7. Unity

Inside this Unity principle we find, for instance, cohesion, homogeneity, obedience to internal norms and respect for colleagues.

Arthur Andersen was possibly the first professional services firm to consider as a basic strategic feature the idea of becoming a single Global Firm, with all offices, in all countries, sharing a single income statement, a single method, a single identity. From the early 50s, an idea became established in Andersen: that, much against the natural instinct of professionals to be independent, different from each other, and also against what the competitors were doing, if the Firm wanted to be powerful it needed to apply decisively the concept of Unity.

“One Firm, One Voice” was the motto that was applied to the letter along and across all countries.

The idea developed especially associated to the international expansion and the opening of offices out of the USA. When the Firm had to decide on a model for international organization this was the chosen one.

In any case, for this book’s purpose, rather than stressing the unquestionable wisdom of this bet, it is more to the point to signal that the “One Firm” idea generates not only consistency and uniformity but also an efficient model and an ambitious spirit to become a relevant firm, shown from at least five different perspectives:

• Ability to offer a high quality service at any place, independently of each particular office own size.
• Possibility of integrating, at once and efficiently, trained but inexperienced young people.
• Use of common own language (blueback, job, TR, personal file, write off, ...).
• Independence of judgment that allows each local or national practice to be free from restrictive factors such as excessive dependence of exclusive customers in certain fields.
• Methods, knowledge and experience which can be shared to give more power to the range of services offered and to the promise of quality given to customers.

This Global Firm platform with access to international and advanced tools and methods was especially valuable in the Spain of the 60s and 70s. Valuable not only for the companies opening to the management world with the need to modernize their structures, but also for young professionals, same as those recruited to the Firm at the time, that could try to follow an attractive professional career and have the ambition to play a relevant role in Spain’s modernization process.

In the end, the value proposal to bring internationally proven management techniques fit very well with the latent and growing Spanish companies’ need of an update. In this connection, the professionals who began forging the Firm in Spain applied the One Firm concept with “the convert’s new faith” and the conviction that such a tool was essential to provide high quality (and sometimes unknown in the country, as was the case for auditing) professional services and also to feel the thrust to participate effectively in the country’s economic and entrepreneurial structures transformation. In any case, it is important to point out that the One Firm concept was not just a more or less elegant expression in the corporate intent and purpose declaration but something that was evident at very different operating levels.

One team, one system

The first manifestation of that Unity regarded the Firm’s juridical structure formula (a global “partnership”), the decision-sharing mechanisms and the compensation as well as the expense and income sharing systems used by the partners, acting in the end as a single global-reach cooperative society based in Geneva, Switzerland. Obviously, the adopted mechanisms evolved over time and had also to accommodate each country legal requirements, but the idea of an association of professionals was always kept, as were the strong links between the Firms.

A second group of Global Firm concept reinforcing elements were the globally homogenous operating procedures, policies and working systems. This went from image matters like the use of the same model of “Arthur Andersen’s door” in all offices, following through the same forms and schemes used to document work done, continuing with the application of standard criteria in each office’s organization, and with an endless stream of elements to homogenize almost all kind of tasks: at the time of work reviews, project planning, candidate interviewing, course evaluation, reporting on work hours for customers (time report), etc.

This homogenized operation offered also a practical advantage in facilitating the transfer of professionals between offices and countries in a very effective way, one more factor to reinforce the One Firm concept.

Another third block of Global Firm concept consolidating elements was the deployment of standards, methods and systems to share and disseminate knowledge among the different practices.

The challenge of building an Integrated Firm leads to the need, on one side, to try to ensure consistency in the implementation of certain relevant criteria ( for instance, accounting principles ) and, on the other side, to allow the repeated use of each professional experience in benefit of all. To tackle this double challenge along Arthur Andersen’s history, there is a succession of global, universally shared, tools: the Subject File, Method/1, Accounting Standards, Global Knowledge Base...

In one word, the professionals were founding constantly global-type references for developing their work. Even if this obviously does not mean that the tools were perfect and their application always precise and accurate, but, besides their usefulness to get work done efficiently, they contributed significantly to deepen the sense of belonging to a Global Firm, day in and day out.

As a result, Arthur Andersen had available, at any place in a world growing global by the day, and for any client, the same type of people, with the same training, the same methodology and the same tools. To work with Andersen was to work with the first truly global professional services Firm.

