1、Organization:OverviewofCoreFrameworks,LocalTrainingModuleForFirst-yearAssociatesAssociateHandbook,FOREWORDANDOBJECTIVE,ThisOrganizationPractice(OP)documentprovidesanoverviewforuseinlocaltrainingsessionsforfirst-yearassociates.Itispartofa“seriesonfunctionalareas.”TheobjectiveoftheseriesistointroduceM
2、cKinseypractitionerstothebasicsineachofourfunctionalareasofexpertise.AllthedocumentsintheseriesarecomprehensiveinnatureanddescribethecurrenttoolsandframeworksinthatfunctionalareaAttheendofthisdocument,youcanfindasectiondescribingaselectionofthecoredocumentsandhandbooksthatcangiveyoufurtherdetailsons
3、omeoftheframeworksdescriedhere.AllofthesedocumentsarenowonPDNet;andhardcopiesofthemcanberequestedfromPDNetExpress,whichwilldeliverthemin24hoursThecontentsofthisdocumenthavebeenadaptedforlocaltrainingsessionsthrough“SwitchingTracks”OPsfirst-yearmodulevideotape,whichcommunicatesthebasicconceptsinaconc
4、iseandvisualwayusinganactualclientTheScandinavianRailroadCompany.Itis40minuteslongandshouldbepresentedin3shortsegments.Betweenthesesegments,thefacultymemberrunstheattachedexercises,addsanycommentaryhe/sheconsidersnecessarytoclarifytheconcepts,andprovidespersonalexperienceonselectedtopics.Acopyofthev
5、ideotapeandmoderatorsguidewithexercisescanberequestedfromtheFirm,Thisdocumentseekstoanswer4questions,SECTION1Whydoassociatesneedtoconsiderorganizationalissuesineveryengagement?SECTION2Whatframeworksdoweusetohelpourclientsimproveorganizationalperformance?SECTION3Whatroledoesanassociateplayinorganizat
6、ionwork?SECTION4Wherecananassociatefindoutmore?,McKinseysmissionistohavelastingandsubstantialimpactonourclients.Tosucceed,weneedtoworkallthreeofthecriticalelements:choosethebeststrategy,developworld-classoperations,aligntheorganization.Thesethreeelementsbothreinforceandconstraineachother.Thebeststra
7、tegyisonlyrelevantifitisoperationallyandorganizationallyfeasible.Theoptimalorganizationaldesigndependsuponthestrategicrequirementandtheoperationalmethodsoftheclient.Thisdocumentfocusesononevertexofthistriangularrelationship.Itwouldbewrong,however,tobelievethatyoucanachievetheimpactweseekbyfocusingon
8、onevertex.Weneedtoconsiderallthreeineverystudy.,CRITICALELEMENTSFORIMPACT,Successfulstrategy,Efficientoperations,Effectiveorganization,Weonlyachieveimpactwhentheorganizationsweservearesuccessfulinimplementingthestrategiesandoperationalmethodswepropose.However,arecentsurveyofengagementsinwhichclients
9、failedtoimplementproposedstrategiesfound,inthreecasesoutoffour,thattheclientorganizationwasnotchange-readyorevencapableofimplementingthestrategyweproposed.Toensurethatwehaveimpact,weneedtoconsiderorganizationalissuesaswedevisestrategies.Wemustchoosestrategiestheclientsarereadyandabletoimplementorcom
10、plementourstrategyworkwithinvestmentinbuildingtheorganizationsskillssothattheorganizationcanstepuptothechallengethesuperiorstrategyposes.,3OUTOF4STRATEGIESTHATFAILDOSOBECAUSEOFTHEORGANIZATIONSINABILITYTOEXECUTE,100%=340responses,Percent,McKinseyrecommendationsflawed,Clientnotchange-readyorcommitted,
11、Organizationlackedthecapabilitiestoexecutestrategy,Other,Thedemandfororganizationalworkisincreasing.Trendsinthemarketplaceandtheevolvingnatureofourclientslargelyexplainthisincreaseindemand.Thepaceofchangeinthemarketplaceisaccelerating.Astrategicchoiceoranoperationalinnovationevokesarapidreactionfrom
12、competitor.Rarelycanadurablecompetitiveadvantagebefoundinthesechoices.Ratheritisthedevelopmentofauniqueorganizationalcapabilitywiththeinherentflexibilityandcommitmenttosustainworld-classperformancethatprovidesdurablecompetitiveadvantageinthesetimesofrapidchange.Theclientsweservearechangingaswell.The
