chief executive officers, and the executive boardrooms of companies varying in scale. Bared with their newly acquired social skills, accountants are rapidly breaking away from that reclusive reputation and are gradually earning the respect and recognition that is rightfully deserved.

Deloitte and her history: 200 years in the making

            While there are many private accounting firms scattered about towns everywhere, one of the most interesting, and seemingly underrated global business enterprises is the Deloitte Touche Tohmatsu Limited Corporation. As of 2013, there are four professional service firms— PricewaterhouseCoopers, Ernst and Young, KPMG, and Deloitte Touche Tohmatsu Limited Corporation— commonly referred to as the “Big Four” that provide audit, tax, consulting, enterprise risk, and financial advisory services (Deloitte). Deloitte, as the company is most commonly referred to, is the second largest “professional services network in the world… employing over 193,000 employees in more than 150 countries (Deloitte).” In 2012, it was reported that Deloitte “earned a record $31.3 billion USD in revenues (Deloitte).” The global headquarters for this company is located at the prestigious address of 30 Rockefeller Plaza, in New York City (Deloitte).

            The start of Deloitte Touche Tohmatsu journeys back to the humble beginnings of William Welch Deloitte. Deloitte was born in London in 1818 and at the age of 15, he began his career in the bankruptcy courts of London. By 25, Deloitte opened up his own financial auditing practice in town that focused on the businesses of the rising railway industry. In 1893, Deloitte advanced to be appointed as the President of the Institute of Chartered Accountants after he developed a system of safeguarding records to protect investors. Upon his election, Deloitte left England to open practice in the U.S. Much like William Deloitte, a few years later, in 1899, London-native, Sir George Alexander Touche opened up his own accounting firm in London. Eventually, he decided to move his practice to the U.S., settling in New York City to capitalize on the growing demand for income tax preparation (Deloitte). Throughout the 20th century, “Deloitte and Touche’s separate firms merged with a number of other firms in various markets.  One of the key mergers was the combination of Touché Ross (as it was then known) and the Japanese firm, Tohmatsu Awoki & Co in 1975 (A brief history of the big four).” However, in 1989, “the firm then known as Deloitte Haskins & Sells broke up.  The majority of the individual partnerships that had made up the firm, including the U.S. piece, merged with Touché Ross to form Deloitte & Touché.  Some of the smaller partnerships that were against the merger of Touché Ross merged with Coopers & Lybrand (A brief history of the big four).” As a result, in 1993 the firm was renamed to Deloitte Touché Tohmatsu. This was largely, in part, due to the growing influence and respect of the Japanese brand (A brief history of the big four).

Since it’s inception, Deloitte has managed to remain the unsung partner of many popular companies and corporations around the world—not only in an accounting/auditing sense, but in a financial advisement as well. Some of the most popular companies of the present time, affiliated with Deloitte are: Allstate Life Insurance Company, Berkshire Hathaway Inc., Boeing, General Motors Company, Morgan Stanley, Superfund, Yankee Holding Corporation (Public Company Audit Clients). Making sure that all of the companies in which Deloitte audits maintain accurate and honest financial statements is a critical job. If these statements are not accurately represented, a whole host of individuals and corporations can be affected in the process.

Deloitte and the company’s place in industry

            Although Deloitte’s roots were firmly founded in the accounting realm of the business world, today, the company dabbles in nearly every aspect of the growing business trends.  Some of the key functional areas of the business are: accounting/financial service, marketing/branding, operational growth and acquisition/sustainability.

Accounting and financial service

According to the Deloitte website, the company recorded $13.07 billion in U.S. revenues in 2012. The breakdowns of some of the firm’s most valuable services are:

Audit/enterprise risk: which provide “organizations with the traditional accounting and audit services, as well as offerings in risk management, data quality and integrity, project risk, business continuity management, internal auditing and IT control assurance (Deloitte).” 31% of revenues for 2012 we derived from this branch of Deloitte.

Financial Consulting: Many different methods are used when aiding clients within their corporate setting. However, some of financial consulting tools Deloitte offers are, guidance on the aspects of bankruptcy, financial disputes, forensic accounting, and strategy and operation (Deloitte). Approximately 50% of revenues for 2012 we derived from this branch of Deloitte.

Tax Guidance: One of the key elements of the Deloitte corporate structure is the tax division. With the help and knowledge of trained tax professionals (aside from the traditional college accounting requirements, Deloitte trains their employees at their own, Deloitte University, in Austin Texas), clients are able to entrust often incomprehensible tax issues. Since Deloitte is a global company, they offer guidance with regard to business tax, private company services, research and development incentives, and tax management consulting. Through all of these services, clients can protect their company against potentially devastating financial scandals, and potentially optimize corporate growth (Deloitte). 19% of revenues for 2012 we derived from this branch of Deloitte.

