The Change Review: McKinsey Interview

The Change Consulting Group, Change Consulting Firms

A key purpose of this newsfeed is to stimulate discussion and debate around some of the challenges associated with change and strategy implementation.  Part of this process is about sharing our experiences and areas of concern with our listeners, and part of this is about commenting on the work currently being done by our colleagues.  Some of this engagement might be critical of that work; this should be seen solely in the light of professional dialogue and debate.

Disagreement should be welcome in an emergent profession such as ours, particularly as we tussle with often enormously complex areas of practice with respect to change and strategy implementation.

The reason we felt it necessary to include the disclaimer above is that we wish to make reference in this newsfeed to articles written by colleagues at various consulting practices around the world, to engage with their ideas and experience and to offer our professional opinion and thoughts in this regard.  At all times we wish to be constructive and in the spirit and interest of adding value to the change and strategy consulting professions.  Of course, we encourage responses to our thoughts and welcome your comments in the space provided below this item.

With that out of the way, this week we would like to comment on what we feel is an important video interview put up in October 2013 by two strategy consultants, Chris Bradley and Angus Dawson, out of the Sydney office of McKinsey & Company (You can see the full interview here).

We feel this interview is extremely important in the context of change and strategy implementation because of two key points made by Mr Bradley and Mr Dawson:

1. Strategy is still a relatively young discipline, emerging from the new field of management studies in the 1960’s, supported by the strategy greats like Peter Drucker in the 1950’s, and more recently, Michael Porter, Gary Hamel, Henry Mintzberg and Tom Peters.  Any yet, if you speak to strategy consultants worth their salt (and McKinsey consultants are certainly at the top of the pile in this regard and we have enormous respect for that firm), they will admit that we continue to learn.  

In fact it is probably true to say that strategy consultants are currently scrambling to really understand and respond to the enormous pace and scope of change that globalisation has foisted on us (and the additional complexity that social media, big data and the financial crisis has thrown into this complex mix).  The impact of these events on the field of consulting are not our purview in this article; our key concern is the fact that these men are brave enough to admit that we are still learning and we feel that this is extremely important for consultants to acknowledge if we are to do our work better (and the statistics as we describe elsewhere on this site are not in our favour).

2. The most important point that the interview conveys, however, (and we can’t stress enough how fundamental this point is), is made by Chris Bradley when he first starts speaking.  He says: “Another layer (of strategy formulation) is bringing psychology and adult learning into strategy and realising that strategy’s not just about what’s written on the paper but about the thinking and feeling processes of the leaders of the company.”  This is a hugely important statement, especially from a firm of strategy consultants of McKinsey’s stature:  It is a recognition that strategy does not happen unless it is understood, bought into and actualised by an often diverse (and often conflicted) group of human beings, usually spread over a wide organisational array, with an enormously complex set of people, process, systems and governance structures in place that often get in the way of the smooth implementation of this strategy.

Strategy formulation, and certainly strategy implementation, is therefore a process of engaging and deploying human beings in such a way that they understand their own motivation for action, as well as the areas of resistance or upset that they might experience from time in time in various parts of their organisation.  As a result, it takes not just smarts to build a strategy, but an enormously complex psychological toolkit in order to execute it.  And from our perspective at CCG, if we can’t execute a piece of strategy, it might as well be binned.

What the article does not speak to, however, (and what we believe is the more difficult part of our work with respect to strategy consulting), is how we get strategy implemented.

In our view, it is easier to formulate strategy than it is to implement it, simply because strategy formulation can rely on smarts and industry data and metrics in order to forecast trends and possible commercial trajectories that are either in the organisation’s interests or otherwise, and they can determine proposed behaviour.  But strategy, once formulated and presented on paper and slides, remains a set of ideas unless it can be operationalised within an organisation.  The formulation of strategy usually gives us no indication of how it might be executed.

In fact, many companies spend a lot of time and money defining a strategy, but very little (if any) time actually describing, in detail and on paper, how they seek to go about executing this strategy within their organisations.  Please note that we are less concerned in this regard with execution of a new product line (for example) to one’s customer base, and more about how we distribute a set of instructions and directives to the myriad of employees who are required to make this happen within the organisation.  In other words, we are concerned in this instance with how we mobilise an often disparate group of individuals towards a single goal.

It is our belief, therefore, (and a fundamental premise upon which we practice as strategy implementation consultants), that we should understand strategy as emotion and that commitment, buy-in and passion are as important for successful implementation as the raw intellectual validity of the ideas contained within a strategy.

Strategy is an innately human activity, that uses all of us for its emergence into and success within the world.

This is a profoundly important insight because it separates strategy into two discrete activities: The first is the formulation of strategy which is a purely intellectual exercise.  The reason that McKinsey is such a globally recognised leader in this regard is that they hire and nurture brilliant analytical minds to formulate strategy, and provide an environment, framework, structure and systems to ensure that the very best strategy is formulated.  But equally, there is a growing understanding that strategy has a second component which is about planning and structure required for the execution or mobilisation of a strategy within the internal spaces of organisations.  This second aspect of change and strategy implementation is more messy, sure, because it calls us to work with human psychology and human fallibility, but it is vital to get right and an increasingly important area of professional practice within the sphere of strategy consulting. 

In next week’s post we will pick up on the second part of this discussion and provide detail on how we might define the field of strategy implementation as something discreet from strategy formulation.