McKinsey & Company: Managing Knowledge and Learning

McKinsey & Company: Managing knowledge and learning

There is a main difference between specialist and generalist: generalist can solve basic problems and implement their solutions whereas specialist have a depth knowledge in specific domain and can solve more complex problem or situation. Therefore, Mckinsey needed to focus more on the development of consultants because of the growth of competition in consulting market and the changes of world economy which became more complex. This is why Mckinsey established an extra path so that they could found better solutions for their clients, acquired a competitive advantage and became the reference on the consulting market.

They have already implemented many cash incentives but it was proved that it doesn’t affect the results in a positive way all the time. Indeed, there are other ways to do so without using directly money like promotions, leadership or social motivators.

It is true that McKinsey already use this kind of incentives in order to try to eliminate competition so that people would like to share more often their knowledge and to specialize in a field. Experts could also have the opportunity to work on projects that they choose themselves.

Different factors provide incentives for knowledge creation. In fact, cross functional-project team allows interactivity between employees and help to improve exchange of knowledge. The use of IT tools is another incentive factor that provide more visibility to experts to create knowledge. An expert can publish and teach at the same time and be rewarded for it. Knowledge creation is thus measured through number of publication and is the base for I-shaped consultant reward. The special path beta is increased so incentives are not counter productive anymore with 1=2=c'(e1+e2).

On the other hand there are a few elements of the new promotion system which are working against knowledge creation. It is true that I-Shaped consultants are much more stimulated toward knowledge creation; but the same is not true for T-Shaped workers. Moreover these employees, resenting toward I-Shaped consultants’ motivational factors, could damage the process of fast and simultaneous creation and exchange of knowledge (unhealthy competition). These tensions arising between the two units, result into a worse coordination and cooperation between them; the link between specialists and generalists become weaker, which is very negative for a consulting firm in expansion. This affects the work organisation too (being global/local, generalists/specialists), making it more confused and unclear for the workers.

Current initiatives and incentives for fostering knowledge creation

McKinsey has implemented a number of different initiatives in order to enhance the creation and the sharing of knowledge within the company. McKinsey’s first initiative was to create 15 Centers of Competence built around areas of management expertise in order to form a shared body of knowledge within the company. This initiative helped to develop consultants and ensured the continued renewal of the firm’s intellectual resources. However, these centers of competence did not have a natural stable client base. There was in fact no management of the process. The Practice Bulletins initiative consisted in two page summaries of ideas that identified the people who had developed them. It was a positive internal advertisement for the ideas and the experts that developed them. Another positive aspect of this action was that it took less time than to write articles, books and staff papers. Thus, people were made more willing to make the effort and share their knowledge. However, the quality of these Practice Bulletins was not checked which lead to an ambiguity of the trust and pertinence of those ideas. This initiative could have been made more successful with the introduction of some experts in charge to distinguish the good bulletins from the improper ones. The creation of a computer based Practice Development Network (PDNet) was a worthy idea since it allowed the company to centralize all the knowledge accumulated in the practice areas. Moreover, as the data was computerized, the system could be easily modified and updated. The unique negative point of this initiative was that its wide adoption was awfully slow. McKinsey Yellow Pages; the Knowledge Resource Directory (KRD) assembled a listing of all experts and key document titles within the company. This initiative was immediately accepted and the book used firm-wide. However, the nature of the KRD made its update difficult and not efficient. In fact, paper-based volumes can hardly see their future in an increasingly technologically-oriented world. The Practice Olympics initiative consisted in forming small teams from worldwide offices that competed again themselves on a regional level presenting ideas emerged from prior client engagements. The twenty best regional teams then would compete at a firm wide event. One of the positive aspects of this initiative was that this competition generated incentives for involvement and motivation. Moreover, the fact of competing on a worldwide level allowed the employees to share their practice knowledge and distinct expertise in a direct and confronting way (face to face). However, competition among employees can generate some negative conditions. First, it can demotivate the teams that did not win leading to a diminution of their motivation in sharing future knowledge.  Also, rivalry can unfortunately lead employees to misbehave, avoid cooperation and denying support in order to win the competition. The Practice Olympics support could have be made more successful for instance by creating annual Practice Olympics volumes or databases with all the ideas and presentation proposed, in order to valorise the teams who did not win. Moreover, additional rewards for the best regional presentation could have been given so as increasing the winners’ satisfaction.