Search This Blog

Wednesday, September 19, 2007

McKinsey on Management practices that work - lessons for knowledge managers

Recently received some information from McKinsey on the subject of what makes companies perform well. They studied and reviewed over 100,000 questionnaires to uncover the practices of 400 business units in 230 companies around the world. Unfortunately, it doesn't say how many of these were knowledge based organisations - but one can imagine that there was a goodly percentage.

The analysis eventually discovered a common winning combination: They were

  1. clear roles for employees (accountability), 
  2. a compelling vision of change (direction), 
  3. and an environment that encourages openness, trust, and challenge (culture). 
Apparently no other option came close in improving organisational performance.

What’s more, the study found that organisational 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 organisational performance had a payoff of $25 million to $30 million. Whilst this doesn't directly extrapolate to say a professional service firm - energy groups have been fairly successful in delivering returns on knowledge management. 

I was particularly interested in point no 3 as if that type of culture is truly in operation then it is likely that knowledge sharing in an organisation will flourish. 

Also it needs courage from the leaders not to abandon the way forward when the transition to a new way of working and performance may suffer slightly whilst your team are developing new ways of knowledge sharing. 

It also does not take into account the concept of tight and loose coupling as mentioned by John Roberts within an organisational structure and my next post will be on this concept.

However one area that is lacking is in disciplined experimentation and an ability to fail. I've always found that if we are allowed to fail responsibly we not only learn lessons but can pass those lessons on to fellow co-workers.

Although an interesting article, I feel that it needs to perhaps extend this research to the knowledge based organisation.

No comments: