10 ms·
A model for CEO excellence
- buyingarmor 7y agoI'm pretty impressed from the content quality level at Mckinsey Most enterprise don't know how to write content people like to read for some reason
- jacques_chester 7y agoWhat I am not seeing in this discussion is any calculations showing how much of these outcomes are down to dumb luck, sample bias and correlation. For example: > Furthermore, research using our CEO database found that the top decile of high performing CEOs are 35 percent more likely to dynamically reallocate capital than average performers. Maybe they stumbled into an opportunity that the rest didn't. That's luck. > To move “boldly” is to shift at least 30 percent more than the industry median. Making one or two bold moves more than doubles the likelihood of rising from the middle quintiles of economic profit to the top quintile, and making three or more bold moves makes such a rise six times more likely. So if your random walk takes you upwards, you wind up having walked upwards. Brilliant. > In the largest research effort of its kind, McKinsey found that CEOs who insist on rigorously measuring and managing all cultural elements that drive performance more than double the odds that their strategies will be executed. Measured number rises, unmeasured number remains unmeasured. Scientists baffled. Remember: these are the best and the brightest. They are taken extremely seriously. Edit: they do give a source for their 45%-explained-by-CEO claim ... and it's a pop-business book written by the same authors. Oh well.
- jacobolus 7y agoConsidering McKinsey’s business model (“hey CEOs, if you hire us we’ll make you excellent”), there’s nothing surprising in the content of this article (“coincidentally, the vague list of things that we consider to make CEOs excellent is the same as the list of things that we have experience promoting”).
- shantly 7y agoI've seen nothing to convince me that most C-level management "experts" care about confounders, selection bias or, generally, the quality of any data they come up with. Nor have I seen evidence that others in a position to call them on it care to. They either do not care, or do not know, how to reasonably use data to support a point or to make a decision. To include folks from the big-3 management consultants. Though to be fair, it's not like people down the org chart are usually much better at it.
- bjornsing 7y agoI can second this. Everybody wants to be “data driven”, but hardly anybody wants to adhere to the rigorous standards necessary for sound data analysis. I think it’s a bit unfair to point the finger at “C-level management” in particular though. The same kind of thinking can be observed in government agencies, in the legal system, even in academia. Statistics is just hard, and a lot of people are simply not interested and cognitively capable enough to get it right, sadly.
- gatherhunterer 7y ago> a lot of people are simply not interested and cognitively capable enough to get it right, sadly. This is how executives discredit engineers. Someone who believes themself to be intellectually superior to others and is socially inept enough to say so is an easy target to discredit. This is how you become a code monkey.
- bjornsing 7y agoI don’t know, is it? I used to be a “code monkey”. To be honest I think the main reason I ended up in that position was that I saw myself as socially inept and thought that there was some kind of “big picture” that the mgmt/power focused people saw and I couldn’t see. I don’t any more, and my latest title is C-level (for a 100 person startup though - so nothing fancy). People love to set social norms that limit how much use others can make of their talents and abilities. But that’s usually not in the company’s best interest, and those norms seldom have the backing of senior management. With that said, of course you should be tactful and show your coworkers respect. People deserve respect not because they are smart, but because they are people.
- nelsonic 7y agoGreat content/analysis. Shame the PDF is not optimised to read on mobile.
- tomp 7y ago> Of the 50 most value-creating roles in any given organization, only 10 percent normally report to the CEO directly. Sixty percent are two levels below, and 10 percent sit farther down. Most surprising of all is that the remaining 10 percent are roles that don’t even exist. This is very insightful analysis, using the method called "I made up all the numbers". And somehow we're supposed to trust the rest of the article?!
- Spooky23 7y agoIn other words, the parts of a company that do work create value. A vapid conclusion even by management consultant standards. A smart CEO or board understands where value can be destroyed. That’s always the existential threat facing an organization who gives a shit about McKinsey.
- tempsy 7y agoAlso that adds up to 90%...
- deleted 7y ago[deleted]
- bostonpete 7y agoThe source they're referencing was talking about asking companies to prioritize roles by value creation. Ten percent ended up being roles that didn't exist in the organization, but should. Also, the source said 20% were three levels below the CEO (as opposed to the quote above, which says 10% "sit farther down"). I agree this is pretty sloppy writing.
- hn_throwaway_99 7y agoIt's still what I like to call "lie with statistics". Take a topic that is pretty much inherently unmeasurable ("roles by value creation"), and then assign numbers to it in a pseudoscientific attempt to sound like you've done your research.
- 7y ago
- gatherhunterer 7y ago> What the CEO controls—the company’s biggest moves—accounts for 45 percent of a company’s performance. What do executives think numbers are for? Why does the author find this metric meaningful? How does this number have any meaning at all? The fact that a CEO is important was not one that I questioned until I read this.
