Consulting Parlour

1. Some of you may identify a whole range of reasons why McKinsey has achieved the enviable position it has: their early commitment to consultant training, their development of a sense of professionalism, their recognition of a niche in top-management consulting, their focus on general management problems, particularly strategy and organization, their recruitment of first-class minds, the power of their "one-firm" culture, etc.
However, given the importance of the firm's culture in supporting subsequent changes, it is helpful to look in to the importance of the "One-Firm" concept to McKinsey's success.
At the heart of McKinsey's overarching cultural values and at the core of its day-to-day operating practices lies the "one-firm'" concept that Bower put in place. It is important to see its centrality to the shared belief system and the way in which this concept provided the firm with an important source of competitive advantage. Unlike many other professional service firms that tended to fragment by office and type of service (sometimes resulting in destructive internal battles over profits, clients, people, etc.), McKinsey was able to use its firm-wide integration to build a strong internal capability. Among the most important issues that may be raised are the following:
- By treating all clients as a firm-wide responsibility, it ensured that there was both a consistent consulting philosophy and a uniformly high standard of work, since there was a consciousness that one weak office could lose a worldwide client.
- By recruiting and developing consultants into the firm, not an office, it ensured uniformly high quality people who were readily transferable, a characteristic that was vital to knowledge transfer.
- By making people and profits firm-wide resources, it could ensure the most efficient utilization of its financial and human resources, two assets in short supply in the rapid expansion phase.
The important issue to highlight here is that even from its earliest days McKinsey was transferring knowledge and expertise through the informal networks it created as a by-product of its "one-firm" culture. However, the expertise was largely a methodological approach (e.g., a way of framing issues, a problem solving methodology) and, even more importantly, a set of strongly held values (e.g., a commitment to client service, and adherence to professional standards). In this way they transferred McKinsey's commitment to providing a disciplined problem-solving approach that generated unique solutions to problems faced by top management of leading companies. There was no attempt to package knowledge or transfer the specific learning from one-assignment to the next.


2. Before engaging the issue of what Daniel did to respond to the perceived problems with the old "client relationship" model McKinsey had pursued for 50 years, it is intriguing to recognize that although the Commission on Firm Aims and Goals presented its findings in 1971, significant change did not occur until Daniel became MD in 1976. One might then wonder as to why it has taken so long to make significant change to a system recognized as flawed.
In a clear case of "Physician, heal thyself," McKinsey found it hard to implement change for several reasons, including the following:
- At an individual level, most firm members—including, and perhaps especially the partners and directors-had succeeded in the system by developing their generalist consulting skills and building client relationships. To many, it must have seemed threatening to be asked to develop specialist skills and become "T-Shaped."
- At the organizational level, the power structure had always been built around local offices that were responsible for hiring and developing consultants and building their local client base. Any changes that would threaten either of these sources of power were likely to be resisted.
- At the level of basic beliefs, many-including Marvin Bower—were concerned that the changes would damage the firm's deeply embedded value of client service by promoting "one-size-fits-all" tools-based consulting driven by visiting experts without long-term client knowledge or commitment.
- Fundamentally, the proposed change to "thought leadership" consulting implied a major shift in the whole business model and organizational capabilities on which McKinsey had been built.
However, under Daniel's leadership, the change process clearly took root as he initiated many of the changes. One of the most important initiatives he undertook was to appoint one of the firm's most productive and respected directors to head internal training. The symbolism of this allocation of a highly productive "snowball thrower" to consultant development role must have been very powerful; the impact of the programs he initiated even more so.
The structural changes—creating industry-based and functional-based groups—were also powerful signals, but it is worthwhile probing what Daniel was trying to achieve with these changes. Clearly, they became McKinsey's repositories for firm expertise—in financial services, strategy or organization, for example. More importantly, they served as affiliation groups for consultants trying to develop their "knowledge spike" as required by the new firm guidelines.
Finally, Daniel oversaw the institutionalization of these changes in a formal redefinition of McKinsey's mission. While Bower was focused only on client service, the new mission now puts equal weight on building a great firm. This recognition that “attracting, developing, exciting, andretaining exceptional people” is at the heart of the McKinsey's mission represents a major step in the development of its intellectual capital.
Many of you may also immediately focus on Gluck's initiative in starting a Knowledge Management Project in 1987 through which a series of information systems were developed. FPIS provided a computerized database of client engagements and PD Net was structured to capture consultant-generated ideas and concepts. These Systems were designed to support the task of capturing knowledge that existed within the firm, and facilitating its transfer and application in other parts of the organization. In other words, it was building on the initial phase of developing "T-shaped" consultants by focusing on the task of institutionalizing the individual expertise and leveraging it across the organization.
In particular, those with strong computer backgrounds may voice strong support for Gluck's initiatives, saying that at last the firm has begun to create the infrastructure that will provide them with a sustainable source of competitive advantage. They may highlight the power of computer-based data systems that can efficiently capture and transfer knowledge throughout the system.
Some other issues to consider are:
* How much of a source of competitive advantage do FPIS and PD Net represent for McKinsey?
* What is different about the focus of cluck's actions compared with Daniel's emphasis?
* Why Is Gluck so fixated on embedding knowledge and institutionalizing the firm's intellectual capital?
* What is the difference between the “discover-codify-disseminate” model of knowledge development and the “engage-explore-apply-share” approach? Why are they keen to develop the latter?


