McKinsey & Co. Case Study

internal task forces at McKinsey & Co. were set up to research a general concern with the problems of management effectiveness and particular concern with the nature of the relationship between strategy, structure, and management effectiveness. One of these task was given to Peters and Waterman, who were in charge of finding out the organizations effectiveness.

In the criteria for success, the authors' were in working on how to define organization effectiveness and the problem of 'expanding diagnostic and remedial kit beyond the traditional tools for business problem solving, which then concentrated on strategy and structural approaches.' This resulted in the finding of McKinsey 7-S Framework (structure, strategy, systems, shared values, skills, style, and staff). With this framework, they chose 75 highly regarded companies and conducted an intense, structured interviews with half of them. From this, the authors labeled the companies that seem to have achieved the innovative performance as excellent companies. This also led to another findings. The 7-S Framework was missing something and from the findings of the excellent companies, there were eight attributes that emerged to characterize most of the excellent companies.

1. A bias for action, active decision making 'getting on with it'.

2. Close to the customer learning from the people served by the business.

3. Autonomy and entrepreneurship fostering innovation and nurturing 'champions'.

4. Productivity through people treating rank and file employees as a source of quality.

5. Hands-on, value-driven management philosophy that guides everyday practice - management showing its commitment.

6. Stick to the knitting stay with the business that you know.

7. Simple form, lean staff some of the best companies have minimal HQ staff.

8. Simultaneous loose-tight properties autonomy in shop-floor activities plus centralized values.

The eight attributes stated above, as the authors mention, is no something that is new or even something special but as all the excellent companies have something in common is that the companies treat the people (staff) as an important asset. Most essential to each of theses excellent companies is the intensity within them and this intensity is built on the strong held beliefs of these companies.

The sample companies included various industry segments but were not limited to any specific ones but had to go through a intense six measurements of long-term superiority. Three are measures of growth and long-term wealth creation over a twenty-year period. The other three are measures of return on capital and sales. The final companies studied were: Bechtel, Boeing, Caterpillar Tractor, Dana, Delta Airlines, Digital Equipment, Emerson Electronic, Fluor, Hewlett-Packard, IBM, Johnson & Johnson, McDonald's, Proctor & Gamble, and 3M. These companies defined what the authors define as 'a group of exemplars which, without benefit of