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ment proposed strategies found, in three cases out of four, that the client anization was not changeready or even capable of implementing the strategy we proposed. To ensure that we have impact, we need to consider anizational issues as we devise strategies. We must choose strategies the clients are ready and able to implement or plement our strategy work with investment in building the anization’s skills so that the anization can step up to the challenge the superior strategy poses.. 3 OUT OF 4 STRATEGIES THAT FAIL DO SO BECAUSE OF THE ORGANIZATION’S INABILITY TO EXECUTE 100%=340 responses Percent McKinsey remendations flawed Client not changeready or mitted Organization lacked the capabilities to execute strategy Other 1784035The demand for anizational work is increasing. Trends in the marketplace and the evolving nature of our clients largely explain this increase in demand. The pace of change in the marketplace is accelerating . A strategic choice or an operational innovation evokes a rapid reaction from petitor. Rarely can a durable petitive advantage be found in these choices. Rather it is the development of a unique anizational capability with the inherent flexibility and mitment to sustain worldclass performance that provides durable petitive advantage in these times of rapid change. The clients we serve are changing as well. They have increasingly hired inhouse strategic capabilities. Most have built strategy shops close to the CEO. Few, however, have the inhouse capability and objectivity to do the anizational work required to make change happen. ORGANIZATIONAL WORK GROWING IN IMPORTANCE Evolving marketplace ?Quickening pace of strategic adaptation ?Durable petitive advantage often rooted in unique anizational capabilities Evolving players ?Many businesses acquiring inhouse strategic capability ?Making change happen remains the ―neglected art‖ McKinsey’s engagement mix Percent of time Increasing demand for help with anization issues and change management Crafting the answer Helping implement change 10 years ago Today 23557745Source: Survey of 23 MGMs across the Firm The recent evolution in our clients has not been missed by our petitors. Each of our petitors has recently introduced a branded anizational element to their portfolio. Their anizational expertise figures prominently in their marketing campaigns. COMPETITORS HAVE BRANDED ORGANIZATION TOOLS Consulting firm Product Client example BCG Time –based petition GE General Systems Process redesign UPRR Booz Allen Continuous improvement Exxon United Research Process redesign and facilitation Mobil Delta Point Transformational change SmithKline Beecham McKinsey’s consulting approach must evolve as our clients evolve. These changes provoke a shift in the nature of our work and an evolution of the role of the associate on engagements. The increased demand for anizational work impacts associates directly. Associates are drawn into leadership roles on larger teams at an earlier point in their careers. This places greater emphasis on the need for associates to develop quite soon after joining McKinseysuperb team leadership skills. EVOLUTION IN McKINSEY’S APPROACH *Survey of 23 MGMs across the Firm From… To… ? ―The answer‖ ? Solving for the ―answer‖ and the change process ? Managing client teams ? Building client capabilities ? Small, analytically focused teams ––average client team of 3* ? Multiple, highly leveraged McKinsey/client teams —Average client team of 10* ? CEO counseling by senior people ? Coaching and feedback at all levels Before we dive into the anization materials, we should announce one critical caveat: the frameworks you are about to see are only as good as the judgment and insight used to fill them out. The frameworks are often mere checklists, useful tools to ensure you do not overlook a key dimension. The OP can provide interview guides and questionnaires that you can use to flesh out the frameworks, as well as applied examples in a range of settings. However, almost all anizational issues are ―situation dependent‖, and almost all client settings are unique. Your judgment, insight, creativity, and anizational acumen will determine whether you add value in the client setting . A CRITICAL CAVEAT “ Garbage in, garbage out” Garbage Good judgment, keen insight, creativity, anizational acumen Garbage Client impact CONCEPTUAL A series of frameworks are available to help clients identify and address anizational limits on effectiveness or obstacles to change. They also point toward solutions. These frameworks help teams answer two fundamental questions: 182。 How should the client implement the change? The OP has derived a set of six attributes that characterize highperforming anizations(HPO). By assessing whether your client anization exhibits these six attributes, you can diagnose whether an anizational performance gap exists as well. Additionally, the 7Ss will help you identify strengths and deficiencies in the anization. The 7Ss focus teams on aligning structure, staff, systems, and style to promote behavioral change and build skills in pivotal jobholders. By contrasting the required skill set (at both the anization and the pivotal jobholder level) with the current skill set, you can often clarify the anizational gap that exists. You plete the diagnostic by filling out the change board. That exercise helps teams understand the anizational skill deficits or resistance to change so they can deliberately plan to build the necessary skills and willingness to change in the anization. Once the gaps have been identified, the team needs to lay out a change program to close the gaps. The transformation triangle highlights the three critical