Where We Are 
"Leadership: Managing for Success in Challenging Times"
Excerpts from Wachovia Distinguished Lecture, October 23, 2007 by Shirley Edwards (edited for length, subheads inserted):
Hokies at Ernst & Young
Since I graduated in 1982, I have really tried to remain active at Virginia Tech and support the university as an alumna. In addition to recruiting talented Hokies to Ernst & Young, I also serve on the Accounting Department Advisory Board and recently joined the Pamplin College of Business Advisory Board. I am proud to say that Virginia Tech graduates do quite well at our firm and are highly sought after. This year, Virginia Tech was added to the select list of priority recruiting schools that Ernst & Young has in the Americas. I really am proud to be a Hokie.
What is success?
To me, success has always been about having an impact on the people I interact with and improving our collective results. The financial rewards and stature that come with success are really nothing if you don’t enjoy and connect with people and find that you are working together towards a common purpose. As the assurance leader for the mid-Atlantic region of Ernst & Young, that includes our clients, my partners, our people and even the community at large. My success in this role comes from their success — my time is invested in directing and supporting them. Some people may call this power, but I prefer to look it as influence. Throughout my career I have always sought out those experiences that would allow me to contribute my talents and creativity to those I was working with, whether that be a client’s business issue or an internal operational problem.
Growing up in rural Maryland
I grew up in a rural part of Maryland — lived in the same house all of my life, went to the same high school as my dad, and we even shared some of the same teachers. This was a great area to grow up in, but I knew early on that I wanted to have a broader college experience. Although I am the first generation to go to college in my family, both of my parents encouraged me to excel in school and reach beyond my past and really define my own future. I ended my high-school years as the class valedictorian but still did not feel fully prepared to take on college. With a lot of scholarship and financial aid and much trepidation, I came to Virginia Tech as a freshman in 1978. This was a big move for me — 6 hours away from my family and a campus with about 25,000 students. I think this was my first experience with personal risk taking.
Risk taking
Being willing to take a personal or professional risk is one of the keys to success. I really don’t think you can live a full life if you live it all in comfort. I have seen this play out for me several times over my career, and this belief has continued to be proven to be true. Whenever we try something, new or different, we are taking a risk. I think you will find it challenging to advance in your career without calculated risk taking — you really do have to put yourself out there in order to move ahead and succeed.
At Virginia Tech
As a student, I tried to do many things to make an impact on those around me and that set me apart from my peers — things that were new and different. I was the first female president of Beta Alpha Psi, which was the premier society for accounting students at the time. Like the profession in the 1970s, Beta Alpha Psi’s leadership was male dominated, and so this was my first gender breakthrough. I think most of the guys were quite surprised when I was not satisfied with the typical position as secretary. We had an excellent year, with great involvement by the students and faculty, and we continued our tradition of being an outstanding chapter. I was also one of the creators of Business Horizons. We had this idea of a job fair that would bring all types of companies together in one venue. Another contribution that I made was fulfilling the role of student representative on the committee that interviewed and selected Dean Sorensen as our new dean of the business school. Given Dean Sorensen’s long tenure and the great success of the Pamplin College of Business, I think that we did a pretty good job. These are just a few examples of the impact that I tried to make. I challenge each of you to do the same — whether you are a freshman or a senior about to graduate. Make sure you are leaving this institution a little better off because you have been a part of it.
Develop a global view
The risk that I took upon graduation was to move to Houston, Texas, and begin my career with Arthur Andersen. I knew I needed to make another move that would really allow me to experience another region of the country. That may have been a bold move then, but I would tell you now that a comparable move would be to go to another country. During the past 10 to 20 years, the economy has become increasingly global, and that has had a significant impact on the way we serve our clients and manage our people. Many of our people participate in our global exchange programs in order to broaden their experience and accelerate their careers. I believe that each of you should take every possible chance to travel or study abroad. You should learn other languages, study international accounting standards, and learn about the world’s economies. You really cannot be successful in business without a global view — I really encourage you to start developing that now. Personally, I expect that before I retire in 10 or 12 years that I will likely spend a period of my time in one of our foreign offices, and I look forward to that adventure.
