Deloitte 2011 Annual Review: A borderless network

Today Deloitte Touche Tohmatsu Limited proudly debuts the Deloitte 2011 Annual Review.

The 2011 Annual Review celebrates the achievements and potential of Deloitte’s global network and showcases examples of “A borderless network” across three spheres:

• Insightful dedication and service to Deloitte member firm clients
• The development and deployment of Deloitte global and member firm people
• An ongoing commitment to innovation, quality, and growth

The interactive Annual Review website illustrates these topics with messages from DTTL leaders, engaging stories, milestones from around the world, and member firm revenue results and key measurements from fiscal year 2011.

The specially designed site is also tablet- and mobile-friendly, making the 2011 Annual Review even easier to access and share.

View DTTL Global CEO Barry Salzberg’s introductory message below and visit the Deloitte 2011 Annual Review site to learn more about Deloitte member firm clients, people, and communities around the world.

In the coming weeks we will also be featuring blog articles from DTTL and Deloitte member firm leaders providing additional perspectives on stories from the Annual Review.

Share your thoughts with us by commenting here or tweet us your favorite stories.

Deloitte’s latest look at the global economy

The world appears to be awash in “black swan” events. That is, events that no one expected are happening with unusual frequency and are having an impact on the overall economic outlook. The two most notable black swans lately have been the uprising in the Middle East and the earthquake/tsunami in Japan. Both have the potential to influence the global economy. In our latest Global Economic Outlook, we address the impact of both events. As for the Middle East, the big questions revolve not around Egypt, Libya, or Syria, but around what might happen in major oil producing countries such as Saudi Arabia. The recent rise in oil prices reflects uncertainty about the future, not any current shortage of oil. As for Japan, we have suddenly been reminded that, despite 20 years of relatively poor economic performance, this country remains an important cog in the global supply chain – especially in relation to high tech products. Thus, the short term outlook for production of electronic gadgetry is problematic.

Why Think Global, Act Local is no longer enough

Think Global, Act Local, commonly referred to as Global-Local or Glocal, is more than just a tagline describing the cross-border pollination of ideas and products of today’s global economy. It was originally used as a rallying cry for people to consider the health of the entire planet and take action in their communities. Today, it takes on a much broader context—from environmental, to public policy, to business—many have even embraced the Think Global, Act Local mantra as the philosophical foundation of running a successful global brand.

But why exactly are political pundits and global economists drawn to the ideals of this ubiquitous framework? Does it really provide the context for which organizations and businesses of all sizes can respond to rapid shifts within our economies of scale?

From my point of view, up to now, Think Global, Act Local has only scratched the surface of this tremendously complex issue. What we need now is a 360-degree view of how we can best prepare businesses for sustained, long-term profitable growth. What we need now is to Think Holistic, Act Personal.

Crossing borders through global investment and education

It is with great pride each year that Deloitte is represented by a delegation of leaders at the World Economic Forum in Davos, Switzerland, an independent international organization committed to improving the state of the world by engaging business, political, academic, and other influencers of society to shape global, regional, and industry agendas.

This year, Barry Salzberg, CEO, Deloitte LLP, and Robert Kimmitt, Independent Chairman of the Deloitte Center for Cross-Border Investment, provided their thoughts from Davos on important issues around cross-border investment and global education initiatives covered at this year’s Forum. We are pleased to share the perspectives of these two leaders from this important world event.

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1:14 - Barry Salzberg on his impressions of Davos this year

2:19 - Bob Kimmitt's takeaways from Davos

3:39 - Barry asks Bob: How has the nature of cross-border investment changed as a result of the global power balance shift?

4:35 - Barry asks Bob: How should companies prepare to execute a cross-border investment?

6:08 - Barry asks Bob: What new cross-border investment models have emerged as a result of the global financial crisis?

6:45 - Bob asks Barry: How do we ensure our young talent force has the skills to compete in the global marketplace of the future?

10:38 - Bob asks Barry: How can businesses, governments, and academia work to combat the talent challenge?

14:21 - Bob asks Barry: What can businesses do internally to develop leaders of the future?

Three enlightening days in Davos

My time at the 2011 Annual Meeting passed quickly as it does every year. My three days in Davos were fascinating, engaging, and enlightening. I was pleased to begin my activities with a panel discussion on “Entering the human age – unleashing and leveraging human potential in the new reality." As the leader of an organization with 170,000 member firm professionals, I am passionately interested in how to unleash the potential of large groups so that they work together effectively toward a shared purpose.