3. It is important to focus on the activity described in the case section "Knowledge Management on the Front," so we can evaluate the effectiveness of the changes made. Each mini-case reveals both the strengths and the limitations of the structures, systems, and processes that McKinsey's leaders have developed. This would allow us to enter debates about the effectiveness of the emerging knowledge-based organization.
For example, some of you may be amazed that the Sydney office project could have been staffed by such junior and inexperienced consultants supervised by an engagement manager who did not even arrive on the scene until most of the analysis was completed. It is not surprising to them that a director John Stuckey was disappointed that the team did not come up with a breakthrough.
On the other side of the argument, you may argue that this is a perfect illustration of how the system is supposed to work. Far from being abandoned, the team was advised and supported by five experts acting as consulting directors on call, educated on firm expertise through 179 PD documents, and backed by the specialized input of more than 60 associates answering specific questions. This safety net of organizational support allowed a junior team with little personal expertise to deliver the firm's knowledge and experience to a demanding client.
Similarly, on the European telecom example, some may be impressed by the way in which McKinsey seems to be transferring and leveraging specialist knowledge through personnel transfers (Bray to Europe), documented learning (PD publications), systematic networking (practicecoordinator's role), and embedding knowledge (the evolution to team leadership of the practice).
On the other side, some may express concern about the insularity of industry practices as they turn inward for input and support. Even beyond John Stuckey's concern that the Sydney team only looked within McKinsey for expertise, it appears the telecom group prefers to look only within its own practice. With the development of a telecom intranet, some may ask whether the information technology is opening up or insulating this practice.
Finally, on the business-to-business competence center, some may see Dull's assignment as a successful redirection of a valuable firm resource to develop as a specialist. The high ranking of B to B documents on the PDnet Best Seller list (Exhibit 7) indicates he is generating valuable knowledge and the success of the conference shows he is developing the networks to develop his ideas to clients.
On the negative side, however, other students may point out that McKinsey still does not appear to have solved the problem of how to support the development of specialists and that people like Dull are constantly worried about promotion. Dull's thoughts about writing a book sounds like a plan to develop his own "brand image" to allow him to leave the firm and take his intellectual capital with him.

# posted by "The Confused Consultant" @ 28.4.05 26 comments

So anybody should rock here. No problems even if Waters is not here you dont have to worry. The potholes in the city make you rocking always.

This city has three distinct advantages:

1. Clement Weather- The weather is awesome. The working hours shoots up. If you are from dry and high place like Delhi then you feel as if you are bat out of hell.

2. Crowd-You get the most honest and decent crowd in this piece of land. They can accommodate you even if you belongs to some other part.

3. Enterpreneurs- The city has given birth to array of enterprenuers. Murthy of Infosys, Shabeer Bhatia of Hotmail fame, Premji of Wipro, Kiran Mazumdar of Bio tech. These are to name a few.

I will be back soon.

# posted by "The Confused Consultant" @ 21.4.05 0 comments

• Purple Haze, Residency Road-New life devolves day by day,As friends and neighbours turn awayAnd there's a change that, even with regret, cannot be undone. You hang on to this place you will as if you are falling straight from a cliff hanger..yeah..draught beer..kewl rock music..and a place which can take breath away.
  

• Styx- Another high voltage pub, plays some extremely noisy music..yet sometimes it's fun to be there.
  