Look for career opportunities
Continuing my career with Arthur Andersen in the Washington, D.C., office, I applied for a residency and spent a year on the Treadway Commission. This was the first focus by the major accounting firms on fraudulent financial reporting and an attempt to determine the root causes for the profession’s failure to identify fraud on a timely basis. It was a unique opportunity for me to work with the SEC commissioners, representatives from the AICPA and the major accounting firms (there were 8 back then), and academics to study fraud. I enjoyed this intellectual challenge but also used this experience as an avenue to connect with some of the leaders within Arthur Andersen. Even though I was a young manager, I met regularly with our key quality and risk management leaders to debrief them on the project and provide my insights about where any recommendations might come out. It gave me great visibility within the firm, and when I came back to the practice, I was able to position myself on several key clients and with continued access to our leadership. Taking this assignment was a risk for me at the time. I was just coming into the Washington office and looking for that unique opportunity distinguish myself. This assignment took me out of our core practice, but it paid off by giving visibility that was well beyond my experience. Looking for those unique assignments or experiences that provide enhanced access to your company’s leadership is another way to successfully navigate your career. Working hard and doing good work is clearly required for success, but getting credit for that hard work and garnering recognition for your contributions is critical for true success.
Gaining diverse experience
Throughout my career with Arthur Andersen, I worked in a number of different industries, including real estate, financial services, not-for-profits, technology, and biotech. Adaptability is another critical trait that you see in most successful people. I firmly believe that you have to go where the opportunities are and then seize them. When I initially came to the Washington metro area, I worked in the real estate industry. It was an exciting time when the area was attracting a lot of international investment. I worked on several major projects acquired by the Japanese, including a unique multi-use development on the Potomac River at the foot of Georgetown. We were involved in the due diligence related to the acquisitions, which allowed me to use not only my accounting and audit skills, but also my business acumen to analyze various structures for the transactions. As is typical for the real estate industry, it eventually became over developed, and there was a major downturn in the real estate market. We saw many of the major developers become overextended with financing. After we completed as many troubled debt restructurings as the market would bear, I moved into our commercial practice, where we were seeing significant growth. I worked with a variety of corporate clients, including Manor Care and Marriott Corporation.
Promotion to partner
As a senior manager approaching the partnership, I saw that we had several partners retiring in our not-for-profit practice that would create an opening for me to make partner. When AARP — the American Association of Retired Persons, the largest not-for-profit in the U.S. — went out for bid, I worked on that proposal, was instrumental in our success in obtaining them as a client, and quickly moved into our not-for-profit practice. At that point, I was well positioned for promotion to partner and had a clear pathway to get there. I had no experience in this industry but had proven to myself and the firm that I was a quick learner and could readily adapt to new industries. This is just one example of being open to opportunity and not becoming too satisfied about just operating in your comfort zone. I truly believe that leaders are the ones who will see the need for change and willingly embrace it. This risk really paid off for me — I was promoted to partner in 1994 as the first woman in our greater Washington practice.
Few role models
I have always been keenly interested in the impact of gender on advancement, development, and retention within public accounting firms and business in general. I have dedicated a lot of effort to gender equity and ensuring that there is a level playing field for women. As I was progressing in my career, there were few role models or mentors, and many of the men at the time did not really know how to be supportive of women in the workforce. It was quite foreign to most of them, the concept of a dual-career couple. The “old boys’ network” was thriving, so I worked hard not to be excluded from opportunities because of my gender. I have always been convinced that I could do the same job as my peers, and, in fact, I was certain that if I worked hard enough, I would even do it better.
Being a working parent
During my early career, there were also no programs to support workplace flexibility. I had my son while a senior manager and my daughter as a partner and continued to work a full-time schedule soon after I delivered both of them. My husband spent about 10 years with Arthur Andersen and then became the CFO of a technology company that grew quickly through acquisitions, eventually went public, and ultimately was sold to another technology company, Symantec. I have always found that the flexibility afforded in public accounting offset the demands. I can truly say that I have never missed an important event or activity of my children or spouse. It took a lot of creativity and communication to ensure that my husband and I managed our careers and family in a balanced manner … and so far have a high functioning 16-year-old son and 12- year-old daughter and a nearly 20-year marriage to show for it.