I also had the privilege of moderating a panel discussion on “The state of manufacturing: a global update.” This was an opportunity to personally and professionally return to my roots as a leader in Deloitte US’s manufacturing practice. There was broad consensus that manufacturing is going to be led by talent-driven innovation. To support this need, manufacturing organizations must focus on education and skills-building and construct public/private partnerships to deliver the skilled talent they require.

The group also agreed that most manufacturing leaders are working to understand what a successful global manufacturing blueprint looks like in today’s new reality. While the answer to the blueprint question varied, the group agreed that industrial policies like deregulation and public sector involvement will play an important role in stimulating investment and collaboration for manufacturers and the countries where they operate.

I also attended Russian Federation President Dmitry Medvedev’s opening address. He displayed great composure in the wake of the tragedy at Moscow’s Domodedovo airport and seemed grateful for the moment of silence observed prior to his speech. While he was understandably solemn, he still delivered his message effectively, addressing Russia’s current political, social, and economic challenges and the country’s effort to improve its investment climate. It was a memorable—and at times, very moving—session.

Thursday began another full day of meetings, dialogues, and receptions. I had the privilege of joining other Big Four leaders for a discussion about accounting for new realities. Dennis Nally, Rolf Nonnenmacher, James Turley, and I discussed the possibility of redesigning corporate reporting to integrate information on the environmental, social, and ethical risks associated with global business. We were aligned in our view that while the current model does not always account for certain risks, any new framework must be developed collaboratively between the private sector, accounting professionals, and financial policy standard-setters.

I also took part in a meeting of the World Economic Forum’s International Business Council, which included a discussion with leading economists about the global economic outlook. Overall, the view was positive and the group agreed that sustained recovery is underway. They expect 2010’s improved economic performance to be stronger in 2011. There also was agreement that the key indicators of recovery will be employment growth plus GDP and that the problem of massive structural unemployment will require major skills-building.

I am honored to have taken part in another Annual Meeting. Each year, I leave Davos grateful for the opportunity I had to broaden my global perspective, engage in memorable dialogs, and connect with old and new colleagues.

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Jim Quigley is the Chief Executive Officer of Deloitte Touche Tohmatsu Limited (Deloitte). Prior to his current role, he was the CEO of Deloitte United States. Throughout his 36 years with the organization, Jim has held multiple leadership roles and is actively engaged in a number of international business organizations and committees, each working to help shape the policies for a successful and sustainable global economy.

Read Jim's guest blog on the World Economic Forum Blog for more reflections on this year's event.

The ‘devil is in the detail’ of global financial regulatory reform

At last year’s World Economic Forum meeting in Davos there was a major focus on framing the regulatory issues facing the financial services industry, including capital reform, liquidity, leverage and systemically important institutions. Those same themes have returned to Davos this year, but with a difference: this year the discussion is all about the detail.

Take, for example, the issue of systemically important financial institutions - or SIFIs as they have been dubbed. The regulators, politicians and financial services executives generally agree that there are certain institutions whose failure could have a catastrophic effect on the financial system and, as a result, should be subject to more stringent rules and regulations.

So far, so good. However, the difficulty arrives when these groups try to agree on what these more stringent rules and regulations should include, or even define which institutions should be categorized as SIFIs. Some have argued that the qualification for SIFI should be based on size, while others maintain that leverage, risk appetite and interconnectivity should all be used in measuring whether an institution is systemically important or not.

Each of these major industry issues are at a different stage in the process of having their detail defined. Some are still at the very early stages of discussion, while others are moving closer to what will likely be their final agreed form. However, one thing is consistent: the financial services industry is going to negotiate right until the very end of the process. They are lobbying hard and making sure that their point of view is heard at this year’s meeting in Davos. Much of this effort is driven by the industry’s concern that the global regulatory response might go too far, driven by the politicians’ desire to appease an angry public.

With such powerful forces still pushing and pulling the debate around the detail it is likely that the industry will experience a continued period of regulatory uncertainty. Perhaps we will witness over-regulation to begin with, followed by sensible retrenchment, before the new global financial regulatory landscape finally settles into something stable and predictable.

So what can financial institutions do while these all important details are still being debated and discussed? Well, I believe institutions should continue focusing on activities that preserve their operational and business ‘flexibility’. Take regulatory compliance as an example. Institutions may need to invest to bring more senior talent into their compliance function over the short-term, and use that experience to empower more flexible decision making and judgment to specific situations as the detail behind the new regulations unfold.

Navigating the journey into the new financial services landscape continues to require delicate decision making on the part of financial services CEOs. If they wait until all the details are worked out they risk trailing those competitors who have marched boldly ahead. However, if they move too quickly, their efforts could be undermined by the still shifting detail behind many of these key issues.

I believe it’s one of the reasons why this year’s Davos discussion will be very closely watched around the financial world.

