Everyone was taught that Andersen’s culture was the glue that held the worldwide organization together. Andersen’s culture and values pro-vided that invisible framework that allowed its decentralized local office system to work. Employees could make decisions and feel confi-dent that their choices were consistent with the firm’s principles and standards. But Andersen’s culture was a culture based on the profes-sional standards and work patterns of public accounting. After all, Andersen’s core service had always been auditing, and auditing at Andersen was about method and following the rules.
But the accounting values that Andersen’s audit staff understood, without comment or question, were not so easily transferred to consult-ing. With their own division, consulting partners were ready to estab-lish their own brand and compete with big corporations such as IBM and Electronic Data Systems (EDS). At the center of consulting’s busi-ness success was its ability to generate fees, maintain staff chargeabil-ity, and ensure client satisfaction. These did not always mix well with protecting the public’s interest. Consulting was in a fundamentally dif-ferent business, and most of their engagements had nothing to do with
public interest. As Andersen Consulting set about building its own brand, it recruited a new type of employee who was innovative and entrepreneurial. They were not accountants and did not share the pro-fessional standards and values of the profession.
As consulting grew, its members began to challenge Andersen’s core culture. Most of these challenges were innocent attempts to adapt the Andersen culture to the consulting division. The stir surrounding Andersen’s double-door symbol is a good example of this type of chal-lenge. A pair of closed doors had come to symbolize the firm during the 1950s, and the same doors were installed in local offices around the world, printed on cards, and crafted into lapel pins. They were Ander-sen’s symbol of integrity and confidentiality. Initiated by members of the consulting division, one Midwestern office broke with tradition by installing glass rather than mahogany doors, despite considerable resis-tance from accounting, audit, and tax partners. The story was always told with a sense of shock. To many, it was a symptom of the growing rift between the two business units.
Other challenges were more direct. When Andersen’s partnership did not go along with some of consulting’s more disruptive requests, the consulting division partners could become aggressive. Under the leader-ship of Gresham Brebach, the consulting division staged one of several revolts to become a separate firm. But the partners, dominated by audit, rejected the idea as they had in 1979. In defeat, Brebach was fired and went on to join one of Andersen’s competitors, Saatchi & Saatchi.
Incidents like the story of the glass doors and Brebach’s revolt highlight the distinctions between the two groups, each with its own business needs, values, and activities. Although consulting services were too lucrative to let go, these skirmishes raised the level of anxiety.
The mechanisms that maintained unity within the firm were in jeopardy.
Aware of the growing threat to Andersen’s common culture, Kull-berg brought in Terrence Deal, co-author of the book Corporate Cul-tures,4 to help assess the state of Andersen’s culture and its 10 core values:
1. Client Service: Delivering quality without compromise 2. Hard Work: Being responsive and timely
3. One Firm Concept: Many independent nationals with common objectives
4. Recruiting Quality People: The first major firm to do campus recruiting
5. Training and Development: Leadership in professional devel-opment
6. Meritocracy: People are rewarded based on their own merits 7. Integrity: Objectivity in all that we do, without fear or favor 8. Esprit de Corps: Pride in the organization and in belonging to it 9. Professional Leadership: Acknowledged leader throughout our
history
10. Stewardship: Making long-term decisions to benefit the Firm To Kullberg’s relief, in 1986, Andersen received a positive report assuring the firm that its culture remained strong and consistent from personnel level to personnel level, from office to office, and from coun-try to councoun-try. The firm might be geographically decentralized but it remained united by its shared culture and values. But the study also found internal tensions because the 10 formally stated values some-times came in conflict with the informal messages that staff were hear-ing from the partners, particularly in the consulthear-ing division. Tension was particularly intense around Andersen’s traditional value of client service. Although important to everyone, pressures to generate revenue and increase profitability confused the meaning of client service. And who was the client anyway—the public or the corporation? Maintain-ing local office autonomy was conflictMaintain-ing with Andersen’s need to manage its now enormous worldwide firm through standardized poli-cies and procedures. Conforming to rules and regulations, so important to audit, was not compatible with consulting’s need for flexibility.
Among the partners, the value system was summarized into four cornerstones—client service, quality audits, good staff, and profits.
The tensions that were reported convinced many partners that a serious shift in the firm’s value system was in process. Some partners began saying that the four cornerstones had become “three pebbles and a boulder.” The boulder was profit. But there were no easy answers.
Despite the rhetoric that Arthur Andersen & Co., SC remained “one firm, one culture,” this had not been true for some time.