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Organization:OverviewofCoreFrameworksLocalTrainingModuleForFirst-yearAssociatesAssociateHandbookFOREWORDANDOBJECTIVEThisOrganizationPractice(OP)documentprovidesanoverviewforuseinlocaltrainingsessionsforfirst-yearassociates.Itispartofa“seriesonfunctionalareas.”TheobjectiveoftheseriesistointroduceMcKinseypractitionerstothebasicsineachofourfunctionalareasofexpertise.AllthedocumentsintheseriesarecomprehensiveinnatureanddescribethecurrenttoolsandframeworksinthatfunctionalareaAttheendofthisdocument,youcanfindasectiondescribingaselectionofthecoredocumentsandhandbooksthatcangiveyoufurtherdetailsonsomeoftheframeworksdescriedhere.AllofthesedocumentsarenowonPDNet;andhardcopiesofthemcanberequestedfromPDNetExpress,whichwilldeliverthemin24hoursThecontentsofthisdocumenthavebeenadaptedforlocaltrainingsessionsthrough“SwitchingTracks”—OP’sfirst-yearmodulevideotape,whichcommunicatesthebasicconceptsinaconciseandvisualwayusinganactualclient—TheScandinavianRailroadCompany.Itis40minuteslongandshouldbepresentedin3shortsegments.Betweenthesesegments,thefacultymemberrunstheattachedexercises,addsanycommentaryhe/sheconsidersnecessarytoclarifytheconcepts,andprovidespersonalexperienceonselectedtopics.Acopyofthevideotapeandmoderator’sguidewithexercisescanberequestedfromtheFirmThisdocumentseekstoanswer4questionsSECTION1Whydoassociatesneedtoconsiderorganizationalissuesineveryengagement?SECTION2Whatframeworksdoweusetohelpourclientsimproveorganizationalperformance?SECTION3Whatroledoesanassociateplayinorganizationwork?SECTION4Wherecananassociatefindoutmore?McKinsey’smissionistohavelastingandsubstantialimpactonourclients.Tosucceed,weneedtoworkallthreeofthecriticalelements:choosethebeststrategy,developworld-classoperations,aligntheorganization.Thesethreeelementsbothreinforceandconstraineachother.Thebeststrategyisonlyrelevantifitisoperationallyandorganizationallyfeasible.Theoptimalorganizationaldesigndependsuponthestrategicrequirementandtheoperationalmethodsoftheclient.Thisdocumentfocusesononevertexofthistriangularrelationship.Itwouldbewrong,however,tobelievethatyoucanachievetheimpactweseekbyfocusingononevertex.Weneedtoconsiderallthreeineverystudy.CRITICALELEMENTSFORIMPACTSuccessfulstrategyEfficientoperationsEffectiveorganizationWeonlyachieveimpactwhentheorganizationsweservearesuccessfulinimplementingthestrategiesandoperationalmethodswepropose.However,arecentsurveyofengagementsinwhichclientsfailedtoimplementproposedstrategiesfound,inthreecasesoutoffour,thattheclientorganizationwasnotchange-readyorevencapableofimplementingthestrategyweproposed.Toensurethatwehaveimpact,weneedtoconsiderorganizationalissuesaswedevisestrategies.Wemustchoosestrategiestheclientsarereadyandabletoimplementorcomplementourstrategyworkwithinvestmentinbuildingtheorganization’sskillssothattheorganizationcanstepuptothechallengethesuperiorstrategyposes..3OUTOF4STRATEGIESTHATFAILDOSOBECAUSEOFTHEORGANIZATION’SINABILITYTOEXECUTE100%=340responsesPercentMcKinseyrecommendationsflawedClientnotchange-readyorcommittedOrganizationlackedthecapabilitiestoexecutestrategyOther1784035Thedemandfororganizationalworkisincreasing.Trendsinthemarketplaceandtheevolvingnatureofourclientslargelyexplainthisincreaseindemand.Thepaceofchangeinthemarketplaceisaccelerating.Astrategicchoiceoranoperationalinnovationevokesarapidreactionfromcompetitor.Rarelycanadurablecompetitiveadvantagebefoundinthesechoices.Ratheritisthedevelopmentofauniqueorganizationalcapabilitywiththeinherentflexibilityandcommitmenttosustainworld-classperformancethatprovidesdurablecompetitiveadvantageinthesetimesofrapidchange.Theclientsweservearechangingaswell.Theyhaveincreasinglyhiredin-housestrategiccapabilities.MosthavebuiltstrategyshopsclosetotheCEO.Few,however,havethein-housecapabilityandobjectivitytodotheorganizationalworkrequiredtomakechangehappen.ORGANIZATIONALWORKGROWINGINIMPORTANCEEvolvingmarketplace•Quickeningpaceofstrategicadaptation•DurablecompetitiveadvantageoftenrootedinuniqueorganizationalcapabilitiesEvolvingplayers•Manybusinessesacquiringin-housestrategiccapability•Makingchangehappenremainsthe“neglectedart”McKinsey’sengagementmixPercentoftimeIncreasingdemandforhelpwithorganizationissuesandchangemanagementCraftingtheanswerHelpingimplementchange10yearsagoToday23557745Source:Surveyof23MGMsacrosstheFirmTherecentevolutioninourclientshasnotbeenmissedbyourcompetitors.Eachofourcompetitorshasrecentlyintroducedabrandedorganizationalelementtotheirportfolio.Theirorganizationalexpertisefiguresprominentlyintheirmarketingcampaigns.COMPETITORSHAVEBRANDEDORGANIZATIONTOOLSConsultingfirmProductClientexampleBCGTime–basedcompetitionGEGeneralSystemsProcessredesignUPRRBoozAllenContinuousimprovementExxonUnitedResearchProcessredesignandfacilitationMobilDeltaPointTransformationalchangeSmithKlineBeechamMcKinsey’sconsultingapproachmustevolveasourclientsevolve.Thesechangesprovokeashiftinthenatureofourworkandanevolutionoftheroleoftheassociateonengagements.Theincreaseddemandfororganizationalworkimpactsassociatesdirectly.Associatesaredrawnintoleadershipro