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© 2010 Deloitte and Touche Sharlotte Naidu EMBA 10 Dissertation – NDXUMB001

Strauss and Corbin (1990) (

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ii © 2010 Deloitte and Touche Sharlotte Naidu EMBA 10 Dissertation – NDXUMB001

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iii © 2010 Deloitte and Touche Sharlotte Naidu EMBA 10 Dissertation – NDXUMB001

Abstract

Deloitte is a leading global professional services firm, which offers clients a broad range of

fully integrated services in areas of audit, tax, consulting and financial advisory.

Deloitte South Africa (DSA) has existed for over 100 years. Today, DSA is the largest

multidisciplinary firm in the country. DSA focuses on creating powerful business solutions

for organisations in Southern Africa and around the world. Their global, integrated approach

combines insight and innovation from multiple disciplines with business and industry

knowledge to help their clients excel anywhere in the world. However the organisation has

witnessed more changes in the last ten years than in its entire history.

During the course of these past two years, as I embarked on my EMBA journey and began to

apply the theories and methodologies that I was learning, various issues began to emerge.

In view of the forces of globalisation, the societal concerns in SA and beyond, the economic

cycles, the technological changes and the rapid growth of consulting firms and organisations

in the international market, there is an immense need for firms, to be able to adjust their areas

of expertise within their spectrum of offerings in order to ensure sustainable growth. DSA is

no different; however DSA has taken a very short term outlook on responding to this

turbulent environment.

As an employee of DSA, specifically in the consulting division know as Deloitte Consulting

South Africa (DCSA), I had decided to focus my dissertation on identifying and investigating

some of the issues that are currently having a negative impact on DCSA, and understanding

as a result, what influences these issues have on the long-term sustainability of DCSA.

This environment gives rise to a number of questions for DCSA: how does it remain

independent in an environment where it is operating not only as an independent outsider,

providing an impartial assessment, but also as a highly involved consultant, conversant with

all the inner workings of its clients and on close terms with them? And how the company can

still develop strong client relationships under those circumstances? The key question in this

research dissertation is:

What does DCSA need to put in place to ensure its long-term sustainability?

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iv © 2010 Deloitte and Touche Sharlotte Naidu EMBA 10 Dissertation – NDXUMB001

In order to find an answer to this research question, I developed a research framework and

methodology that was based on the philosophy of critical realism, which required research to

be completed from a qualitative perspective. Using the Grounded Theory Methodology, I

began my data collecting process by initially interviewing 11 directors and thereafter 5 more

directors, a senior consultant and an external client, to ascertain their perspectives on this

issue.

While analysing the data from the initial interviews, I identified specific trends that stood out

as the key concerns. I put these aside while I continued to list and code the concepts and thus

to analyse the data, until various variables emerged. To avoid an overly subjective

perspective of the situation, I used an interrelationship diagraph to identify which were the

most important drivers that had the most impact on the other variables.

The three strongest variables were the following: the level of strategy used by the company,

more specifically whether it was long-term or short-term, the degree of innovation and

creativity, and the level of performance of the people working for the company. These

variables were closely aligned to the trends I had identified during the interviews, which

enhance the credibility of the Grounded Theory Methodology.

The answer that emerged was that DCSA needs to create a culture of employing high-

performance individuals who are creative and innovative in driving the long-term strategy, in

order to ensure the long-term sustainability of DCSA.

DCSA needs to review its strategy, by understanding the global economy and the long-term

effects of that, they need to understand the dynamics of a partnership with regard to their

appetite for risk, they need to understand what the market, industries and clients want and

need, and they need to look at the DCSA of tomorrow.

Creating a culture of employing high-performance individuals will require DCSA to be at the

cutting edge of new innovative ways to present solutions to clients, refining and granulating

the performance measurement metric to meet the needs of their employees and in doing so,

allowing their employees to be creative and innovative.

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v © 2010 Deloitte and Touche Sharlotte Naidu EMBA 10 Dissertation – NDXUMB001

To locate this theory in the broader body of knowledge I conducted a review of the relevant

literature, which revealed similar trends and variables. More importantly, though, this review

made it evident that there was not much been literature available to assist South African

consulting firms with regard to long-term sustainability.

In order to create a high performance culture, I have recommended an approach that had been

developed by two Deloitte partners, in the Deloitte UK office. This approach called

Behaviour Led Strategy Execution is an approach to improve the effectiveness of DSCA‟s

execution of the strategy, by optimising the interplay between strategy and culture.

Through this approach, small wins are made and small improvements are acknowledged and

rewarded, which in turn will produce lasting changes to the culture and values of DCSA.

The relevance and utility of this research lies in the fact that it provides the reader with a clear

understanding of the dynamics of the current organisational situation and the relevant concern

of that organisation.

It is understandable that none of this can happen at once, but it is important to set the process

in motion. The best way of doing so is to start creating this culture as a key normative issue,

to set this organisation on a new part.

The findings from this research will assist leadership in reviewing the current structures and

processes and to implement some of the recommendations put forward.

The ethical implications of trying to create a culture of high performing people from a social

benefit perspective will be long-term employment, more creative and innovative individuals,

and a culture of optimism. It is the duty and rights of the employees of DCSA to be measured

according to their skills and abilities and not have a one size fit all performance measurement

matrix system. From a justice perspective, all employees of the organisation, from leadership

to the tea ladies need to contribute and take ownership towards creating a high performance

culture. In caring for the people of the organisation and the greater good of South Africa, a

desired environment will be established. This intern will encourage people to become more

innovative, creative and pro-active.

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vi © 2010 Deloitte and Touche Sharlotte Naidu EMBA 10 Dissertation – NDXUMB001

Table of Contents

Abstract .........................................................................................................................................iii

List of Figures .............................................................................................................................. vii

List of Acronyms ........................................................................................................................viii

Acknowledgement ........................................................................................................................ ix

Chapter 1: Introduction and Overview..................................................................................... 1

1.1 Personal Background of Researcher...................................................................................................... 1

1.2 Structure of the SCQArie Framework and the Research Process .......................................................... 2

1.3 Research Framework ............................................................................................................................. 3

1.4 Situation ................................................................................................................................................ 4

1.5 Concern ................................................................................................................................................. 7

1.6 Rich Picture of the Problem Situation ................................................................................................. 13

1.7 Focus on the Research Concern .......................................................................................................... 14

1.8 Questions ............................................................................................................................................. 17

1.9 Answers ............................................................................................................................................... 17

Chapter 2: Literature Review ................................................................................................... 20

2.1 Introduction ................................................................................................................................................ 20

2.2 Sustainability .............................................................................................................................................. 21

3.1 Introduction and Overview ......................................................................................................................... 33

3.2 The Nature and Purpose of Management Research.................................................................................... 33

3.3 Philosophical Foundations of Management Research ................................................................................ 38

Chapter 4: Research Question .................................................................................................. 55

4.1 Introduction and Overview ......................................................................................................................... 55

4.2 Data Collection........................................................................................................................................... 55

4.3 Grounded Theory Process .......................................................................................................................... 56

4.3 Conclusion .......................................................................................................................................... 68

Chapter 5: Conclusion and Recommendations ...................................................................... 70

5.1 Conclusion.................................................................................................................................................. 70

5.2 Recommendations ...................................................................................................................................... 72

5.3 Evaluation .................................................................................................................................................. 77

5.4 Ethical Implications.................................................................................................................................... 78

References .................................................................................................................................... 81

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List of Figures

Figure 1: Financial Results FY2009 .............................................................................................. 8

Figure 2: Rich Picture of concerns within DCSA ...................................................................... 14

Figure 3: Casual Loop Diagram................................................................................................... 15

Figure 4: Concerned Behaviour over Time ................................................................................. 17

Figure 5: CCLD with possible solutions ..................................................................................... 18

Figure 6: High level approach to Literature Review .................................................................. 20

Figure 7: Three pillars of Social, Environmental & Economic Sustainability ......................... 21

Figure 8: A.T. Kearney analysis of Leadership Process ............................................................ 24

Figure 9: The Five Tasks of Strategic Management (Thomson and Strickland, 2003 ............. 26

Figure 10: Leadership Judgement process (Tichy and Bennis 2007: page 304) ...................... 29

Figure 11: Systemic Management Practice – SYSTAL model integrated ................................ 35

Figure 12: The Biological System Model: Systems Thinking, Creative Holism for Managers,

page 6............................................................................................................................................. 36

Figure 13: Integrating Utility, Rights, Justice and Caring ......................................................... 38

Figure 14: Systems approaches related to problem contexts in the SOSM .............................. 42

Figure 15: DCSA Ethical Principles............................................................................................ 43

Figure 16: DCSA Values.............................................................................................................. 44

Figure 17: The actionable part of the systems model ................................................................. 45

Figure 18: CR as the Ontology underpinned, by the research methodology - G5 EMBA 10,

10.6 PP........................................................................................................................................... 46

Figure 19: Expansion to the actual world and thereby the real world - G5 EMBA 10, 10 .6 . 47

Figure 20: Seven Components of a Worldview - Tom Ryan's Presentation ............................. 48

Figure 21: Graphical Integration of a Worldview and CR - Tom Ryan's Presentation on

Worldview & CR .......................................................................................................................... 49

Figure 22: Alignment of Grounded Theory to Critical Realism ................................................ 50

Figure 23: Grounded Theory - Elevator presentation................................................................. 51

Figure 24: Integration of Grounded Theory and Critical realism - Tom Ryan's Presentation . 51

Figure 25: Systems Failure Methodology - Tom Ryan's Presentation ...................................... 52

Figure 26: Integrated approach of SFM, GT, CR, DC ............................................................... 53

Figure 27: Interrelationship Diagraph of DCSA Variables........................................................ 59

Figure 28: CCLD highlighting the strong drivers....................................................................... 60

Figure 29: Strategic Challenges ................................................................................................... 63

Figure 30: Key HR Competencies in the future ......................................................................... 64

Figure 31: Concern Causal Loop Diagram ................................................................................. 66

Figure 32: Concerned Behaviour over Time............................................................................... 67

Figure 33: Concern Causal Loop Diagram ................................................................................. 71

Figure 34: Possible solutions for CCLD ..................................................................................... 71

Figure 35: BLSE approach – Dallas presentation – January 2007 ............................................ 73

Figure 36: Overview of the BLSE Approach or Methodology - Dallas presentation, January

2007 ............................................................................................................................................... 74

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List of Acronyms

ACLD Answer Causal Loop Diagram

BLSE Behaviour Lead Strategy Execution

CBOT Concerned Behaviour Over Time

CCLD Concern Causal Loop Diagram

CLD Causal Loop Diagram

CR Critical Realism

DCSA Deloitte Consulting South Africa

GT Grounded Theory

HP Hewlett-Packard

HR Human resources

IT Information Technology

KPI Key Performance Indicators

R&D Research and Development

RNC Restoration of Natural Capital

SAICA South African Institute of Chartered Accountants

SFM Systems Failure Methodology

SSM Soft Systems Methodology

NABE National Association of Business Economics

TCS Tata Consulting Services

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Acknowledgement

Firstly, I would like to thank Tom Ryan and the academics of UCT GSB for affording me the

opportunity to complete my EMBA.

The EMBA has been the beginning of a journey to understanding the world from a different

perspective.

I would like to thank my EMBA 10 class for their support, encouragement and commitment

to helping each other through this process of completing the EMBA.

Particular thanks go to the EMBA 10 Gauteng group for the ongoing support and the fun

times we had throughout these two-and-a-half years.

Thank you to Deloitte Consulting South Africa, for allowing me to complete my dissertation

on their firm. I would like to thank all the directors for affording me their time for interviews,

even though these last two years have been two of their toughest years.

To my friends and family, thank you for your support and assistance in helping me to

complete this dissertation.

Sherry, you have been exceptional through these two-and-a-half years: your passion,

commitment and contribution are highly appreciated. Thank you.

To my mother, thank you for helping me with the boys and for always being my pillar of

strength.

Finally, a very special thanks to my husband and my boys: you are amazing. You created the

space and environment that I needed to complete this dissertation. I know that my time was

limited, but my studies have come to an end now, and I intend to make up for the lost time.

Love you guys.

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Chapter 1: Introduction and

Overview

Chapter 1 introduces the topic studied and gives an overview of the dissertation. A high-level

overview is presented of the researcher‟s personal background, and the structure of the report

and the research process followed in this project are introduced.

1.1 Personal Background of Researcher

I began my working career in 1988 at Standard Bank. I worked as a home loans clerk and

thereafter requested a move. I was sent to various branches, where I pursued my career as a

waste clerk, a teller, and a central teller. I eventually moved into a learning and development

role.

During that time, I completed a Licentiate Diploma in Banking. Eight years later, in 1996, I

moved over to Nedbank where I worked as sales consultant, installing and selling credit card

devices. After a year, I moved into a training and development role within the Card Division

of Nedbank. During my seven years with Nedbank, I completed a one-year certificate in

Learning and Development, and a two-year diploma in Learning and Development.

At the end of 2002, I joined the South African Institute of Chartered Accountants (SAICA),

where I managed the accreditation and de-accreditation of training offices. I managed

approximately 9000 potential CAs. While working at the SAICA, I completed a Bachelors of

Technology in Human Resource Development.

In 2005, I undertook a move into the consulting industry, and worked at various consulting

houses, including Learning Resources, SAB&T Auditors, Ernst & Young and Deloitte

Consulting.

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Despite my vast experience in the people aspect of organisations, I felt that I was lacking in

the other aspects of running a business. I had completed an intense review of the various

MBAs and decided that the EMBA at UCT met my specific requirements.

I began the EMBA in 2008. The programme has given me a new perspective on business and

on the way in which I do business. It has acted as a significant catalyst in transforming me: I

now see the world from a different perspective.

All the methodologies I have learned over the past two years are being applied in my day-to-

day activities, both professionally and personally.

1.2 Structure of the SCQArie Framework and the Research Process

During the two years of the programme, we followed a rigorous framework for articulating

and conceptualising ideas in a meaningful manner, which assisted me in effectively

communicating my research and findings in a structured way. The process we use is called

the SCQA “rie” framework.

This framework consists of six parts, which guide the structured development of reasoning:

Situation: Setting the context for the concern (defined below). During this process, one sets

the background as to what is creating the concern. This can be determined by interviewing

key stakeholders who understand the environment. Evidentiary material must be provided.

Moreover, cognisance has to be taken of, inter alia, people, organisational structure and

process.

Concern: A concern is often brought about by a specific behaviour or situation that has a

negative impact on the modus operandi of the organisation. If we do not focus on this

concern behaviour over time (referred to herein afterwards as a CBOT), the behaviour will

either remain at its constant low or stagnate even further.

Question: This refers to the key question that needs to be asked about the concerns and the

relationships of these concerns.

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Answer: The answer to the key question, claim, inference, conclusion or position must be

substantiated by means of supporting arguments, reasons and evidentiary material.

The “rie” section of the dissertation focuses on a high-level understanding of the rationale,

which provides a logical flow of the construction of the situation, the concern, the question

and the answer. It demonstrates how one would obtain the answer in a credible manner. The

implementation of the answer and the evaluation, which comprises four parts (relevance,

utility, validity and ethics), will form part of the recommendations.

Structure of Research Process

This dissertation is divided into five chapters. Chapter 1 will introduce the dissertation and

give an overview of the topic under discussion. Chapter 2 will present a detailed literature

review of my findings. Chapter 3 provides the reader with a detailed plan of the research or

the research framework and it looks at the fundamental theories used in this dissertation.

Chapter 4 presents the research results. Finally, Chapter 5 provides the reader with a

conclusion and an evaluation of the findings.

1.3 Research Framework

The research framework that has been used for this dissertation is elaborated on in Chapter 3.

As the concern centres on the long-term sustainability of Deloitte Consulting SA (DCSA), it

needs to be established what DCSA needs to put in place to ensure the long-term

sustainability of the business.

The concern that needs to be researched spans across creative holism, where one would look

at the overall situation (in other words, to study the whole before looking at the parts) and

Critical Systems Thinking, which enables you to look at a problem or concern decide how to

resolve it from a variety of views, using different system approaches in combination, as

discussed in Michael C. Jackson‟s Systems Thinking Creative Holism for Managers (2004).

I have applied the principles of creative holism to understand the complexity of the

sustainability of DCSA , using Grounded Theory as the overarching methodology to study

data from DCSA, as I needed to provide meaningful accounts of DCSA‟s concerns.

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These conceptual ideas allowed me to transcend the limits of our own experiences, by

adapting and applying the substantive theory to other situations.

I have also aligned the Grounded Theory (GT) methodology to Critical Realism (CR), which

required me to begin the process with a question to be researched. I had to align my process

to what I know, which is known as the empirical world. Then I needed to obtain views from

others, i.e. the interviewees.

Critical realism views the world as a model of interacting layers, which are the empirical,

actual and real world. The world exists independently of our knowledge of it, therefore

knowledge is fallible.

Using Grounded Theory (GT) as a research tool, I am able to obtain a broader perspective of

the concern behaviour over time (CBOT) and to develop a hypothesis of my perspective of

what is happening in the real world.

With my perspective of what is happening in the real world through my hypothesis, I was

able to understand the undesirable behaviour. I have also used Systems Failure Methodology

(SFM), to analyse the system structures and failure points.

The purpose of this research is to develop actionable knowledge in understanding what

factors are having a negative impact on the long-term sustainability of DCSA and to provide

recommendations on how to contribute to the long-term sustainability of the organisation.

1.4 Situation

1.4.1 Global Management Consulting Firms

Although management practice has been around for many years, the origins of management

consulting and management theory can be traced back only as far as the 19th

century. They

only became established in the early 20th

century.

In 1904, Arthur Little in the United States moved his firm beyond chemical testing and

engineering into the area of administrative advisory services. In a similar fashion, George

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Touché, William Deloitte and Arthur Young each started their own accounting practices in

the 1890s and then shifted to Auditing and Advisory after 1900.

At the end of the 20th

century, accounting or auditing services separated from those of

consulting was witnessed. It led to the creation of Accenture, formerly Arthur Andersen.

From the 1990s to the present, some of the most well-known technology firms diversified

into management consultancy in a major way. EDS acquired AT Kearney (which had

previously left McKinsey); CSC purchased the Index Group; and Cap Gemini absorbed the

advising business from Ernst & Young. IBM acquired the consulting arm from

PricewaterhouseCoopers. In 2008, Hewlett-Packard (HP) purchased EDS.

There is competitive pressure both globally and locally contributing to the following:

Most multinational consulting firms have established offices in all major cities around

the globe.

The National Association of Business Economics (NABE) conducted a survey using

international MBA students, which revealed that Indian firms such as Tata Consulting

Services (TCS), Infosys and Wipro have become formidable competitors. India firms are

particularly strong in information technology and related areas. They have access to enough

local talent, operate on a lean budget, and can match their rivals with regard to good working

conditions and offering overseas assignments.

There many small - to medium-size consultancy firms with a very fragmented profile

operating in this market.

According to NABE, consultancies are likely to face at least four barriers in the coming

years:

“Firstly, there are long-established networks of a domestic nature in each nation –

family firms, interlocking directorates, and the tradition of doing business only with

family members, trusted friends, and domestic partners.

Secondly, Asian Information Technology and consulting companies that are

established on their home turf are moving abroad to compete.

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Thirdly, there are relatively few multi-billion dollar enterprises or public agencies to

which bids can be tendered.

“Fourthly, growth rates are bound to slow down worldwide as a result of the current

financial crises, scarcity of resources, emphasis on curbing consumption, going green

and transparency demanded by customers”. (Gross, Andrew, C, Poor, Jozsef,

Business Economics, Oct 2008).

Civilisations evolve over time, necessitating changes in communications, global trends, social

diversity and economic volatility (Professor Gillian M Marcelle „Innovation Getting Ahead‟

Business Brief December/January 2009/2010 at page 10- 11). These changes occur rapidly,

because businesses are reacting to market conditions daily. As a result, consulting companies

need to shift their focus from short-term revenue generation towards long-term sustainability.

1.4.2 Sustainability of consulting firms

“Sustainability is the single biggest business opportunity of the 21st century... it will be the

next main source of competitive advantage” (Lee Scott, CEO of Wal-Mart, Oct 2005)

Sustainability can be conceptualised more as a journey than a destination; it is a process

requiring continuous management attention and capability building.

The key question at this point is: “Do we have a choice”? The current growth patterns and

processes are not sustainable and eventually, increasingly undesirable outcomes will be

created.

All organisations, academics and NGOs need to step up to the challenge of transforming

towards sustainable growth. There is a need to be at the leading edge of change and fully

engaged, driving the fundamental changes in the three pillars of social, environmental and

economic sustainability.

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1.5 Concern

This section deals with the formulation of the concern. A rigorous process will be followed to

ensure that all the relevant concerns have been identified.

1.5.1 Sustainability of Deloitte Consulting SA

This dissertation focuses on DCSA, as I am a former employee and as a result, am able to

provide an empirical view and to understand the views of others at the company.

DCSA has been conducting business for over 100 years. Since the establishment of the firm

in 1894 by Howard Pim, the organisation has witnessed more changes in the last ten years

than in its entire history.

“Technology, national and international politics and economics, fundamental ructions

in global business environment, chaos across our borders, black economic

empowerment, hiving off and reintegrating consulting services, remodelling the firm

itself, restructuring of the health, education, trade and labour sectors, local and

international legislation affecting almost every aspect of our lives and

business”,(Vassie Naidoo, Of Ledgers and Legends, 2006)

Today, DSA is the largest multidisciplinary firm in the country. Proud recipient of the

Markinor Top Brand 2005 Award, for the second consecutive year, DSA is recognised as one

of the “Best Companies to Work for” in South Africa.

DSA is thus under pressure to adapt to a world that is in constant flux, both in business and in

profession. Their life-blood is their revenue stream and their sales pipeline. One of the

biggest challenges that DSA faces, is that it needs to remain independent in an environment

where it is operating not only as an independent outsider, providing impartial assessments,

but also as a highly involved consultant, conversant with all the inner workings of its client

and on close terms with them, and with that in mind DSA still needs to develop strong client

relationships.

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Actuals

YTD

Budget

Variance

Growth

R’m R’m

S&I R 20,2m -R 5,6m +26%

Technology R 12,6m +R 1,4m -47%

Human Capital R 4,2m -R 5,0m -47%

XBS R 13,9m +R 1,1m +35%

Integrated

Solutions

R 2,9m +R 1,4m +4 161%

ME JV

Discontinued

-R 4,1m -R 4,1m -261%

Enablement R 3,3m +R 8,3m +37%

Total R 52,9m -R 2,4m -11%

The profession is faced with yet another problem: how to improve its profitability (while

retaining its independence in the audit function, how to attract both promising graduates and

more experienced individuals, and more importantly, how to retain talented and experienced

directors and partners?

The impact of the global economy has affected the company‟s choice of strategy. Because of

the recession, DCSA has been forced to find new ways to survive – focusing on the next six

to 12 months to generate income.

FY2009 September 2009 Results (by Johan Goosen)

As seen in figure 1, DCSA is a portfolio of businesses divided into 5 main service area

streams, namely Strategy & Innovation (S&I), Technology, Human Capital, Business

Processing Services (BPS) and Integrated Solutions. Although the downturn in the economy

has been felt in the business, it did not have the same negative effect in all the service areas.

The slowdowns in the mining and manufacturing industries have mainly impacted the

Technology service area. Profits are down from previous reporting year (- 47%); this was

however anticipated and budgeted for (R1,4m ahead of budget). Rightsizing of the business

was part of the management response to the slowdown. Our operation in the Middle East was

discontinued ahead of the big fallout in Dubai. Closure cost of R4,1m was however

unavoidable.

Figure 1: Financial Results FY2009

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The S&I business is the biggest contributor of profits for DCSA. The Innovation service line

is highly profitable and strong revenues were generated in the FSI industries. The Strategy

service line was negatively impacted by the economy slowdown. This is a high competitive

market and retaining or gaining market share is critical. Matching revenue flow to the

resources plan remains the biggest strategic challenge.

BPS was shielded from the slowdown; due to opportunities create from the demand for

placing contractors with clients instead of clients employing permanent staff in the one

service line and annuity based revenue in the other service line.

Some of the Human Capital business is cyclical in nature which will affect the bottom line.

The fixed based cost structure increases the risk in this business and rightsizing of the

structure has taken place during the year. Although revenue and profits are down against

prior year and budget, this business is the leading business services provider in its field with

very strong brands and recovery in eminent.

“Our business has done well considering the performance of Deloitte businesses elsewhere in the world and the

state of the economy. While we manage the short-term challenges, we need to approach our business from a

long-term perspective. The economy will turn and Deloitte needs to be well-positioned to capitalise on that.

We need to embrace that culture of selling and delivering our services in shorter cycles, to ensure our resilience

in the current environment. A key success factor is for us to all work together in tackling the market. Each of us

can do something extra to help our business through the current cycle.

This is our business – we have no option but to ensure that it is successful. Now it is definitely the time to be

more agile and innovative.” Thiru Pillay, Director DCSA

The dynamics of the global economic downturn have affected the South African market.

Some of the key challenges experienced at DCSA were to maintain morale and optimism in

the face of overwhelming negative sentiment in the market.

Many clients reduced their “discretionary” budgets including, in large parts, budgets for

consulting services.

The last six months had sent out contradictory messages: on the one hand, DCSA

experienced significant interest from quality clients who wanted the company to assist with

work and solutions, while on the other hand, clients were slow to make decisions or even

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worse: decisions or interventions were postponed “for better and more certain times”. This

affected DCSA‟s short- and medium-term financial performance negatively.

From a revenue perspective, the pricing of solutions to clients has declined, but employee

salaries have increased, and this situation has put an even tighter squeeze on profit margins.

Because of the limited number of annuity based income clients, which are the client that

provide repeat business, revenue generation is dependent on as and when the client needs

consultants

In view of the above, the leadership of DCSA has been focusing on short-term revenue

generation as opposed to long-term sustainability. Although the leadership does want to focus

on long-term strategy, in practice this is not possible. Budgets are thus formulated around the

next 12 months.

What is interesting about DCSA, because it is a partnership, leadership both owns and runs

the business. That is a very different model to any other kind of corporate structure. Can

DCSA be considered a corporate? Theoretically, DCSA should not have a bureaucratic

structure that slows down innovation. There are 250 owners of the business, so DCSA

resembles a corporate structure, suggesting that the owners run the business. Actually, there

are many owners, and thus decisions are not made quickly.

Given the dynamics of a partnership, the owners of DCSA do not have shares that appreciate

in value, nor do they have shares that are issued as a reward to their employees. A partnership

is a cash-based environment, where the profits are distributed at the end of each year, and the

start of the next year brings a new beginning.

The key question at this point is this: if, at the end of each year, a large portion of the profits

is taken off the table or shared among the owners, what percentage, if any, is put aside for

long-term sustainability, or innovation?

The firm does make selective investments in innovation. The innovation service line in itself

is a big investment in the SA practice. This service line focuses on creating new revenue

services for the service lines which needs to generate revenue within a period of 12 months. It

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does not exist in any of the Deloitte offices anywhere else in the world, but the concern is the

percentage of funds that are invested to ensure the long-term sustainability of DCSA.

DCSA is conservative where innovation and investment in innovative services or new

services are concerned, because of the cost. The reality is that DCSA is aligned with a global

franchise, so there is commitment from the member firms to replicate what is developed

globally. Member firms do participate in these global endeavours and are very much part of

them. The rationale for that is that DCSA is serving global clients, who demand consistency

from the different member firms of Deloitte.

With the development of innovative services and new services globally, why is DCSA

finding it difficult to generate revenue at the desired rate?

Firstly, DCSA tends to propose very blended solutions; the company is not inventive in

crafting solutions. It needs to be innovative and creative. Not enough focus is given to

understanding the client‟s needs; therefore, the solution is not aligned to these needs.

Secondly, DCSA has not been focusing on or investing in businesses that will provide them

with annuity type revenue streams. In order for long-term sustainability, DCSA needed to

focus on building strong relationships with the top 200 clients, so that there will always be

repetitive work on yearly bases.

Thirdly, DCSA operates in a market of the top 200 companies in the world; these companies

may have “smarter” employees than DCSA, although DCSA is in the business of creating

innovative solutions. The market determines what is needed and DCSA is not satisfying the

market needs. Our solutions are to blend. DCSA is not innovative in its pricing model

because of the risk factor.

Admittedly, there are many risks in business, and many regulations govern the risks that a

company is allowed to take. This contributes to the leadership‟s conservatism. . Even with

clients where they face no explicit restrictions, they are still concerned about the potential

risks to the company. This is an excessively cautious approach and thus wrong in the present

economic circumstances.

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With the decline in revenue and client work, DCSA had to be strict with regard to

performance management. The performance levels of employees dropped significantly, as

there were no projects. Anxious employees were wondering whether they would have a job in

the future. Directors faced difficult decisions, and some employees had to be retrenched. This

resulted in low morale, fear and negativity. Ten months later, the impact of the recession has

not changed how employees feel nor has the situation improved.

The performance measurement system seems to be to homogenous, although there are

problems at all levels. Employees feel that the one size fit all approach is negatively

impacting their performance, as they cannot be excellent at everything.

The company has not been very good at giving its employees a sense of what their future

could look like at DCSA; leadership tend to be trapped in tracking against a particular net and

gross margin. This comes through in the language that they use and manner in which

performance is measured.

Besides the performance process, one of the other concerns that Human Capital division has

raised, is that they employ too many people who are technically proficient and who can

deliver technically on methodology, however struggle at closing the sale, because that has

been DCSA‟s paradigm.

However, Human Capital does not have enough entrepreneurial individuals who can take a

whole suite of its offerings across the organisation and adequately project that into the

market.

Human Capital finds that when they go out and hire people that do not have the knowledge

and experience of having delivered, they can talk a good war, but they have not got the

experience of fighting a good war, in other words, they do not have the knowledge or the

experience of delivering results, although they do know the jargon and how to sell themselves

and the company‟s products.