13、yhaveincreasinglyhiredin-housestrategiccapabilities.MosthavebuiltstrategyshopsclosetotheCEO.Few,however,havethein-housecapabilityandobjectivitytodotheorganizationalworkrequiredtomakechangehappen.,ORGANIZATIONALWORKGROWINGINIMPORTANCE,EvolvingmarketplaceQuickeningpaceofstrategicadaptationDurablecompe
14、titiveadvantageoftenrootedinuniqueorganizationalcapabilitiesEvolvingplayersManybusinessesacquiringin-housestrategiccapabilityMakingchangehappenremainsthe“neglectedart”,McKinseysengagementmixPercentoftime,Increasingdemandforhelpwithorganizationissuesandchangemanagement,Source:Surveyof23MGMsacrosstheF
15、irm,Therecentevolutioninourclientshasnotbeenmissedbyourcompetitors.Eachofourcompetitorshasrecentlyintroducedabrandedorganizationalelementtotheirportfolio.Theirorganizationalexpertisefiguresprominentlyintheirmarketingcampaigns.,COMPETITORSHAVEBRANDEDORGANIZATIONTOOLS,McKinseysconsultingapproachmustev
16、olveasourclientsevolve.Thesechangesprovokeashiftinthenatureofourworkandanevolutionoftheroleoftheassociateonengagements.Theincreaseddemandfororganizationalworkimpactsassociatesdirectly.Associatesaredrawnintoleadershiprolesonlargerteamsatanearlierpointintheircareers.Thisplacesgreateremphasisontheneedf
17、orassociatestodevelopquitesoonafterjoiningMcKinsey-superbteamleadershipskills.,EVOLUTIONINMcKINSEYSAPPROACH,*Surveyof23MGMsacrosstheFirm,Beforewediveintotheorganizationmaterials,weshouldannounceonecriticalcaveat:theframeworksyouareabouttoseeareonlyasgoodasthejudgmentandinsightusedtofillthemout.Thefr
18、ameworksareoftenmerechecklists,usefultoolstoensureyoudonotoverlookakeydimension.TheOPcanprovideinterviewguidesandquestionnairesthatyoucanusetofleshouttheframeworks,aswellasappliedexamplesinarangeofsettings.However,almostallorganizationalissuesare“situationdependent”,andalmostallclientsettingsareuniq
19、ue.Yourjudgment,insight,creativity,andorganizationalacumenwilldeterminewhetheryouaddvalueintheclientsetting.,ACRITICALCAVEAT,“Garbagein,garbageout”,OrganizationalpracticeframeworksChecklistsSurveys,questionnairesAppliedexamples,Garbage,Goodjudgment,keeninsight,creativity,organizationalacumen,Garbage
20、,Clientimpact,Aseriesofframeworksareavailabletohelpclientsidentifyandaddressorganizationallimitsoneffectivenessorobstaclestochange.Theyalsopointtowardsolutions.Theseframeworkshelpteamsanswertwofundamentalquestions:Whatchangeisneeded?Howshouldtheclientimplementthechange?TheOPhasderivedasetofsixattrib
21、utesthatcharacterizehigh-performingorganizations(HPO).Byassessingwhetheryourclientorganizationexhibitsthesesixattributes,youcandiagnosewhetheranorganizationalperformancegapexistsaswell.Additionally,the7-Sswillhelpyouidentifystrengthsanddeficienciesintheorganization.The7-Ssfocusteamsonaligningstructu
22、re,staff,systems,andstyletopromotebehavioralchangeandbuildskillsinpivotaljobholders.Bycontrastingtherequiredskillset(atboththeorganizationandthepivotaljobholderlevel)withthecurrentskillset,youcanoftenclarifytheorganizationalgapthatexists.Youcompletethediagnosticbyfillingoutthechangeboard.Thatexercis
23、ehelpsteamsunderstandtheorganizationalskilldeficitsorresistancetochangesotheycandeliberatelyplantobuildthenecessaryskillsandwillingnesstochangeintheorganization.Oncethegapshavebeenidentified,theteamneedstolayoutachangeprogramtoclosethegaps.Thetransformationtrianglehighlightsthethreecriticaldimension
24、sofanyeffectivechangeprogram-topdown,bottomup,cross-functional.Theproperbalanceamongthesedimensionsdependsonthegap,theclientsetting,andthecompetitivecontext.Everychangeprogramcontainssomemixofsixfundamentalenergizingelements.Eachmustbeconsideredaswedesignchangeprograms.Thissectionofthehandbookwilldi
25、scusseachframeworkinturn.,COREFRAMEWORKS,High-performingorganizationattributes,7-Sframework,Winningformula,Pivotaljobs,Designlevers,Organizationalstructure,Staff,Managementsystems,Leadershipstyle,Changeboard,Agenda/platform,DirectionsettingStructuringBottom-upenergizing,Transformationtriangle,Energi
