Managing Business Relationships
True to our rich history of continuous evolution, McKinsey & Company is undergoing further transformational change. This latest reinvention builds on our traditional consulting expertise on strategy, organization and productivity topics and our broad and deep industry sector experience to include a variety of new service offerings, which in turn has had impact on who we hire, the kind of work we do and how we serve our clients. Also impacted has been McKinsey’s Information Technology backbone. In this brief article, I will highlight McKinsey’s evolving approach towards relationship management on both the technology and cultural levels, and key lessons learned.
As has been widely reported, McKinsey latest transformation has seen it expand and diversify its client offerings in recent years. These new services include deep digital capabilities, advanced analytics, more hands on implementation of strategy recommendations to drive change through an organization, innovative product design, and supporting distressed companies or divisions in need of restructuring.
As we grow bigger and more diverse, we have to embrace the good complexity and minimize the bad
But McKinsey’s evolution has not just been external. As Managing Director Dominic Barton explained in a recent interview, “We’ve been telling people what to do for a while now. It’s time for us to do it ourselves.”
McKinsey is a traditional partnership – with 1,800 Partners, most of whom serve clients across the globe. We also have1,000 other senior consultants, including Associate Partners and topical experts. With such a diverse array of traditional and emerging capabilities, and with constant change, it is a challenge to function as “One Firm”, one of the core values of our firm culture. As Dominic Barton said recently, “We have a major task force now wrestling with how to restructure governance to accommodate the new talent and modes of working, while still honoring our values. As we grow bigger and more diverse, we have to embrace the good complexity and minimize the bad.”
Almost three years ago a small group was asked to focus on modernizing the firm’s approach to Relationship Management, managing our external relationships across the firm. Our focus was threefold: 1) Create a managed view of all external contacts across the firm; 2) Create a platform for more easily sharing McKinsey’s thought leadership – the product of hundreds of millions of dollars of research investment annually – with our clients and the external community; and 3) Create tools that will simplify the task of Partners in managing their client relationships. This project represented a wholesale evolution from a largely decentralized approach to relationship management, built around teams of Partners and clusters of Practices and geographic offices.
There were two key elements that needed to be addressed in order to successfully deliver on our objectives:
• Technology: Creating an integrated system that blended existing systems with cutting edge technologies that incorporated the latest advances in Relationship Management and digitization of the enterprise.
• Culture: Rolling out a new platform and capabilities, and driving adoption among a diverse body of senior users, many of whom have chosen to remain at McKinsey because of the firm’s culture of personal autonomy and entrepreneurship.
Nearly three years into the process, we have had our share of successes and challenges, related to both of the elements noted. We have also learned several lessons relevant to many organizations. Here are my top four.
1) Think big, act small: While there are grand aspirations and pull for implementing multiple use cases, it is far better to focus on executing a minimum level of functionality well, rather than trying to address all aspirations at once. At the same time, it is important to put in place an underlying architecture that can be built upon, as additional features and capabilities are rolled out.
2) Beware the hidden pitfalls of integrating legacy systems: Moving data from one system to another should be simple, but never is. Do not underestimate the time and complexity required to make the “theoretically simple” work in practice.
3) Adoption is grounded in user experience and perceived impact: The typical user (myself included) is “spoiled” by the technology experiences of our generation. Today’s social media applications have set a high bar for providing simple and intuitive applications. Especially in a company like McKinsey, where senior colleagues will not be forced to adopt a Relationship Management system, systems must be easy to use, intuitive, require minimal investment in set up, and deliver clear value to the Partner. Perceived impact is the ultimate incentive.
4) Centralize wherever possible, and minimize transactional overhead: Rather than rely on the actions of busy individuals scattered across the globe, provide centralized support that simplifies actions such as set up, information sharing, and data analysis. As well, aggregate as much relevant data through “passive” capture, e.g., count the number of e-mail exchanges with a given contact at the server level, without requiring redundant human entry of such data.