DCSA has employees who are either very technically sound, or very methodologically sound

in terms of their business knowledge and business acumen, but who are not good salespeople.

The company also has employees who are excellent at delivery of solutions to clients, but

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who are not good salespeople either. When DCSA does have employees who are sales-

orientated, they tend to lack the technical knowledge that is needed to gain credibility with

the client.

It has emerged from the research that the professional development of senior consultants,

managers, senior managers, associate directors and directors lacks focus, and that more work

needs to be done to find individuals who are methodologically sound, technically sound and

has sound selling skills.

One of the concerns that seem to have a negative impact on the long-term sustainability of

DCSA is the silo mentality. Until a few years ago, DCSA produced a single income

statement, which fostered team synergies. Currently, too many income statements are

produced, and they appear to be competing with each other. The problem has nothing to do

with the clients or with the industry; rather, there is too much individualism in the company.

This is also the case among the leadership. Directors lack an integrated focus on the longer

term market and opportunities outside of their competency silos. There is a component of

social capital or networks between the different business units within consulting and the

broader firm which is crucial.

From a leadership perspective, directors are seen as “one size fits all” by the company and the

rest of the staff. In other words, when someone is promoted to director, it is expected that he

or she will not only be knowledgeable about all aspects of the business but also capable of

managing key client relationships, managing teams of people, keeping staff engaged and

focused, generating revenue, etc. Insufficient attention has been paid to sound quality

leadership at director level by DCSA when employing, developing and promoting directors.

1.6 Rich Picture of the Problem Situation

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Sustainability

Global

Economy

Partnerships

EmployeesRisk

Innovation &

Creativity

Clients

Process, methods &

systems

Sales & Revenue

Brand

Growth

The current situation within DCSA can be illustrated by means of the rich picture below

(Figure 2), (Michael. C. Jackson, March 2004, page 193), describes rich pictures as “actual

drawings that will allow the various features of a problem situation, as it is perceived to be set

down pictorially for all to see.” It highlights some of the key relationships between the

stakeholders and the relevant issues, as well as how they all interact with each other.

1.7 Focus on the Research Concern

This problem situation illustrated in the rich picture above was examined critically and

established management theory has been merged with my own experiences of DCSA, using

the Systems Failure Methodology (Presentation, Tom Ryan, 2009), to understand where the

actual failure has occurred. The findings clearly revealed that the most significant problem

faced by DCSA was that of ensuring the company‟s long-term sustainability. In order to

understand a holistic view of the causal mechanisms that had led to this situation, Critical

Realism (CR) (Presentation, Tom Ryan, 2009), and Grounded Theory (GT) (Presentation,

Tom Ryan, 2009), were used. Out of these findings emerged the following causal loop

diagram (CLD)

Figure 2: Rich Picture of concerns within DCSA

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Figure 3: Casual Loop Diagram

Understanding the Causal Loop Diagram

From scrutiny of the rich picture (Figure 3) and from the research as described above, it

became clear that DCSA tends to follow a short-term strategy. It is thus focusing on short-

term sales, which will assist the practice in getting through the recession. However, it may

not be possible to sustain the company in the long term. With a short-term strategy, DCSA

tends to focus some of its Key Performance Indicator‟s (KPIs) on sales pipelines, delivery

and utilisation, whereas with a long-term strategy, the focus of the KPIs will be on

sustainable growth, brand growth and the promotion of the company being “Best Company to

Work For”.

Due to its lack of creativity and innovation in service delivery, the company tends to win one

proposal out of five. The time, cost and value that has been wasted on making these proposals

in the first place further reduces profits.

The growth of the brand will be determined by the level of innovation and creativity applied

to client solutions. If DCSA understands the market, industry specifics and client needs, it

will be able to win more proposals and close more sales, which in turn will grow the brand.

Currently DCSA‟s strategy focuses on short-term revenue-generating solutions. By shifting

it‟s focus to a long-term strategy, building long-term relationships with clients and

developing a long-term sales pipeline, as well as attracting ongoing annuity clients, DCSA

can increase its revenue and sales and contribute to its own sustainability.

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While there are many issues, DCSA has the opportunity within its current environment to

leverage off its people, to develop a long-term strategy, with innovative and creative ways of

providing winning solutions to its clients.

It is imperative that the level of performance of people be addressed. The ripple effect is

substantial. DCSA‟s business is the selling of knowledge, skills and experience. It does not

have a visible product that can be shown. The only way of increasing the generating of

income is to up-skill its people.

A whole new paradigm shift is required to change the culture. A new system, a new way of

thinking, a new working system and a new way of measuring performance from a different

perspective are needed, and DCSA needs to redesign the relationships between these work

systems.

DCSA also needs to improve its level of normative management, as defined below and as

measured by the level of performance of its people to sustain the business.

Normative management is reflected in four distinctive yet integrated characteristics:

Generativeness means that, employees are empowered to develop a new range of

behaviours to deal with their environment – be it natural or cultural.

Tolerance means that, when someone does not agree with certain values or world

views, they should not be judged or eliminated outright.

Congruence is reflected in strengthening debate to create new value systems in the

outside world without compromising one‟s inner world.

Dialectical theory claims that even though our opponents have worldviews

contradicting our own worldviews, we appreciate and trust others.

The leadership team of DCSA‟s normative management is thus reflected in the level of buy-

in and commitment from its people towards changing the culture and system within DCSA.

The ability of DCSA to ensure long-term sustainability depends on this.

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TIME

The ability of Deloitte

Consulting SA to ensure

long term sustainability

Figure 4: Concerned Behaviour over Time

1.8 Questions

Questions that may arise in this setting include:

1. Does the sustainability of DCSA rely on the creativity, innovation and performance of

its employees?

2. Does it have the right calibre of leadership to change the culture of the organisation?

3. What does it need to do to increase the level of normative management at leadership

level?

4. How does it create a culture within its people to support long-term sustainability?

The central research question in this paper can therefore be phrased as follows:

“What does DCSA need to put in place, to ensure the long-term sustainability of the

company?”

1.9 Answers

After completing in-depth research on the core variables, the findings provided me with a

possible answer. At this point, in the form of a CLD (Figure 5), I will be introducing the

possible solutions. The solutions will be elaborated in Chapter 5 of this dissertation.

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Long term

Sustainability of Deloitte

Consulting SA

Level of

strategy, long term versus

short term

Impact on the global

economy

Impact on market,

industry and

client needs

Brand Growth

Development of new methods, systems and

solutions

Limited apatite for risk

Dynamics of a partnership

Proactive management

posture

Proficiency in execution

Long – term performance

Research & Development

Competitive edge

Attract rich talent

Employee incentives

Culture of innovation as part of the way of

work

Leadership development &

pipeline

Talent management &

talent acquisition

High performance culture

Proactively addressing critical

strategic challenges

Level of

performance of people

Degree of

innovation and creativity

Concern:

Level of strategy, long term versus short term

Concern:

Degree of innovation and

creativity

Concern:

Level of performance of

people Question:

Long term sustainability

of DCSA

Possibleanswers

forLevel of strategy

Possible answers for

Level of performance

of people

Possible answers forDegree of innovation

and creativity

Figure 5: CCLD with possible solutions

When reviewing Figure 5, it appears that the answer is the following:

DCSA needs to create a culture of encouraging high performance individuals who are

creative and innovative in driving the long-term strategy to ensure the sustainability of

DCSA.

Rationale:

The rationale is that if strategies and processes are put in place to ensure the long-term

sustainability of DCSA, there would be a more solid sales pipeline, an innovative and

creative culture of developing and implementing innovative solutions based on clients‟ needs,

which will in turn increase the revenue.

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Implementation:

Implementing the outcomes of this dissertation will make significant contribution to the long-

term sustainability of DCSA. The leadership team needs to understand the seriousness of this

situation and concern, and to assign a team to work on implementing the recommendations.

Evaluation:

I am no longer an employee of DCSA, but I hope that these findings and recommendations

will be reviewed and implemented. I would like to see, in years to come, a culture that strives

to promote innovation and creativity.

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Chapter 2: Literature Review

2.1 Introduction

2.1.1 Approach

This chapter presents an extensive research review of literature relevant to the issue of long-

term sustainability to broaden the perspective of the research problem beyond the context of

DCSA.

Parent Discipline

Research Problem

Research Question

Sustainability of consultancy firms Sustainability of consultancy firms in SA

The ability of Deloitte Consulting SA to ensure long-term sustainability

Core Variable 1

Core Variable 2

Core Variable 3

Level of Strategy

Level of Performance of People

Degree of Innovation & Creativity

What does DCSA need to put in place, to

ensure its long-term sustainability?

Figure 6: High level approach to Literature Review

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The above approach (figure 6) will serve as a map to navigate the manner in which the

literature has been reviewed. Theory related to the topic of research, namely, sustainability

of consulting firms and the core variables influencing the long-term sustainability, is included

in this chapter.

Using the grounded theory methodology, the identified parent discipline looked at the

sustainability of consultancy firms in general and within SA in particular. The identified

research problem investigated the long-term sustainability of consulting firms, with a specific

focus on SA firms. The research question goes a step further, providing research data on the

long-term sustainability of DCSA. Within the same, three core variables emerged, centred on

the level of performance of people, the degree of innovation and creativity and the level of

strategy, long term versus short term. A detailed literature review using Toulmin's argument

model, (Stephen. Toulmin, 1969) was completed.

2.2 Sustainability

2.2.1 Sustainability

The word “sustainability” is derived from the Latin sustinere (tenere, to hold; sus, up).

Dictionaries provide more than ten meanings for sustain, the main ones being to “maintain",

"support", or "endure” (Shorter Oxford English Dictionary, 1964: 2095).

Definitions of sustainability often refer to the “three pillars” of social, environmental and

economic sustainability (Adams, W.M. 2006) as seen below.

Figure 7: Three pillars of Social, Environmental & Economic Sustainability

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Placet et al (2005) expressed the opinion that sustainable development has three broad goals:

environmental stewardship, social responsibility and economic prosperity for both the

organisations and its stakeholders. These three goals are interrelated and supportive of each

other:

Environmental stewardship involves protecting the air, water, land, and ecosystems,

as well as effectively managing the earth‟s natural resources (including fossil fuels).

Social responsibility focuses on improving the quality of life and equity for

employees of the organisations and for society as a whole.

Economic prosperity means creating economic opportunities for both the organisation

and all its stakeholders (e.g. in the locale of the community).

Porter and Van der Linde (1995), Reinhardt (1999), Hart and Milstein (1999), Larson (2000),

Hedstrom et al (2000), Hart (1997) and various others have focused on the emerging

challenge of sustainability as being a catalyst for improved competitiveness and more radical

creativity for those organisations with the vision and foresight to recognise it.

Blignaut and Van der Elst claim that there are three distinct non-exclusive, integrative,

sustainable development pathways (Aronson, Blignaut, Milton & Clewell, 2007) :

Sustainability through technological change – the resource and energy intensity of

an economy is significantly reduced.

Sustainability through social behaviour – social preferences and value systems

change what we regard as wealth, the reason or rationale for living, and the way in

which we live.

Sustainability through the restoration of natural capital (RNC) (Network) –

defined as an activity that integrates investment in and replenishment of natural

capital stocks to improve the flows of the ecosystem‟s goods and services, while

enhancing all aspects of human well-being (Aronson et al, 2007).

They argue that if a country, region or organisation wants to be sustainable, it would need to

embark on a process that will involve political and behavioural changes and the adoption of

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strategies and actions to facilitate implementation of the above pathways (Blignaut with Van

der Elst, 2009).

2.2.2 Sustainability of Consulting Firms

I have reviewed various books, articles, and journals and a range of academic literature, but I

was unable to find relevant information on the sustainability of consulting firms. I was also

unable to find any literature focusing more specifically on the sustainability of consulting

firms in South Africa. This suggests that there is scope for further investigation of both of

these topics. Admittedly, there is an enormous amount of information on sustainability in

general and in environments other than business, but there are very few studies that can

advise consulting firms on ensuring their long-term sustainability.

2.2.3 Innovation and Creativity

Marcelle (2009/2010) emphasises the importance of sustainability. According to her,

countries across the globe face challenges of managing technological and institutional change

that is inherent in innovation in a way that promotes development. She claims that economic

growth and development is increasingly dependent on organisations and institutions to be

innovative, thus enhancing capabilities (Marcelle, 2009/2010). She states that managing

innovation effectively in a country or at an organisational level will rely on the ability to

generate and master new knowledge as well as the ability to acquire and use existing

technology.

Kearney (2008) claims that innovation is no longer limited to the research and development

(R&D) division of organisations. Companies such as Apple, BMW, Google, Netflix and

Procter & Gamble have gone beyond R&D to ensure that innovation is an integral part of

their organisation and value chains. They argue that companies that excel at innovation

management are committed to „open innovation‟, which means that they work with a wider

network of partners in their industry. These companies collaborate up and down the value

chain, capturing and sharing ideas with customers, suppliers, distributors and all key

stakeholders. They concur that open innovation allows organisations to:

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Speed the development of new products and services and in doing so increase revenue

and market share.

Shorten time to market new products, services or solutions and accelerate profits.

Reduce direct spending on R&D.

Improve the success rate of new products, services or solutions.

The study found that the best innovators – companies that were designated as true leaders in

their study – invest more than three times as much effort in the beginning stages of the

innovation process than do their followers (as per Figure 8).

According to Jackson, there are five processes of innovation, which can be filtered as

follows:

1. Goal definition – this requires the company to state explicitly to everyone in the

company what the company‟s goals are.

2. Effective alignment of goals – this links explicit actions involving ideas and projects

to specific goals. This also includes effective management of action portfolios.

3. Participation of all teams – this refers to the behaviour of individuals, in and out of

teams. Each member must be allocated a specific responsibility. A reward system

must be implemented to reward goal attainment.

Innovation Strategy Idea Generating Idea ScreeningConcept

DevelopmentCommercialization

Figure 8: A.T. Kearney analysis of Leadership Process

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4. Effective monitoring of results - this requires the monitoring of goal attainability,

actions and teams involved.

5. Communication and the access of information –the communication channels must

be left open all the time. An open door policy must be adopted, where people feel safe

to explore their thoughts and ideas. The company should work with a high level of

transparency and ensure that information is available to all its employees.

Innovation adds value to a company. However, some caution is necessary, as ideas, products

and services do sometimes fail in the market. Nonetheless, failure is part of the innovation

process, and one should always factor in a level of risk. Failure in this way may extend far

beyond a loss of investment.

2.2.4 Level of Strategic Management

Thompson and Strickland (2003) argue that a company‟s strategy is akin to a game plan: “it

is used to stake out the market position, conduct its operations, compete successfully, attract

and please all its stakeholders and achieve the organisational objective”.

Crafting, implementing, and executing a strategy are priorities at executive level: first, there

is leadership needs to shape proactively how the company‟s business will be conducted and

secondly, leadership needs to mould the efforts and decisions of different divisions,

departments, managers, and groups into a coordinated, compatible whole.

