The McKinsey Engagement Read online

  Part 1

  TEAM

  1

  TALK

  Figure 1-1 TEAM FOCUS Model—Talk

  CONCEPT

  We begin our journey of dissecting and improving team problem solving with the most obvious, but in my mind the most important and often troublesome, element of team interaction—talking. In fact, during my research and interviews with McKinsey alumni, the Talk element of the model was consistently ranked the most important of all interpersonal elements. Why is it that the simple act of talking can cause so many problems in team problem solving? Generally, because we don't have specific Rules of Engagement; because we like to speak more often than we listen; and because we get personally attached to our own points of view. The good news is that there are a few minor adjustments that can go a long way toward improving the communication among team members—and that is what this chapter aims to provide.

  Think of your last major team problem-solving effort and reflect upon the communication process that took place. Specifically, try to answer the following questions:

  Did you ever have a problem tracking down the contact information for a team member?

  Did any team members contribute in a less-than-meaningful way in any team meetings?

  Was there any evidence of redundant work or rework during the project?

  Did any team members ever try to stick to a particular perspective a bit too long?

  Were some of the meetings ineffective, or did any of them end without specific and clear action steps?

  Even if you can't remember particular instances in which you encountered these particular issues, this chapter's tips may help you communicate more effectively in your next problem-solving adventure.

  RULES OF ENGAGEMENT

  Based on observations at McKinsey and on conversations with hundreds of current and former McKinsey consultants, I quickly realized that the issue of communication is a high priority for the firm. While it is not as glamorous as developing the killer recommendation that turns a project around, it is just as important. As tedious as a discussion of communication techniques may seem, it is an important starting point for this book for a reason. The rules of talking (or, more broadly, communicating) are a great place to start, as they constantly affect everyone on the project—far more than any other aspect of team problem solving that I will present in this book.

  In each chapter of this book, three key Rules of Engagement will be offered that are designed to provide specific explanations of the primary element of the TEAM FOCUS model discussed in that chapter. Each of the Rules of Engagement is followed by specific Operating Tactics to help you implement these principles in your next engagement. Finally, each chapter concludes with a few stories from my research that illustrate good or bad examples of how these rules can affect team problem solving.

  RULE 1: COMMUNICATE CONSTANTLY

  Let's do some very loosely defined math for this discussion. I would like to compare the costs of over- vs. undercommunication. First, consider the costs of overcommunication:

  Time to write additional update reports or e-mails

  Time to read additional update reports or e-mails

  Annoyance of yet another e-mail or voice mail update (how many do you receive a day?)

  Next, consider the potential costs of undercommunication:

  Lack of other (perhaps divergent) perspectives on important issues

  Redundancy of work streams (people working on the same things)

  The wrong answer or a significant reworking of the analytical process

  Which of these strike you as potentially "costing" more (i.e., more risk to a project team)? It seems clear (at least to me) that the costs of undercommunication far exceed those of overcommunication. Thus, we arrive at our first Rule of Engagement: communicate constantly. This policy is applicable throughout the duration of a project; each team member should share information regarding personal background, project background, similar projects, conversations, issues, deliverables, takeaways, new ideas, scope changes, and client input. This includes both good news and bad news (especially bad news, as this is the news that is most likely to require input and adjustment). Much of this communication can take place via e-mail, which has the positive characteristic of being documented for later reference. However, it is better to balance e-mail with phone and in-person communications, as e-mail can often lead to misinterpretation, and these other forms of communication can go a long way toward fostering team harmony and creating clear communication. A good friend of mine (Bill Gilliland) who worked in consulting for a long time always had daily "flash meetings" with his teams, during which they could hit the high points of the project and share insights. This was particularly important with tight deadlines (are there ever loose deadlines?).

  RULE 2: LISTEN ATTENTIVELY

  I find it quite interesting that although listening skills are generally considered one of the most important sets of skills for executives and consultants, formal courses in listening are uncommon in MBA and undergraduate management education. In my case, one particular weakness that continues to gnaw at me—and some of you may suffer from it as well—is cutting people off in the middle of their sentences. I like to think it is because I am smart enough to figure out where they are going, but indeed it is just rude! A critical Rule of Engagement is for everyone on the team to learn how to listen attentively.

  McKinsey provides specific training on how to become a better listener. It advocates a number of techniques in this area, and four specific tips stand out to me as worthy of repeating:

  Let go of your own agenda—at least for the time being—and don't interrupt.

  Focus on the speaker. Physically look at the speaker, maintain eye contact, and give him or her your undivided attention.

  Encourage the speaker, both verbally and nonverbally (e.g., through body language).

  Discuss the content. Summarize it, paraphrase it, and demonstrate understanding of it.

