 Mobilizing Minds the McKinsey way |
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Lowell Bryan is a senior partner at McKinsey & Company and co-author of the new book Mobilizing Minds: Creating Wealth From Talent in the 21st Century Organization. Bryan sat down recently with Consulting magazine to discuss the book.CM: What exactly do you mean by “mobilizing minds?” Bryan: Traditionally, industry has focused on mobilizing capital and labor. This book deals more with mobilizing the intangible assets—products of the mind. I’m speaking of relationships, reputation, knowledge and talent—that’s where the value is created today. The organizational model that we all know and love was literally created in the 1920s, and that’s still the model that is used in most companies. In the mid 1990s, all of sudden value was being created quite differently—it was being created by the collaboration of several people. You still have the traditional hierarchies in place to run the company, but now you have this need for large-scale collaboration. Well, today’s organization isn’t designed for large-scale collaboration. The organization design is flawed. It’s designed to conduct business in a different era. CM: What can be done about it?  Bryan: We try to offer smart, new ways to allow people to work together without having to work through matrix structures all of the time. We also introduce a brand new metric—profit per employee. That’s the new metric for performance as opposed to return on capital because talent is where the value is. Harnessing the talent of your people isn’t easy. The book offers a lot of ideas, and certainly some firms already are doing it better than others, but no firm is doing it perfectly. Innovation is hard and everyone is still trying to figure this out. CM: Why profit per employee? Bryan: It’s very simple, actually. In this new way of doing business, we need a new way to measure success. Return on capital is the way it was done in the old organizational model, but we think profit per employee is a better metric. CM: What are the biggest problems facing companies today? Bryan: A lot of the companies that are trying to accommodate all of this change have wound up with unbelievably unproductive and complex organization structures. People are not sure who is in charge. The accounting departments are flawed. The unintended complexity of a lot of incremental decisions has led to a systematic problem that has created a dysfunctional organization. Those companies have to go back to basics. Another major challenge is that a lot of these companies are over siloed. They basically operate in a series of business silos. Of course, a lot of these problems start when you have 10,000 or more employees. CM: Can a company be too big? Bryan: We maintain not. We think it’s a matter of innovation. There are companies out there that have businesses that don’t need to be tied together. And if you’re speaking in terms of employees… well, Wal-Mart has 1.9 million employees, and it’s doing very well. And when you use measure success by profit per employee, then size really shouldn’t matter. | |
