The secret operating system invented in the 1960s

Driving to work that day I was filled with excitement. It was not a feeling I had associated with work in the past. In a past summer internship, I found myself questioning the merits of some action driven by corporate bureaucracy and asked myself “this is what work is like?” I held out hope for better options.

As I drove into the parking garage, I still had that rush of excitement. I found myself walking faster than usual from the parking garage into the office building. As I climbed the stairs all I could think about was getting to my desk and jumping into the work I left the night before.

Everyone should be so lucky to be this excited to get to work.

The Mckinsey Persona

Marvin Bower invented the McKinsey “persona” — this person was someone who would “be selfless, be prepared to sacrifice money and personal glory for the sake of building a stronger firm, never take public credit, and always be confident or discreet” (Quote from The Firm). Bower believed in professionalism, something he felt was a higher bar than acting ethically.

McKinsey isn’t perfect, but in terms of optimizing an organization and culture for high-performance and enabling people to thrive — I have not experienced better.

Landing my dream job

When I arrived at McKinsey in 2008, I had no idea what I was getting into. It had merely been a dream hatched a couple years earlier to break into consulting. By some combination of preparation, luck and an unwillingness to give up — the top consulting firm in the world took a chance on me.

I worked there for two years and the experience transformed the way I thought about organizations and high-performance. It also altered the expectations of myself and made me realize that people are capable of more than they believe.

Since leaving McKinsey, I have been fascinated with understanding what helps enable and sustain a high performing organization. Why are they so rare and what made it work so well at mckinsey?

So what was special about McKinsey?

Besides equipping me with the slide making skills to make this beautiful framework, what made McKinsey successful came down to three things:

High performance, visualized

Those Three things:

  1. Top Talent: Getting the right people and getting rid of the “wrong” people
  2. A “BS” Proof Values-Driven culture reinforced by two fundamental principles
  • Powerful stories: Stories that reinforce the values and create context for how to operate within the culture
  • Respect for People: Open and candid feedback, autonomy and a “caring meritocracy”

3. Continuous Improvement: At an individual level, this means starting with #1, getting the right people who are wired for continuous improvement, but it is also about cultivating an institutional humility and mindset that no matter how well your company is performing, there is always opportunity to tweak or even radically disrupt the culture and business model.

Lets explore each a little bit more…

1. “Top Talent”

Pretty much every company says that want to attract, hire and retain “top talent.” Few actually do it.

Fixing your culture is a losing battle if you do not have the right people. If you have spent years filling your ranks with the wrong people (and promoting them), building a high-performance culture is likely impossible.

When people think about “top talent” they think about recruiting. McKinsey had the best recruiting organization I’ve seen, but recruiting was arguably the least important part of ensuring the organization had “top talent.”

There were three much more important things:

  • Development: McKinsey over-invests (compared to most companies) in training and development and building it into the core fabric of the day to day work. In part, this was a necessity because they recruited from such a wide range of sources — from art history majors to lawyers, medical doctors and MBA’s. Many people hire smart people from good schools, but fail to develop their skills. Due to the existing high-performance culture of learning, development and coaching, McKinsey was more robust to hiring “mistakes” than most other organizations would be.
  • Supportive Culture: An obsession with creating and maintaing a culture that supports the people who perform — or as the firm value says: “Create an unrivaled environment for exceptional people.” (more on the values later).
  • Firing People: This may seem counterintuitive, but one of the biggest hacks to hiring the right people, is ensuring you get rid of the wrong people quickly. Nothing forces you to lose credibility with your top performers faster than keeping people who slow them down. At McKinsey this is not taken lightly — it is done compassionately and treats people as humans first. In addition to being able to use the resources of the firm to look for a new job, all exiting employees are seen as valuable alums and members of the “family” forever.

2. Values-driven culture

Most companies have their values proudly listed on the company website. Few resonate with the employee experience as well as they did at McKinsey.

From day 1, you hear over and over again about the values. In fact, there is a entire day devoted to the values every June aptly called “Values Day.” Think about that — over 10,000 employees spending a full day talking about the firm values and re-engaging in the mission and direction of the firm. Would your firm ever do that?