Nothing affects the company‟s ultimate success or failure more fundamentally than how well

its leadership and management team sets the company‟s long-term direction, develops

competitively effective strategic moves and business approaches, and makes sure that they

implement the deliverables of the business strategy.

According to Thompson and Strickland (2003), this implementation of the strategy consists

of five interrelated managerial tasks:

1. Forming a strategic vision of where the organisation is headed in order to improve

long-term direction, delineate what kind of enterprise the company is trying to

become and infuse the organisation with a sense of purposeful action.

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Developing a Strategic Vision and Business

Mission

Setting Objectives

Creating a Strategy to Achieve the Objectives

Implementing and Executing the Strategy

Evaluationg Performance, Monitoring New Developments, and

Initiating Corrective Adjustments

2. Setting objectives by converting the strategic vision into specific performance

outcomes.

3. Crafting a strategy in order to achieve the desired outcome.

4. Implementing and executing the chosen strategy effectively and efficiently.

5. Evaluating performance and initiating corrective adjustments in vision, long-term

direction, objective, strategy, or execution in light of actual experience, changing

conditions, new ideas, and new opportunities.

During my interviews with DCSA‟s directors, they concurred with what had been said by

Thompson and Strickland (2003) on the requirements for ensuring the sustainability of the

company. DCSA uses a similar process in designing and developing their strategy, but its

focus is not on long-term and that is where the focus needs to be.

Even though the leaders of DCSA are making a concerted effort to look at the long-term

sustainability of DCSA, they do tend to focus only on what will have the most impact on

revenue generation over the next 12 months. As a former employee of DCSA, I understood

why this happened. They needed to find ways of generating revenue, so that they would not

have to retrench employees or down-size their operation.

The key question to be asked is thus:

“Has DCSA ever looked at a long-term strategy, or has the focus been on short-term strategy

since inception?”

Figure 9: The Five Tasks of Strategic Management (Thomson and Strickland, 2003

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The views and conclusions of the leadership on what an organisation‟s long-term direction

should be – its technology, product, customer focus, and its future business scope – all

together constitutes the strategic vision of the organisation. A strategic vision is a long-term

roadmap of a company‟s future. This roadmap will furthermore need to provide specific

detail with regard to the following: Is DCSA maximising on the use of their technology?

A focus on whether DCSA is providing excellent solutions that are creative and innovative to

their clients. Are they ready to play in the Africa market? Is DCSA pursuing the product

markets with leading products or solutions? What capabilities is DCSA planning to develop

among its employees? Lastly, what kind of firm or organisation the leadership wants to

create?

It appears that many businesses are employing and implementing strategies that are only of

short-term benefit. These strategies and solutions are thus short-sighted and they tend to be a

survival technique designed to survive the current economic crisis. Global trends have a

substantial impact on the strategies chosen by businesses.

2.2.5 Leadership

Viguerie et al (2007) say that many executives have an average view of the markets. They

argue that averaging out the different growth rates in an industry‟s segments and sub-

segments can produce misleading views of its growth perspective.

They claim that the research that they have completed on 100 large companies suggests that

executives should “de-average” their view of markets and develop a granular perspective on

trends, future growth rates, and market structures instead.

Tichy and Bennis (2007), in their study of judgements made by successful leaders, argue that

the essence of effective leadership is a contextually informed decision-making process that

encompasses three domains: people, strategy and crisis.

Good leadership judgement needs to be supported by contextual knowledge of one‟s self,

social network, organisation and stakeholders. When leaders make so-called „judgement

calls‟, a few factors are relevant.

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Firstly, judgement is the core of leadership. Leadership is, at its marrow, the chronicle of

judgement calls: this is a leader‟s biography. Good leadership requires good judgement.

Secondly, in decision-making, the only thing that counts is winning or losing: it is only the

result that matters. Long-term success is the sole maker (and the sole proof) of good

judgement. Judgement only leads to success when the outcomes have achieved the goals of

the organisation. This is echoed by Drucker (1954) who states:

“The ultimate test of management is business performance. Achievement, rather than

knowledge, remains, of necessity, both proof and aim.”

Tichy and Bennis (2007) have created a framework that explains how leaders can make good

judgements. In doing so, there first goal is to help leaders to improve their own judgement-

making faculties, and to improve their judgements of others. Their second goal is to

encourage, educate and influence others about the importance of making good judgements,

particularly in business, but not limited to business.

Key leadership judgement encompasses dimensions, viz. time, domains, and constituencies.

With regard to time, this can be broken down into three phases. These are not linear. Good

leaders are able to self-correct by using „redo loops‟, repeating earlier phases to correct errors

or to adjust for oversights. There are three phases:

Preparation: What happens before the leader makes the decision.

The call: What the leader does as he or she makes the decision that helps it turn out to

be the right one.

Execution: What the leader must oversee to make sure the call produces the desired

results.

Tichy and Bennis (2007) have identified three critical domains in which most of the

important calls are made:

Judgement about people.

Judgement about strategy.

Judgement in time of crises.

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The last dimension is that of constituencies. Leaders need to build strong relationships, as

these provide the information they need to make a good decision. Obtaining buy-in from the

various relationships makes it easier to implement the decision. In addition, to improve

judgements throughout the organisation, leaders must teach others in their organisation to

make successful judgement calls too.

The figure below shows how these dimensions play out in the judgement process.

Figure 10: Leadership Judgement process (Tichy and Bennis 2007: page 304)

2.2.6 The future of management/leadership

In the past century, technology management has enabled a few companies – including

General Electric, Procter and Gamble, Toyota, and Visa – to cross new performance

thresholds and build long-term advantages. Yet there is still a huge gap between most

companies when it comes to management innovation

Leadership Judgment Process

Cognitive Processes Span All Phases

Emotional Processes Span All Phases

Preparation Phase Call Phase Execution Phase

Sense/identify

Frame/ Name

Mobilize/ Align

CallMake it Happen

Learn/ Adjust

Redo Redo Redo

Good Judgment

Early identification

in the environment

Able to cut through

the complexity and

get to essence

Identifies key

stakeholders

Exercise yes/no

judgment

Leader stays in the

game

Gets feedback

Mobilize to act Clearly sets

parameters of a

problem

Engages and

energizes around

framing

Clearly explains

judgment

Supports those

making it happen

Make adjustments

Energized about

the future

Provides context

and language

Tops best ideas

from anywhere

Sets clear

milestones

Feedback is

continuous

Bad Judgment

Cannot read the

environment

Frames the wrong

decision/judgment

Does not set clear

expectations

Still makes bad

calls/wrongheaded

Leader walks away Resistance by

organization

Fails to see reality Ultimate goal is not

clearly defined

Wrong people Failure to see how

things intersect

and are likely to

play out

Bad info Lack of operating

mechanisms for

dealing with

changes

Not following your

gut can span all

phases

Stuck in old

paradigm

No self-correction Avoids:

dillydallying in

making a call

Failure to see all

factors

None or wrong

metrics

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In The Future of Management (2007), world-renowned business sage Gary Hamel argues that

organisations need bold management innovation now more than ever. The current

management models, which are centred on control and efficiency, no longer suffice in a

world where adaptability and creativity drive business success. He claims that what really

fuels long-term business success is not operational excellence, but management innovation

with new ways of mobilising talent, allocating resources and building strategies.

In his book, he looks at what is preventing 21st century organisations from meeting new

challenges. From these he has distilled ten important lessons to turn an organisation into a

serial management innovator. Hamel further explains that it is necessary to understand the

systemic problem or the root cause of the problem.

Peter Checkland, the founder of Soft Systems Methodology (SSM), similarly refers to the

„root definition‟ (1990) which is important for understanding the cause of a complex

situation, in order to make the necessary changes.

Hamel‟s lesson three states that: when a leader is trying to change the deep-seated habits

and patterns of a large organisation, setbacks will be encountered along the way. It is thus

crucial to assess and validate the impact of the management innovation by monitoring the

level of improvement in the organisation. This is particularly relevant when the improvement

occurs gradually.

Hamel emphasises that buy-in from leadership is critical for the success of management

innovation. He suggests that innovation should first be tested informally with volunteers in

order to secure approval. Furthermore, the new process must be run parallel to the old

process, as it is too risky to abandon the old process in favour of something that has not yet

been finalised and tested. Lastly, it is important to look for ways to validate hypotheses

cheaply and quickly before implementing them in the company. Kotter (year) uses a similar

process to manage change in his book, The Heart of Change.

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2.2.6 Performance of People

Collins (2001) talks about a culture of discipline in his book, Good to Great. He believes that

in order to sustain great results, an organisation needs to build a culture of self-discipline,

which means taking actions consistent with the following:

What you are deeply passionate about.

What you can be the best in the world at.

What drives your economic engine.

Collins also emphasises that it is important to employ the right people, and to avoid creating a

bureaucracy, as a bureaucratic culture arises to compensate for incompetence and lack of

discipline. A culture of discipline requires people who understand and follow a consistent

system, but who is afforded the opportunity, to have the freedom and responsibility to work

within a framework of that system.

A culture of discipline should not be confused with a tyrant who disciplines; these are two

very different concepts, in that the one is highly functional, while the other is highly

dysfunctional. The single most important form of discipline for sustained results is to adhere

strictly to Collins‟ three key points (listed above).

Mary Parker Follet, in her book “Creative Experience”, outlines the following points:

1. “Leadership is not defined by the exercise of power, but by the capacity to increase

the sense of power among those who are led. The most essential work of a leader is to

create more leaders.

2. “A large organisation is a collection of local communities. Individual and institutional

growth are maximised when these communities are self-governing to the maximum

degree possible.” (Follet, 1924)

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2.2.7 Conclusion

The ideas and suggestions that emerged from the literature review and presented in this

chapter validate my research question. The only way to build a company and ensure its long-

term sustainability through difficult economic cycles and global changes is to develop a

culture of high performing people. Developing a long-term strategy that honestly elicits

honours and cherishes human initiative, creativity and passion, all of which are the key

elements for business success in this 21st century, will build an organisation that is fully

prepared for extraordinary opportunities that lie ahead.

There are three components to the success and long-term sustainability of any organisation

which is clearly evident from the literature review. These are performance of people, depth or

level of strategy and innovation and creativity of leadership and their employees.

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Chapter 3: Research Methodology

3.1 Introduction and Overview

In this chapter, the research methodology used is described. It will also present a detailed

roadmap of the science dealing with the principles of procedure, process and various

strategies that I have adopted to meet my research objective. This research methodology is

centred on building substantive theory and propositions, to obtain the desired outcomes of the

research.

The research methodologies adopted in this study were designed in response to the research

situation and the research question identified in the previous chapters.

For ease of reference, the research situation and research question can be stated as follows:

3.2 The Nature and Purpose of Management Research

The aim of management research is to gain insight into certain events, processes and

phenomena in the world of business.

Management research is not only for experts in this particular area of business. Most people

spend time trying to make sense of everyday experiences, be it in their personal lives or at

work. Management research is a very effective way of improving our understanding of

problematic or difficult situations (particularly in business), in order to arrive at workable

solutions.

Research Situation: Sustainability of Consulting Firms

Research Concern: The ability of Deloitte Consulting SA to ensure its long-term sustainability

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In the past, there has been a greater emphasis on quantitative research methods, which focus

on describing, coding and counting events, rather than on understanding why these events are

happening in the first place. The purpose of such methods is to measure corporate results or

performance.

In contrast, using qualitative methods will assist us in understanding in greater depth, the

origin of people‟s viewpoints, or the reasons and consequences of the situation at hand. In

this dissertation, I will place greater emphasis on the use of qualitative data research.

In summary, the two fundamental purposes of management research are:

1. To contribute to scientific knowledge, by gaining a better understanding of an

organisation and its workings.

2. To contribute to the “real-world” by finding solutions to the problems.

3.2.1 Management Practice

The role of management is to identify problems, to investigate them, and to decide what

changes must be made to overcome them (see Figure 12).

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Sense Making

Using Grounded theory to construct an explanatory theory (Concern Causal Loop Diagram CCLD) for the phenomenon represented by the Concerned Behavior Over Time in the Context (CBOT)

Produces the CCLD

Produces the ACLD

Practice

Stakeholders

Climate: relationships between stakeholders

Process & structure

CBOT

Context

Small Wins Approach

Implements the First Small Win

APPENDIX A

SMALL WIN 10.5

Title: Hi school drop-out rates due to pregnancy Name: Sharlotte Naidu Date: August 2009

Short description of Small Win:

Develop a programme to assist schools in scaling up on pregnancy prevention efforts

1-Describe the problem:

Through in- depth research, it was evident that one of the main

courses of a high drop-out rate of school kids was pregnancy.

There is a lack of pregnancy prevention efforts at schools to

educate these kids on pregnancy prevention.

Pregnancy rates among 15-19 year olds has to be reduced

significantly, for two specific reasons:

1. Teen pregnancy increases the risk of HIV infection

2. Teens need to complete school, right up to grade 12

2-Describe the current process:

The current process at schools that I have interviewed are

as follows:

1. No pregnancy awareness workshops

2. Girls between the age of 15 and 19 fall pregnant

3. Parents are informed

4. A talk is given to the pregnant girls on what to do and who

to call

5. Teachers monitor girls

6. Some girls give birth in toilets and go into labour while

writing exams

7. Some girls come back to finish school and some do not

3- Identify the root causes:

Poverty

Lack of pregnancy awareness

No support from school and family

Pressure from peers and boys

Violence and harassment against girls

4- Develop a solution and action plan:

There were a few options that had been presented to me when

having these interviews. The options were as follows:

1. Pregnancy awareness programmes

2. Mentoring for girls from grade 9-12

3. Entrepreneurship learneship for girls that have

dropped-out of school

4. After birth support groups

5. Leadership development skills for girls

5. Implement the solution:

We identified two schools that had a high rate of pregnancies.

We developed presentations on pregnancy awareness and we

presented to all the grade 9-12 at each of the schools, not only

to the girls but to the boys to.

6- Review and evaluate results:

The response was promising, however to early to tell what

impact that had made. We intend on going back every

month to reinforce the message. I am sure we will see a

change

7- Reflect and act on learning’s:

Ongoing monitoring

REAL WORLD

ACTUAL WORLD

EMPIRICAL WORLD

Using Grounded Theory (CCLD) as a research tool, we are able to obtain a broader perspective of the concern behaviour over time (CBOT) and develop a hypothesis of our perspective of what's happening in the real world

DATA

COLLECTION

CON

CEP

T

DEV

ELO

PME

NT

Ladder of

inference

CON

CEP

T

FOR

MATI

ON

From our observation of the Empirical World, we identify a problem variable that exhibits an undesirable behaviour (CBOT) Our purpose is to chance the behaviour

With our perspective of what’s happening

in the real world through our hypothesis, we will be able to understand and/or change the undesirable behaviour

Figure 11: Systemic Management Practice – SYSTAL model integrated

This dissertation uses the systems thinking approach, as described in Figure 11. In order to

make this SYSTAL model more comprehensive, it is necessary to build the theory in detail.

