Leading Organizations

Ten Timeless Truths

Scott Keller and Mary Meaney
Bloomsbury USA © 2017
272 pages
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Rating Take-Aways

8
9 Applicability • Executive interviews and a review of the literature reveal 10 topics that are crucial to
effective management:
8 Innovation
8 Style • Recruit talent – Hire the best people, keep them and assign them to pivotal roles.
Also: Develop talent – Invest in your employees' continual growth.

• Manage performance – Differentiate between high and average performers. Do more

  for the best, but keep processes fair and open.
Focus • Build great teams – Deploy high-performance teams to your most critical projects.
Leadership & Management • Make good decisions – Teach people to avoid bias and groupthink.
Strategy
Sales & Marketing
• Redesign if needed – When you reorganize and implement change, consider the impact
on people; communicate and gain their buy-in.
Finance
Human Resources • Cut costs – Save money relentlessly but without cutting into muscle.
IT, Production & Logistics
• Cultivate your culture – Obsess about workplace culture. Shape it; don’t let it simply
Career & Self-Development
happen.
Small Business
Economics & Politics • Transform your firm – Embrace necessary change.
Industries
• Develop leaders – Use planning and coaching to help new leaders make the transition
Global Business into management.
Concepts & Trends

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getabstract

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Relevance
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What You Will Learn
In this summary, you will learn:r1) Truths about ten timeless topics, including how to hire and shape more effective
workers and teams; 2) How to make better decisions and keep costs in check; and 3) How to shape workplace culture
and develop new leaders.
getabstract
Recommendation
McKinsey senior partners Scott Keller and Mary Meaney examined 20 years of queries to their firm and went
through Harvard Business Review articles since 1976 to identify the most important, most queried about and
most written about management topics in that time span. They found “ten timeless truths,” phrased more often as
“ten timeless topics,” about leadership and management practices and compiled them in a well-illustrated, well-
referenced manual. Their condensation of hundreds of books, articles and queries on business wisdom into about
200 pages and 10 topics will excite any busy leader. While this is a broad overview, not profound, detailed
guidance, you will gain a smart introduction to the most important tasks for any leader. Even if the authors only
spark your further reading and research, their 10 overviews – including concrete, applicable steps and, in most
areas, illustrated case studies – provide a great place to start, especially if you’re new to leadership.
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Summary
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“Ten Timeless Topics”
These findings represent the most frequent queries received by McKinsey since the
mid-1990s and the subjects of articles from the Harvard Business Review published
getabstract between 1976 and 2016. Use these 10 key areas to assess the situation you must manage,
“In a world of then prioritize the action you will take depending on your organization’s most pressing
constrained resources,
we suggest that issues:
companies focus their
talent work in the
critical few areas where 1. “Attract and Retain Talent”
getting the best matters Get the best talent you can – people with the skills you need and the will to use them. High
most.”
getabstract performers will be four to eight times more productive than average workers. The current
and deepening shortage of skilled workers means competition for talent will increase.

Identify the most important 5% of roles in your workforce, and focus attention on getting
the best people into those positions. Connect and align your firm’s purpose to your
critical talent. Leverage your recruiting and retention technologies, realizing that algorithms
outperform humans in choosing potential employees to interview. Track your progress
getabstract through data and metrics.
“Goals should be set
with career aspirations
and passions taken into 2. “Talent Development”
account (employee-
centric), but they
Some people have innate talents in certain skills they need to develop, and once they build
also need to drive their skills, they perform at world-class levels. Put those people into your critical 5% of
forward the priority roles while developing everyone else to competence. Invest in developing talent; you can
business strategies of
the company (employer- never hire enough job-ready people. Companies often fail to implement crucial components
centric).” of talent development, including coaching and on-the-job training. Today, the utility of
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skills deteriorates quickly. Employees must learn nearly constantly to stay abreast. Create
learning programs that blend a small amount of formal training or education with coaching
and mentoring. Follow a model with roughly 70% of its focus on formal training, 20%

Leading Organizations                                                                                                                                                                 getAbstract © 2018 2 of 5

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 on coaching and 10% on on-the-job development. Tailor learning programs to individual
needs, and focus on building and stretching peoples’ strengths. Determine the gap between
your firm’s current skills and what it needs to achieve its objectives. Invite non-HR leaders
getabstract into the process of designing your learning programs. Involve managers as you launch pilot
“Companies that are
both fast and stable projects to test learning initiatives. Retain the people you develop.
are over three times
more likely to be
high-performing than 3. “Performance Management”
those that are fast, but While gurus may recommend abandoning the performance review process, it remains
lack stable operating
disciplines.” worthwhile when done correctly. Use universal motivators like autonomy, mastery and
getabstract purpose to inspire higher performance. Emphasize the intrinsic rewards of work and offer
small, frequent gifts – but not as carrots. Surprise people after they’ve done well.