  One more idea related to listening is to actively solicit opinions and ideas from those on a team who have not yet contributed. This is especially important for the quieter or more introverted members of the team.

  RULE 3: SEPARATE ISSUES FROM PEOPLE

  The final Rule of Engagement under Talk is one of the most effective guidelines for creating team harmony, and it is especially useful when group members are wrestling with tough analytical issues. I imagine everyone reading this book has experienced what I call "he said, she said." Over the course of a team problem-solving effort, there are usually differences of opinion that result from diversity within the team and that contribute to better answers. That is not the problem; the real issue is how we deal with the divergent opinions. The problem is that more often than not, when we put forward an idea or point of view, we become personally attached to that perspective. If our idea is rejected by the group, we may feel an urge to argue more vehemently to get others to accept it. The better approach is to present an idea, separate the person from the idea, and then move to discussing the pros and cons of the idea on its merits only.

  OPERATING TACTICS

  As discussed earlier, each chapter will conclude with a set of specific Operating Tactics that may help with the implementation of the Rules of Engagement in your respective team problem-solving engagements. While these tactics are basic, my premise is that if your team uses each Operating Tactic shown in this and the subsequent chapters, it will be more effective and efficient than would have been the case otherwise.

  The Operating Tactics for the Talk element of the TEAM FOCUS model are:

  Tactic 1: Document and share all contact information for the entire internal and external team, identify the key communication point players (who will contact whom), and define the overall scope of the project.

  Tactic 2: Agree on a meeting schedule that matches the nature of the project, but try to meet in person as a full team at least weekly (include the client in some meetings), or daily for one- to two-week projects.<
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  Tactic 3: All meetings should have a clear agenda (or list of issues to discuss), produce specific deliverables, and result in new action plans.

  Tactic 4: Use e-mail frequently to keep the team updated on progress, and use a brief and consistent format. Remember that overcommunication is better than undercommunication.

  Tactic 5: When evaluating the pros and cons of issues and ideas, remember to separate the issue or idea from the person (once an issue or idea is presented, everyone evaluates it on its merit without any personal attachment to it).

  STORIES FROM THE FIELD

  STORY FROM THE FIELD—1

  Topic: One lagging work stream fails to communicate crucial information. A story from a management consultant who worked for two leading global consulting firms in Asia demonstrates that no matter how well a project's other aspects go, poor communication can reduce the team's overall efficiency and lessen its final impact.

  During an engagement for a Fortune 500 company in the consumer goods segment, I worked on a project for the company's Japanese subsidiary. The subsidiary was losing market share in Japan, and this loss was believed to be the result of increased low-cost competition. We framed the key question well: why is the company losing market share? From there, we decided to focus on the cost part of our issue tree. Cost was made up of two components: in-plant cost (in the country of manufacture) and cross-country cost (logistics and other shipping-related costs). Having narrowed our focus, we divided ourselves into three subgroups:

  A team focusing on the in-country costs in Japan (basically, the cost of distribution once the product was imported into Japan)

  A team looking at the cost structure of the products manufactured in China and Thailand (this was my team)

  A team analyzing the cost structure of the products manufactured in Australia

  During the early stages of the engagement, the team used every tool listed later under FOCUS:

  We framed the question.

  We developed a comprehensive issue tree.

  We benchmarked the players in the industry (and found that the competition was using contract manufacturing—manufacturing in the United States and exporting to Japan)

  Teams 2 and 3 conducted extensive interviews in China, Thailand, and Australia while collecting benchmarking data. Based on the input of these groups, we felt confident that we had uncovered the core issue. Our analysis suggested that there was a good opportunity to reduce costs by moving a product portfolio from Australia to Thailand.

  Manufacturing in China also offered some cost benefits, but since the local market was growing rapidly, we felt that exporting from China to Japan might not be feasible in the long term. All this time, team 1 was focusing on the cost structure in Japan, and although there were periodic conference calls between the three teams, team 1 was behind schedule in its research and its analysis of Japan's local cost structure.

  After the in-country cost teams had finished our analysis and had also created our mock-up final deliverables [similar to ghost charts, which will be introduced in Chapter 7—PF], we recommended moving some products from Australia to Thailand. Our goal was to reduce the landed cost in Japan and to improve margins as well as market share. But when team 1 finally finished its analysis, the real problem facing the company emerged. The first team found that SG&A costs in Japan were very high. This was due to the fact that the company was run by expatriates from the United States; there were no locals (Japanese) in the management team of the Japanese subsidiary. Some expatriates were costing up to $1 million a year, and it was equally beneficial to reduce the SG&A costs and reduce the cross-country costs.

