Caroline Tervoort (KPMG): ‘Making a Real Impact With the Human Side of HR’

When you were chosen as CHRO of the year at the end of last year, you were widely lauded, including by your own CEO, Stephanie Hottenhuis. She particularly commended your empathetic abilities. Do you yourself see you as an empathetic leader?
‘That was great to hear. I do recognize myself in that. Yes, I think I am an empathetic leader. But I am not only empathetic. I also value consistency and clarity. I believe it is crucial for a leader to provide clear direction and set the course. That is what colleagues expect too. At the same time, I believe that you can only get people on board if the relationship is good. I invest a lot of time in building relationships. But above all, I always try to be honest. I will not sugarcoat things; I will always try to be clear. Say it like it is.’

Staying with the praise for a moment. When you were elected CHRO of the year, you were particularly praised for social innovation…
‘I was very happy with that. It was great to see the judging panel recognize that aspect. It is an acknowledgment that HR extends beyond just its technical facets. Thereby, they recognized that HR is more than its hard side. This ‘hard side’ has received a lot of attention lately: it is about the future of artificial intelligence and the importance of data. These are undoubtedly extremely important themes. But I particularly belief that the social aspect is vital too. An HR department should prioritize people, especially in an organization like KPMG, where our people are our capital. If I truly want to make an impact, I can do so on the social front. So, this is what I have been focusing on the last couple of years.’

How do you implement this social innovation?
‘The transactional style of leadership is no longer sufficient. An organization cannot simply say: 'We pay you well and now expect you to perform certain defined tasks.' That approach does not cut it nowadays. If you want to motivate and retain people in your organization, it requires an empathetic style of leadership. Our focus is on creating an environment which people find appealing to stay in. An environment where they feel at home, where there is room for development, and where they can be themselves, feel comfortable in a team, and feel acknowledged by the colleagues they work with.’

Was creating a psychologically safe environment part of your assignment when you returned to KPMG five years ago?
‘When I joined the organization our CEO Stephanie Hottenhuis and I had several discussions. The assignment included strengthening the culture and values of KPMG and aligning them with the various dynamics of the three business units of KPMG. The task was to become best in class.’

How did you approach this?
‘There were several transformations which needed to be addressed. We looked at other profiles in the market and adjusted our training programs according to what we saw. Transformations have a direct impact on the culture, as each transformation calls for different qualities, as do the dynamics in the market. The group of people associated with us has grown increasingly diverse in recent years. We now have employees from 83 different nationalities. They are individuals from various parts of the world with diverse backgrounds and experiences. And make no mistake: achieving diversity is just the beginning; achieving inclusivity requires substantial effort. We view diversity through five lenses, with taskforces organizing activities like the 'Ramadan Participate Day' and holiday exchange options, fostering awareness about the diversity of beliefs, backgrounds, and talents. These efforts contribute to an environment where everyone feels at home and can be themselves.’

You identified psychological safety as an important theme. How do you approach this?
‘In terms of psychological safety, we strongly focus on our leadership team. We think it is important each of our people feels recognized by one of the leaders. We invest in this, for instance, with our inclusion, diversity & equity impact program. This is a mandatory program for the entire senior management with the focus on unconscious biases. The opening message here is that we all have biases. We encourage conversation on this and invite people to challenge what arises. This brings a different perspective, as those who speak up often are colleagues from a younger generation. It assists in creating a better understanding of each other's worlds and beliefs, which is a prerequisite to achieving conscious inclusion. For me, this is the foundation of psychological safety and the essence of empathetic leadership. The program was very well received.’

Implementing such an impact program raises awareness of the issue; how do you assure that it maintains its significance?
‘One program does not create impact; you need continuous conversation about it. To kickstart that conversation, we conduct various assessments. We organize an annual global people survey that yields valuable data. Additionally, we regularly conduct smaller-scale studies and surveys. This provides us with good insight into the psychological safety within departments. As a result, we have identified areas of success and areas where support is needed. The findings from these studies serve as a foundation for our leaders to engage in dialogue with each other and their teams. We also encourage leaders to share best practices with their colleagues. It is of course interesting to learn from each other. If we identify areas for improvement, we can use these studies to pinpoint where to focus our efforts. This continuously updated data helps keep the conversation alive.’