- kiba 7y agoI heard that changing the CEO doesn't really change the performance of a company, which made me skeptical right away. I am not sure if the statistics I heard had any basis whatsoever though.
- avip 7y agoComing next on HN: A model for ladders strength (stanleytools.com)
- Vaslo 7y agoHad a lot of experience with McKinsey doing projects at my company at different levels I’ve been in throughout it the years. When it’s highly technical things like implementing a new technology or creat8!( a new manufacturing footprint, they do really good work. Anything “Strategic” or fluffy like this I find a waste of time. They are excellent salespeople and do a lot to calm the C-suite but I rarely see these fluffy items like this article driving employee happiness or the bottom line after spending millions.
- hos234 7y agoAgree but many of the issues at the top of the food chain are like solving Family Dysfunction. Dad is the problem. Dad doesn't listen to anyone. Dad pays the bills.
- cosmodisk 7y agoI'm sympathetic to the CEO position.Not because of the overly glamorised picture of what it entails but because of how lonely it can feel sometimes. Most people can make decisions knowing that there's someone above them who can advise/change or cancel it all together.For CEOs that's often not the case and whatever you decide,you have to live with it.
- throwawayuuuu5 7y agoCurrent McKinsey, not associated with this report but kind of close. Yes, this one is very fluffy. There’s a few high level things that are important though around Org. Lots of companies just don’t have a good strategy for org, and there’s a lot of low hanging fruit for things like talent, culture, etc.
- osipov 7y agoSo do you admit that McK occasionally acts as a fluffer?
- throwawayuuuu5 7y agoI would say every business and the vast majority of individual people occasionally act as fluffers (as I believe I am to interpret that term) so sure. My point is not to reveal a gotcha that McKinsey is not the word of God. You will find nobody at the firm thinks this way. Many people have strongly negative perceptions of consulting firms, and I’m sure some people have strong anecdotes to justify their beliefs. Yet I’m brought in to address certain problems and it’s very clear that help is needed. Sometimes the solution is something that could have come from someone inside, or is perhaps something that someone on the inside is already saying beforehand, but the consultant gets communicated better to leadership because they have more political capital and credibility on the issue. If this happens, then you’re already experiencing some of the problems highlighted in this article. Political and organizational friction is real. If that is the “only” thing preventing an organization from solving a problem, then they are still incapable of solving the problem on their own. I think a lot of people would benefit from seeing how things are from the consultants point of view.
- zebnyc 7y agoMy wife's company (large pharma in SSF starting with G) consulted with Mckinsey for "strategy and innovation". Mckinsey recommended a) the company G move to Agile except that they didn't say how. So now every meeting/townhall/1:1 is filled with buzzwords. It is clear from the way she describes it, no one in the company understands what Agile means. Everybody talks about collaboration but they don't do any of the Agile rituals. b) All of G's employees should move to an open office plan with non dedicated seats. You come in the morning and have to hunt around for a desk. If you have to go for a meeting in a conference room, you have to pack up all your stuff in your bag and go. When your meeting is over, it is time to start hunting again. Morale amongst the rank-and-file is quite low.
- arbitrary_name 7y agoDid the Mck guys handle any of the implementation? Because that sounds like the client took potentially valid recommendations and half-assed the implementation. Plus if the name ends with g, well, morale was already kinda low from what I heard from ex employees.
- barry-cotter 7y agoMcKinsey don’t do implementation. Not doing implementation is what strategy consulting means.
- arbitrary_name 7y agoImplementation of strategy. I.e. change management, strategy program management, follow on work from original strategic planning, etc. They do it all the time. But should have clarified between system implementation. Also McKinsey, Bain and I think BCG have actual system implementation or at least integration offerings now.
- moeffju 7y agoMcKinsey absolutely DO implementation.
- 7y ago
- hogFeast 7y agoI truly despair for the world. The "advice" offered is just so devoid of content. What if some things can't be learned, packaged into a Powerpoint, and then taught and instantly absorbed? It is like the economist who spends his whole life ensconced in his little office telling investors how to invest, or policy makers how to manage an economy...despite having no actual experience of those things himself. I don't know how we got to this point.
- rcurry 7y agoAfter a number of years in the space I’ve come to the sad conclusion that many (not all) companies succeed despite their leadership rather than because of it. There are often a large number of true believers involved in keeping the ship sailing straight and they often get little credit for it.
- ncmncm 7y agoWhat I like in a CEO: takes no salary, and keeps the hell out of the way. And never, never hires McKinsey.
- dwoozle 7y agoMcKinsey’s advice on what makes a great CEO is like my advice for making it through menopause. They know absolutely nothing about it and their expertise is mainly in creating CYA documents for executives and assisting corrupt governments and regimes.
- jl2718 7y agoVery impressive. Language-generation models have really come a long way.