Align employees’ career aspirations with your organizational needs. Make sure your
performance management system treats people fairly. Don’t pay or reward everyone the
same; segment people transparently and objectively. Link every employee’s goals to his
or her supervisor’s objectives, aligned with corporate goals. Have frontline leaders initiate
getabstract regular performance, coaching, feedback and career conversations with team members.
“If, as a leader, you
don’t have concrete
plans in motion to 4. “High-Performing Teams”
leverage technology in
the war for talent, make High-performing teams accomplish more than people working individually or collectively.
no mistake: you are A solid, cohesive team usually beats a more talented group of individuals who are “out of
falling quickly behind.”
getabstract sync.” Great teams coalesce only through great effort. Aim for teams of six to ten people for
optimal trust and communication. Gather diverse people with different and complementary
skills. Help them develop trust and openness and allow for risk-taking. Structure group
meetings to maximize the team’s time. Have your teams do the work they do best.

Build and grow shared and common purpose. Deploy your best teams to work on your
most important goals. Assemble teams to talk about their goals in relation to the firm’s
objectives. Support team members and encourage them to tell stories about overcoming
getabstract past challenges. Track each team’s collective progress, and have your teams consider who
“Go after the cream
of the cream. A small might replace members if they move on.
team of A+ players can
run circles around a
giant team of B and C
5. “Decision-Making”
players.” (Steve Jobs) The average adult makes about 35,000 decisions daily. A big corporation with tens of
getabstract
thousands of employees makes hundreds of millions of decisions every day. A firm’s
collective decisions lead to its success or failure, yet companies often fail to choose the
right course. Kodak famously invented the digital camera but “buried it” to protect its film
business. Motorola stuck with pagers rather than cell phones.

Such decisions affect your firm’s ability to hire and retain top talent. For example,
getabstract
Yahoo made poor choices in the years it battled against and lost ground to
“A high-performing Google. Delegate frequent, important decisions to people or teams with matching expertise
team…achieves
superior results by
and responsibilities. Give them autonomy, and hold them accountable. Use data and
working together evidence to inform important decisions. Combine data with discussion among experienced
in the pursuit of a people who are capable of the right insights.
common goal in ways
that fully leverage
the complementary Cognitive biases can impair your decisions. “Groupthink” can infect teams so much
talents and skills of its
members.” they gradually make decisions without question. “Confirmation bias” can cause you
getabstract to subconsciously filter out information that contradicts your beliefs. “Social bias”
can cause you to base decisions on what you believe others will think. “Optimism bias” can
cause you to overestimate the potential upside and downplay or ignore risks.

Leading Organizations                                                                                                                                                                 getAbstract © 2018 3 of 5

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 Run a “pre-mortem” exercise to avoid biases. Assemble your team to think back from
the future, as though a decision has already been made and implemented. Brainstorm
and list everything that could go wrong. Check your potential decisions and their impact
against your strategy. Prioritize decisions that promise the most positive results on strategic
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“While certainly objectives. Devise processes, tools and initiatives to implement decisions. Experiment with
some are born with a tests and pilot initiatives to identify what works and where to make adjustments.
magic touch in certain
endeavors, there’s no
question talent can be 6. “Organization Redesign”
developed.”
getabstract Redesigns often include wholesale changes in how organizations function and their means
of management. The pace of organizational redesign today is astounding. It takes almost
a year for most organizations to fully adapt to a redesign, but the process occurs almost
every two years in most firms. Successful reorganization can deliver huge gains depending
on execution and timing. Yet more than 75% of reorganizations fail because companies
abandon them or because they don’t achieve their goals.

getabstract Think about people – how they will fit in after a redesign and how they feel during
“We tend to meet
any new situation the process. Think about governance – who will make what decisions and how you will
by reorganizing; measure progress. Think through the resulting structure: who will report to whom and where
and a wonderful
method it can be for accountabilities will land. Strive for agility. Balance your ability to seize opportunities and
creating the illusion innovate while maintaining a stable core culture. Align your redesign efforts to your top
of progress while
producing confusion, strategic goals. Try small changes to see what works; gain buy-in by involving people; track
inefficiency and your progress; and enlist leaders to communicate the change across the organization.
demoralization.”
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7. “Overhead Cost Reduction”
Firms tend to accumulate processes, forms, approvals, meetings, employees and other
overheads. Conduct audits regularly to make sure you’re getting real value from
your people, processes and decision-making rules. If not, change them. Hold nothing
sacred. “Zero-based” budgeting results in greater cost reductions than standard tactics.

