Thursday, November 20, 2014

The McKinsey Quarterly at 50 Years



The Quarterly’s mission is to help define the senior management agenda; this anniversary issue* is focused on McKinsey’s vision for the future of management. (p. 1)  The issue is organized around several themes (strategy, productivity, etc.) but we’re interested in how it addresses culture.  The word appears in several articles, but usually in passing or in a way not readily applied to nuclear safety culture.  There were, however, a few interesting tidbits.  

One article focused on artificial intelligence as a sweeping technological change with exponential impacts on business.  An interviewee opined that current senior management culture based on domain expertise will need to give way to becoming data-driven.  “[D]ata expertise is at least as important [as domain expertise] and will become exponentially more important.  So this is the trick.  Data will tell you what’s really going on, whereas domain expertise will always bias you toward the status quo, and that makes it very hard to keep up with these disruptions.” (p. 73)  Does the culture of the nuclear industry ignore or undervalue disruptions of all types because they may threaten the status quo?

McKinsey’s former managing director listed several keys to corporate longevity, including “creating a culture of dissatisfaction with current performance, however good” and “focus[ing] relentlessly on values . . . A company’s values are judged by actions and behavior, not words and mission statements.” (pp. 121-22)  The first point reinforces the concept of a learning organization; the second the belief that behavior, e.g., the series of decisions made in an organization, is culture-in-action.  Any design for a strong safety culture should consider both.

Lou Gerstner (the man who saved IBM) also had something to say about values in action: “The rewards system is a powerful driver of behavior and therefore culture. Teamwork is hard to cultivate in a world where employees are paid solely on their individual performance.” (p. 126)  We have long argued that executive compensation schemes that pay more for production or cost control than safety send an accurate, although inappropriate, signal of what’s really important throughout the organization.

Finally, management guru Tom Peters had some comments about leadership.  “If you take a leadership job, you do people.  Period.  It’s what you do. It’s what you’re paid to do.  People, period.  Should you have a great strategy?  Yes, you should.  How do you get a great strategy?  By finding the world’s greatest strategist, not by being the world’s greatest strategist.  You do people.  Not my fault.  You chose it.  And if you don’t get off on it, do the world a favor and get the hell out before dawn, preferably without a gilded parachute.  But if you want the gilded parachute, it’s worth it to get rid of you.” (p. 93)  Too simplistic?  Probably, but the point that senior managers have to spend significant time identifying, developing and keeping the most qualified people is well-taken.

Our Perspective

None of this is groundbreaking news.  But in a world awash in technology innovations and “big data” it’s interesting that one of the world’s foremost management consulting practices still sees a major role for culture in management’s future.


*  McKinsey Quarterly, no. 3 (2014).

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