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Jack Ribeiro is Chairman of Deloitte’s Global Financial Services Industry (GFSI) practice. He has over 32 years of experience working with financial services clients and has played a prominent role in the management of some of Deloitte’s key practices around the world.

Live at Davos | Deloitte’s response to “Preparing for the Global Talent Crisis”

As the Global Managing Director of Brand at Deloitte Touche Tohmatsu Limited, I am often asked how employer branding—the way an organization uses its brand to attract, engage, and retain its people—can protect the sustained future of an organization and the global business community.

The answer, as you might suspect, is not simple—engaging employees with their employer’s brand requires the utmost innovation. In fact, central to the idea of investing in an employer brand as a way to achieve competitive eminence is viewing talent and brand as an integrated solution to resolve the unparalleled global crisis of talent scarcity.

With that in mind, I am proud to be in the company of the distinguished government, business, and community leaders participating in this year’s World Economic Forum session on “Preparing for the Global Talent Crisis: Action Time”. The Forum is a wonderful opportunity to engage in education-focused discussions with other thought leaders.

Below are several key insights and responses on the impact of global talent risk from the Forum’s report Global Talent Risk – Seven Responses:

The day before Davos

After weeks of preparation, I was delighted to finally arrive in Davos on Tuesday for the World Economic Forum Annual Meeting 2011. The Swiss mountain town was already busy with activity—delegates arriving from around the world, finishing touches being put on the new Congress Hall, and the international media ready to begin interviews.

While I find this all fascinating and exciting, one of my favorite parts of my yearly visit is the drive through the Swiss Alps to the town of Davos. I find the natural beauty in Switzerland stunning and a welcome reminder of the mountains and valleys of my childhood home in the western United States. Every year, I enjoy these few hours to take in the area’s breathtaking scenery before the start of a busy week at the Forum.

My first day was largely spent doing interviews with CNN, the Associated Press, and the Wall Street Journal. In line with this year’s meeting theme, many of the journalists were interested in discussing the new reality of a post-recession world. Richard Quest from CNN International asked me if the recovery that is underway will be sustainable. As I told Richard, I am cautiously optimistic that it is. Deloitte member firms are seeing clients look for help and assistance in managing today’s dynamic environment. Our network’s hiring numbers also are back to pre-crisis levels and we continue to invest in our people and our capabilities.

I enjoyed all of my day one activities in Davos. The interviews were engaging and I enjoyed the opportunity to catch up with the Deloitte team that supports our Forum activities every year. But most importantly, I am proud to once again represent Deloitte during the Annual Meeting. Some of the brightest minds in the world attend the gathering and it is a privilege to serve as Deloitte’s ambassador and to showcase our brand for the 2,500 delegates. I look forward to sharing more from Switzerland in the coming days.

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Jim Quigley is the Chief Executive Officer of Deloitte Touche Tohmatsu Limited (Deloitte). Prior to his current role, he was the CEO of Deloitte United States. Throughout his 36 years with the organization, Jim has held multiple leadership roles and is actively engaged in a number of international business organizations and committees, each working to help shape the policies for a successful and sustainable global economy.

For more on Jim’s perspectives on the 2011 World Economic Forum view his video message or follow him @deloitteceo.

View Jim’s interview with Richard Quest of CNN International

Deloitte’s latest look at the global economy

As editor of Deloitte Research’s quarterly Global Economic Outlook I often struggle to find new things to say about the economy other than updating the outlook. In this quarter, my colleagues and I have chosen to look a bit beyond the horizon. While many economists today focus on the short term transition out of crisis and into sustainable recovery, one cannot help but feel that a bigger and longer term transition is under way.

Of course, things have been changing for some time. For the past 30 years, the big emerging markets have gradually increased their share of the global pie following two centuries of relative decline. But now, the process of catching up appears to be accelerating, and with dramatic consequences. This is most noticeable in the aftermath of the global recession.  As developed markets struggle to recover, big emerging countries are racing ahead—not only boosting their own living standards, but stimulating growth in the rest of the world. With much more rapid growth than the developed world, these countries have become significant players in the global economy. For the first time, their policies are of critical importance to everyone else.  Moreover, as they grow, their middle classes are rising in importance and attracting the lion’s share of attention from many of the world’s biggest companies. For the developed economies, this means managing a process of relative decline.

Consequently, this quarter’s Outlook spends a good deal of time focused on the changing world of emerging nations. Interestingly, the challenges they face are quite different from those faced by the developed economies. In the U.S., Europe, and Japan, the biggest challenges are maintaining decent growth and reducing long-term fiscal deficits.  In the emerging economies, the challenge is to keep the economies from overheating and generating serious inflation. Hence governments are struggling with balancing the threat of inflation with the need to maintain competitiveness in the global economy. 