3.2.2 Purpose of Management Research

Management research needs to be systematic and thorough. Ludwig von Bertalanffy (1968)

argued that organisms should be studied as complex wholes, and coined the term „general

systems theory‟. He talks about open systems and closed systems. The former does not

engage in any exchanges with its environment, whereas the latter accept input from their

environment.

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OUTPUTSINPUTSManagement

‘The system’

‘The environment’

Boundary

A subsystem

A relationship

Cycle of events

This „general systems theory‟ was soon embraced by management system thinkers who

adapted the open systems model to study organisations.

The biological system model is represented in Figure 12. It shows a distinct boundary

separating the system from its environment. There are complex structures in this system,

which is differentiated into subsystems that themselves have parts: in other words, there is a

hierarchy of systems.

The close interrelationships of mutual influence between the subsystems must ensure

homoeostasis – the maintenance of a steady state. One of the subsystems, the management

subsystem, is responsible for integration and coordination.

An awareness of this the above model will assist me to understand the inputs and outputs of

the subsystems, the environment, the boundaries and the relationships, all of which form part

of the research situation and question.

3.2.3 Research Ethics

Ethics are norms for conduct that distinguish between acceptable and unacceptable

behaviour.

Figure 12: The Biological System Model: Systems Thinking, Creative Holism for Managers, page 6

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One may also define ethics as a method, procedure, or perspective for deciding how to act

and for analysing complex problems and issues.

Ethical research though includes a set of generalised principles and codes of ethics, such as

those governed by the University of Cape Town‟s institutional review boards on the

treatment of human subjects.

Philosophers have long grappled with questions of right and wrong and how their ideas have

shaped our understanding of ethics in business. They do not provide answers to moral

dilemmas. But managers and businesses can use them as tools to organise, prioritise, draw

conclusions and justify decisions. They are tools to serve judgement.

When we talk about ethical principles in business, some of the following questions are asked:

1. What is justice?

2. What are the key concepts underlying “ethics of care”?

3. How can the concept of “right and duties” be applied to a business situation?

4. What is the central question in the utilitarian approach to moral evaluation?

Detailed understanding of the following concepts:

1. Utilitarianism: a general term for any view that holds that actions and policies should

be evaluated on the basis of the benefits and costs they will impose on society

(Velasquez, year: 61).

2. Duties and rights: individual entitlements to freedom of choice and well-being. Legal

right, an entitlement that derives from legal system that permits or empowers a person

to act in a specified way that requires others to act in certain ways to that person.

Moral rights are rights that human beings of every nationality possess to an equal

extent simply by virtue of being human being (Velasquez, year: 68).

3. Justice: distributing benefits and burdens fairly among people (Velasquez, year: 68).

4. Caring: An ethic that emphasises caring for the concrete well being of those near to us

(Velasquez, year: 102).

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Ethical Questions to Ask

1. Does the action, as far as possible, maximise social benefits and minimise social

injuries?

2. Is the action consistent with the moral rights of those whom it will affect?

3. Will the action lead to a just distribution of benefits and burdens?

4. Does the action exhibit appropriate care for the well-being of those who are closely

related to or dependent on oneself?‟

Bringing together an array of different moral standards requires that one keep in mind how

they relate to each other.

To ensure that all four kinds of considerations are incorporated into one‟s moral reasoning is

to investigate systematically into the utility, rights, justice and caring involved in a given

moral judgement as seen in Figure 13 (Velasquez, year: 107).

Figure 1: Integrating Utility, Rights, Justice and Caring

3.3 Philosophical Foundations of Management Research

To develop a clear understanding of my own philosophical stance and configuration of the

research framework, I would like to introduce a few additional concepts and methods that I

have learned about during my studies and my research. In order to position the research

framework, a detailed review, which includes the „Philosophical Trinity‟, has been provided.

Moral Standards:

Maximise social utility;

Respect moral rights;

Distribute benefits and burdens justly;

Exercise caring

Factual Information:

Concerning the policy;

institution;

or behaviour under consideration

Moral Judgement:

On the rightness or wrongness of the policy, institution, or

behaviour

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From Graham Durant-Law (2007), choosing an appropriate research strategy or framework

requires a deep and honest reflection of one‟s own beliefs. There needs to be commitment

between the philosophical trinity, the research paradigm and the research methodologies.

3.3.1 The research paradigm

According to Thomas Kuhn, there are two essential qualities of paradigms. The paradigm

must firstly be “sufficiently unprecedented to attract an enduring group away from the

competing modes of scientific activity” (Kuhn, 1962: 10) and secondly “sufficiently open-

ended to leave all sorts of problems for the redefined groups of practitioners to resolve”

(Kuhn, 1962: 10). In essence, there are two paradigms available to researchers: qualitative

and quantitative research.

From consultancy work, it is further distinguished that each research paradigm of necessity

has a preoccupation with theory, particularly with the „philosophical trinity‟ of theory.

3.3.2 The philosophical trinity

The philosophical trinity is formed together by three questions:

1. „What exists?‟, known as ontology.

2. „How do I know?‟, known as epistemology.

3. „What is valuable?‟, known as axiology.

3.3.2.1 Ontology: a model of the world

Ontology is a philosophy of the world view of reality (Heron and Reason 1997). An

ontological question that researchers should be asking is: “Is there a „real world‟ out there

that is independent of our knowledge of it?” (Law). The ontological approach has been

selected for this framework and has been based on the philosophy of Critical Realism.

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3.3.2.2 Epistemology: a model of the knowledge of the world

Taking the approach that ontology has been based on the philosophy of critical realism,

epistemology is the philosophy of knowledge and justification (Audi, 2000). There is an

overlap between ontology and epistemology, as the theory of nature of knowledge, or the

world, is at the same time a theory about the knowledge of the world. The key

epistemological question for researches is: “Can real or objective relationships between

social phenomena be identified and if so, how?”(Durant-Law, 2005) .

Critical realism is based on understanding the underlying mechanisms within the real domain;

that have been accounted for in the real domain and observed in the empirical domain.

Understanding the underlying mechanisms of the real domain requires us to understand the

theory of nature of the world and the theory of knowledge of the world, and therefore have a

welcoming stance towards epistemology.

3.3.2.3 Axiology: a model of the values and ethics of the world

Ontology and epistemology focus on the truth. Axiology is about values and ethics (Mingers,

2003: 557). Values and ethics provide a standard for the evaluation of epistemology ad

ontology claims. The crucial axiological question for researchers is: “What is the ultimate

purpose of the enquiry?”

3.3.3 The methodology landscape

3.3.3.1 Methodology is defined as:

“… a generic combination of methods, that is commonly used as a whole – as in soft

systems methodology, strategic options development and analysis, or survey

methodology covering the design and analysis of questionnaires (Mingers, 2003:

559).”

Before a research methodology can be chosen, a primary choice has to be made between

qualitative and quantitative research approach.

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Assumptions about the nature of the world rest on positivist and the interpretivist paradigms;

they require different methods and tools or instruments to extract the required data. The

positivist generally uses surveys, whereas the interpretivist generally uses interviews.

The primary method of research will be qualitative research.

3.3.3.2 Qualitative research

Qualitative research is used to understand a specific situation in terms of behaviours,

concepts and perceptions, as revealed through the accounts of the individuals who are

involved in the situation. As a result, the focus is on the individuals‟ personal experiences.

The data generated is in the form of words (e.g. interviews), pictures (e.g. diagrams), and

objects (e.g. artifacts).

I have selected Grounded Theory as my preferred methodology for the dissertation.

3.3.4 Systems Thinking and Practice

Systems thinking emerged as a transdiscipline in the 1940s and 1950s, as a reaction to the

failures of methods of reductionism. As system thinking evolved, attention was given to

whether it could tackle real-world problems.

When various system ideas and techniques are brought together in an organisation to try and

improve a situation, we refer to that as „systems methodology‟. During the Second World

War and its immediate aftermath, methodologies of Operational Research (OR), Systems

Analysis (SA), and Systems Engineering (SE) were born.

Checkland (1981) recognised similarities between these three methodologies (OR, SA and

SE) and labelled them „hard systems thinking‟. Two limitations were identified with hard

systems thinking. One was that the reality facing today‟s managers is complex and subject to

change, and that it is impossible to reduce problems to make them amenable. Secondly, hard

systems thinking are unable to deal satisfactorily with multiple perceptions of reality. It

requires that the goals of the system of concern be known before analysis can proceed

(Jackson, 2004: 16-17).

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By the 1970s, in order to overcome the obvious failings of hard systems thinking, the

„applied systems thinking‟ approach was developed. This has been around for the last three

years, and no significant developments have taken place since then. Applied systems thinking

is now valued as making an important contribution to resolving a much wider range of

complex problems. A framework that was developed for classifying systems methodologies,

by Jackson and Keys in 1984, was called Systems Of Systems Methodologies (SOSM)

(Jackson, 2004: 16-17).

The SOSM in Figure 14, has assisted in demonstrating the relationships between the different

approaches, and has made it possible to understand that they do not necessarily have to clash

with one another. We need to understand how creativity can be enhanced by using various

systems approaches in combination.

3.3.4 Values and Normative Issues

Throughout the research process, cognisance will be given to the alignment of my research to

the values of DCSA. The leadership and employees of DCSA inspire towards living and

applying all the values that have been listed in Figure 15.

The research has been aligned to DCSA ethical principles (Figure 16).

From a normative perspective, cognisance will be given to the four areas of normative

management.

Figure 2: Systems approaches related to problem contexts in the SOSM

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Integrity Commitment to each other

Apply the highest standards of

professional conduct to all activities

affecting our clients and communities.

Behave in a manner that sustains the

public's trust and reinforces the

reputation of our firm.

Think independently, be objective, and

demonstrate sound judgement.

Build on mutual trust and respect.

Listen actively and communicate

openly.

Recognise and reward initiative and

contribution.

Behave in a manner that preserves

each other's reputation.

Help each other and work together.

Outstanding value to clients Strength from cultural diversity

Bring together our diverse knowledge

and talents. Work as a team.

Help clients do the right thing to

sustain public trust.

Offer innovative solutions.

Deliver excellent service.

Capitalise on all aspects of diversity.

Understand individual cultures and find

the best solution collectively.

Develop an environment that enables

us to achieve common goals.

Generativeness, empowering people to develop a new range of behaviours, to deal with their

environment, be it natural or cultural. Tolerance, allowing individuals the opportunity to not

agree with certain values or world view and they should not be judged or eliminated

Congruence is reflecting on strengthening debate to create new value systems in the outside

world without compromising their own inside world. Dialectical theory says that although

our adversaries have world views contradicting our own worldviews, we appreciate and trust

others.

Figure 3: DCSA Ethical Principles

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3.3.5 Actionable Knowledge

As seen in the systems model below in Figure 17, the circled area in red, known as the

„Action Taking‟ phase of the model, requires the implementation of the decision that has

been made in the „Decision Making‟ phase of the systems model.

On completion of the research, of which the situation is identified, the concerns (CCLD) are

stated and the questions are asked, which will form the concerned behaviour over time

(CBOT). A research question will be established to understand the concerned behaviour and

find solutions or answers, Answer Causal Loop Diagram (ACLD) to address or change the

behaviour of that concern.

On completion of finding the answer, action needs to be taken to implement the solution, in

order to change and imbed the desired behaviour.

The approach that can be used to implement the solution is called the small wins approach.

With this approach, the solution is broken down into manageable tasks. Each task is then

addressed and the positive outcomes of the completion of those tasks are called small wins.

On completion of the many small wins, it adds up and addresses the overall concern.

Figure 4: DCSA Values

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Due to the nature of this research, the action taken phase of the systems model will not form

part of this paper or dissertation.

3.4 The Research Framework

3.4.1 Critical Realism

Critical realists view the world as a model of being interacting layers which are the

Empirical, Actual and Real World. The world exists independently of our knowledge of it,

therefore knowledge is fallible. Critical Realism as ontology has informed the research design

for my research question which is.

‘What does DCSA need to put in place to ensure the company’s long-term

sustainability?’

Figure 5: The actionable part of the systems model

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Critical Realism proposes that the real world exists independent of our own personal

experience and is an invisible complexity of causal mechanisms, the results of which are

experienced as events occur in the empirical and actual world. At an empirical level, only

certain of these events are personally experienced, contributing to the formulation of an

individual‟s empirical world as illustrated in Figure 18 below.

Empirical world

The world exists and acts independent of our experience and is not based on cognitive choices

The real world can be understood through following a methodology to understand causality

Variable

variable

variableVariable

variable

variable Variable

variable

variable

Variable

variable

variable Variable

variable

variable Variable

variable

variable

Critical Realism as underpinning ideology

Actual world

Real world

The events and we experience personally as individuals

All of the events experienced irrespective of whether we personally experience them as individuals or not

The mess of interdependent causal relationships and mechanisms that explain the events experienced in the actual world

Figure 6: CR as the Ontology underpinned, by the research methodology - G5 EMBA 10, 10.6 PP

In order to affect change it is necessary to understand as best as possible the complexity of

the causal relationships giving rise to the events occurring in the empirical and actual world.

This notion of causality is the crux of understanding the complex interactivity,

interdependence, dependability of the variable factors impacting one another.

Failure to understand the full extent of the causal relationships can lead to solutions that

deliver unintended consequences that are further detrimental to the system as a whole.

Given the mystery of the real world where causal reality is obscured, our only way of

accessing reality is through rigorous application of a research methodology that will surface

all of the events in the actual and empirical world that are pertinent to the research question

and allow for causal relationship to be inferred. In the context of this research, such events

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might be the level of creativity, performance and innovation of the employees of DCSA, the

impact of the long-term strategy versus the short-term strategy and long-term sustainability of

DCSA.

Access to the actual world is limited by the researcher‟s empirical view, and interviewee‟s

worldviews, contexts, culture, ideologies, attitudes, location, access to information and

external limitations. This means we need to both declare the biases inherent in our empirical

world as researchers and expand the scope of empirical world events that are accessed as

data, and analyse their relationships.

This allows us to develop a robust hypothesis about the causal mechanisms operating in the

real world that are causing the behaviours in the actual world as illustrated in Figure 19.

Figure 19: Expansion to the actual world and thereby the real world - G5 EMBA 10, 10 .6

To formulate a hypothesis concerning the causality originating in the real world, it is

necessary to understand the worldview with critical realism.

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3.4.1.1.1. Concept of a Worldview

A world view is a system of coordinates or a framework that allows us to tie everything

together, so that we understand society, the world, and our place in it, and that could help us

make the critical decisions which will shape our future. It is a symbolic system of

representation that allows us to integrate everything we know about the world and ourselves

into a global picture, one that illuminates reality as it is presented to us within a certain

culture (Ryan, 2009).

There are seven fundamental components of a worldview:

Figure 7: Seven Components of a Worldview - Tom Ryan's Presentation

Apostel (2000) argued that every worldview must answer the following questions:

1. What is the nature of our world? How is it structured and how does it function?

2. Why is our world the way it is, and not different? Why are we the way we are, and not

different? What kind of global explanatory principles can we put forward?

3. Why do we feel the way we feel in this world, and how do we assess global reality,

and the role of our species in it?

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4. How are we to act and to create in this world? How, in what different ways, can we

influence the world and transform it? What are the general principles by which we

should organise our actions?