Marketing and Branding

Ultimately, Deloitte’s goal is to “create a distinctive brand experience that positions Deloitte as the first choice among the most sought-after clients and talent (170,000 brand managers step ahead as one).” With that being said, Deloitte has sought out a variety of different “social media and other online communication channels to [broaden Deloitte’s] overall brand (170,000 brand managers step ahead as one).” One of the most prominent Deloitte marketing strategies is called “the Green Dot Campaign.” Utilizing its bold and visual style, rather than a complexity of words, the Green Dot is intended to symbolize something stronger, and more prominent against the typical black or white background of advertisements. The goal of the Green Dot advertisement is to “capture the clarity, leadership, and progressive direction of Deloitte’s point of view in a way that is unique and unforgettable (Deloitte: Green Dot campaign).” These ads can be found in magazines, newspapers and on billboards in over 100 countries (Deloitte: Green Dot campaign). With this simplistic approach, Deloitte abandons the notion that pomp and circumstance is the way to capture attention. Instead, by focusing on a clear and concise symbol that can provide meaning for everyone, regardless of culture, language, or creed, the company can maintain their influence in an understated manner. Some of the other brand strategy ideas implemented by Deloitte are: “Deloitte Fantasy Football, the official Deloitte Facebook fan page, Deloitte on Twitter, Deloitte U.S. YouTube Film Festival, Webcasts, and Deloitte Insights podcasts (170,000 brand managers step ahead as one).”

Operational Growth and Acquisition and Sustainability: 

In 2011, Deloitte acquired Domani Sustainable Consulting and ClearCarbon Consulting with the intention to “further strengthen Deloitte’s ability to help clients drive value, mitigate business risk, and drive growth and efficiency and innovation through improved environmental, social and financial performance (Deloitte Expands Sustainability Offering).” According to the same website, “ClearCarbon has been dedicated to enhancing competitive advantage and increasing profitability through improved carbon and energy management. ClearCarbon has used carbon as a lens for identifying opportunities to reduce energy usage, operating costs and environmental impacts. ClearCarbon has been recognized as a sustainability industry leader because of the accuracy, transparency and completeness of its analyses and its record of saving - and making - its clients money (Deloitte Expands Sustainability Offering).” Deloitte’s sustainability consulting services plans on using this recent acquisition to not only bring clean water to countries and locations in need, but also greatly reduce and manage the carbon footprints around the globe.

In January of 2012, Deloitte acquired a company by the name of Ubermind, Inc.— a Seattle based company that transforms the way companies use mobile solutions. “This transaction amplifies Deloitte’s full lifecycle professional services relating to strategy, creative, mobile, web, eCommerce, content, and enterprise mobile enablement to help clients gain business advantage (Deloitte Acquired Ubermind).” It is also worth noting, that in January of 2013, Deloitte also acquired one of the world’s leading strateggic consulting firms, Monitor Inc. Deloitte is certain that “ Monitor’s talent and assets will combine with the Deloitte’s consulting strategy service lines and operate under the Monitor Deloitte brand, resulting in a new global presence that will redefine [the present] industry (Deloitte Completes Acquisition of Monitor’s).”

Leadership of Deloitte: The Strengths, Weaknesses, Opportunities, and Threats

            In 2010, Deloitte was chosen by Gartner’s Hype Cycle to be analyzed on a SWOT basis. Gartner’s, at the time, felt that Deloitte was the best choice for a SWOT analysis because “of it’s overall stature and influence in the business consulting service marketplace (SWOT: Deloitte).” Gartner’s broke down Deloitte’s SWOT as follows:

                                                                                    (Chart courtesy of Gartner’s Hype Cycle)

Despite the fact that this chart is nearly three years old, it is still rather relevant to Deloitte today. While it is true that the world has gone through quite a few drastic economic changes since this was originally drafted, it is interesting to see how certain, strategic aspects of the company have changed. If one were to redraft that same SWOT analysis for today, the difference may look like this:

Unfortunately, since the former SWOT analysis was drafted, Deloitte has slipped from the number one auditing and consulting firm to number two. I believe this to be in direct response to economic events beyond Deloitte’s control. For instance, with respect to Deloitte’s “Green Agenda,” by focusing on the feasible actions that an be taken in the present, such as investments in clean water companies, Deloitte thus improves their chances of strengthening their global influence in a completely new and “on-trend” way. It is also worth noting that Deloitte has made many great strides in the gender equality realm of the business industry. As a woman, this is completely awe-inspiring.