The emergence of the emerging nations is but one of the many new realities that global companies face.  Indeed, “new realities” is the theme of this year’s World Economic Forum meeting in Davos, Switzerland. In the latest issue of Deloitte Resarch’s quarterly Global Economic Outlook, Elisabeth Denison examines some of the new realities of the global economy and their implications for global business. She looks at the changing dynamics of East versus West, private sector versus public sector, energy demand versus sustainability, and youth versus aging among other topics.  The rest of the report focuses on specific geographies including the U.S., Europe, Japan, the BRIC nations, and a new outlook on sub-Saharan Africa.   

Today, readers of newspapers and viewers of television news are probably perplexed by the arguments about exchange rates, inflation, deficits, and the like. If you want a bit more clarity on these issues, as well as a point of view from people who do nothing but follow these issues, I suggest reading our latest Global Economic Outlook report.

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Dr. Ira Kalish is Director of Global Economics at Deloitte Research, Deloitte Services LP. He is an expert on global economic issues as well as the effects of economic, demographic and social trends on the global business environment. He has authored more than 150 articles and reports on economic and consumer trends around the world.

The Gender Dividend – Transforming business through the leadership of women

As we begin the second decade of the 21st Century, businesses need to make the most of their resources, especially those with a proven track record in boosting performance. That makes now the time for many more women to take on greater leadership roles, especially in the c-suite and boardroom.

As an accountant for the past 38 years, I have long believed that numbers tell a story. For many years, I have seen a steady stream of research whose numbers confirm the impressive contributions made by the relatively few women at the highest levels of leadership in business today. So it only makes sense that more women serving in these roles will lead to greater business performance and economic growth.

Catalyst, a nonprofit research and advisory organization focused primarily on the advancement of women, invited me to serve on its board a few years ago. I have long been acquainted with Catalyst’s research. Its research findings consistently confirm that those organizations with the most women as senior leaders enjoy rates of return that are greater—often by double-digits—than those with far fewer or no women in their leadership ranks.

That’s what the Gender Dividend is all about. Much like the dividends that public corporations pay to shareholders, the Gender Dividend is a steady benefit that is earned by making wise, balanced investments in developing women as workers and potential leaders, as well as understanding women as consumers and their impact on the economy and the bottom line. Done right, the Gender Dividend should be reflected in increased sales, expanded markets, and recruitment and retention of a key market segment—women.

It is not wishful thinking. As research has consistently proven, the Gender Dividend is a demonstrable fact. But when culture and custom conspire to keep businesses from achieving the greatest returns, investors should take note and vote with their feet. I believe that enlightened investors in search of the greatest returns will vote for those businesses that not only value diversity, but are smart enough to capitalize on it.

Beyond returns in the marketplace for talent and customers, the Gender Dividend can show a payback in the boardroom. As the chairman of Deloitte’s board, I speak often about the ABCs of corporate governance—attitude, behavior, and candor. When present and positive, they help create a boardroom environment that can set ideas into motion and enable people and organizations to move forward productively. Yet it is another element that follows the ABCs—the letter “D” for diverse people and diversity of thought—that enables businesses to enjoy strong governance and develop the best strategic decisions. The diversity of thought provided by women can bring different attitudes and behaviors to the boardroom, as well as fresh candor that can be inspired by a variety of perspectives. Diversity in the boardroom is powerful, and it works.

At the height of the recent recession, Catalyst produced a short video to address the business challenges of a desperate economy. Its voiceover concluded by telling executives that there is an “overlooked yet effective solution to help you make your numbers—and she may be seated right next to you.” I hope that documented research and an open mind will help people understand that such thinking makes perfectly good sense.

Economic growth is one of the quickest ways to unleash transformational change – and with more growth comes more possibilities. In two weeks, the World Economic Forum will convene once again with its mission to improve the state of the world. In the spirit of Davos, let me challenge you, your business, and your nation to intentionally invest in women as business leaders. The women that your investments will enable—as well as the greater returns from the Gender Dividend that it will create—can transform your business, spur your nation’s economy, and improve the state of our world.

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Sharon Allen is Chairman of the Board for Deloitte LLP where she leads the board in providing oversight and guidance to the management of the U.S. Firm and its subsidiaries. Frequently honored for her contributions to business and community leadership, Sharon was named to Forbes’ list of “The 100 Most Powerful Women in the World” for four consecutive years.

As used in this post, “Deloitte” means Deloitte LLP and its subsidiaries. Please see About Deloitte for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.