Last Friday we learned that Deloitte CEO Joe Echevarria had decided to call it a career after 34 years at the Green Dot. The news came as a bit of surprise, especially since Joe is only 57 and would be able to serve another four years in the big chair without reaching Deloitte's mandatory retirement age of 62. He's going to pursue public service which is great for him, unless he's thinking about running for national office because that is a terrible idea.
But, whatever! A change in leadership of an accounting firm is fun because it involves speculation, back-door bickering, speculation, alliances, betrayal and more speculation. Today, we'll be focusing on the speculation.
The Economist actually got this ball rolling with a recent post:
The firm does not disclose the mechanics of the process. But most partnerships form a nomination committee on their executive boards to assess candidates on both their visions for the firm and how much support they command from peers. After a series of informal consultations with fellow partners, the committee delicately advises likely losers to bow out gracefully. If these “soundings” yield a clear-cut heir apparent, the firm may proceed straight to a coronation vote where the new leader is rubber-stamped.
The Economist's description is correct-ish. Obviously no one over there read what we wrote about the leadership election process the last time Deloitte went through this exercise. At the time, our primary source was sharing his frustration with the process and hoped to incite a backlash to the firm's "broken" process.
But the process, for all its faults, is of little consequence. Back to the Economist:
The race to succeed Mr Echevarria is likely to be hotly contested. Under his stewardship since 2011, Deloitte has grown impressively. In the first two years of his term, revenues at its American arm rose from $11.9 billion to $13.9 billion. The other members of the Big Four—EY, PwC and KPMG—sold their consulting arms after the Enron scandal and have since had to rebuild them from scratch. Deloitte stayed in consulting and Mr Echevarria has pushed that side of the business.
Right! The firm's business priorities are what matter and the next CEO will have to continue to push the agenda that will allow the firm's consulting services to thrive.
But who, pray tell, is this person? Last week the Journal reported that Frank Friedman, the firm's CFO would serve as CEO "until the completion of Deloitte's formal leadership election, which is held every four years and is currently under way."
Now, some obvious questions and my baseless responses:
- Is Mr. Friedman just a placeholder? That's a sure thing
- Does the firm continue to buck the old white dude trend? Odds are against it
- Will the new CEO come from the traditional background of audit or tax or will it be someone from the consulting side? Smart money is on audit, just for appearances
If you look at the People Profile page(s) on the firm's website there's room for all kinds of possibilities but the eventual winner is probably right under our noses.
So now for the fun part — we want to hear your ideas on who the favorite(s), spoilers, dark horses and long-shots are in this race for Deloitte CEO. And if you have any definitive knowledge about what's going on behind the scenes, email us. If we get enough good information we might just handicap this thing.
Place your bets!
