‘The most exciting time to be a CA' – Interview with EY's Steve Varley
Steve Varley speaks to the CA magazine about seeing the upside of change in society, the transformative power of technology and the benefits of welcoming diversity in business.
These are uncertain times in the world of business, but you're missing the point if you only see the downside, according to Steve Varley, Chairman and Managing Partner of EY in the UK and Ireland.
As he puts it: “To a degree, uncertainty is a positive because it creates change. We are setting out to embrace that, because it creates opportunity for EY and our people. I think this is the most exciting time ever to be a chartered accountant.”
EY is the third largest of the Big Four global accountancy firms and recent financial results have been very good. The UK arm reported 8.% growth to £2.010bn last year.
But with a variety of economic and political headwinds affecting global growth, will the momentum continue? Firms are facing more frequent tendering for listed company audits and restrictions on the services they can provide to audit clients.
“I’d frame all these as positives," said Steve. "We’ve got a highly competitive market that is making us all innovate to the next level, finding new ways of working together, new ways of collaborating with our clients, and meeting the needs of all the stakeholders, including regulators.
“This is an amazing time to be in the profession, and definitely an amazing time to be with EY.”
Investing in a digital future
The firm is notably spending significant sums on tech, not only making improvements to audit tools but an arm’s length internal project, EYX, has been set up to develop radical ideas for disrupting the accountancy sector itself.
The EYX team is based in Shoreditch, right at the heart of London’s new hip, high-tech East End, and is actively looking for the breakthroughs that a challenger might use to shake up accountancy, just as Uber has transformed the taxi business.
Steve explained: “We want to get there before we are disrupted by somebody else.
"We are already cycling a whole bunch of our high-potential ideas through this new initiative and we are asking them to think through how they would create the next EY, using high-end technology.”
Among the ideas considered so far are looking at how the 'blockchain' concept, underpinning the e-currency Bitcoin, might be used more widely in business and how drones could be used to help audit high-value assets over a wide area, such as equipment at an opencast mine.
Technology change happens more slowly than you might think, but when it hits you, it hits you twice as hard.
Steve commented: “When I was in Palo Alto it was during the first Internet boom, and not all the predictions of its impact turned out to be true.
"At one level, technology change happens more slowly than you might think, but when it hits you, it hits you twice as hard. So you do have to focus on it.”
He accepts that the rise of artificial intelligence (AI) will have a fundamental impact, but is adamant that firms like EY need to lead in developing ways for AI to be used to help human professionals, rather than replace them.
In fact, he says technology promises to free up more time from 'administrative' tasks so that "our people can do more of the exciting stuff!”
A 'non-auditor' in the Big 4
Steve took an Engineering degree at Loughborough University but had already concluded by the end of his course that he was not a "natural engineer".
He took a year out to travel the world and then joined what was then Andersen Consulting, now Accenture, as a Graduate Trainee in Management Consultancy.
He became a Partner in 1999 and in 2005 moved across to EY to lead the firm’s advisory business. Effectively, they were getting back into the management consultancy game and Steve was brought in to lead the process.
In 2009 he was appointed as EY’s Markets Leader across the whole UK firm and he became Chairman and Managing Partner, his current role, in 2011.
Steve said: “I have always felt that leading EY as a non-auditor put a special responsibility on me to ensure that EY stays focused on delivering high-quality audits, in the public interest.
"I’m delighted that we are now top for audit quality, as judged by the Financial Reporting Council. That’s taken a lot of investment and effort.
“We have a really diverse team that brings together the best of many different disciplines. One of the things we are good at is working together to challenge where we are and to create a vision of where we want to be.”
Leading internal and global growth at EY
Steve believes passionately in the importance of global trade, and he takes the EY UK and Ireland leadership team on a “trade mission” each year to a significant overseas marketplace.
As well as meeting with local peers in EY, they spend time with clients and other stakeholders to appreciate their perspectives. Destinations so far have included India, China, South Africa, and the US east and west coasts.
The firm’s biggest single investment, however, is in its people. According to Steve, EY received just under 30,000 applications for posts at all levels last year.
He added: “We are looking for great team players, with a positive attitude, who will bring their differences to EY; which include in this day and age not just gender or ethnicity, but also sexuality, social mobility and disability.”
We have a really diverse team that brings together the best of many different disciplines.
Diversity is a key issue for the firm, not just because it is the right thing to do, but also because it secures the right quality of talent at a time when the “war for talent” is heating up again.
That has led to radical moves such as moving toward 'blind' recruitment in the company’s graduate and school leaver application process.
This assesses candidates on their raw potential rather than just their academic performance, ensuring that EY is able to attract bright and motivated young people from all social backgrounds.
Steve’s energy is apparent and it is no surprise that he continues to compete in triathlons, completing his first Iron Man” competition last year. He also sees it as important to make sure that, even with work and sporting commitments, he has enough time to spend with his family.
As he put it: “There are times in anyone’s year when you have to work harder than normal, but I don’t feel I have a ‘work/life balance issue’.
"When my family is happy, I’m happy and I’m at my best at work when I’m happy. That’s the way I think about it.”
The full version of this article appears in the July/August 2016 edition of CA magazine.