• Office- Backyard of the devils..if you dont want to do anything and then go and disturb somebody..LOL..For a useless like me its always better beat the bushes...fungus inside the den. You dashed inside...you feel you are in den!! May be for millions of years mankind has lived just like the animals. Then something happened which unleashed the power of our imagination, we learned to talk. 2.30 P.M., Weekdays-There is a silence surrounding, i cant seem to think straight..uummm..I will sit in the corner..No can bother you..I thought I should speak now...I seems to cant speak ever..I sometime wonder..where do we go from here? It shouldnt be like this...all we need to make ensure that we keep talking. 6.oo P.M.-Suddenly there is a hush...no one is there...you realized from the corner..something has happned...you feel somebody has thrown the lock into ground. And with glasses high we raised a cry for freedom time has arrived...i started wondering..where is freedom or shall i call it wisdom...Hey still some peoples are there like the ship of fools run aground..promises lit up the night like paper doves in flight. 6.45 P.M.- Your vicinity is empty!!Oh no..no warmth not even pride remaining.. Next day 9.30 A.M.-Again new frontiers shift like desert sands while some feel they have washed their blood in hands!! of loyalty, of history or sheds of gray!! You can see the smirk and victorious smile once again...deja vu...?? Yup man..I woke up to the sound of drums, the morning sun streamed in..I turned at cell..but all but the bitter residue slipped away... One more dream is over....

The roller coaster ride hasnt acheived the target..

The show must go on....

Part II later on..

Idea Generated and Concieved by "The Demented Devil"...never meant offence to anyone...Sorry and sincere apologies if somebody is offended. This is my ray of thought...

Have a nice day all!!