5. What future is open to us and our species in this world? By what criteria are we to

select these possible futures?

6. How are we to construct our image of this world in such a way that we can come up

with answers to (1), (2), and (3)?

7. What are some of the partial answers that we can propose to these questions?

The nature of critical realism, using qualitative research, will provide empirical and actual

views of individuals on what is impacting the real world, which in turn will provide answers

to the questions that every worldview must answer. Following is a graphical presentation of

the impact that critical realism has on worldviews.

Figure 8: Graphical Integration of a Worldview and CR – Tom Ryan’s Presentation on Worldview & CR Figure 9: Graphical Integration of a Worldview and CR - Tom Ryan's Presentation on Worldview & CR

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REAL WORLD

ACTUAL WORLD

EMPIRICAL WORLD

Using Grounded Theory (CCLD) as a research tool, we are able to obtain a broader perspective of the concern behaviour over time (CBOT) and develop a hypothesis of our perspective of what's happening in the real world

DATA

COLLECTION

CON

CEP

T

DEV

ELO

PME

NT

Ladder of

inference

CONCEPT

FORMATION

From our observation of the Empirical World, we identify a problem variable that exhibits an undesirable behaviour (CBOT) Our purpose is to chance the behaviour

With our perspective of what’s happening

in the real world through our hypothesis, we will be able to understand and/or change the undesirable behaviour

3.4.2 Critical Realism and Grounded Theory

The methodology that had been chosen to complete this research was the Grounded Theory

research tool. This method has been used for almost 40 years. The Grounded Theory

Methodology was used as a quantitative research approach to explore social processes. The

characteristics and application of the chosen approach included issues related to refinement of

the research question.

At DCSA, Grounded Theory is used as the overarching methodology to study data from the

client as meaningful accounts must be provided for the clients‟ concerns.

They can significantly contribute by providing theory grounded in their field of work, which

has been enriched by conceptualisation and extant literature from multiple sources. By using

this methodology, we were able to avoid stating the obvious to the expert and instead

providing categories based on many indicators and show ideas based on patterns.

These conceptual ideas allowed us to transcend the limits of our own experiences, adapting

and applying the substantive theory to other situations.

It was important for me to align the Grounded Theory Methodology with Critical Realism

(see Figure 22 below).

Figure 10: Alignment of Grounded Theory to Critical Realism

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The alignment with the Grounded Theory Methodology to Critical Realism required

beginning the process with a research question. Alignment of the process to what we know

was the starting point, which is known as the Empirical World. Others needed to be

interviewed, to obtain the Actual Worlds, to obtain an understanding of what is happening in

the Real World.

Using Grounded Theory (CCLD) as a research tool, I was able to obtain a broader

perspective of the concern behaviour over time (CBOT) and develop a hypothesis of my

perspective of what is happening in the real world.

With my perspective of what is happening in the real world through my hypothesis, I will be

able to understand and/or change the undesirable behaviour.

Figure 11: Grounded Theory - Elevator presentation

Figure 12: Integration of Grounded Theory and Critical realism - Tom Ryan's Presentation

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3.4.3 Systems Failure Methodology

With my Empirical view, mechanisms of actual and potential failure needed to be indentified

at the initial stages of this process. This methodology probes not only the technical and

individual human aspects but also the organisational and cultural precursors to signs and

symptoms of failure.

As seen in Figure 25, there are four stages of the methodology. During my research process, I

focused only on stage one of the processes which was describing the failure situation. During

this process I was searching for evidence to establish an apparent failure. My own world-

view and those of actors in the situation were pertinent to the perception of failure and what

is deemed relevant.

Figure 13: Systems Failure Methodology - Tom Ryan's Presentation

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This included searching for data, documents, interviewing relevant people and perhaps

visiting places where relevant failures are said to have occurred. This process aligned well

with the Grounded Theory Methodology (GTM), as the data collection phase of GTM

required a data search, interviews, and observations.

Figure 14: Integrated approach of SFM, GT, CR, DC

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3.4.4 Critical Realism, plus Grounded Theory, plus Systems Methodology, plus Data

Collection

The purpose of this research was to establish the current behaviour within DCSA and provide

recommendations on how this behaviour can be changed. My aim was to gain a clear

understanding by reviewing raw data and converting it into meaningful information and

structured knowledge and providing possible recommended solutions for the future with a

view of taking action and achieving the long-term goal which is long-term sustainability of

DCSA.

3.5 Conclusion

The model shown in Figure 26 is a combination of methodologies. SFM was used to guide

me with a high-level understanding of where the failures in the system had occurred, or were

still occurring. I used my empirical view, and information available, based on reports and

discussions that had been held.

In order for me to gain an in-depth understanding of the situation and the concern, I used the

teachings of CR to obtain the views of others and observe the environment. I followed a

qualitative data collection process, which is recommended when using CR and GT.

Following the GT process, I reviewed the data, followed the coding process until saturation.

A literature review was completed on the parent discipline and the research problem. On

completion of the literature review, a number of core variables emerged.

An interrelationship diagraph was completed to understand where the strongest drivers with

the strongest relationship were influencing these variables. Once the strongest drivers had

been identified, a literature review was completed on the three strongest core variables. A

concern causal loop diagram was established. This formed the basis of the research question.

Reviewing all the data that I have gathered (the interviews, the literature reviews,

observations, general discussions), I will be able to provide recommendations on what could

assist DCSA in becoming a more sustainable organisation over a long term.

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Chapter 4: Research Question

4.1 Introduction and Overview

The focus of the rest of this chapter will be to address the research concern and to identify the

research question.

As indicated in Chapter 3, for my research framework I have combined qualitative and

quantitative research from various stakeholders through individual interviews, academic

reviews, articles and various books.

The interviews were recorded and coded, which formed an integral part of my research

process. Based on stakeholder engagements, analysis and research sampling, I have assumed

that the quality and credibility of the sources that I have used has been sufficient to develop a

research answer that satisfies the criteria of desirability, feasibility, transferability and

systemicity.

As seen in Chapter 1, a detailed stakeholder and situational analysis was completed. In the

grounded theory data collection process, key stakeholders were represented throughout every

stage of data collection and data refinement.

The next section presents the findings from the data gathering.

4.2 Data Collection

I have used the Grounded Theory Methodology to observe behaviour over time.

During the data collection process, I used a selection of interviews as my first source of

information. I selected 15 directors, the CEO of DCSA, 1 Executive Lead, 1 Lead and 1

client.

Initially, I decided to interview 11 directors to help me define the parameters of the problem

and to understand the current situation.

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Approximately 230 concepts emerged from these eleven interviews (Appendix A. They

related to various issues within DCSA that limited the sustainability of DCSA over the long

term.

It became evident during the interviews that the directors were finding it difficult to find

working solutions to address the issues that were having a significant negative impact on the

long-term sustainability of DCSA.

4.2.1. Interviews, Observation and Documents

In addition to understanding the issues from the directors‟ perspectives, the interviews also

allowed me to build relationships with them, and to obtain their buy-in and commitment to

resolving the issues.

I was able to probe deeper into the issues identified during the interviews by asking

questions. I observed a sense of frustration and urgency to find solutions to these problems,

as they have already started to affect the sustainability of DCSA.

Eleven interviews were completed initially, in order to collect sufficient data to enable me to

identify the most important categories of issues. Thereafter, I conducted further interviews

and in-depth research into the most important problems raised. Once the data collected during

the subsequent interviews had been analysed, I was able to formulate and recommend

solutions that will address all the relevant issues.

4.3 Grounded Theory Process

4.3.1 Level I Coding (Open Coding/Substantive Coding)

Once all the data had been gathered, an in-depth analysis using open coding was completed,

and 230 concepts emerged (listed in Appendix A). These concepts were then reduced and

grouped into 21 categories:

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Table 1: 21 Emerged Categories from Level I Coding

Leadership Industries Revenue Generation

Innovation Clients Sales and Marketing

Performance Processes and Systems Brand Growth

Strategy Models Talent

Risk Sustainability Creativity

Markets Global Economy Partnership

Remuneration Skills Reactive and Proactive

4.3.2 Level II Coding (Axial Coding)

These 21 categories, derived from Level I coding, were grouped into categories of similar

concepts by looking for commonalities and merging some of the concepts.

In this way, they were reduced to ten categories in total, which incorporated all the key

concepts and issues raised by the initial interviews.

Table 2: 10 Categories from Level II Coding

Performance Risk Brand Growth

Innovation and Creativity Strategy Sustainability

Markets, Industry and Client

Needs

Global Economy Partnership

Methods, Systems and Solutions Revenue and Sales

Once I had categorised the concepts, I followed the BSP process of using the following

questions to identify the central theme that emerged from each of the concepts.

What is going on in the data?

What is the focus of the study, and what is the relationship of the data to the study?

What is the problem that is being dealt with by the participants?

What processes are helping the participants cope with the problem?

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Table 3: Categories from Level II Coding

Level of Performance of

Employees / Staff

Limited Appetite for

Risk on the part of the

company leadership

Brand Growth

Degree of Innovation and

Creativity

Level of Strategy, viz.

Short-term versus Long-

term

Long-Term Sustainability of

DCSA

Impact on Markets, Industry and

Client Needs

Impact on Global

Economy

Dynamics of a Partnership

Development of New Methods,

Systems and Solutions

Revenue and Sales

To establish which of these categories had the greatest influence on the problem, viz. how to

ensure the long-term sustainability of DCSA, I used an Interrelationship Diagraph (Strauss

and Corbin, 1998). This looks at the causes and effects of the relationships between the

variables in order to assess the strongest drivers.

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Adding the number of outgoing and incoming arrows revealed that the following are the

strongest drivers:

1. Level of performance of people.

2. Degree of innovation and creativity.

3. Level of strategy, long-term versus short-term.

The limited appetite for risk on the part of the company and the dynamics of a partnership are

the next important drivers.

Dynamics of a

partnership

Long term sustainability

of DCSA

Impact on global

economy

Level of performance

of people

Brand growth

Revenue and Sales

Level of strategy,

short term versus

long term

Development of new

methods, systems and

solutions

Impact on market, industry

and client

needs

Limited appetite for risk

Degree of innovation

and creativity

In= 1Out=9

In= 3Out=7 In= 2

Out=8

In= 5Out=5

In= 7Out=3

In= 2Out=8

In= 6Out=4In= 7

Out=3

In= 9Out=1

In= 9Out=1

In= 3Out=7

Figure 15: Interrelationship Diagraph of DCSA Variables

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These three core variables will determine whether DCSA will be sustainable in the long term.

Figure 28: CCLD highlighting the strong drivers

4.3.3. Level III Coding (Selective Coding)

The final stage of the coding process, which forms part of the Grounded Theory

Methodology, is called selective coding. This process begins with theoretical sampling. This

is a process of sampling events, situations, populations, and responses, making comparisons

between samples of responses, descriptions, and behaviours in inductively generating theory

(Strauss and Corbin, 1990).

Glaser (1978, 1992) advocated that theoretical coding examines saturated categories and

provides the researcher with analytical criteria, which will assist in the development of

conceptual relationships between categories and their relevance to literature (Theory).

Once I had identified the three strongest drivers, I completed the remaining interviews with

the aim of gaining an in-depth understanding of the underlying concerns within those core

variables.

4.3.4. Theoretical Sampling

During this process of theoretical sampling, I also reviewed two surveys, articles and related

literature, which assisted me in understanding the concerns.

The first survey was recently conducted by DCSA to understand what the company‟s

competitors are doing in the arena of “innovation”. The research report provides a macro-

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level view of how DCSA‟s 32 competitors describe their innovation-related strategy and

pursuits with regard to inter alia service offerings, investments and talent management.

The following findings emerged from this literature review:

Innovation has different meaning for different firms, but the need for innovation is the

same across most of the firms.

Based on the study of 32 companies ranging from strategy consulting firms to

offshore IT firms, companies are innovating to capture future opportunities, to have a

competitive advantage in the marketplace and to attract rich talent.

According to the recent global innovation study conducted by DCSA‟s in-house

research centre entitled “Competitive Intelligence: Innovation (2008):

o There is no direct relationship between Research & Development

(hereinafter referred to as R&D) spending and significant measures of

corporate success such as growth, profitability, and shareholder return.

o R&D spending by companies in developing nations (China, India) is

relatively small, but growing rapidly, although developing nations are

spending only 1% of revenue on R&D, compared with 4.9% for firms in

North America, 4% in Europe, and 3.8% in Japan.

o Superior results are the function of the quality of an organisation‟s

innovation process – the bets it makes and how it pursues them – rather

than either the absolute or relative magnitude of its innovation spending.

Conventional methods of ensuring innovation among staff are providing recognition

in the form of financial or in-kind rewards, or public acknowledgement. Such

schemes offer an incentive for successful innovation.

DCSA‟s research showed that in order to have innovation within a firm, the firm has

to create a culture where innovation is part of how people work, rather than something

that must be rewarded. The proof is how popular the company is to work for: Google

has won awards for its work practices, and they have a waiting list of hundreds of

people who wish to work there. For decades, innovations were done in the US, Europe

and Japan. Innovation today is taking place at a rapid pace on a global scale. Most of

the companies are using India and China as an innovation hub for product

development, due to the availability of a rich talent pool.

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In Strategic Management, Thompson and Strickland (2003: 28) claim that strategic thinking

and conscious strategy management is the key to a better long-term performance. They cite

the following reasons: it will provide better guidance to the organisation on important issues;

it will make the leadership more aware of new opportunities and imminent problems; it will

assist in the unification of the organisation; it will encourage more proactive management;

and it will promote the development of constantly evolving business models, systems and

solutions to produce sustained financial success for the organisation. Lastly, it will also

provide a rationale for evaluating competing budget requests. A good quality managerial

strategy and strategy implementation will have a significant impact on the performance of

any organisation. The better conceived a company‟s strategy and the more proficient its

execution, the greater are its chances of being a leading performer in the market.

The second survey looks at the talent paradox, which was a survey completed by DCSA.

A total number of 359 people from 78 countries participated in this survey. 60% of

respondents were senior leaders, including CEOs, board members, department heads, vice

presidents, and directors. 30% were from human resources (HR), with the rest representing a

broad cross-section of business functions, from operations and corporate management to

finance, and sales and marketing.

The survey results show that, in order for an organisation to thrive, HR needs to focus more

time and effort on people strategic issues:

Leadership development and pipeline – building the next generation of leaders.

High performance culture – creating a workforce that is pre-wired for high

performance.

Talent management – attracting, developing, and retaining the talent that an

organisation needs to thrive.

Talent acquisition – recruiting and hiring people with the right skills and capabilities.

Anticipating and responding to mission-critical events proactively addressing strategic

challenges, instead of reacting after the fact.

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It is important for the HR department to attract and develop staff with new skills and

capabilities. According to the survey, only 29% of respondents believe their organisations

currently have the HR talent necessary to succeed over the next three to five years.

However, the vast majority of HR departments in organisations (80%) do already have the

talent they need to meet demand in traditional transaction areas, such as payroll and benefits.

