A new order of things.

In celebration of Chief Executive magazine's 20th anniversary, we've been asking CEOs who've held their positions for the better part of that period - or longer - to reflect on the changes they, and their companies, have experienced during that time. In our fourth installment, DTTI's Ed Kangas finds a modern message in the words of Machiavelli - and a metaphor in the experience of one particular soccer dad.

There is nothing more difficult to take in hand," wrote Niccolo Machiavelli in The Prince, "more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things." As you know, all CEOs have to undertake that perilous course of action, not once, but again and again.

In 1985, I was elected, managing partner and CEO at what was then Touche Ross. Both our firm and our profession were in the midst of great change. Because clients were demanding an array of consultative services that went beyond the audit, the Big Eight firms had begun to realize that they were professional services firms, not just auditors. The recognition of this profound shift in emphasis, I believe, may have been a factor in my election, since I came out of our fast-growing, but relatively small consulting practice.

A time of such change demands leadership, which, as Machiavelli teaches, involves manipulation, or, I might say, "organizational judo." Getting people to move and change radically requires understanding the politics of an organization, its people, pressures, and leverage points.

Because we were one of the smallest of the Big Eight accounting firms, I realized that, to remain viable, our firm had to be a top-performing professional services firm. As part of our effort to meet that challenge, we had to grow our market share - and improve profits. We had to attract clients and good people. We also had to accomplish a task that seemed impossible: double earnings per partner by 1990. For our firm to perform, our partners had to believe we could be the highest-performing firm - and they didn't know how good we were. So, we took a bright light and shone it on ourselves, highlighting our strengths rather than our weaknesses. We established new businesses, built a strong Japanese practice capability, met our partner earnings goal, and focused on people, creating an effective human resources organization, changing management practices, and translating core values into action.

Although we were doing well, by 1989, I realized we faced a much greater challenge. We were not going to achieve our objectives unless we came to terms with globalization. A firm our size simply did not have the capabilities necessary to serve clients in several key overseas markets. We had to merge. At the same time, Mike Cook, chairman and CEO of Deloitte, Haskins & Sells, had come to a similar conclusion.

Mike and I decided to do something more than merge. We decided to create a new firm, one of the largest in the profession. Mike assumed the role of chairman and chief executive of the U.S. practice, focusing on clients and the profession. As managing partner of the U.S. practice, my job was to make the merger work and begin to deal with the forces of globalization. To do so, I took on the added role of chairman and chief executive of our international organization, Deloitte Touche Tohmatsu International.

We recognized we had to build our new firm on a set of core values. Creating a modern professional services firm is all about people, and people are about values, the rules by which any society lives. So, clarifying and instilling these values across the organization was one of our first tasks.

We weathered the recession of 1990-1991, but even as we gained momentum as a new and confident firm, the pace of globalization was accelerating. As companies downsized to deal with the recession, they had helped boost our consulting practice immensely. But with downsizing completed, companies turned to global economies of scale to achieve competitiveness. Advances in computerization and telecommunications allowed them to operate, not as groups of autonomous subsidiaries, but as one global enterprise. They were moving toward global consistency - in facilities, manufacturing, and inventories - in order to achieve greater economies of scale. In the process, they discovered what I call "power of scale" - the ability to control supply sources and dominate markets, to "call the shots" in a given industry.

The challenge of globalization for us was that our clients began to insist on something we couldn't always provide: global consistency in technology, methodology, and people. They wanted one partner in charge of all their worldwide affairs. They wanted our audit services to be seamless and global.

Our clients also began to demand the same approach to management consulting and tax services, with presence and capacity everywhere; consistent standards worldwide; seamless operation with qualified global teams; and a partner in charge of all service to a particular client. These four simple commands demanded another quantum change from our firm.

To focus our efforts, I became full-time global chairman and CEO in 1994. My job was to do worldwide what I'd been doing in the U.S. - to integrate and build a truly global firm.

The first step was to establish a global strategic partnership. That means we manage things where they should be managed - some globally, some by country, and some by city. That is no small task, since it means asking partners to relinquish national sovereignty and transfer more authority to a global organization.

There are compelling reasons for doing so, in every area of our business. In the 1990s, the consulting business is not locally or nationally driven, but globally driven. So, we've consolidated our management consulting organization into one worldwide business. In our tax practice, we developed a standardized template to organize and operate all our services. We work with clients to make the template work for them - and to develop and deliver global tax products consistently. In accounting and auditing, we've transferred the development of all methodologies and technologies to the global level. Our new audit methodology enables the audit of a worldwide company. Risk management and human resources are likewise becoming global. And this year, we've begun holding annual global new partners' meetings - in place of the old country-by-country approach.

At the core of our globalization is a concept which allows us to leapfrog the issue of geographic financial integration. We're integrating managerially and financially around clients, rather than geography, beginning to share revenues and profits on a client-by-client basis, not a country basis. We put this concept to a vote at an annual meeting, asking: Should the global lead client service partner have more authority than any country managing partner or chairman as it relates to decisions affecting clients? The vote was a resounding "yes," a recognition that clients are more important than our structure.

During my tenure, one of the biggest changes has been the rejection of the management style most of my generation grew up with: command and control. That approach worked in the 1960s. It's a dinosaur in the 1990s. The talented young people joining our organization reject it. They want more freedom; they resist control. They are less respectful of their elders. They will accept influence, however, if it's built on respect, competence, and capability. They respond well to motivation that helps them develop. They seek the psychic rewards that come from growing, learning, and serving clients, and their firm, well.

As partners, we face a major personal and professional challenge - changing the way we have managed for most of our careers. Our firm will not excel unless it continues to attract the best and brightest young people. The firms that perform best in this arena are those that will beat their competition.

To learn new approaches for leading young professionals, we've also had to deal with diversity. In the United States, for example, we have a major initiative to level the playing field between men and women, an effort that has already produced remarkable results, making us a better firm for women, as well as men.

When I started out, I learned that when you're in last place, you have to do more than just develop and execute superior strategy. In fact, we had to achieve superior performance by doing things that were extraordinary, things that were sometimes risky and often dependent on good fortune. In the process, we learned that underdogs win for a reason. They are bolder; they have less to lose; they take more risks; they work harder. And they have a greater need for leadership.

Over the years, I've observed many great CEOs, most of them at our clients' companies. The great ones are powerful builders of consensus. They also have a number of other characteristics: They're good students, who understand the scope and complexity of their task; they're not intimidated by supreme challenges, no matter how daunting; they're able to develop a vision and strategy that allow their firms to compete effectively; they're able to translate that strategy into action. Finally, they have the capacity to command the organization to act and perform.

At the beginning of this piece, I used the dreaded word "manipulate" to describe the tool I use to command my organization to act and perform. Perhaps a story will clarify what I mean.

When my son Jeff was six years old, I took him for the first time to play soccer. A father threw out a soccer ball, and 10 little kids milled around, going nowhere. Suddenly, another father whistled and said, "Hey kids, look down there!" A hundred yards away a dad was setting up a net. The herd of little boys looked at the net, then they and the ball began moving toward it.

Were those kids manipulated? Of course. The dictionary defines manipulation as "to operate or control by skilled use of the hands...to manage shrewdly." The manipulator points people in the right direction, and then lets them proceed on their own to the goal. It takes skill to produce consensus - unified, goal-oriented behavior. Consensus is a powerful tool, essential in transforming an enterprise. The ability to command an organization to act and perform has been and will continue to be the key ingredient that sets the chief executive apart in the world of management.