Books: Same old brave new world

Two McKinsey execs offer us a template for business success in the digital age, but what Andrew Wileman encounters here is woolly thinking and dodgy analytics.

by Andrew Wileman, a business consultant
Last Updated: 31 Aug 2010

Mobilizing Minds
Lowell L Bryan and Claudia I Joyce
McGraw-Hill £16.99

This book should have stayed as a marketing pamphlet and reduced its carbon footprint. It is written by senior partner Lowell L Bryan, valiantly assisted by aspiring principal Claudia I Joyce, both from McKinsey's New York office.

Its subtitle, Creating wealth from talent in the 21st century organization, sounds like a good topic. The book is going to be about 'designing an organisation to capture the opportunities of the 21st century', about how companies can 'mobilise mind power', building 'organisations that better fit the digital age', investing in 'designing how thinking-intensive work is undertaken'.

The old organisation models were rigid and hierarchical, designed for managing grunt hourly factory labour and squeezing returns from scarce financial capital. We need new collaboration-based models for talent-intensive businesses, where talent is the scarce resource and value is created from intangible, not tangible assets.

Having spent the first two chapters recapping these well-known but still interesting themes, our authors launch into their ideas for a brave new world. And what is their first chapter about? How to set up a 'backbone line structure' to make hierarchy work better! They mount a pre-emptive defence with: 'Some readers may wonder why the first ideas we offer up are for making hierarchy work better. Didn't we just get through arguing that collaboration is the great new opportunity of the 21st century?'

Well, yes, guys... and? Ahhh... 'Fixing hierarchy is essential, to reduce unproductive complexity, and for creating the conditions that enable enterprise-wide collaboration.' Ah, that's alright then; you can now read on through a chapter on how you need clear line authority that could be a cut-and-paste from Drucker 40 years ago.

Then you're told you're going to get some radical deep thinking on new-wave organisation design, and you get a re-hash of stuff that's old hat, thin and only vaguely do-able. And, annoyingly, many chapters aren't even about organisation design, unless you apply a broad definition of 'organisation issues'. So Chapter 4 is about leadership and culture, both key to making collaboration happen (agreed, yep, that's worth 10 seconds of my time). Chapter 5 is about how strategy needs to be adaptive, with evolving portfolios of initiatives and investments (agreed, but is this an organisation issue?). Chapters 7 and 8 are about internal marketplaces for talent and knowledge (semi-relevant). Chapter 9 is about financial measures. Chapter 10 is about performance appraisal - an HR issue - so gets a relevance tick.

I found not a glimmer of insight into 21st-century organisation design. I came away with platitudes like 'no-one can ignore the continuing changes in the world today. Even the most recalcitrant CEO now understands that change is here, and it's not going away'. Who are these recalcitrant CEOs? When was change not here?

Since this is an organisation- and HR-type book, it doesn't do any real-world case studies. And it's dodgy on analytics. The authors argue that profit-per-employee should now be the key business metric, not return on capital or profit margin - which could lead to some extreme outsourcing decisions. They note with interest that the total market capitalisation of companies is highly correlated with total net income; fancy that! And they raise the engaging possibility that annual reports could give a numbers breakdown between 'thinking-intensive' and 'non-thinking-intensive' employees.

The kind of organisations the authors like sound suspiciously like McKinsey: smart MBA consultants, charged out to projects at per diem rates, meeting up at luxury hotel off-sites to network and share knowledge, building their practice teams, looking forward to the day when they too can join the partnership and maximise profit-per-partner. And it's a US-skewed view of the desirability of growing headcount: in can't-fire-anybody Europe, most firms are obsessed with how to cut full-time in-house staff.

It's interesting to spot McKinsey pitch moments like: 'Redesigning the organisation does not require enormous financial input. It is hard to conceive of how a company of 100,000 employees could spend more than $1bn on designing and building the strategic organisational capabilities described in this book. The decision to make such an investment is a no-brainer...'

A billion? That's a bargain. It will, of course, be a much better investment than all the effort on 'organisational design in the last decade (which) has often amounted to... a ceaseless reshuffling of players without much purpose'. I wonder which consulting advisers helped out on that?

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