Their shortcomings are in areas that are critical to HR‟s new role as a strategic partner, such

as business strategy, workforce planning and development, global mobility, change

management, and innovation. Currently, only 34% of organisations believe that their HR has

the talent required to meet their needs in these areas. Nonetheless, they do expect HR to

improve their capabilities dramatically in these key areas over the next three years.

Figure 29: Strategic Challenges

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The competencies that are expected to increase the most in importance over the next three

years are all fundamental to HR‟s new role as a strategic partner in innovation, strategic

thinking and analytical ability, relationship building/strategic partnership, and business

acumen:

Innovation is important because the best ideas eventually become commodities. To

keep pace with changing needs – and to maintain a sustainable advantage in the talent

marketplace – HR must constantly strive for new and better ways of doing things.

Strategic thinking and analytical ability are essential HR competencies because

today‟s talent challenges are driven by complex trends, such as workforce aging and

global sourcing. It is HR‟s job to help the organisation understand and solve these

complex puzzles.

Business acumen and relationship building are also critical. In order to serve the

broader organisation as credible and trusted partners, HR staff must develop strong

Figure 16: Key HR Competencies in the future

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relationships with the organisation‟s leaders, and demonstrate a solid understanding of

strategic issues.

Unfortunately, the survey data shows that many HR departments have yet to develop these

critical competencies. 38% of respondents rate HR as “weak” or “very weak” in innovation,

while another 39% believe HR‟s innovation capabilities are just “moderate”. Other key

competencies such as business acumen and strategic thinking/analytical ability received

similarly low marks in the survey. To support the future strategic needs of the organisation,

HR must find ways to expand and improve its performance in all of these key areas.

After using all the various sources of data collection and analysis and going through

theoretical matching and generating of additional concepts, I was able to adapt the results of

the grounded theory and provide a model that complements the information from the above

documents in respect of the critical drivers for the success of this project.

The high-level literature review helped me become familiar with works published on the

concepts under study and to fill in the missing pieces in the emerging theory.

4.3.5 Saturation

During the theoretical sampling process, as the main concepts or variables emerged, it was

particularly useful to compare these with the data, which determined under what conditions

these concepts occur and whether they were central to the emerging theory. Through selective

sampling, saturation of the categories occurred.

Through the process of reduction and comparison, the core variable for the investigation

emerged.

“The concept of core variables refers to a category, which accounts for most of the

variation in a pattern of behaviour and which helps to integrate other categories that

have been discovered in the data” (Ryan, year).

Following the emergence of the core variables, I began to modify and integrate the concepts.

By using theoretical codes, the conceptual framework moved from a descriptive to a

theoretical level.

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The theoretical coding approach provided me with direction and the memo process assisted

me in preserving my thought and abstractions related to the emerging theory.

4.3.6 Substantive theory development

Substantive theory development is the development for a substantive or empirical area of...

inquiry (Glaser and Strauss, 1967: 32).

During this process, the theory (CCLD) will be constructed and the behaviour of the CBOT

which forms part of the CCLD will be explained.

From the concept modification and integration process, a causal loop diagram explaining the

interaction of the emergent variables on the critical drivers, which became apparent through

the Interrelationship Diagraph analysis (Figure 27), that will have an influence on the long-

term sustainability of DCSA has been constructed.

Figure 17: Concern Causal Loop Diagram

Long term Sustainability

of Deloitte

Consulting SA

Level of strategy, long

term versus

short term

Impact on the global

economy

Impact on market,

industry and

client needs

Brand Growth

Development of new methods, systems and

solutions

Limited apatite for risk

Dynamics of a partnership

Proactive management

posture

Proficiency in execution

Long – term performance

Research & Development

Competitive edge

Attract rich talent

Employee incentives

Culture of innovation as part of the way of

work

Leadership development &

pipeline

Talent management &

talent acquisition

High performance culture

Proactively addressing critical

strategic challenges

Level of performance

of people

Degree of innovation

and creativity

Concern:

Level of strategy, long term versus short term

Concern:

Degree of innovation and

creativity

Concern:

Level of performance of

people

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As a more in-depth understanding of the impact that the core variables have on the long-term

sustainability of DCSA, I needed to understand what some of the underlying variables were

that would have an impact on the core variables. The data from the literature assisted me in

building on the core variables shown in Figure 31.

With having a clear CCLD of the situation and concerns, I also had a clear understanding of

the concerned behaviour over time (CBOT) in Figure 32.

Based on all the information that had been gathered, a few questions had been identified.

1. Option 1 - Question: Does the sustainability of DCSA rest in the creativity,

innovation and performance of its people?

2. Option 2 - Question: Does it have the right calibre of leadership to change the culture

of the organisation?

3. Option 3 - Question: What does it need to do to increase the level of normative

management at leadership level?

4. Option 4 - Question: How does DCSA create a culture within its people to support

long-term sustainability?

The central research question motivated by these concerns for this paper is:

What does DCSA need to put in place, to ensure long-term sustainability?

TIME

The ability of Deloitte

Consulting SA to ensure

long term sustainability

Figure 18: Concerned Behaviour over Time

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4.3 Conclusion

Based on the research findings, DCSA‟s leadership or management team needs to understand

the magnitude of these findings and to identify areas that can be addressed immediately by

implementing small changes. This will allow the organisational culture to change gradually

over time until it is more aligned to the vision and values of DCSA.

Performance is affected and driven by creative thinking and innovative styles of managing.

DCSA embraces different paradigms and realises that different alternative perspectives must

be entertained. Exploring different paradigms always ensures that a challenging encounter

with rigorously formulated alternative theoretical positions takes place.

The key players at DCSA need to be innovative and creative. Innovation does not just mean

putting ideas into actions to make a significant difference within the organisation. These key

players need to understand what will sustain DCSA over the long term and put a strategy in

place to achieve that goal.

The uncertain world within a business environment of the 21st century requires flexible

responses to problems, and if leadership/management sticks to rigid structures, precise task

definitions and collaborative rules, then they are undoubtedly setting themselves up for

failure.

Managerial work needs to be transformative, and managers must be able to respond

appropriately to many complexities, turbulences and diversities. Leadership and management

are continuously faced with making stressful and difficult decisions in order to increase

productivity, to become more market-orientated, to improve communications, or to adhere to

government regulations regarding their recruitment policies and the ever-daunting task of

motivating a diverse workforce.

Organisational performance is dependent on the ability of leadership and management to

improve goal seeking and viability, while ensuring fair labour practices, promoting diversity

and adopting creative holism; these tasks can be achieved with the best of results.

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Problem-solving through creative holism has its advantages over traditional approaches in

dealing with complexity, change and diversity. Creative holism will help management to use

different systems approaches. These system approaches may not be able to be implemented

all at once, but over a certain period, they could provide an overall improvement in the way

in which management confronts problem situations.

I envisage this to be an eye-opener for leadership/management in all divisions, from Strategy,

Human Capital, Technology and HR, to realise that a radical change in their thinking is

needed before any improvement can be made possible.

Research Situation: Sustainability of consulting firms

Research Concerns:

The ability for Deloitte Consulting SA to ensure long term sustainability

Research Question:

What does DCSA need to put in place, to ensure long term sustainability?

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Chapter 5: Conclusion and

Recommendations

5.1 Conclusion

This chapter of the dissertation summarises the research findings presented in Chapter Four,

and it seeks to establish the logical process of finding the answer to the research question.

High-level recommendations and suggested solutions will be provided to guide DCSA in

addressing a number of their concerns pertaining to the long-term sustainability of DCSA.

In order to achieve this, the critical drivers identified by means of the concern causal loop

diagram (CCLD) illustrated in Figure 28, will be discussed in detail. Thereafter, the factors

that are critical for ensuring the long-term sustainability of DCSA will be discussed, and

possible solutions will be offered.

I would like to begin the process by restating the research situation, the research concern and

the research question. These are as follows:

Research Situation: Sustainability of consulting firms

Research Concern: The ability of Deloitte Consulting SA to ensure its long-term

sustainability

Research Question: What does DCSA need to put in place to ensure such long-term

sustainability?

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Long term

Sustainability of

Deloitte Consulting SA

Level of strategy, long

term versus short term

Level of performance

of people

Degree of innovation

and creativity

S

S

S

S

Long term

Sustainability of Deloitte

Consulting SA

Level of

strategy, long term versus

short term

Impact on the global

economy

Impact on market,

industry and

client needs

Brand Growth

Development of new methods, systems and

solutions

Limited apatite for risk

Dynamics of a partnership

Proactive management

posture

Proficiency in execution

Long – term performance

Research & Development

Competitive edge

Attract rich talent

Employee incentives

Culture of innovation as part of the way of

work

Leadership development &

pipeline

Talent management &

talent acquisition

High performance culture

Proactively addressing critical

strategic challenges

Level of

performance of people

Degree of

innovation and creativity

Concern:

Level of strategy, long term versus short term

Concern:

Degree of innovation and

creativity

Concern:

Level of performance of

people Question:

Long term sustainability

of DCSA

Possibleanswers

forLevel of strategy

Possible answers for

Level of performance

of people

Possible answers forDegree of innovation

and creativity

The basic structure of the CCLD is represented in Figure 33 below.

Figure? Concern Causal Loop Diagram

In order to identify possible solutions to the research question and concern, the key variables

have been incorporated into the basic CCLD. This made it possibly to identify possible

solutions, as shown in the CCLD in Figure 34 below.

Figure 19: Concern Causal Loop Diagram

Figure 34: Possible solutions for CCLD

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An analysis of Figure 34 revealed what DCSA needs to do in order to drive the long-term

sustainability of the company. The most important answer is the following:

DCSA needs to create a culture of employing high performance individuals who are

creative and innovative in driving the strategy for the long-term sustainability of DCSA.

“Culture should not be something that simply happens and through some miraculous roll of

the dice turns out in a way that works for us. It is the product of behaviours, symbols, and

processes, which should be controllable and which contribute to – or detract from – a

company‟s performance.” - Deloitte White Paper: “Culture and the Myth of the Black Box”,

By Stephanie Quappe, David Samso-Aparici and Jon Warshawsky

5.2 Recommendations

What the above statement in mind, what does DCSA need to do to create a high performance

culture?

When reviewing various literatures, I found that some of the recommended ways of creating

a high performance culture was very theoretical rather than practical. With the environment I

wanted to create, required more practical hands on approach, to creating the right culture that

the employees of DCSA would be proud to be apart off.

A very practical methodology of improving the effectiveness with which organizations

execute strategy is Behaviour Lead Strategy Execution (BLSE); it does so by optimizing the

interplay between strategy and culture .This approach or methodology was developed by

partners from the Deloitte UK office. Most strategies, however, are inconsistently understood

and poorly executed, which has a negative impact on the growth of the organisation and on

its culture.

Thompson and Strickland claim that the most trustworthy signs of good management or

leadership are how well this leadership sets the company‟s long-term direction, competitively

develops effective strategic moves and business approaches, and makes sure what has been

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strategized is implemented or executed. This determines the company‟s ultimate success or

failure.

Using this approach will help DCSA to execute their strategy more effectively and to begin

creating a culture of employing high-performance individuals. A culture when aligned to

DCSA‟s strategy can be a source of competitive differentiation for the company.

5.2.1Understanding the approach

A detailed explanation will be provided on how this approach works and thereafter I will be

providing an example using the strategy of DCSA to demonstrate the impact of this approach.

As seen in figure 35, the process begins by understanding the organisation‟s culture, its

alignment with the strategy and the extent to which employees are engaged. Focus is given

on strategy – development (outcomes), articulation and interpretation. Thereafter value

creating events are identified.

The desired behaviours are defined, as well as understand what drives and holds in place

existing behaviours. Multiple interventions or small wins are used to reinforce desired

behaviours. And lastly, the desired behaviour is monitored, to understand the extent of

adoption.

Figure 20: BLSE approach – Dallas presentation – January 2007

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©2004 Deloitte Consulting, LLP 17

1. Articulate Strategy and Test Alignment

2. Identify and Prioritise Value Events

3. Analyse and Design Events

What is the strategy and how well is the company aligned to

delivering this strategy?

What are the value events which drive delivery of

the strategy?

Check-point

• Is the integrity of the strategy sufficient for developing value events?

• Review strategy and populate Deloitte ‘strategy articulation framework’

• Assess alignment across leadership team

• High-level review of current state capabilities to identify magnitude of change required to deliver strategy

• Review of employee engagement levels as a major dependency

• Create objective view of current behaviour/clear baseline in relation to value events

• Define the tasks and behaviours desired within value events

• Create descriptions of how events should take place that are aligned with the strategy

4. Pilot and Execute Events

5. Monitor andManage Effectiveness

What is the desired behaviour within value

events?

How can the desired behaviour be initiated

and kept in place?

How can performance be assessed and

maintained?

• Build mechanisms that track behaviour

• Identify more conventional measures, linked to outcomes, that indicate success

• Build ownership for behavioural change within the organisation

• Enable line managers to report on performance and to succeed

Check-point

• Is there a compelling case for change for action in relation to the events?

Check-point

• Do the events as they have been designed deliver the strategy?

• Is the organsation ready to start execution?

• Identify levers that drive behaviour

• Design interventions around events to drive desired behaviour

• Define complete set of behavioural measures that indicate success

• Mobilise organisation to complete pilots, evaluate key learning and initiate interventions at scale

Check-point

• What can be learned from pilots?

• Is there a scaleable approach to driving behavioural change in place?

• Develop hypotheses as to the value events

• Test and refine hypothesis

• Prioritise value events• Establish case for

change for each event

Programme Management, Communication and Stakeholder Engagement

The Behaviour Led Strategy Execution Methodology

Process of execution of the methodology or approach can be seen at high- level in the

diagram below.

The implementation of a possible solutions, did not form part of the dissertation, however an

example of the possible impact that this process or approach could have on all aspects of

implementing the strategy of the organisation.

5.2.2 Applying this approach with one deliverable of the DCSA strategy

Figure 21: Overview of the BLSE Approach or Methodology - Dallas presentation, January 2007

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Phase 1: Articulate Strategy and Test Alignment

We first populated the framework to provide a basis for identifying value events

Strategic Intent

Strategic Outcomes

Value Propositions

Key Themes

Value Events

Capacitate revenue growth

Climbing the Mountain Together

Reinvigorate our industry focus

Drive One Deloitte/ One

Consulting

Enforce Leadership Discipline and Performance Management

1. Reengineer our Reward Strategy

2. Realign the director / principal / exec lead performance managementmetrics to clearly define baseline expectations

1. Reengineer our Reward Strategy2. Realign the director/principal/ executive lead

performance management metrics to clearly define baseline expectations

• Understanding the mix of competences or skills

• Review the current metric and identify the gaps

Revenue Growth

Profitability & Operational Efficiency

Leadership Discipline and Camaraderie

• Review current reward

strategy for gaps. Understand

what the employees are

looking for from a reward

perspective. Ref ine and

redesign strategy

By following this process, one is able to see the impact that the value events have on the

business strategy, which in turn will drive the culture.

The reengineering of the reward strategy is an event on its own. They would need to look at

what leading reward solutions are out there. They would need to understand the various

generations of employees within DCSA and how they would like to get rewarded.

