• Strategy
  • McKinsey & Co.

Managing Your Organization by the Evidence

An organization is much more likely to improve its current performance and underlying health by using a combination of practices rather than any one of them alone, new McKinsey research finds.

We tested this article’s high-level conclusions for robustness across industries, geographies, organizational size, and so forth. None of these conclusions have only marginal or partial support from the data.

A Wide Range of Management Practices
Outcome Type of Practice Brief Description
Direction
(where company is heading)
  • Visionary
  • Directive/Strategic
  • Engagement
  • Top down, attractive, personally meaningful
  • Top-down specifics for reaching end state
  • Driven by input from below
Leadership
  • Community
  • Command and Control
  • Patriarchal
  • Hands off, delegating, empowering
  • Hands on, highly concentrated authority
  • Strong but caring
Environment, Values
  • Open, Trusting
  • Competitive
  • Operational/Disciplined
  • Entrepreneurial/Creative
  • Collaboration, Transparency
  • Competition, High Intensity
  • Process-Driven Efficiency, Consistency
  • Innovation, Initiative, Creativity Encouraged
Accountability
  • Structure, Role Design
  • Performance Contracts
  • Consequence Management
  • Personal Obligation
  • Formal structures creating role clarity
  • Explicitly stated and accepted
  • Rewards, penalties
  • Implicit agreement on what’s involved
Coordination Control (of Performance, Risk)
  • People Based
  • Financial
  • Operational
  • Values, Professional Standards
  • Management Via HR Systems
  • Management of Financial Performance
  • Focus on KPIs (Key Performance Indicators) and Metrics, Targets
  • Management of Actions Through Ethics, Boundaries
Capabilities
  • Process Based
  • Internally Developed
  • Acquired
  • Rented/Outsourced
  • Embedded Knowledge, Manuals
  • Organic, Focus on Training
  • Skills Brought in From Outside
  • Skills Borrowed—eg, Consultants
Motivation
  • Leaders
  • Values
  • Opportunities
  • Incentives
  • Charisma
  • Company Culture
  • Job Design, Autonomy
  • Financial Rewards, Recognition
External Orientation
  • Customer/Channel
  • Competitor/Market
  • Business/Partner
  • Government/Community
  • Cultivation of relationships with end users
  • Focus on rivals, controlling market share
  • Business collaboration between two parties
  • Aligned with political/regulatory powers
Innovation
  • External Sourcing
  • Top Down
  • Bottom Up
  • Cross-Pollination
  • Renewal from outside company
  • Ideas, change generated by top management
  • Ideas, change generated by each business unit, department
  • Ideas, change from knowledge sharing across organization

Discuss

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