The professional network, extended throughout the world both horizontally and vertically, was the most valuable Firm’s asset. That sense of unity equipped on their turn the Arthur Andersen professionals with great security in their capacity to deal successfully with great challenges and projects giving a certain aura of invincibility.

Saint Charles’ important role

Additionally, the feeling of belonging to a Global Firm was reinforced by establishing development milestones in the professional career; those came with meetings and training sessions held in international venues, especially in the Firm’ training center in Saint Charles, a small town in Illinois, not far from Chicago.

The role of Saint Charles was very important in maintaining a common spirit, because there was Andersen in the air everywhere in the place. It was like a temple to Andersen’s gods, in which those faithful to the message went deeper in the links uniting everyone with the Firm and with each other. From this point o view, the decision taken by the Auditing Division in the 80s not to send the new professionals to Saint Charles, sending instead the European ones to Segovia, Spain, and Eindhoven (Holland) was probably misguided, because some euros were saved but the opportunity was missed to instill in the professionals the Firm’s values from the beginning; above all the value of Unity, but also those of Ambition, Cooperation and Talent. All of them arose with the simple fact of spending a few days at Saint Charles.

It really was the building up of an entrepreneurial Global Firm culture what allowed Andersen’s professionals to develop the feeling of belonging to an organization that was able to accomplish relevant challenges, able to be important in the economic and business community, and in consequence boundless ambitious in its projects and objectives. Possibly that would be also the main reason for Arthur Andersen to become the first firm that, from the accounting and tax advise position, would think of diversifying into consulting and, later on, legal advice.

As a strategic principle, it seems clear that the strong bid to build a Global Firm was a good choice in business development terms but also from the point of view of establishing a strong organizational culture. However, this type of medicine presents as well its own contraindications.

Perhaps the most significant difficulty comes from the complexity of the task of maintaining a Global Firm juridical, organizational and managerial structure when the size grows in the various dimensions; geography, industrial sectors and nature of the services. The efforts to maintain unity require the deployment of quite complex juridical figures and governance organs that are often hard to understand by laymen. From the organizational point of view, the different structuring lines (geography, type of service, type of client) tend to produce matrix structures that are also difficult to govern.

The danger of single thought

In another order of things, homogeneity in operating procedures and proliferation of working standards present certain incompatibilities in respect of the organizations capacity to innovate and to adapt to changes. In fact, well known were the difficulties that Arthur Andersen had to integrate external experienced professionals and also to groom from inside the type of visionary or unorthodox profile professionals that are the ones to bring diversity in thought and innovative approaches to an organization.

Organizations with very strong cultures run the risk to grow “robots”. In fact, in the US the Arthurs used to be called “androids”, as people that did not think on their own. As with any label, while it pointed to a permanent danger for the Firm, the truth is that the arthurs, under their uniformity label, were thinking people even from their youngest years, contributing their ideas and expressing their opinions and critical comments. There is need to combine uniformity and discipline with the capacity to think and dissent, and then, through the right channels, send critical comments from lower to upper echelons. We don’t dare to say it could not be improved, but we believe Andersen had established the right mechanisms to make that possible.

However it should be recognized that incorporating new ideas and integrating experienced people from other cultures is difficult in company models such as Andersen’s. It is one of the model’s weaknesses. It should be assumed as such, and the right measures should be implemented to mitigate its effects.

Andersen’s was a culture based on people adapting to the Firm, and not vice versa. Changing that was impossible.

When in the 90s there was the will to recruit experienced specialized consultants (known as “ luminaries” in the US) it brought a period of difficulties, not only at the time of attracting them but also later when trying to integrate them.

The danger of arrogance

Finally, from another point of view, the strong organizational culture achieved, with a high sense of belonging, along with the success in the business development and the high market shares obtained, may very well have lapsed into haughtiness and arrogance.

It was another weakness, typical of a successful organization, which must be cared about. Success contains the seeds of failure.

The importance of Unity

The Unity column may not look much important, but it really is and to a high degree. In fact, its breach as a consequence of separation in Andersen Consulting creation, and its independent operation, brought about the end of a Firm that was, up to that moment, a model of success and union.

Any company, after all a sum of persons working as a team towards a common destiny, must manage how to become a single and well-tied block if it wants to be successful. Unity is in sum the assurance in the company holding the values associated with it, such as:

• cohesion
• pride in belonging
• team spirit
• a common language

Without those values it is not possible to govern efficiently an organization. Without those values it is impossible to reach leadership.