Do leaders dare to be vulnerable? Are they allowed to admit that they're not sure how to proceed at times?’
‘That varies from person to person. Moreover, each department has its own dynamics. I have noticed not everyone finds it equally easy. I also recognize that people have different levels of courage. However, I see a lot of progress, partly because discussing it has become less intimidating over time, thanks to our ongoing focus on the subject.’

The American professor of leadership Amy Edmondson writes extensively about psychological safety, particularly about creating a culture where learning from mistakes is encouraged. How realistic do you find this in a high-performance organization like KPMG?
‘In my opinion it is realistic, even though it is not undemanding. In fact, to foster a learning culture in our organization is a major strategic pillar. We had a challenging time when the company came under scrutiny when it transpired that some of our colleagues shared answers during mandatory training assessments. This was indefensible, especially given our societal responsibility. We learnt a lot from it, also through extensive reflection. What happened? Why did it happen? And what are we going to do about it? It took courage to engage in the conversation with each other, but this needed to be done and was the correct thing to do. We analyze, learn, improve and move forward. We take responsibility for what happened.’

In addition to psychological safety, there is a considerable focus on combating toxic behavior. Do you believe toxic behavior is prevalent?
‘Toxic behavior exists in every organization. This is evident from research on workplace integrity violations conducted by our advisory practice among several companies in the Netherlands. It revealed that 40 percent had experienced something that was not above board. The most common issues mentioned were about bullying and a hostile work atmosphere. It was reported in 50 percent of cases. These are significant figures which reinforce my belief that integrity and social safety are universal issues. Following the controversies at the television program The Voice, we, in the spirit of noblesse oblige, also conducted an investigation in our organization. It was revealed that some of our colleagues also experience micro-aggressions in the workplace. It often involves seemingly minor incidents: a joke that rubs the wrong way, an ill-timed remark, but there were also instances of bullying. When this occurs frequently, it can become toxic. Toxic behavior is like a smoldering fire. We believe that we have everything in place to be able to detect any signals early, so that we can prevent a full-blown blaze.’

You cannot keep an eye on everything yourself, of course. Do you have some sort of toxic police patrolling around?
‘A toxic squad? No, that we do not have. We endeavor to detect signals that could lead to toxic behavior early on through interim assessments. Naturally, this places significant demands on our leaders within the organization. We also have a team dedicated to leadership, culture & inclusion which is responsible for analyzing psychological safety. As part of our approach, we have appointed several culture coaches. They work with departments to assess what is needed to strengthen psychological safety. We provide extensive support, for instance, a booklet with various conversation starters. Ultimately, however, our leaders need to take up the baton.’

Have you experienced any change since you became involved in this?
‘Yes, I have definitely seen changes. In the beginning it was difficult, and we struggled to make it concrete. But we did eventually succeed. People now know that we do research and that we use the data from those studies in our processes. For instance, the results are incorporated in performance reviews. The data is then on the table which facilitates an easier, more meaningful conversation. We encourage employees to speak out. This is what we aim to stimulate.’

Have the numerous media reports on toxic or boundary-crossing behavior helped you in this matter?
‘I am not sure that it helped. It is something you must relate to. This topic existed ten years ago as well. Incidents in various sectors brought it to the forefront and created awareness. What is outside reflects what is on the inside. This awareness focused attention on the issue which provided the impetus to really address it.’

It appears as though there is an increasing occurrence of boundary-crossing or toxic behavior. Is this also your perception?
‘It seems like it is becoming more common because the issue is being highlighted more. It is more out in the open. There is also less turning a blind eye. People are more inclined to report it, in my experience. Another factor is that the world is undergoing change. There are societal developments and geopolitical tensions. These undercurrents also affect the organization. And as mentioned, what is outside is inside. These are themes we need to address. You cannot script everything; you act partly from your moral compass — from the feeling you have about what is right and what is wrong.’

Has that moral compass become more significant in your area of expertise?
‘There is a tendency to invoke it more and, in that sense, it has become more important. But it has always been there. HR should by definition function according to a moral compass. Our responsibility is to maintain the values of the organization. This is becoming increasingly important, especially considering the various digital developments. We will soon be able to do a plethora of new things, but is it obligatory to want to do it all? Where are the moral boundaries? HR has a crucial role to play in answering these questions. Yes, we are the compass and conscience of the organization, and it is a role that is only becoming more significant. It is the future of HR.’

This interview was published in Management Scope 05 2024.