# posted by "The Confused Consultant" @ 18.4.05 0 comments

Source-Booz Allen Hamilton

Contributed By Mr. Arun Maira, Chairman-The Boston Consulting Group of India

Way back when (pick your date), senior executives in large companies had a simple goal for themselves and their organizations: stability. Shareholders wanted little more than predictable earnings growth. Because so many markets were either closed or undeveloped, leaders could deliver on those expectations through annual exercises that offered only modest modifications to the strategic plan. Prices stayed in check; people stayed in their jobs; life was good.
Market transparency, labor mobility, global capital flows, and instantaneous communications
have blown that comfortable scenario to smithereens. In most industries and in almost all
companies, from giants on down heightened global competition has concentrated management collective mind on something that, in the past, it happily avoided: change.
Successful companies, as Harvard Business School professor Rosabeth Moss Kanter told in 1999, develop a culture that just keeps moving all the time.
This presents most senior executives with an unfamiliar challenge. In major transformations of large enterprises, they and their advisors conventionally focus their attention on devising the best strategic and tactical plans. But to succeed, they also must have an intimate understanding of the
human side of change management the alignment of the company culture, values, people, and behaviors to encourage the desired results. Plans themselves do not capture value; value is realized only through the sustained, collective actions of the thousands perhaps the tens of thousands of employees who are responsible for designing, executing, and living with the changed environment.
Long-term structural transformation has four characteristics: scale (the change affects all or most of the organization), magnitude (it involves significant alterations of the status quo), duration (it lasts for months, if not years), and strategic importance. Yet companies will reap the rewards only when change occurs at the level of the individual employee.
Many senior executives know this and worry about it. When asked what keeps them up at night, CEOs involved in transformation often say they are concerned about how the work
force will react, how they can get their team to work together, and how they will be able to lead their people. They also worry about retaining their company unique values and
sense of identity and about creating a culture of commitment and performance. Leadership teams that fail to plan for the human side of change often find themselves wondering why their best-laid plans have gone awry.
No single methodology fits every company, but there is a set of practices, tools, and techniques that can be adapted to a variety of situations. What follows is a ;Top list of guiding principles for change management. Using these as a systematic, comprehensive framework, executives can understand what to expect, how to manage their own personal change, and how to engage the entire organization in the process.
1. Address the human side systematically.
Any significant transformation creates people issues. New leaders will be
asked to step up, jobs will be changed, new skills and capabilities must be developed, and employees will be uncertain and resistant. Dealing with these issues on a reactive, case-by-case basis puts speed, morale, and results at risk. A formal approach for managing change Beginning with the leadership team and then engaging key stakeholders and leaders should be developed early, and adapted often as change moves through the organization. This demands as much data collection and analysis, planning, and implementation discipline as does a redesign of strategy, systems, or processes. The change-management approach should be fully integrated into program design and decision making, both informing and enabling strategic direction. It should be based on a realistic assessment of the organization history, readiness, and capacity to change.
2. Start at the top.
Because change is inherently unsettling for people at all levels of an organization, when it is on the horizon, all eyes will turn to the CEO and the leadership team for strength, support, and direction. The leaders themselves must embrace the new approaches first, both to challenge and to motivate the rest of the institution. They must speak with one voice and model the desired behaviors. The executive team also needs to understand that, although its public face may be one of unity, it, too, is composed of individuals who are going through stressful times and need to be supported. Executive teams that work well together are best positioned for success. They are aligned and committed to the direction of change, understand the culture and behaviors the changes intend to introduce, and can model those changes themselves. At one large transportation company, the senior team rolled out an initiative to improve the efficiency and performance of its corporate and field staff before addressing change issues at the officer level. The initiative realized initial cost savings but stalled as employees began to question the leadership team vision and commitment. Only after the leadership team went through the process of aligning and committing to the change initiative was the work force able to deliver downstream results.
2. Involve every layer.
As transformation programs progress from defining strategy and setting targets to design and implementation, they affect different levels of the organization. Change efforts must include plans for identifying leaders throughout the company and pushing responsibility for design and implementation down, so that change cascades through the organization. At each layer of the organization, the leaders who are identified and trained must be aligned to the company vision, equipped to execute their specific mission, and motivated to make change happen. A major multiline insurer with consistently flat earnings decided to change performance and behavior in preparation for going public. The company followed this cascading leadership methodology, training and supporting teams at each stage.First, 10 officers set the strategy, vision, and targets. Next, more than 60 senior executives and managers designed the core of the change initiative. Then 500 leaders from the field drove implementation. The structure remained in place throughout the change program, which doubled the company earnings far ahead of schedule. This approach is also a superb way for a company to identify its next generation of leadership.
3. Make the formal case.
Individuals are inherently rational and will question to what extent change is needed, whether the company is headed in the right direction, and whether they want to commit personally to making change happen. They will look to the leadership for answers. The articulation of a formal case for change and the creation of a written vision statement are invaluable opportunities to create or compel leadership-team alignment.
Three steps should be followed in developing the case: First, confront reality and articulate a convincing need for change. Second, demonstrate faith that the company has a viable future and the leadership to get there. Finally, provide a road map to guide behavior and decision making. Leaders must then customize this message for various internal audiences, describing the pending change in terms that matter to the individuals.
A consumer packaged-goods company experiencing years of steadily declining earnings determined that it needed to significantly restructure its operations instituting, among other things, a 30 percent work force reduction to remain competitive. In a series of offsite meetings, the executive team built a brutally honest business case that downsizing was the only way to keep the business viable, and drew on the companys proud heritage to craft a compelling vision to lead the company forward. By confronting reality and helping employees understand the necessity for change, leaders were able to motivate the organization to follow the new direction in the midst of the largest downsizing in the companys history. Instead of being shell-shocked and demoralized, those who stayed felt a renewed resolve to help the enterprise advance.