26、zingelements,TheOPundertookastudyof10high-performingcompanies,trueindustryleaders,thatweknewverywell.Thecompanieshadsustainedpace-settingperformanceintheirrespectiveindustriesover2decades.These10HPOssharedsixmanagementattributes,eachofwhichfocusesonperformance.Bycomparingyourclientorganizationtothes
27、eHPOs,youmayidentifyopportunitiestoimproveyourclientorganization.,“HIGH-PERFORMANCECOMPANY”ATTRIBUTES,Drivenbyleaders,Alignedbysimplestructuresandcoreprocesses,Basedonworld-classskills,Rejuvenatedbywell-developedpeoplesystems,Builtbyrelentlesspursuitofbefore-the-factstrategies/vision,Energizedbyanex
28、traordinarilyintense,performance-drivenenvironment,Thefirstthreeofthesixcommonmanagementattributes:Drivenbyleaders.Theleadersofthesecompanieshadveryhighperformanceaspirations.Fortheseleaderstherewasnosuchnotionas“goodenough”.Atthecenteroftheseleadershipgroups,weconsistentlyfounddemanding,unreasonabl
29、eCEOs.Builtbyrelentlessbefore-the-factstrategies/visions.HPOsspendtheirtimelookingforward,notback.Theirstrategiesdriverelentlesslyforbothprofitabilityandgrowth.Energizedbyanextraordinarilyintense,performance-drivenenvironment.HPOshaveademanding,occasionallypunishing,workpace.Thereisrealaccountabilit
30、y,especiallyatthetop.HPOs,whilebeingverygoodplacestowork,arenotalwaysniceplacestowork.,ATTRIBUTESOFANHPO,ATTRIBUTESOFANHPO(CONTINUED),TheHPOresearchfoundsomethingelsecommontotheHPOs:all10wereexperimentingwithself-governance.Self-governanceintheseHPOsmeansempowermentwithaccountability.TheHPOssharethe
31、commoncharacteristicofinvolving“awiderangeof“or“broadcross-sectionof”employeesindrivingforimprovedperformance.Theirgoalistoimbueeveryemployeewithanownersmind-set.SelfgovernanceintheseHPOsisdifferentfromthatpracticedinother“engagedandempowered”companies.InHPOsthesingle-mindedobjectiveofempowermentisp
32、erformance.Inthematrixbelow,theHPOswestudiedwereallinthetophalfofthematrix(highperformance);manywerereaching,inaddition,fortheright-handsideofthematrix(engagedandempowered).,PERFORMANCEANDEMPOWERMENTATHPOs,Mostlargecompaniesstartoutinthelowerleft-handcornerofthematrix(lowperformanceandcommand-and-co
33、ntrolmanagementapproach).WediscoveredthatHPOsthathavesuccessfullytransitionedtotheupperright-handcornerhavefirstachievedhighperformanceandthenexperimentedwithandadoptedempowerment.Empowermentwithoutfirstestablishingatrueperformanceethicinthecompanytendstoresultincontinuedlowperformance.Ifyourclientf
34、allsinthelowerleft-handcornerofthismatrix,itneedstoconcentratefirstonbuildingatrueperformanceethic.Empowerment,alone,isunlikelytoyieldperformanceimprovement.,TRANSFORMATIONPATH,7-SFRAMEWORK,McDONALDSWINNINGFORMULA,Vision:tobecometheleadingrestaurantchainintheworld,Strategy,Sharedvalues,Skills,Conven
35、ientGoodqualityConsistentFamily-orientedenvironmentFairvalue,QualitycontroloverallaspectsofbusinessSuperiorsiteselectionContinuousnewproductdevelopmentStrongpromotionofproductsandMcDonaldsimage,QualityServiceCleanlinessprice,Organizationsusuallychangeinresponsetodiscontinuitieseitherexternalshocks(s
36、uchasderegulation)orinternalchanges(suchasnewleadership)thatmakeitclearthattheold,“grooved”wayofdoingthingsisnolongerwinning.Thesuccessfuloneswillcreateanewwinningformulathatisbasedonchangesinstrategy,newerorstrongerskills,and/orsharedvalues.Contrastingthenewwinningformulatotheoldformulaidentifiesan
37、dgaugesthechangethattheorganizationisconsideringanddefinesthevisionforthechangeprogram.Achangevisionisacreedthatsummarizeswhatanorganizationistryingtobecomeandwhy.Assuch,itguidesorganizationalprioritiesbyredefiningandrecombiningbusinessobjectives,requiredinstitutionalskills,andcorporatevaluesaboutwh
