McKinsey finds the holy grail of mangement…..50 years after Peter Drucker found it.

18 Sep

I picked this up from McKinsey and Co and it reads::

Management practices that work

What makes companies perform well? To find this holy grail of management studies, a McKinsey team analyzed upward of 100,000 questionnaires to uncover the practices of 400 business units in 230 companies around the world. The team eventually arrived at one winning combination: clear roles for employees (accountability), a compelling vision of change (direction), and an environment that encourages openness, trust, and challenge (culture). Nothing else came close in improving organizational performance.

What’s more, the study found that organizational and financial performance correlate directly. An analysis of a global energy group’s production facilities, for example, suggested that for a facility of typical size and margins, better organizational performance had a payoff of $25 million to $30 million

Peter Drucker who is probably 95 years old has been saying the above for the last 50 years….. and he called himself Consultant to Management NOT Management Consultants.

How Organizations Fall Down

Make sure the people with whom you work understand your priorities. Where organizations fall down is when they have to guess at what the boss is working at, and they invariably guess wrong. So the CEO needs to say, “This is what I am focusing on.” Then the CEO needs to ask of his associates, “What are you focusing on?” Ask your associates, “You put this on top of your priority list–why?”

The Danger Of Charisma

You know, I was the first one to talk about leadership 50 years ago, but there is too much talk, too much emphasis on it today and not enough on effectiveness. The only thing you can say about a leader is that a leader is somebody who has followers. The most charismatic leaders of the last century were called Hitler, Stalin, Mao and Mussolini. They were mis-leaders! Charismatic leadership by itself certainly is greatly overstated. Look, one of the most effective American presidents of the last 100 years was Harry Truman. He didn’t have an ounce of charisma. Truman was as bland as a dead mackerel. Everybody who worked for him worshiped him because he was absolutely trustworthy. If Truman said no, it was no, and if he said yes, it was yes. And he didn’t say no to one person and yes to the next one on the same issue. The other effective president of the last 100 years was Ronald Reagan. His great strength was not charisma, as is commonly thought, but that he knew exactly what he could do and what he could not do. 

Mission Driven

Leaders communicate in the sense that people around them know what they are trying to do. They are purpose driven–yes, mission driven. They know how to establish a mission. And another thing, they know how to say no.

What Needs to Be Done

Successful leaders don’t start out asking, “What do I want to do?” They ask, “What needs to be done?” Then they ask, “Of those things that would make a difference, which are right for me?” They don’t tackle things they aren’t good at. They make sure other necessities get done, but not by them. Successful leaders make sure that they succeed! They are not afraid of strength in others. Andrew Carnegie wanted to put on his gravestone, “Here lies a man who knew how to put into his service more able men than he was himself.” 

1 Comment

Posted by on September 18, 2007 in General


One response to “McKinsey finds the holy grail of mangement…..50 years after Peter Drucker found it.

  1. Kay Own

    September 19, 2007 at 8:17 am

    Thanks Ashraf. The problem is we have so many organisations which are concentrating on promoting cult leadership that so many crap is done in their name. “tan Sri” says we ought to do this… “spoken to Dato’, and he said…” that no question as to whether it should be done or not. Trustwortiness is sometimes almost unheard of as the ‘palace guards’ is jockeying for positions in the organisation, so make it happen irrespective.


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