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Cost-cutting is tricky. Beware of unintended consequences. Too often, organizations
“Leaders are well eliminate muscle when they intend to cut fat. Consider the implications several levels
advised to think of their
transitions in two equal
down to foresee the impact of cuts. For example, layoffs of redundant workers could save
steps: First, take stock; money, but it might damage your retention of other employees. Consider teaching people
then, take action.” new skills so they can fulfill higher demand positions. For better cost control, calibrate
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your processes, people, meetings, and the like to fit your objectives. Don’t reduce areas
of strategic importance. Know where you need to maintain strength. Build in controls to
prevent eliminated costs from creeping back in. Communicate your plans honestly and
transparently, especially when they include layoffs. Reassure people who stay in order to
avoid costly turnover.

8. “Culture”
Every organization has a culture. Others can imitate your ideas, partnerships, processes
getabstract and other competitive advantages, but no one can copy your culture. It can be your
“High-quality analytics
are relatively useless one sustainable competitive advantage. Conversely, a toxic culture can damage your
without a high-quality organization. Consider the impact of the emissions scandal on the culture at Volkswagen. To
dialogue to interpret,
evaluate and draw out change your culture, set a clear vision for your organization and align everyone toward it.
the implications.” Appoint inspiring leaders to champion the change, and build an environment people want to
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join. Give employees clear responsibilities, and manage their performance. Hire, retain and
develop people with the skills you need to achieve your corporate goals. Emphasize strong
relationships with external stakeholders. Implement, measure and continually improve your

Leading Organizations                                                                                                                                                                 getAbstract © 2018 4 of 5

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 cultural strengths. People resist change, but you can ease their fears by describing your
vision. Use rewards and sanctions to encourage behavior that supports change. Give people
the tools and resources they need, including training, to help them succeed after a change.
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“As automation and As a leader, show the behavior you seek. Work to turn new behaviors into habits so they
algorithms become become “the way we do things around here.” That’s the essence of culture.
commoditized and
information more
difficult to secure, 9. “Transformational Change”
human wisdom,
judgment and
For centuries, philosophers, politicians and business leaders extolled the importance of
creativity will be fundamental change. Yet big change rarely sticks. For example, even people suffering
the most powerful from life-threatening conditions often can’t maintain healthy habits – such as not smoking
differentiators.”
getabstract or drinking, even when their lives are at stake. Organizations suffer similar resistance.
Transformational change succeeds in less than one-third of cases.

To make change work and stick, aim at “operational” and cultural factors. Use the “five
frames approach.” 1) Know your goals; 2) assess your current gaps to achieving them; 3)
devise a plan to close the gaps; 4) implement tailored initiatives to achieve your plan; and
5) generate processes to embed continual improvement. Execute using small experiments;
ramp up what works. Integrate new processes into routines to turn them into habits.
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“Where there are Involve your employees in planning; offer frequent, small, nonfinancial rewards for good
people working work; leverage their strengths; and connect them to a shared purpose.
together, there is a
culture, whether a
leader chooses to 10. “Leadership Transitions”
influence it or not.”
getabstract Famous leaders often made their mark quickly and dramatically. But leadership transitions
don’t require drama or crisis to succeed. Don’t hold yourself to artificial timeframes, like
the “first 100 days” made famous by Franklin Roosevelt. It usually takes longer than a few
months for new leaders to absorb all they need to know and to plan, communicate and win
converts before they act. Success during this transition predicts the longer-term success
of any leader. Between one-quarter and one-half of leaders fail in their transitions, often
because they downplay the importance of culture and people.

Organizations should invest in methods to help transitioning leaders. Detailed, individual

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“If we learn anything transition plans and dedicated executive coaching, for example, make a positive
from the history of difference. As a firm, assess your skills, capabilities, team-strength and culture to ensure that
economic development,
it is that culture each element delivers what your transitioning leaders need. As a transitioning leader, assess
makes all the your readiness and understanding of the organization, its stakeholders and your role. Know
difference.” (Harvard
historian David
and communicate what you won’t do as well as what you intend to do. Determine what you
Landes) plan to “stop as well as start.” Involve your team in determining shared goals. Organize
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your team or company to achieve those goals. Put the required structures in place, and then
execute and track your progress, adjusting as needed.

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About the Authors
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Scott Keller, in California, and Mary Meaney, in Paris, France, are senior partners at McKinsey & Company
and consult with business leaders around the world.

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