            In 1993, Deloitte began its Woman Initiative to support and promote women in the workplace. Before this plan was introduced, women only made up 7% of Deloitte’s partners, principals, and directors (Making a Female Friendly Workplace). WIN (Woman’s Initiative) sought to “address two related issues [in the workplace]: a high rate of female attrition and underrepresentation of women in leadership positions (Deloitte LLP—The Women’s Initiative: Living the Lattice).” Over time, Deloitte began offering “development programs and networking events to contribute to the growth of and opportunities for Deloitte’s women (Deloitte LLP—The Women’s Initiative: Living the Lattice).” The company also began implementing a “corporate lattice model of growth. This approach provides a sustainable career-life without sacrificing a high-level of importance (Deloitte LLP—The Women’s Initiative: Living the Lattice).” For example, if a woman wants or needs to take some time to have children, or take care of a family member in need of assistance, Deloitte allows women workers to keep their position. Instead of constantly moving “up the ladder,” as we hear so often, women are afforded the opportunity to move “along the rungs” until you are ready to continue moving up in the corporate world again.

Compare and Contrast: Deloitte vs. Ford Motor Company

            Initially looking at the two of these companies together, it is difficult to see how both Deloitte and Ford Motor Company might relate to one another.  To start, the latter is primarily rooted in the backbone of American car culture, whereas the former was a company fused together by two British accountants who decided, separately, that their accounting services would be better purposed in America. At first, I grew frustrated, trying to think about ways that both Ford and Deloitte could overlap, and then I grew excited at the prospect that perhaps Deloitte could be Ford’s auditing company. Unfortunately, after some research, it turned out the Ford Motor Company’s yearly accounting is taken care of by Deloitte’s “Big Four” competitor, PricewaterhouseCoopers. Just when I thought I had lost the one connection that could have linked these two companies together, Erik and I realized that our companies are more similar than one would initially think. Much like Deloitte with regard to their WIN program, Ford has also dedicated a great deal of effort into sourcing products from minority, women, and veteran-owned business. In fact, in 2012, “Ford was selected for Women’s Business Enterprise National Council’s 13th annual listing of America’s Top Corporations for Women’s Business Enterprises (Ford Goes Further with Supplier Diversity).” This was the first time an automaker has earned this award.

As I mentioned earlier, Deloitte is extremely interested in the investment and improvement of new technologies and innovations. Ford is no different. In fact, in February 2013, “Fast Company’s annual Most Innovative Companies issues honors leading businesses, including Apple, Amazon, Google, Target… and [Ford Motors Company with this prestigious honor.] Ford Motor Company is the only full-line automaker names to the 2013 list (Ford the Only Full-Line Automaker Named to Fast Company 2013 Ranking of World’s 50 Most Innovative Companies).” In order to progress in this fast-paced world, it is imperative that companies of all statures and businesses stay competitive with respect to continued innovation and technological improvement. Another strong, and perhaps most important, correlation between Ford and Deloitte is their devotion to finding sustainable means and methods of business. While Deloitte has sought out and acquired companies with the intention of not only improving the company’s environmental impact, but the companies they are involved with, Ford Motor Company has enacted a “new five-year global waste reduction strategy that calls for a 40 percent per vehicle reduction in the amount of waste sent to landfill between 2011 and 2016. This is equivalent to 13.4 pounds per vehicle worldwide (Ford Aims to Cut Waste-to-Landfill 40% per Vehicle by 2016).” It is interesting to note the financial benefits that can be associated with these reductions. “In 2012, Ford generated $225 million in revenue through the recycling of 568,000 tons of scrap metal in the U.S. and Canada alone (Ford Aims to Cut Waste-to-Landfill 40% per Vehicle by 2016).” While both of these companies manage to be quite different in terms of the style of business, it is great to see that regardless of their place in the business world, they can still pull the resources together to make a difference in the world.

            While it is nearly impossible to summarize the enormity of Deloitte Touche Tohmatsu Limited Corporation, it is astonishing to fathom that a business, rooted in accounting, could become such an integral component of companies and corporations around the world. It’s funny, because most people always like to remark on how a company is successful as a result of the “firm foundation” upon which it was founded. But the truth is, foundation can crumble. What really makes a corporation, or anything for that matter, strong, is the support. It is clear that Deloitte has spent a great deal of time strengthening those core supports by working with employees and partners to make the Deloitte experience and reputation the best that it can possibly be. 

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