A year of The New Equation

A year ago we announced The New Equation, our new strategy designed to help clients and stakeholders build trust and deliver sustained outcomes. Today, we are more passionate than ever about the need for us to deliver on that strategy.?

The New Equation was built from analysis that highlighted a number of major global forces that will shape the economy of the future. When I sit down with the CEOs of our clients, it is that constellation of big picture issues - from climate change and the Great Resignation, to cyber, supply chain insecurity and geopolitical risk - that is driving their agenda. The lingering impacts of the pandemic, coupled with the ramifications of Russia’s invasion of Ukraine, the continuing advance of technological disruption and rising inflation are confronting the C-suite with challenges that need solving now.?

Corporate leaders need to focus on both delivering the short term results and exploring how they can best deliver outcomes that will last beyond next quarter’s earnings call; and they want to know how to build trust with the full set of stakeholders that are demanding more today and shaping the future they see in front of them.?

The last year has shown how interconnected the ideas of trust and sustained outcomes are. Do stakeholders trust corporate ESG data? If not, how can they use it to make decisions that deliver the outcomes the world - and investors - need? Are vaccines trusted? If not, how can they be rolled out at the scale needed? Do countries trust each other? If not, how can they work effectively together to tackle the most pressing issues of our time??

It is our job, at PwC, to help our clients and stakeholders navigate these issues. It is our commitment that we will solve the new equations needed to find the answers - not just at the strategic level, but also through helping design and operate the systems and processes needed to make real change.?

Solving these challenges takes deep expertise in multiple areas. For example, business transformation certainly needs technologists and deals experts, but it also needs to integrate tax implications and to develop the right people and reporting strategies. Assurance increasingly needs cyber security and climate expertise alongside traditional audit skills. One of our greatest strengths is the diversity of deep skills we have within our teams and across our ecosystem of alliance partners. The New Equation is accelerating our ability to mobilise these experts together at scale in a community of solvers that brings precisely the skills and capabilities needed to help clients tackle the problem at hand.

The response from our clients and stakeholders has been overwhelmingly positive. We will share more on our progress in our Global Annual Review later this year, but the interim numbers are encouraging. We have front loaded our hiring despite the tight labour market, and have created over 28,000 net new jobs in the last year. Our Trust Leadership Institute in the US is up and running and the Asia Trust Leadership Institute begins work later this year. Our new approach to partnerships and strategic alliances is delivering a step change in the scale of our cloud and digital capabilities. We have refocused our people and organisation activity, divesting our mobility enablement business and focussing on how we can use our expertise to help clients transform their businesses and deliver best in class organisational strategies.

One key element of The New Equation is the integration of ESG throughout our work - whether that is strengthening our capabilities around non-financial reporting or building future ESG considerations into tax or transformation work. We believe that ESG-skills are increasingly like digital-skills - where everyone needs to have a certain baseline level of competency, bolstered by a core group of advanced specialists. To that end, we have rolled training out globally while continuing to deepen our specialist expertise.

The last year also saw us make a change we did not anticipate. Russia’s brutal and unjustifiable invasion of Ukraine is a tragedy for the people of Ukraine. We have 800 people working in our practice in Ukraine, based in our offices in Kyiv, Lviv and Dnipro, with many now working remotely after having sought safety in neighbouring cities and countries. I am proud of the way our global network - and particularly colleagues in Central and Eastern Europe - rallied to help. It was more than money and logistics; our people opened their homes to colleagues and others who had become refugees. I am also confident that we made the right decision in concluding that the Russian firm could not remain part of the global PwC network.

Change is a teacher, and so it is no surprise that we have learnt a lot as we embarked on this journey. One of the biggest areas of learning is around people, as we have increasingly been able to get back to the office in many parts of the world. We are learning what the new hybrid world will be like and how we can best support our people’s wellbeing. The result is real productivity gains both relative to the pandemic, because people can physically get together, and relative to the pre-pandemic era, because people can now have much more control over their time.

The first year is, in some ways, the easiest year of a strategy implementation. The change you need to make is clearly mapped out. The excitement of launch keeps the wind at your back. Momentum is there. My task, and the task of our leaders around the globe, is to continue to build on that momentum.?

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