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Copy of Management Presentation - McKinsey & Company
Transcript of Copy of Management Presentation - McKinsey & Company
Originally an accounting and engineering advisory firm.
Efficiency Experts, Business Doctors. Now ... Global management consulting firm.
Advise the worlds leading businesses, governments and institutions.
98 offices across the world. How Does Knowledge Create Value for McKinsey and Company ? 1. Knowledge is McKinsey's Product 2. Value of McKinsey's Knowledge is Realised Through Knowledge Management "As a firm, and as individuals, we are driven to be the very best, to develop unrivaled knowledge and to convey that knowledge to every client, every time" (McKinsey and Company 2012) What is Knowledge? Knowledge is intangible, dynamic and difficult to measure VS Information is able to be measured and quantified Types of Knowledge Tacit Knowledge - context specific, hard to formalise and articulate, in the heads of individuals
Explicit Knowledge - easily written down and codified a system created to store info on client engagement and it accessible to all members of the firm.
The benefits, as we see them, are two fold:
1) organize and store historical data on client projects;
2) provide information on ‘lessons learned’, to be used as a benchmark for future projects.
This type of system illustrates how tacit knowledge is transferred to explicit knowledge (Externalizaion). FPIS used to capture knowledge, specifically in the various practice areas.
This proved to be a challenging task since the knowledge had to come from the consultants and it was difficult to get participation from them.
The use of PDNet by consultants had grown tremendously and was contributing to the knowledge creation within the firm. PDNet Knowledge IT Platform FPIS: Firm Practice Information System
PDNet: Practice Development Network
KRD: Knowledge Resource Directory a quick success among the firm’s consultants.
It offered the consultants a source to identify co-workers.
It served as a “yellow pages”. KRD Benefits These three systems are part of the knowledge infrastructure at McKinsey and all contributed to the idea of “One Firm.”
They were utilized by the consultants in order to gather and share knowledge. Disadvantage No creative solutions
Database systems are complex, difficult, and time-consuming to design
Substantial hardware and software start-up costs
Damage to database affects virtually all applications programs
Extensive conversion costs in moving form a file-based system to a database system
Initial training required for all programmers and users New Knowledge Always Begins With The Individual True at all levels of the organisation - in every case the individual knowledge is transferred into organisational knowledge that is valuable to the whole organisation How to Transfer Tacit Knowledge 1967 - Gluck realised the need that knowledge development had to become central to the firm
1978 Staff Paper series commenced, later to be followed by Practice Bulletins
1987 Finally resulted in Knowledge Resource Directory
1990's Knowledge Recourse Directory highly used. Duarte Rocha Organisational Culture & Knowledge Management Changing the organisational culture is imperative in fostoring a knowledge based organisation
Create a climate that consultants are willing to volunteer their creativity and expertise
"Successful knowledge sharing is 90% cultural, 5% tools and 5% magic. All the technology and tools in the world wont make you a knowledge-based organisation if you do not establish a culture that believes in sharing" Knowledge Management Process McKinsey use people-to-people methods to personalize tacit knowledge and encourage and reward individual ownership of knowledge and the process. They share knowledge and group physical and intellectual assets in new and creative ways. However, knowledge sharing was limited to the methodology, as tacit knowledge is less quantifiable as it most often learned by experience. It is the knowledge that people carry in their minds and that is difficult to access. McKinsey - people-to-people methods 2. Critically evaluate the company’s soft knowledge management strategy (i.e. people). - Recruiting of employees on a worldwide base.
- The clients to be treated as McKinsey responsibilities.
- Profit sharing from a firm pool as opposed to an office pool. One firm policy - Develop ‘T-shaped’ consultants
develop the consultants with deep industry knowledge and substantive specialized expertise The McKinsey has developed different measures for knowledge management: Clientele and professional development The objectives of CPDC are replacing the leader-driven knowledge creation and dissemination process with a stewardship model of self-governing practices focused on competence building. Client impact committee McKinsey created a Client Impact Committee, and ask it to explore the ways in which the firm could ensure that the expertise it was developing created positive measurable results in each client engagement. One of the most important initiatives of the committee was to persuade the partners to redefine the firm’s key consulting unit from the engagement team (ET) to the client service team (CST). The McKinsey dicide to create two new career paths for client service support and administrative staff.
- The first reaffirmed a path to partnership for practice-dedicated specialists who built credibility with clients and CSTs through their specialized knowledge and its expert application. Their skills would have them in high demand as consultants to teams (CDs) rather than as engagement directors (EDs).
- The second new option was the practice management track designed to provide a career progression for practice coordinators, who had a key role in transferring knowledge and in helping practice leaders manage increasingly complex networks. Valuable administrators could also be promoted on this track. Client service support and administrative Recruitment was given high importance in McKinsey. The company recruited graduates from top-tier business schools. Before a candidate was selected, he/she was interviewed six to eight times by the partners and principals. Upon joining the firm, entry level business analysts can expect to spend plenty of time learning the basics such as data gathering, modeling, analyzing and preparing reports and etc.; but after two years of toil, opportunities for advancement will present themselves. However, McKinsey is notorious for an aggressive ‘up-or-out policy’, where those that don’t progress leave. This policy leads to intense competition but retain the talent people for company. Employee Recruitment One firm policy and strong network which means ideas can be shared easily; knowledge management can increase innovation and help to create better customer relationship.
• The speed of change in the market place is so rapid that the time is available to organizations to gain experience and acquire knowledge has diminished. Therefore, expertise development and knowledge sharing can increase the efficiency and productivity. Enable people to use tacit and explicit knowledge and technology as tools to leverage their own professional and personal intellect to make right decision. The advantages of McKinsey’s KM : Knowledge management can increase the corporate assets, such as management systems, brand image, customer information and corporate reputation.
• Increasing opportunities for innovation, creating a free exchange of ideas and working collaborate to develop and create new knowledge.
• More efficient knowledge capture and storage in relation to customers will enable company to build better relationships with customers through deeper understanding of their needs and how to provide the best service to them. The advantages of McKinsey’s KM : The disadvantages of McKinsey’s KM : • The Committee is not necessarily beneficial to the company's development. When companies face problem, the Commission only general to point out the problems but does not find a solution for current problem.
• The tacit knowledge is an invisible, therefore it is hard to formalize and communication.
• Disagree and suspect often occur among experts. People can easily misinterpret facts or make incorrect assumptions thus induce conflict.
• The knowledge sharing may be difficult due to cultural and language differences.
• When company make their future strategies which are based on their core competencies, it is easy to make some mistakes. Because all of the organizations believe that they are one of the best ones. Thank You For Your Attention. A source of competitive advantage in the knowledge based economy Stephen Dull & The Knowledge Resource Directory Limitations of McKinsey and Company's Value from Knowledge McKinsey and Comapny's hiring practices do not promote diversity of consultants "In our search for bright guys, we throw out the creatives ones" limiting the value of knowledge by missing out on major pools of tacit knowledge (Huey 1993, pg. 72) (Gerami 2010, pg. 236) (Gerami 2010) (Gerami 2010) (Gerami 2010) (Gerami 2010) (Bartlett & Ghoshal 2008) Knowledge Management Timeline Questions! What is tacit knowledge ? How is it different from explicit knowledge? Suggestions on how McKinsey and Company could reduce the limitations of their knowledge are there any questions? :) Question Time: which one of those three IT Platform is using the Externalisation knowledge creation method?
C. KRD 3. Critically evaluate the company’s hard knowledge management strategy
Sydney Office Assignment
Business Marketing Competence Center illustrated as the following examples: