Prominent McKinsey Watchers Share Their Views on "Marvin's Shoes"
The Case Against Term Limits
Your May cover story on McKinsey & Company, "Marvin's Shoes," reminded me of an occasion some years back, when I had the pleasure of listening to another of the firm's notable managing directors, Ron Daniels, talk about McKinsey's culture. One of the things he said that particularly stood out in my mind was "people join organizations because they like and agree with that organization's core values and cultural norms." Following on the heels of Andersen paying a huge price for having contravened some of their core values, I'd bet on McKinsey staying true to the principles that Bower first set out, and retaining their partnership principles.
The article does, however, raise an interesting question for all of us interested in professional service firm management: If you are fortunate enough to benefit from having an impressive managing director, why would you artificially limit their term of office? There is certainly a case to be made for bringing new blood into the leadership role of any firm, nurturing potential new leaders, and providing for some degree of succession. And it is unquestionably advisable for a firm leader to reconfirm the support of the partnership after every term. Some might also say that it takes a different set of skills to preside over a growing firm in good economic weather, versus the skills required to handle the rudder when the economic seas get rough.
What is fascinating is how McKinsey has advanced a system where partners have an economic interest in the firm after they have retired (for 5 years) in order to promote a partner's long-term thinking, but then take a rather short-term view of how long a firm leader may serve. Here we observe Bower admittedly holding office for a period of 26 years, being followed by subsequent leaders (Rajat Gupta) who are limited to a maximum of three terms. My experience suggests that there are a good many professional firms who could only wish that they might acquire a firm leader with the skills to amass the influence within the partnership that Gupta has achieved.
Patrick J. McKenna
Co-author, First Among Equals
Principal, Edge International
Edmonton, Canada
Firm Leader Herds Not Cats, But Tigers
Some thoughts regarding your May cover story on McKinsey & Company.
From our work in developing and writing Aligning the Stars, I would make several predictions about the next leader of McKinsey and the challenges he/she will face. First, I'm confident that the governance process in place will enable the partners to select a leader who has the support and credibility to step into Gupta's shoes. The challenges he/she, or the leader of any large professional service firm, face, however, are formidable. The size, global reach, and complexity of these firms makes it extremely difficult to reach a consensus among the firm's various "stars" (outstanding professionals) about firm strategy, governance, or organization. Leaders in such firms must lead without much control over those they are leading.
The metaphor of "herding cats" is often used to describe this problem. The truth is that this is an inaccurate metaphor if you think of the "cats" as household pets. Rather, the cats in question are big and powerful — more like lions and tigers. They are partners with great ability, strong client relationships, and influence in their own spheres. They are leaders of their firms whose ultimate challenge is to build a consensus among themselves about where they want to take their firm.
While this is a huge challenge, the next leader of McKinsey will have its culture, which is similar to that in other great professional service firms, to support them. Our work suggests that such cultures place intense importance on a sense of community, partnership, and perpetuity in these firms. This is the glue that holds these great firms together. Even though leaders like McKinsey's new one will find that there may be disagreement about specifics among the firm's stars, the culture provides the cohesion that can help him/her build the needed consensus.
Jay W. Lorsch
Louis E. Kirstein Professor of Human Relations
Harvard Business School, Boston
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