Danish Impact Report

Resilient leadership will guide us to a new normal

By Anders Dons, CEO & Partner

As I look back at our past financial year, COVID-19 only affected our business for three months. However, because of the massive impact this black swan event has had on all aspects of society, our lives and behaviour, it feels like corona has been our reality for years. History repeats itself; a crisis does not create new megatrends, but it significantly accelerates current trends. COVID-19 is no exception.

Needless to say, the pandemic has rocked the boat in a way we never thought possible. We were on a journey of transformation and development, where globalisation, innovation and climate change took on the headlines. Then came stormy weather. Corona completely changed the agenda in the sense that we went from helping our clients transform and develop to help save their business, sometimes their life’s work. We went from advising the Government and leaders in Denmark about how to become a Small Great Nation that would lead in innovation and climate change to advising on the best aid packages possible, a corona fund worth DKK 300bn and how to move from the long-term view and zoom in on short-term action.

As a global as well as Danish organisation we are very concerned with the impact that COVID-19 will have on many societies, their families and daily lives. We are helping many societies around the world, their governments, institutions and corporates in fighting and recovering from the pandemic.

The safety of our people is also a big concern. When Denmark went into lockdown, we changed our ways of working within our organisation and with our clients overnight. Everything turned digital, decisions became simple, and a different form of team spirit came to life. Leadership at all levels and daily communication to our employees infused a strong spirit of care and a ‘can-do attitude’.

In Deloitte Denmark, we have experienced five years of 10% growth on average, while creating impact for our clients, creating the workplace of the future, and making an impact in the society around us. This year, the annual report discloses negative growth of 4%. The underlying pro-forma measured growth is actually 8%. This significant variance reflects global client projects delivered to Danish HQ clients, including Danish resources, but invoiced from other Member Firms than Denmark. In addition, the Danish government’s reduced use of advisers as well as the COVID-19 impact bring a further decline. Unfortunately, this also resulted in laying off 175 colleagues. The 300 new recruitments of young graduates in August and September 2020 will not be impacted by these actions, as we will continue to be an attractive workplace that recruits new people, invest in innovation, and develop our business to support the transformation of our clients.

Innovation will take us into a brighter future

Deloitte is part of a global firm of 330,000 employees in 150 countries that just tuned 175 years old. I am proud to be part of a firm and culture that have been able to innovate through four industrial revolutions and are resilient to withstand crises like the corona crisis. We leverage our global capabilities to serve our clients with distinction through centres of excellence and our global community of talented people – also in times of crisis.

Looking ahead, we will focus on delivering on our purpose to create an impact that matters. This requires resilient leadership, agility and focus. Crises often bring the best innovation to the world, and as an optimist, I do hope that we will start to see brighter skies during the next year with new innovation – especially on climate solutions – and globalisation returning to a new normal state, where we choose collaboration over isolation and international trade over nationalism.

“Agility will be the most required capability in the coming months and years. That is essentially, what will distinguish the companies that surface stronger after this crisis. That is resilient leadership”.

Anders Dons, CEO & Partner

Strategy

FY23 Ambition – Connecting for Impact

Our purpose, aspiration and strengths have helped us far, but past achievements do not equate to future success: what brought us here, won’t get us there. This financial year introduces a new strategy term. A term that takes off in unprecedented times, where the global community is facing one of the biggest challenges imaginable with COVID-19. As a Partnership, Deloitte has successfully adapted to significant changes throughout 175 years, and helped societies overcome these. Like most firms, we are not unaffected by the ongoing threat and uncertainty, but we have proven resilient through focus and tough prioritisation.

Our FY23 Ambition does not change our purpose to deliver impact that matters, nor our ambition to be the undisputed leader in areas we choose to operate. But three years from now, we do plan to take even more responsibility for our society, our clients, and for each other. During recent years, we initiated our journey towards becoming a more globalised firm by coming together in the Nordics and in North South Europe. The globalisation of the Deloitte Network has continuously allowed us to truly bring the best of Deloitte – independent of geography. The way we globalise and connect further in the future will - as always - be through the lens of our clients.

That lens is open to diversity in all aspects, open to alliances, and open to creating and engaging in eco-systems. The challenges we face are too great for a single firm to solve, but together we believe we have an important role to play in connecting the dots for clients, talents and society. We will ensure sustainable growth; we will help transform clients and industries, and we will continue to promote market trust.

Choices

To deliver on our FY23 Ambition, we will need to grow sustainably, while transforming our firm and building a market-leading brand. All at the same time. We point to three primary choices that will evolve our firm:

Connect for Impact - We will further leverage the intersection between our industry expertise and the experience and capabilities of our businesses – delivered locally in a seamless collaboration across the globe. We will collectively respond to the needs of our clients, and we will better deliver on our promise of creating an impact that matters. Our ability to deliver the best competences across borders and disciplines will be catalysed by our market programmes focusing on collaborating with clients and in partnerships with other leading players.

Diversity of Thought - We will continue to promote a culture characterised by diversity of thought. Diversity of thought speaks to an inclusive culture, inclusive leadership, and removal of the unconscious biases that have influenced decision-making for decades. We want to create equal opportunities for all. We wish to attract the brightest talents and deliver the best lifelong learning experience for all. Our firm is shaped by our values of leading the way, serving with integrity, taking care of each other, fostering inclusion, and collaborating for measurable impact. These are non-negotiables and will be pushed more than ever in the coming strategy term.

Invest in the Future - We want to influence the change in the world around us and serve our clients with distinction. To continue to do that, we need to be able to actively invest in the future. We will have a continued focus on innovation by building capabilities in the latest technology and leveraging the delivery centres across our global network. We will digitise our services and ways of working with clients, and we will invest in the best talents and teams, offering the best training programmes.

We make an impact. An impact that lasts. An impact that matters.

Financial highlights

Revenue

Revenue for the financial year 2019/20 amounts to DKK 3,588m against DKK 3,732m last year.

After six years of consecutive growth by between 6-11%, revenue declined in 2019/20 by 4% or DKK 144m, of which DKK 80-100m is estimated to derive from fact that the Danish Government has put the rendering of consultancy services on hold and from COVID-19. The underlying pro-forma measured growth is actually 8%. This significant variance reflects global client projects delivered to Danish HQ clients, including Danish resources, but invoiced from other Member Firms than Denmark. In addition, the Government’s reduction in advisers as well as the COVID-19 impact bring a further decline.

In line with our global strategy, we have in recent years accelerated the exploitation of competencies from other member firms in order to bring the best of Deloitte to our clients no matter where the client is domiciled or the origin of our resources and competencies. Some of these projects can be invoiced and accounted for in the Danish annual report and others cannot. Taking the latter into account, revenue would have been DKK 4.2bn.