The values based culture worked because of two fundamental reasons — powerful stories and an underlying respect for people:

Powerful Stories

Running a company by values may sound far fetched — especially in today’s data and planning obsessive business climate. However, it worked. The power of the values was that they were shared and reinforced through stories. On my first day I watched a video of one of the most influential people in the firm’s early days, Marvin Bower. It was a 30-minute video where he just talked about the values and the type of place he was trying to build. It set the tone for what came next — many informal and formal conversations where colleagues would openly discuss the values and share stories to bring them alive. They all took a similar form: here is how we do it here, and this is why.

Many organizations have these values — you can find them on any company website:

“we hire the best”

“we obsess over our customer”

“we exceed expectations”

I could go on and on, but these values don’t actually tell you how to behave. The difference between these and a place like McKinsey is that the values at McKinsey were backed up with stories that told you what to do. For example, there was a value that stated “govern ourselves as a “one firm” partnership.” This story was translated to reality with my colleagues telling me “you can call anyone at any level and they will help you out.” On multiple occasions, I reached out to Partners who were experts on various topics and they made time to help me. The values resonated.

Respect for People

Respect for people is not typically what people think. Being nice does not always equate with respect — in many cases, not telling people the truth can be damaging to their potential growth.

At McKinsey, I learned that respect for people meant that you would push others to achieve their potential, but in a thoughtful way. This played out in a feedback approach that boiled down to five core elements:

  1. Start with Self-reflection: Tease out whether you want to actually help someone or you are just annoyed at their behavior
  2. Build a Foundation of Respect on Which to Offer Feedback: Show someone you care — and then help them improve.
  3. Timely: Deliver the feedback as close to the event as possible — otherwise let it go
  4. Be specific: Use actual examples of what you observed
  5. Offer to help: Offer an actionable next step and personally offer to be part of that growth

Beyond the Feedback Sandwich: Delivering World-Class Feedback

What gave this approach power was the fact that people really did care. Sometimes the feedback stung — but you knew it was from someone who really wanted you to be great and that they would offer to help you move in that direction. I still miss the quality of the feedback (but maybe not the quantity of it!).

Passing the “BS” Test

Humans are smart. I like to think that most people have a natural BS detector. At McKinsey, if there was an instance where the values did not hold true, it would have set off that BS detector and led to a lack of trust. Maintaining this trust is the key to building and maintaining a “high performance” culture.

For example, have you ever been in a situation where a company will keep a senior executive because they bring in a lot of money? If this hypothetical company had a value “be kind to others” the employees would be quick to call BS on any belief in firm values. This is a company run by profit not through values.

At McKinsey the values were reinforced and I had trust that the firm was very grounded in the values. For example, two of the specific values that I experienced over and over again were “be nonhierarchical and inclusive” and “uphold the obligation to dissent”:

=> Be nonhierarchical and inclusive

Evidence: I was not technically on the front line as a consultant, but was always treated as part of the broader team. While senior partners certainly commanded respect — it was more because of their insights and leadership than any formal rank. Equally, I always found that my ideas and contributions were on an equal playing field with anyone else in the firm.

=> Uphold the obligation to dissent

Evidence: In my first week a Partner asked me “what do you think?” I was not prepared as I had only been in very top down corporate environments in the past. Over time I got used to this and always made sure I had a view of what I thought. What made this work was that more experienced experts and consultants had an intellectual humility — looking to be challenged and having the flexibility to change their thinking

3. Continuous Improvement

In my time at McKinsey, I felt a deep institutional humility and a shared aspiration to be an ensuring institution. Two of McKinsey’s three core values set this tone and leave no doubt that the aspiration is to be the best, not one of the best:

1. Adhere to the highest professional standards

2. Create an unrivaled environment for exceptional people

The execution of this vision can be traced to the bold vision of Marvin Bower — who understood that the way to build a “high performance” environment was through reinforcing the right behaviors. He makes this clear in the following quote:

“Convinced that behavior and conduct are every bit as important as skills and expertise, I sought to build the firm into an enduring, values-based institution” — Marvin Bower

Marvin Bower understood the secret of business. Business models change, industries appear and disappear — but values are forever.

There is no better continuous improvement mechanism than a values-based culture. By reinforcing the values and relentlessly protecting them through stories, you can attract great people who continuously protect and maintain those values.

As I said before, McKinsey changed the way I look at the business world and made me believe that high-performance is indeed possible. If I had to bet on an institution to be alive in 100 years, my money would be on McKinsey.

33k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

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