Being a partner
As a partner at Arthur Andersen, the next 7 years of my career were challenging and fulfilling. I have always loved being a partner. I enjoy the camaraderie with my partners — the way we support each other as if (we were) family. Working with our teams and our younger personnel to mentor and develop them has also been fulfilling. The dynamic nature of the profession has always suited my high-energy personality and the need for constant learning. One of the keys to long-term professional success is persistence, and that is clearly a trait that is valued in public accounting. We have a demanding profession that calls for us to be adaptive to many environments and focused on achievement. It often takes significant persistence to deliver the timely, quality service that our clients demand and appreciate.
In addition to persistence, I see resiliency as key to a successful career. You cannot work for 25 years and not have something that you work on or are responsible for go wrong. Hopefully, it’s only a project that didn’t work out as planned or a minor business investment that did not bear the expected returns. In my case, it was a certified disaster. The fall of 2001 was a trying time for most people. In addition to the September 11 tragedy, my firm was beginning to go through its own professional tragedy. With the downfall of Enron and the destruction of some audit work papers, I quickly saw the 20 years that I had invested in Arthur Andersen begin to fade away from me.
Demise of Arthur Andersen
From the winter of 2001 to the spring of 2002, it became increasingly clear to me and my partners that Arthur Andersen would not be able to withstand the blow we had taken to our reputation. Clearly, the criminal indictment of the firm by the Department of Justice — which was subsequently overturned — put the nail in the coffin. I can’t adequately describe to you the emotions that I felt at that time. I was very concerned about my personal and professional reputation. We trade on our individual reputations, and to have the firm I was associated with to be declared a criminal was quite a blow. As CPAs, our primary goal is to serve the public’s interest and protect our client’s shareholders. Our integrity must be irreproachable in order to maintain our reputation. Interestingly, the Arthur Andersen practice in the mid-Atlantic region was very successful and well respected within the area for being conservatively managed. In the end, we were able to rely upon that reputation to hold our practice together and seek out an appropriate exit for our part of the business.
During this time, I was also concerned about my family and their financial wellbeing. As a partner in a firm, you share in the full risks and rewards of the firm. As a result of the demise of Arthur Andersen, all of the partners lost their invested capital as well as all of their retirement. Since I was in my early 40’s, I was in a position to potentially rebuild my financial position, but that was still quite a loss, given my 20-year investment. Needless to say, this was a traumatic time for my family. My husband was an alumnus of Arthur Andersen, so he participated in the demonstrations and marches and even gave a speech on the footsteps of the Capitol. My children watched the news reports and worried about the impact on their mother and the career they knew I loved.
The true meaning of leadership
A typical day during these trying times involved serving our clients until 10 at night —calming our people and convincing our clients to stay with us until we could work out a plan. Then, the partner group would meet until 2 in the morning, working through the various options, and managing the impact on our practice. During this turmoil, the partners in the mid-Atlantic region of Arthur Andersen demonstrated what I believe to be the true meaning of leadership. During a tumultuous time, when we were intensely focused on maintaining the confidence of our clients and our people, we were able to hold our practice together and, as a cohesive group, market it to the other firms. This was clearly an example where the whole was more valuable than the individual parts. Other offices within the firm seemed to implode and people and clients scattered among the different firms. After several weeks of negotiation, we successfully moved the majority of our practices from D.C., McLean, Baltimore. and Richmond from Arthur Andersen to Ernst & Young. We were able to negotiate to bring to Ernst & Young 10 people for each partner that made a commitment to join the firm — this was a group transaction that allowed us to keep the core of our practice together. We were able to give staff through managers as well as administrative personnel a soft landing — over 300 people were promised jobs as part of our negotiations.
Interestingly, individual partners could have negotiated their own deal that might have been greater for them, but, as a practice, we decided to stay together and take care of the most amount of people possible within the region. So, after almost 20 years with Arthur Andersen, I completed my last deliverable due to a client at 11 p.m. on June 6, 2003 and arrived at EY at 8 a.m. the next morning to begin another chapter of my professional services career.
