McKinsey: Simulation key to how effective organizations build staff capabilities

I’ve seen the impact of leadership development on organizations: it’s why I joined PM College. One of the challenges is to determine which methods work best to drive transformation, or accelerate improvements one has already reaped. Our firm has experience and research that pins this down, but it’s always nice to find a third-party that confirms what we know and believe.

McKinsey to the rescue, with a new survey on “Building Capabilities for Performance.” The survey refreshes data from a 2010 study, and found that:

… the responses to our latest survey on the topic suggest that organizations, to perform at their best, now focus on a different set of capabilities and different groups of employees to develop.

In other words, the best performers did personnel development differently.

What did they do? The first finding that struck me was the use — or disuse — of experiential learning: McKinsey model factories or simulations as examples. The most effective organizations used these methods more than four times more frequently than others. But even then, experiential learning was used sparingly, by just under a quarter of the top performers.

As long-time Crossderry readers know, I’m a big fan of simulations. We had great experience with them at SAP. As McKinsey notes, they are about the only way “to teach adults in an experimental, risk-free environment that fosters exploration and innovation.” To that end, several popular PM College offerings — Managing by Project, its construction-specific flavor, and Leadership in High Performance Teams — use simulations to bring project and leadership challenges alive…without risking real initiatives.

I’ll have more on other success factors — custom content and blended delivery — in following posts.

Strategy and Stories Redux

When we want to convey or convince, our first instinct is often ask to “tell a story.” It may be a joke or fable, but the ideas that we want to promote aren’t thrown out there randomly. We try to embed them in a plot and setting that engages the listener. It also brings together the teller and hearer in a way that fishing for a “yes” to an idea never can.

I was reminded of storytelling and strategy by a Jonah Goldberg piece about stories in our political culture. From his open:

There is an enormous amount of whining these days about our ideological debates. This gets the problem wrong. Ideological debates are fought over ideas, but politics is more often about competing stories, or, as the eggheads call them, “narratives.”

This insight — ideas ≠ equal stories — is one of the reasons McKinsey is the dominant strategy consultancy. The firm’s associates are great at sweating the narrative through dozens of drafts, yet they also hang the “footnote” details just out of sight. The details are out of sight of the listener perhaps, but available for the speaker to summon in a second.

I often relay the story of sweating the prep for a strategy presentation for a CEO under the tutelage of a McKinsey alum. Not only did we go through fifteen full drafts, but we carefully positioned our proof points in the appendices. Therefore, when the CEO questioned an assumption — one that underlay a key plot twist — I could then go straight to the idea that supported the assumption. In fact, those ideas were their own little story.

The result? The executive said “now I know why the story goes the way it does…I’m not sure I agree with that premise, but it makes sense now.” This careful layering of narrative and support bounded the problem for us. Now we could focus on refining and selling that plot point, not patching up scattered plot holes.

On the other hand, other consultancies don’t do this nearly as well. It’s either all story and no setting, or all setting and no plot. To tie this back to politics, I can’t say I was surprised that Bain founder Mitt Romney’s platform was a barrage of ideas, with little story to focus their aim.

Talent Development for Complex IT Programs

I just received a McKinsey brief on “Developing talent for large IT projects” that has the usual recommendations, but adds two useful insights.  From the opening section:

The responses [to a survey on levers for improving IT performance] reflect the challenge of attracting, developing, and retaining the right IT talent at a time when building a digital enterprise has become a priority for most companies. To succeed, organizations need to cultivate in-house talent for roles that require intimate knowledge of the business and the organization. Enterprises must recognize the value and scarcity of employees who combine IT savvy with business acumen and must build and support a staff of such people.

The authors lay out three recommendations:

  1. Focus on the roles that really matter: Here’s the first useful point. There are plenty of skills and competencies that can be outsourced, but the piece suggests ensuring that IT program manager, business change leader, and lead IT architect roles stay in-house.
  2. Attract talent by improving culture, benefits, and career paths: I really like the recommendation around career paths, because it identifies the biggest barrier to nurturing project-oriented staff. Where do they go next? From the post:”Career paths for leaders of large IT-driven projects are rarely clear or compelling, and they’re often nonexistent, which is one reason these leaders are in short supply.”
  3. Build IT project-management capabilities: a.k.a., train and build a PMO…err, a Center of Excellence.

Here’s one point of my own, related to career paths. Project and program managers need to drive this discussion, even if it’s in their own heads. While firms could be more proactive in career planning, we own our careers. If the project is sufficiently important and strategic — whether you accept the role, refuse the role, successfully deliver the project, or light a Viking Funeral — your next move may well be out of the organization. If you’re being asked, you’ll have a choice in front of you sooner or later.

Whether you like it or not.

A few points re: elite consulting firms

Do you select, work with, or want to join the ranks of elite management consultants?Jim Manzi’s post on elite business recruiting at the American Scene gives first-hand insight on how those folks got there.  Three quick points of my own:

  1. Gut courses can come back to haunt you.  Ever tempted to dial back on your effort… say, take a B.A. in Economics rather than a B.S.?  After all, who would notice one little letter?  Well, recruiters do, and they’ll know that a B.A. Econ avoided econometrics and modeling classes, the “hard” stuff Jim highlights.
  2. There is no “tail” at elite universities.  Did you ever look around in class and wonder how some of your classmates ever got into college, B-school, etc.?  From my experience — recruiting, not attending — there aren’t obvious weak reeds at elite schools.  Top firms can’t risk a hire who stood out simply because he/she was the pick of a litter of runts.
  3. It really is a competitive marketplace.  As Manzi notes, “it is very rare that the COO of a Fortune 500 company hires your case team to do a six month project at $375K per month so that you can sit around and reminisce….”  

Of course, the competition isn’t always about the “best” answers.  Sometimes it is about “selling” that your firm has the best answers.  But that delves into territory Steve Hsu covers more deeply in his post on credentials and elite performance.

Sustainable value in the knowledge economy

Whenever Mary Adams comments on Crossderry (thanks, Mary), I always make a point to work through my Google Reader inventory of her posts (here also).  She posted briefly (here) on Jay Deragon’s post (here) and comment thread — including some from McKinsey reps — wondering how valuable McKinsey’s “Premium” offering is.

I dropped the “Premium” subscription myself a few years ago, but I do return to mckinsey.quarterly.com pretty regularly.   However, I’ve seen certain articles that stand out — in the way that McKinsey consulting stands out — by being on point, detailed, yet well-written and digestible (unlike some of the academic work Jay refers to).  I know I’m missing something, but I’m not sure its worth $150/year.

In such cases, it would be nice to have the option to buy a single article (like HBR… hint, hint).  Not sure of the price point, but I could see myself making a $5-$10 “impulse” buy for the right piece.

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