5. Create ownership.
Leaders of large change programs must overperform during the transformation and be the zealots who create a critical mass among the work force in favor of change. This requires more than mere buy-in or passive agreement that the direction of change is acceptable. It demands ownership by leaders willing to accept responsibility for making change happen in all of the areas they influence or control. Ownership is often best created by involving people in identifying problems and crafting solutions. It is reinforced by incentives and rewards. These can be tangible (for example, financial compensation) or psychological (for example, camaraderie and a sense of shared destiny). At a large health-care organization that was moving to a shared-services model for administrative support, the first
department to create detailed designs for the new organization was human resources. Its personnel worked with advisors in cross-functional teams for more than six months. But as the
designs were being finalized, top departmental executives began to resist the move to implementation. While agreeing that the work was top-notch, the executives realized they
hadnt invested enough individual time in the design process to feel the ownership required to begin implementation. On the basis of their feedback, the process was modified to include a deep dive. The departmental executives worked with the design teams to learn more, and get further exposure to changes that would occur. This was the turning point; the transition then happened quickly. It also created a forum for top executives to work as a team, creating a sense of alignment and unity that the group hadnt felt before.
6. Communicate the message.
Too often, change leaders make the mistake of believing that others understand the issues, feel the need to change, and see the new direction as clearly as they do. The best change programs reinforce core messages through regular, timely advice that is both inspirational and practicable. Communications flow in from the bottom and out from the top, and are targeted to provide employees the right information at the right time and to solicit their input and feedback. Often this will require overcommunication through multiple, redundant channels. In the late 1990s, the commissioner of the Internal Revenue Service, Charles O. Rossotti, had a vision: The IRS could treat taxpayers as customers and turn a feared bureaucracy into a world-class service organization. Getting more than 100,000 employees to think and act differently required more than just systems redesign and process change. IRS leadership designed and executed an ambitious communications program including daily voice mails from the commissioner and his top staff, training sessions, videotapes, newsletters, and town hall meetings that continued through the transformation.
Timely, constant, practical communication was at the heart of the program, which brought the IRS customer ratings from the lowest in various surveys to its current ranking above the likes of McDonald& and most airlines.
7. Assess the cultural landscape.
Successful change programs pick up speed and intensity as they cascade down, making it critically important that leaders understand and account for culture and behaviors at each level of the organization. Companies often make the mistake of assessing culture either too late or not at all. Thorough cultural diagnostics can assess organizational readiness to change, bring major problems to the surface, identify conflicts, and define factors that can recognize and influence sources of leadership and resistance. These diagnostics identify the core values, beliefs, behaviors, and perceptions that must be taken into account for successful change to occur. They serve as the common baseline for designing essential change elements, such as the new corporate vision, and building the infrastructure and programs needed to drive change.
7. Address culture explicitly.
Once the culture is understood, it should be addressed as thoroughly as any other area in a change program. Leaders should be explicit about the culture and underlying behaviors that will best support the new way of doing business, and find opportunities to model and reward those behaviors. This requires developing a baseline, defining an explicit end-state or desired culture, and devising detailed plans to make the transition.
Company culture is an amalgam of shared history, explicit values and beliefs, and common attitudes and behaviors. Change programs can involve creating a culture (in new companies or
those built through multiple acquisitions), combining cultures (in mergers or acquisitions of large companies), or reinforcing cultures (in, say, long-established consumer goods or manufacturing companies). Understanding that all companies have a cultural center the locus of thought, activity, influence, or personal identification is often an effective way to jump-start culture change. A consumer goods company with a suite of premium brands determined that business realities demanded a greater focus on profitability and bottom-line accountability. In addition to redesigning metrics and incentives, it developed a plan to systematically change the company& culture, beginning with marketing, the companys historical center. It brought the marketing staff into the process early to create enthusiasts for the new philosophy who adapted marketing campaigns, spending plans, and incentive programs to be more accountable. Seeing these culture leaders grab onto the new program, the rest of the company quickly fell in line.
8. Prepare for the unexpected.
No change program goes completely according to plan. People react in unexpected ways; areas of anticipated resistance fall away; and the external environment shifts. Effectively managing change requires continual reassessment of its impact and the organization willingness and ability to adopt the next wave of transformation. Fed by real data from the field and supported by information and solid decision-making processes, change leaders can then make the adjustments necessary to maintain momentum and drive results.
A leading U.S. health-care company was facing competitive and financial pressures from its inability to react to changes in the marketplace. A diagnosis revealed shortcomings in its organizational structure and governance, and the company decided to implement a new operating model. In the midst of detailed design, a new CEO and leadership team took over. The new team was initially skeptical, but was ultimately convinced that a solid case for change, grounded in facts and supported by the organization at large, existed. Some adjustments were made to the speed and sequence of implementation, but the fundamentals of the new operating model remained unchanged.
10. Speak to the individual.
Change is both an institutional journey and a very personal one. People spend many hours each week at work; many think of their colleagues as a second family. Individuals (or teams of individuals) need to know how their work will change, what is expected of them during and after the change program, how they will be measured, and what success or failure will mean for them and those around them. Team leaders should be as honest and explicit as possible. People will react to what they see and hear around them, and need to be involved in the change process. Highly visible rewards, such as promotion, recognition, and bonuses, should be provided as dramatic reinforcement for embracing change. Sanction or removal of people standing in the way of change will reinforce the institution commitment.
Most leaders contemplating change know that people matter. It is all too tempting, however, to dwell on the plans and processes, which dont talk back and dont respond emotionally, rather than face up to the more difficult and more critical human issues. But mastering the soft side of change management neednt be a mystery.

# posted by "The Confused Consultant" @ 8.4.05 0 comments