The churn rate of companies has gone up significantly. In 1935, the average lifetime for an S&P 500 company was 90 years; today, it is about 18 years, says Dominic Barton
By Karen Christensen, editor, Rotman Management. Reprinted, with permission, from Rotman Management, the magazine of the University of Toronto's Rotman School of Management. www.rotman. utoronto .ca/ rotmanmag
http://www.business-standard.com/article/management/we-are-in-a-period-of-profound-change-dominic-barton-114061500617_1.html
I think the key thing is that we are very fortunate with respect to the incoming talent we attract. I will always remember Marvin Bower telling me that you win or lose on the talent that comes through your door. If you attract the best people, they are, in a sense, by definition going to do very well. For the 2,200 consultants that we hire each year, we look at about 225,000 applicants. I knock on wood when I say this, but we're fortunate to be at an 87 per cent acceptance rate on the offers we make. Despite the ups and downs of the economy, we've consistently been able to get more than our fair share of great people.
The second thing is our focus on leadership development. We spend about $120,000,000 per year on various training programmes for our people. More importantly, in our job design, we try to provide as much variety and intensity as possible. I think one of the best ways to foster leadership is to have people work in different countries and industries, on different types of issues and projects - growth, turnarounds, a mix of things. Of course, we would love for our people to stay with us forever, but sometimes, their 'higher order calling' is to go and lead another organisation - and that is totally fine. Those who leave become 'alumni', but remain part of our wider network.
Another part of it is the apprenticeship and mentorship that people get here, which, by the way, extends to our alumni. We have big alumni events every year, but people there are less interested in hearing about what McKinsey is up to; instead, they want to catch up with their friends and talk about how they can help each other out. I also think our 'up or out' approach helps. We really like to push people into the deep end, not knowing if they can swim or not. You just grow faster that way.
Has the sort of talent you seek out changed in recent years? If so, how?
Definitely. For one thing, we've shifted away from just hiring MBAs. When I joined McKinsey in 1986, I was one of the very first non-MBA hires. Obviously, MBAs are still our core in terms of human capital, but today the ratio is about one-to-three for advanced degrees of varying types vs MBAs. We hire about 30 to 40 doctors per year, lots of lawyers and nurses, to name a few.
We're also hiring more experienced people than ever before. Of the 2,200 people we hire each year, around 400 have significant past professional experience. That's a pretty big shift for a company whose traditional approach has been to bring in brand-new graduates. These experienced hires have things like heavy-duty data analytics capabilities and restructuring expertise. Some of them have already turned around companies. For example, we hired one guy with 20 years of experience in operational leadership at places like Motorola and Sears, sort of 'distress' situations.
The second thing is our focus on leadership development. We spend about $120,000,000 per year on various training programmes for our people. More importantly, in our job design, we try to provide as much variety and intensity as possible. I think one of the best ways to foster leadership is to have people work in different countries and industries, on different types of issues and projects - growth, turnarounds, a mix of things. Of course, we would love for our people to stay with us forever, but sometimes, their 'higher order calling' is to go and lead another organisation - and that is totally fine. Those who leave become 'alumni', but remain part of our wider network.
Another part of it is the apprenticeship and mentorship that people get here, which, by the way, extends to our alumni. We have big alumni events every year, but people there are less interested in hearing about what McKinsey is up to; instead, they want to catch up with their friends and talk about how they can help each other out. I also think our 'up or out' approach helps. We really like to push people into the deep end, not knowing if they can swim or not. You just grow faster that way.
Has the sort of talent you seek out changed in recent years? If so, how?
Definitely. For one thing, we've shifted away from just hiring MBAs. When I joined McKinsey in 1986, I was one of the very first non-MBA hires. Obviously, MBAs are still our core in terms of human capital, but today the ratio is about one-to-three for advanced degrees of varying types vs MBAs. We hire about 30 to 40 doctors per year, lots of lawyers and nurses, to name a few.
We're also hiring more experienced people than ever before. Of the 2,200 people we hire each year, around 400 have significant past professional experience. That's a pretty big shift for a company whose traditional approach has been to bring in brand-new graduates. These experienced hires have things like heavy-duty data analytics capabilities and restructuring expertise. Some of them have already turned around companies. For example, we hired one guy with 20 years of experience in operational leadership at places like Motorola and Sears, sort of 'distress' situations.
At last count, 359 ex-McKinsey-ites, who you call 'alumni', were running $1 billion-plus companies. No other organisation even comes close to this. What is in the proverbial water at McKinsey?
We're also trying to use technology more in our hiring. We've put some anonymous games out there for people to try, without the McKinsey name on them. When someone does particularly well, we contact them and say, 'We'd be interested in talking to you.' We are very aware that there's a lot of talent in places like India and Indonesia that do not know us, and we want to attract them.
Today's top talent doesn't necessarily want to work a 70-hour work week. Describe your moves to embrace work-life balance for your associates in recent years.
About three years ago, we did a strategy effort on ourselves, to explore what types of services we should be providing and how best to deliver them. As part of this, we turned the spotlight on our people and their needs, and, not surprisingly, we found that a balanced lifestyle was very important to them. They also told us that the nine-to-five schedule is a thing of the past, and that they wanted flexibility. As a result, we've introduced 'flexible work options'. Our people aren't measured by the clock - no one pays attention to what time you come in or what time you leave; instead, you are measured on whether or not you deliver on what you said you would do.
Today's top talent doesn't necessarily want to work a 70-hour work week. Describe your moves to embrace work-life balance for your associates in recent years.
About three years ago, we did a strategy effort on ourselves, to explore what types of services we should be providing and how best to deliver them. As part of this, we turned the spotlight on our people and their needs, and, not surprisingly, we found that a balanced lifestyle was very important to them. They also told us that the nine-to-five schedule is a thing of the past, and that they wanted flexibility. As a result, we've introduced 'flexible work options'. Our people aren't measured by the clock - no one pays attention to what time you come in or what time you leave; instead, you are measured on whether or not you deliver on what you said you would do.
By Karen Christensen, editor, Rotman Management. Reprinted, with permission, from Rotman Management, the magazine of the University of Toronto's Rotman School of Management. www.rotman. utoronto .ca/ rotmanmag
http://www.business-standard.com/article/management/we-are-in-a-period-of-profound-change-dominic-barton-114061500617_1.html
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