  Team 1's breakdown was driven by both inefficient analysis and communication failure. Whereas teams 2 and 3 utilized the 80/20 rule effectively, team 1 went into too much detail (boiled the ocean); additionally, there was a communication gap between subgroups. These delays in analyzing and communicating the real problem led to project inefficiency, which in turn caused an overall project delay because we had to rework everything. Thus, although we implemented the FOCUS part well, our project was not an overall success because we failed to communicate effectively.

  STORY FROM THE FIELD—2

  Topic: Multiple teams and time zones lead to inefficient and ineffective communication. Another example that addresses the risks of undercommunication, especially when dealing with issues such as resource allocations and time differences, comes from a consultant at another major consulting firm.

  I was part of a major project in Dubai that involved quite a few teams of consultants and other advisors—up to seven at a time—crossing over numerous time zones. In fact, no more than 20 percent of the overall effort participants were in the same time zone at any point in time. In addition to this mix of time zones, the project was complicated by the frequent rotation of team members and leadership of different parties involved.

  Some team members laid out best practices that were then shared by other offices, e.g., we began immediately documenting key takeaways after every client or team meeting and sharing them with every team member in real time. It was crucial to maintain 100 percent transparency in communication, as any secrets can have negative effects on team morale and lead to significant delays due to conceptual gaps. We also saw that the larger and more virtual a team becomes, the more means of informal and quick communication need to be encouraged with a high degree of team-oriented proactiveness from all people involved in the effort.

  STORY FROM THE FIELD—3

  Topic: Clear communication within the team and with external shareholders leads to success. A colleague of mine described communication as the key element of a successful McKinsey engagement that involved a major North American company sourcing auto parts from low-cost countries.

  The background for this project is that the client had spent two years trying to build a sourcing network in low-cost countries, but the project had gained some, but not the desired amount of traction. Several potential reasons for this delay were identified:

  Difficulties holding people accountable

  Difficulties communicating effectively across the organization (both across functions and across geographic areas)

  Need for a louder mandate from senior leadership

  Limited amount of supplier access

  Analytical horsepower

  I was part of a 10-person team that stepped in and turned the project around in three months. We delivered an actionable plan that prioritized key obstacles, designed mechanisms for monitoring progress and reviewing opportunities, and obtained buy-in from the client. Two other key deliverables included a robust savings database and comprehensive sourcing toolkit. Some of our keys for successful interactions during the project are outlined here:

  Structure

  Providing topics for discussion before each meeting and pulling in the key stakeholders meant that meetings tended to be more effective in terms of problem solving and time savings. (Decision meetings were heavily, if not exclusively, fact based.)

  Structure led to preparation, where attendees could digest the topics and come prepared to ask or field questions.

  Clear communication

  Straight talk, active listening, and pushing to keep dialogue logically driven steered discussions away from black-and-white, binary, culturally driven responses (e.g., yes or no), and more toward "yes" or "what needs to be done to make the answer yes?"

  Frequency

  Holding meetings on a regular basis improved overall communication and kept various parts of the organization up to date (especially given team locations in Canada and China).

  Frequency of meetings with attendees from varying levels in the corporate hierarchy also provided visibility for project owners, a showing of support to the midlevel managers from upper management, and time savings for all parties involved.

  Our focus on generating supplier excitement was a specific demonstration of TEAM FOCUS principles, especially the importance of obtaining internal buy-in by cultiva
ting external relationships. Some of my takeaways are given here:

  Show the suppliers the prize by tailoring the presentation to the audience and by giving specific incentives that motivate the audience to action.

  A presentation by senior company executives not only enhances the presentation by showing the sincerity and seriousness of the offer, but also creates structure for the project internally, driving responsible parties inside the company to meet the external commitments (in essence, creating urgency and accountability within the company).

  STORY FROM THE FIELD—BUSINESS SCHOOL EXAMPLE

  Topic: Communication with constituents leads to support of executive board's plans. Our first example from the world of business schools comes to us from Columbia. Rob Torti describes a situation that required a significant amount of communication, listening, and separating issues from people:

  I had the privilege of serving as the president of the Graduate Business Association (GBA) at Columbia. During my tenure, I remember a project that involved restructuring our organization. The project seemed to be headed for disaster, but it was saved by utilization of some of the tools described in this section. The GBA had an executive leadership team of 12 people, and I was responsible for overall management of the group. It was a diverse group, and it governed all of the different events, academics, finance, community service, IT, clubs, and careers—pretty much everything interacting with students. There were several layers below the executive board, including the student senate, committees, and other clusters. My hypothesis was that there seemed to be duplication of effort and overall poor integration of the different organizations (especially the class committee).