38、atisimportantaroundhere.Achangevisionisattheheartoftopmanagementsroleinimprovingperformanceandisoftenthefirststep.Itprovidesthevitalbridgebetweentheinitialdissatisfactionwiththestatusquoandthefirstpracticalstepstakeninachangeprogramthearticulationofacleartargetthatrepresentssomethingbetterthatisboth
39、logicallysoundandemotionallyappealing.,IMPROVINGORGANIZATIONALPERFORMANCE,Grooved,Redirected,Unfrozen,Discontinuities,ExternalshocksNewcompetitors,economicsNewtechnologiesDeregulationInternalchangesNewaspirationsNewleader,Majorchangethroughpeople,Newstrategy,Neworstrongerskills,Sharedvalues,CHANGEVI
40、SION,Certainkeypeopleintheorganizationholdpositionsthatdeterminesuccessorfailureininstitutinganewstrategy,skill,orsharedvalue.Thesepeoplefillwhatwecallpivotaljobs.Wewillonlysucceedinimplementingthechangevisionifwesucceedinchangingthebehaviorofpivotaljobholders.AtMcDonalds,forexample,pivotaljobsinclu
41、dethecentralizedpurchasersofallrawmaterialsforallstores,thestoremanagers,andthehourlyemployeeswhotakeandassembleorders.,PIVOTALJOBSWhatpeoplemustdo,Whatarethey?Positionsthathavedirectimpactondeliveryofvaluetothecustomer.Typicallythey-Designtheproduct-Maketheproduct-SelltheproductPositionsthatmustcap
42、ablymasternewskillsWherearethey?Closetothefrontline,Inarecentstudyatachainstoreretailer,thechangevisionincludedasignificantimprovementinin-storeconvenience.Twopositionswereidentifiedaspivotaljobsthestoremanagerandtheareaoperationsmanager.Thisstudyemployedacontrastanalysisintwoforms.Thefirstconsidere
43、deachelementofbehavioranddefinedhowthenewbehaviorwouldneedtodifferfromcurrentpractices.Abehaviorcontrastanalysisoftenproveshelpfulindefiningpreciselyhowthepivotaljob-holdersneedtochange.,CONTRASTANALYSISPivotaljobs:storemanager,chainretailer,Thesecondanalysiscontrastedthepercentageoftimespentoncriti
44、caltasksundercurrentpracticesandenvisionedinthefuture.,CONTRASTANALYSISBYPERCENTAGEOFTIMESPENTPivotaljob:areaoperationsmanager,100%,Merchant/owner,Coach,Player,Admini-straor,ORGANIZATIONALDESIGNLEVERSATMcDONALDS,Winningformula,Pivotaljobs,Designlevers,Organizationalstructure,Managementsystems,Leader
45、shipstyle,Staff,ORGANIZATIONALDESIGNLEVERSATMcDONALDS,Winningformula,Pivotaljobs,Designlevers,Organizationalstructure,Managementsystems,Leadershipstyle,Staff,STRUCTURALOPTIONS,CHANGEBOARD,Skilltobebuilt,*Modifiedasappropriateforcompany*E.g.,customers,suppliers,tradeunions,CHANGEBOARDCHAINRETAILEREXA
46、MPLE,Deliveringin-storeconvenience,CHANGEBOARDCHAINRETAILEREXAMPLE,Deliveringin-storeconvenience,Lockinsupport,Createsharedresponsibilityforprogress,Buildasuccessmodelfrombelow,Forceawarenessofrealities,Restructurefieldorganization,Toanswerthequestion,“Howshouldchangehappen?”,theOPdevelopedthe“organ
47、izationaltransformationtriangle”thatsummarizesthethreebasicmanagementtaskswhendealingwithchange.Theirrelativeemphasismayvary,butallthreeofthemhavetobemanagedtoachievefundamentalbehavioralchange.,TRANSFORMATIONTRIANGLE,Thewell-knownGE“workout!”changeprogramincludedelementsfromeachdimensionofthetransf
48、ormationtriangle.,GE“WORKOUT!”,Top-downdirectionsetting/cultureshapingNo.1orNo.2ineverybusiness“speed,simplicity,self-confidence”DelayeringBestpracticesworkshops,Bottom-upperformanceimprovementTownmeetings:2-to5-dayinteractivesessions“Brandname”qualityprocessesOperations:unit-by-unitredesign,Corepro
49、cessredesignProjectteamstoidentifycross-functionalissuesProcessmapping,Theclientshouldseekanappropriatebalanceacrossallthreedimensionsofthetransformationtriangle.Overrelianceonanydimensionwillimpedechange.,BALANCEON3DIMENSIONSISKEY,TheOPhasdefinedawidearrayofchangeapproaches.Eachchangeapproachstrikesauniquebalanceamongthedimensionsofthetransformationtriangle.Yourchallengeisfindingthechangeapproachthatstrikesthebalanceappropriateforyourclientsituation.,OVERVIEWOF5PERFORMANCECHANGEAPPROACHES,Nomatterwhatchangeprogramisselected,thefollowi