Engagement with all key stakeholders will need to take place, to obtain buy-in and

commitment from leadership and other key stakeholders.

Refinement of the strategy would need to take place and thereafter the reward strategy would

need to be signed-off and implemented.

What I have provided is an example of a possible value event or small win that could

contribute to the implementation of the strategy and in-turn work towards creating a culture

of high performance individuals.

Figure 37: Example of the implementation BLSE

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From a normative management perspective, DCSA will be able to improve its level of

normative management. There will be an increase in the generativeness, as employees will

feel more empowered and encouraged to develop a new range o behaviours to deal with the

DCSA environment.

The tolerance levels of leadership and employees would increase, because when someone

does not agree with certain values or world views, they would be more aware and show more

empathy and not judge or eliminate outright.

With a more innovative and creative high performance culture, there would be more debate to

create new value systems in the outside world without compromising one‟s inner world , and

in doing so increase congruence.

There will be a willingness from leadership to be mature enough to appreciate and trust

others worldviews, even if it is contradicting your own worldview, thereby positively

impacting on the Dialectical theory.

In conclusion, management consultants are almost at the top of the economic food chain.

They are in close contact with global executives. By using the BLSE methodology, they will

be able to break down the organisational strategy into specific deliverables, identifying

interventions or small changes that need to be made to address underlying concerns that are

having a negative impact on the strategy and in turn on DCSA.

Another useful methodology is the Seven Step, Soft Systems Methodology (Checkland,

year). As its title indicates, it uses seven steps to understand the problem situation and to

apply an action to address the problem situation, which could have an impact on another

problem situation. Identifying these problem areas and using small steps and adjustments

makes it easier to address the bigger problems.

The leadership of DCSA will need to shift its focus from the short term to the long term, and

to change its strategy of responding to problems in the present to finding more long-term

solutions

For the DCSA clients, a picture of the future needs to be built to say to them that in five years

time, in your industry, this is how you likely to be operating. That can only be done if DCSA

creates a high performance culture of innovative and creative individuals. As a result, it is

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one of my recommendations in Chapter 5, that further research is necessary in this field to

develop a workable model to assist consulting firms with long-term sustainability.

5.3 Evaluation

This section provides an evaluation of this dissertation. This covers the Relevance, Utility,

Validity, and Ethics of my research

5.3.1 Relevance

I put forward that this dissertation has demonstrated sufficient relevance with regards to the

long-term sustainability of Deloitte Consulting South Africa (DCSA). This dissertation was

set out to understand some of the critical drivers preventing DCSA from working towards

long-term sustainability.

Once these critical drivers were identified, the available literature was reviewed to understand

what needs to put in place to leverage these critical drivers in order to achieve or work

towards the long-term sustainability of DCSA.

The critical drivers of this dissertation are as follows:

Level of strategy, long-term versus short-term

Degree of innovation and creativity

Level of performance of people

In order to have reached these drivers, a rigorous process, involving Systems Failure

Methodology, Grounded Theory, Critical Realism and other systems tools was followed.

Consideration was made when identifying the critical drivers, and the interaction or

relationships between them when reviewing the successful and unsuccessful interventions

within DCSA.

When reviewing the CCLD, a possible solution had emerged. I will not be developing a

solution as part of this dissertation; however I will be recommending a possible solution to

DCSA on one of the ways to drive long-term sustainability.

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In summary the research question, this is:

What does DCSA need to put in place, to ensure long term sustainability?

5.3.2 Utility

It is my humble submission that this dissertation sufficiently demonstrates that the findings

will deal with the concern of long-term sustainability of DCSA.

By working towards long-term sustainability, not only will it contribute to revenue

generating, it will establish a stronger culture, which will result in more motivated staff,

retention of talent and a more innovative and creative workforce.

5.3.3 Validity and Trustworthiness

The validity of these findings can be justified based on the rigorousness and robustness of the

tools and system approach that were applied in this research.

A proposed research framework was followed, and empirical and actual data was used to

enhance validity through the triangulation process

5.4 Ethical Implications

People generally think of ethics (or morals); of rules for distinguishing between what is right

and what is wrong. Ethics are norms for conduct that distinguish between acceptable and

unacceptable behaviour.

Another perspective on 'ethics' focuses on the disciplines that study standards of conduct,

such as philosophy, theology, law, psychology, or sociology. (Nih) One may also define

ethics as a method, procedure, or perspective for deciding how to act and for analysing

complex problems and issues.

Ethical research though includes a set of generalised principles and codes of ethics, such as

those governed by the University of Cape Town‟s institutional review boards on the

treatment of human subjects.

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Philosophers have long grappled with questions of right and wrong and how their ideas have

shaped our understanding of ethics in business.

They do not provide answers to moral dilemmas. But managers and businesses can use them

as tools to organise, prioritise, draw conclusions and justify decisions. They are tools to serve

judgement.

When we talk about ethical principles in business, some of the following questions are asked:

What is justice?

What are the key concepts underlying “ethics of care”?

How can the concept of “right and duties” be applied to a business situation?

What is the central question in the utilitarian approach to moral evaluation?

What ethical implications will there be with creating a culture of high performing

individuals?

From a utilitarianism perspective, the long- term sustainability of DCSA will benefit all

stakeholders over the longer term. The benefits to society will be long-term employment,

more creative and innovative individuals, and a culture of optimism.

It is the duty of management and leadership to create and drive the right culture with the right

values. Stakeholders have the right to want the best for their future and their organisation;

therefore they have to provide their clients with the best solutions and their employees with

the best benefits and rewards.

In order for the long-term sustainability of DCSA, all employees of the organisation from

leadership to the tea ladies need contribute to the long-term sustainability of DCSA. By

contributing to the greater good of DCSA, they will intern contribute to the greater good of

the SA.

In caring for the people of the organisation and the greater good of South Africa, a desired

environment will be established. This intern will encourage people to become more

innovative, creative and pro-active.

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Bringing together an array of different moral standards requires that one keep in mind how

they relate to each other.

In conclusion, overall, the process and outcome of this research has not breached ethical

norms, as concerted effort to ask ethical questions were made.

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Appendix A

Interview Log –

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Mike Vincent

You press control delete at the end of each year and we start again. What is the role that innovation

plays in Deloitte as an organisation? The interesting thing about Deloitte is that the people that own

the business run the business. That a very different model to any other kind of corporate structure.

Is Deloitte a corporate or what is it? Therefore theoretically we should not have a whole

bureaucratic structure that could slow down innovation. The problem is that there is 250 owners of

the business, so it assumes semblance of a corporate structure and so the notion that the owners

run the business is true, but in truth, you have a lot of owners and they do not make the decisions

quickly. If you add on to that, the understanding that by our very nature, the history of the firm is

one of a conservative nature. Reputation is very important and you would assume that the levels of

risk is important, perhaps more so than other firms because of the Audit side of the firm.

Having said that, there is a shift taking place in Deloitte. So when I compare the Deloitte of the

1990’s when I used to be here, to the Deloitte of now, there has been a huge shift in te view relating

to how we remunerate our people, what kind of businesses we look for. The culture of the business

is one aspect of how innovation is fostered or negatively impacted.

The people who run the firm has been delegated by the owners of the firm and they too are owners

of the firm by running the firm and they can play a huge role in shaping these issues related to risk.

At the end of every year we do retain some funds, however books are closed.

Innovation by is nature requires investment and the whole sort of the remuneration model was in

the partnership says we do not have shares in the traditional since of the word and we are not listed

and therefore at the end of every year you need to take the money of the table.

What differentiates a partnership from a normal organisation is that shares do not appreciate in

value and you can’t issue shares and that’s how corporate reward their people. In a partnership, its

more of a cash environment and at the end of the year you hit the Control Delete button ad start all

over in the new year.

How do we invest in a business idea that will take some time to incubate, but that only bares fruit in

5 years time? The guys that have invested in that opportunity may have left Deloitte in the

meantime and there is a cash cost involved and in 5 years time they do not benefit from it.

In my world with corporate clients, we tend to define the banker up front. We agree upfront what

the level of investment will be required over what period of time to receive, what sort of results.

That’s agreed upfront. It will take something similar in a Deloitte environment were the partners

contribute 10 % of our profits are going to go into a pool and the purpose of that pool is we going to

do things differently for example, find new service lines.

The other sort of issue that strikes me is we also need to differentiate between the business of today

innovation and the business of tomorrow innovation. Now the business of today innovation is much

closer and has less of this impact that I am talking about which is about renovating and optimising

operations , systems and skills and the players there are far more in line with what Deloitte currently

is.

Andrew Farrant

I think Deloitte is reasonably innovative, but its not Deloitte consulting, it’s across the whole of

Deloitte. For many years the benefits were for consulting and the other divisions were complaining.

We are now focusing on Deloitte as a whole.

We are at the early stages of collaboration on global bases. Global leaders are collaborating.

Australian and New-Zealand are leading.

There is a team of 13 people doing innovation. Reporting to Grant Gelling the CEO. Our ideas get

vetted by Manco. The Manco team is very risk averse.

Before we embark on things, Andre meets with Grant Gelling regularly.

At a much earlier stage we check with Grant to see if he is on the same page. We are really good at

packaging the business idea.

We have to have a profitability business venture within 18 months. We try to turn the businesses

around with an 18 month period.

We have started nine other businesses which are profitable or break even at this stage.

We not short of ideas, we maybe short of good ideas.

We believe that in 10 years time Auditing will be different. A client could possible use artificial

intelligence, data analytics.

We do take a longer term view, and we do say that we need to build our data analytical skills.

Climate change in SA is still not an item on SA agenda

We would like to say to clients that we are at the fore front of thinking, how do you account for it,

how do you measure it, how do you record it, how can we improve it, how can we get your board to

think about it, how can you do interventions, how can you prioritise, how can it be part of your

strategy. That has a longer term goal. Our Deloitte digital has a longer term goal

We have to force ourselves into our clients. It hard work, we do accompany clients and we ask LCSD

to take us in and the have excuses. We do and ask for forgiveness later. We do lots of cold calling. If

the LCSD has a good relationship then we bag and plead. We are not going to sit and wait for the

LCSD. What we are proud of is our new clients, cause we went out their and cold-called.

Typically the existing businesses do not cold called companies. We go through the telephones.

We literally call them.

We want to go to Grant gelling and say that w want to go and make our own business. We also

believe in harvesting the long tail. The book the long tail. People will afford Deloitte Services we will

get more clients.

Sample of Interviews

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List of concepts per category

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Categorisation of concepts per category

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Findings from Interviews with 15 Directors of Deloitte Consulting SA

People Process Innovation Revenue Strategy

The other statement around performance, if you look at

consulting, a few years ago,

we had one income statement

which fostered team synergies. Currently we have

to many income statements in

consulting, overlaying each

other. And income statements

are competing or fighting for its place in the sun. It has got

nothing to do with clients and

nothing to do with industries.

It is not in line with the one Deloitte or the Deloitte Way.

There is too much

individualism.

One of the biggest issue across all levels of the

organisation is that our

performance system is

to homogenous, we have problem at all

levels

Innovation by its nature requires investment and the

whole sort of the

remuneration model was in

the partnership saying that we do not have shares in the

traditional since of the word

and we are not listed and

therefore at the end of every

year we need to take the money of the table.

Prices have come down and salaries have gone up,

tight squeeze on our

margin.

The challenges confronting Deloitte

Consulting SA are to try

and create a proposition

for employees to buy into. The reality is that we do

sit and look at a longer

term strategy; however

we always come back to

the immediate 12 month period. Somewhere there

is a challenge to break up

the 5 year period into a

number of single 5 year challenges. We constantly

talk long term; however

we pull back our matrix to

short term. Everything is budgeted around a 12

month cycle.

Given Deloitte’s

leverage model, they cannot afford to put to

many people on to

research teams locally,

it’s too expensive. If they take out five to ten

people a month, each

with a potential earning

of R500 000.00 in billing

per month over a period of ten months, that will

have a major impact on

our revenue.

What differentiates a

partnership from a normal organisation is that shares do

not appreciate in value and

you can’t issue shares and

that’s how corporate reward their people. In a partnership,

it’s more of a cash

environment and at the end of

the year you hit the Control

Delete button ad start all over in the New Year.

What is the role that

innovation plays in Deloitte as an organisation? The

interesting thing about

Deloitte is that the people

that own the business run the business. That a very

different model to any other

kind of corporate structure.

Is Deloitte a corporate or

what is it? Theoretically we should not have a whole

bureaucratic structure that

could slow down innovation.

Because of the financial

squeeze, we cancel the tomorrow stuff

We would like to say to

clients that we are at the fore front of thinking, how

do you account for it, how

do you measure it, how

do you record it, how can we improve it, how can

we get your board to

think about it, how can

you do interventions, how

can you prioritise, how can it be part of your

strategy. That has a

longer term goal.

One of the concern that Human capital has it that they

employ to many people that

are technically proficient and

can deliver technically on what we have, because that is

our paradigm, however we

don’t have enough people that

are entrepreneurial that can take a whole suite of what we

have across the organisation

and adequately project that

into the market.

Overall Deloitte Consulting SA is conservative where

innovation and investment in

innovative services, or new

services are concerned, because of the cost. Due to

most of our new content being

developed globally and global

is putting money into the development of new

innovative solutions, Deloitte

Consulting SA, have an

agreement to piggy back of

those solutions.

The problem is that there is 250 owners of the business,

so it assumes semblance of a

corporate structure and so

the notion that the owners run the business is true, but

in truth, you have a lot of

owners and they do not

make the decisions quickly.

As a professional service provider contracts bind us

to specific deliverables and

we cannot just do things

off the cuff. It will come back to haunt us, and we

will lose potential fees.

A lot of it lies with who we

employ and what we measure

and what we allow people to

do. We have allowed people to roam freely and be

entrepreneurial and try

things, those people have

been very successful in the market. Professional services

like ours can’t rely on 30-40

people taking high risks and

going their own why.

Risk is a concern; there is lots

of regulation around the risk

that we can take, what we can

do. It’s always on the minds of the directors, which is a

contributory factor to

conservatism. Even in clients

where we have no restrictions, no independence restrictions

what’s so ever, our mind is

still filled with, what is the risk

to Deloitte of doing this without the boundaries of a

clear method?

The firm does make selective

investment in innovation.

The innovation service line in

itself is a big investment in the SA practice. It does not

exist anywhere else in the

world.

The fundamental of a

professional credibility and why clients buy us and buy

from us is because they know

us, they trust us, and the

have seen the work that we deliver. They now the

solutions we offer, they can

understand whether we are

delivering to their needs or

whether we are delivering innovation, if that is what they

We tend to ignore the detailed

process of professional development of senior

consultants, manager, senior

managers, associate directors

and directors and we need to focus on finding individuals

withal three aspects of the

triangle, which requires these

individuals to be

methodologically sound, technically sound and sales

The other area is that we

tend to propose very blend solutions; we need to get

clever on how we craft

solutions. We need to be

innovative and creative. We need to craft an innovative

solution for the clients.

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Interrelationship Diagraph