Now I would be misleading you if I inferred that the transition was easy, but the key point here is that it takes resilience to make a significant career change successfully. There are few careers that move along in a linear fashion without any detours or dead ends. Being resilient and able to recover from a misstep is critical to advancing in your career.
At Ernst & Young
My initial year with Ernst & Young involved a substantial investment in listening and learning. In addition to new methodology and terminology, it is important to learn about the culture of an organization. It was an interesting time, as the addition of the former Andersen personnel and clients more than doubled the size of the EY practice in the mid-Atlantic. It took a lot of effort just to assimilate the business and ensure that clients were well served. I was also keen to understand how the region was managed and who were the key influencers.
I was also looking for opportunities to make a difference in the region — to set myself apart and add value. I looked for ways to contribute to our industry programs, to work on new proposals for additional work, and to identify problems within our practice that needed to be solved. I became the leader for our gender equity initiatives in the region and began to make a name for my self across the area. One of the challenges in coming to a new firm was that much of my internal network that was created over 20 years had to be replaced. I tried to identify visible positions so that I could build upon my reputation and jumpstart my career at Ernst & Young. Whether your next job is for full-time employment or as an intern, embrace the opportunity to learn as much as you can about the organization. Volunteer for additional responsibilities, especially those that will improve the organization and impact those around you. Make a difference to the company and make a name for yourself.
Over the next few years, I worked on several task forces and committees within the firm. I served for three years on our firm-wide gender equity task force that allowed me to interact with the firm’s leadership, which made a major commitment to escalating our efforts to enhance the opportunities for women in the firm. I also worked on a committee that was focused on our go-to-market strategy and how to improve our execution of the strategy. That afforded me an ability to interact with our key business developers and rainmakers around the firm. I also worked on a partner advisory council that was a sounding board for our executive board. These committees and task forces are probably meaningless to you but they demonstrate the way I methodically recreated an internal network at Ernst & Young in five years when it took me 20 years to create one organically while at Arthur Andersen. You will need to do this too at some point in your career. Whether you join a new organization or move into a new business unit, it is critical to gain visibility for your contributions, access to leadership, and influence over results.
Becoming assurance leader
In 2006, my efforts to build my reputation at Ernst & Young were rewarded. I became the assurance leader for the mid-Atlantic region. I now manage about 800 people and oversee a business with over $350 million in revenue. I have full responsibility for all of our programs that support our people, quality, and growth within our audit practice. This position has increased the breadth of my influence and allowed me to continue to improve and build the culture of excellence that we have within the area.
I also continue to serve clients, as I believe that in my business it is critical that the other partners be able to relate to you as a client server. I manage a large account for which we provide over $8 million in annual services. Serving clients is core to our business and I have always enjoyed the challenges of a professional services firm.
Community service
One thing that has been critical to my career is my commitment to the community. Not only does my career give me the flexibility to be actively engaged in the community, it’s actually encouraged as good business. I have developed excellent business contacts through these activities in addition to making a contribution to society. I am a trustee and audit committee member at Trinity University in Washington, D.C. This predominantly women’s institution serves large segments of the Washington, D.C.-area, including many under privileged members of the population. I just completed my term as the chair of Leadership Greater Washington, which is the region’s most important change agent and works through its network of connected leaders. I am also a member of the board and chair of the governance committee of the Girl Scouts of the Nation’s Capital. Each one of these community service activities is not only incredibly enjoyable but allows me an opportunity to connect with our leaders in the community. I am also able to showcase Ernst & Young’s commitment to making the Washington metro area a great place to live and work.
The past five years
Since I joined EY, the profession has undergone tremendous change as a result of the regulations and reforms that have been instituted. It has been an incredibly demanding five years, with the influx of work required by Sarbanes Oxley one of the most overwhelming I have ever seen. I would not say that all of the reforms have been well thought out or positive, but, overall, I do believe that the environment has been improved. Our audit committees and boards are more engaged. Management accepts greater responsibility for its own financial statements. Clearly, auditors have a renewed respect for the importance of quality work. It is hard for me to say that the loss of Arthur Andersen was worth it, but five years later, I can at least see the value in the lesson. My 25-year career has certainly been one of learning, and I am sure that I have more to come.