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McKinsey

CapabilityBuilding
Building capabilities
forperformance

Introduction to our services


What is McKinsey CapabilityBuilding
andwhy is it important?
What is McKinsey Why is it important?
CapabilityBuilding? Many CEOs recognize a significant
McKinsey Capability Building is capability gap in their organizations
a highly scalable approach that and know that they need to
enables organizations to rapidly address this to succeed globally.
identify, build, and sustain the Half of the executives surveyed by
targeted capabilities needed to McKinsey & Company in May 2014
continuously improve performance rank capability building as a top-
and deliver impact. McKinsey three priority. Done well, capability
Capability Building enhances building translates directly into
employees skills, mindsets, and performance improvements, on the
behaviors. Drawing on adult learning individual as well as organizational
principles it utilizes experiential level. The majority of organizations
learning theory, by shaping capability today link capability building with
development around real work performance, although many still
within an organization. Concurrently, struggle with credible metrics to
it establishes the institutional measure that impact.
processes and systems needed to
sustain those capabilities. McKinsey Capability Building helps
assess and close the capability
gap, and ultimately increases and
sustains the impact of capability
building programs which are
clearly aligned with the overall
business strategy to deliver larger
and more lasting impact.

50%
of CXOs rank capability building among the
topthree priorities in their organizations

56%
link learning to individual performance...
with leadership capabilities (35%) and
functional capabilities (31%) ranked as the
top contributors to business performance

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How does it work?
We base our capability building work on five core principles
that link to the drivers of value and impact.

1
Focuses on capabilities and
behaviors linked to value
drivers of the business

2
Addresses organizational
and individual capability
building needs

3
Tailors program to
organizations unique
starting point and specific
requirements

4
Leverages real work and
is complemented with
experiential and other learning

5
Scales and institutionalizes
capabilities through
processes, tools, and people

4
What that means in practice What our clients say

We do not build capabilities for capabilities McKinsey helped us save $300M during
sake. All targeted interventions to build this capability building program, but more
capabilities are directly linked to improving importantly they enabled us to save $1B on
the performance of our clients our own over the next 2 years

We employ hard diagnostics to benchmark McKinsey not only enhanced my teams


both individuals and organizations/ skillset but also helped me introduce
institutions, and then work with our clients performance management tools and
towards a solution that integrates their streamline our decision making process,
individual and organizational needs with generating a truly holistic impact
optimization of the value creation process

Our content is adjusted based on the results We had various gaps across the
of our diagnostics to leverage thebest company and McKinsey adapted to meet
learning journeys and client service models our requirements coupling traditional
for a given situation (e.g., from broad-based transformations with targeted interventions
capability building programs to targeted
bootcamps)

We use adult learning principles in a McKinsey provided both hands-on training


combination of real work settings (field) and and classroom sessions to hone our
in settings outside of a given job (forum) as a skills and help us deliver on an important
foundation for all of our programs companyinitiative

We foster a level of client ownership that McKinsey helped us create Centers of


sustains and expands the impact in ways the Excellence and a professional network
original project team may not even predict that were instrumental to the success and
sustainability of our global manufacturing
capability program

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A blend of learning approaches
Capability building programs are designed to address learning
in the three primary domains identified by researchers.

1 Learning in the cognitive


domain revolves
2 Learning in the behavioral
domain focuses on the
3 Learning in the affective
domain includes fostering of
around knowledge acquisition, actual performance of procedures, attitudes, feelings, and preferences.
comprehension, and critical operations, methods, and Techniques employed include self-
thinking. It employs discussion and techniques. It employs practice discovery and the influencing model
explanation. andcoaching. is applied.

CASE STUDY 1: CASE STUDY 2: CASE STUDY 3:


A packaging and paper company A video and telecommunications An infrastructure conglomerate with
with 25,000 employees was provider was challenged by 54,000 employees was challenged
challenged by slow revenue increasing competition and a dearth with a leadership pool that was
growth and declining margins. A of new product offerings. A McKinsey struggling to keep up with the
McKinsey team was deployed over team of 12 was deployed with the companys success. It was also
30 months, with the performance performance objective to build a facing the imminent retirement of
objective to improve marketing and sales force capability improvement many senior leaders. A McKinsey
sales performance and develop program to drive growth. team was deployed with the objective
the capabilities to sustain that to develop 500 leaders over a six to
improvement. eight year period.

Key approaches to success: Key approaches to success: Key approaches to success:


A Sales Excellence Academy A coaching mindset was adopted A leadership engine was
was created that institutionalized company-wide and employees established by developing
knowledge and best practices, learned how to identify coaching a pipeline of emerging
using the McKinsey Capability opportunities leaders, creating a cadre of
Center as a model entrepreneurial leaders, and
Sales leaders and supervisors strengthening overall leadership
More than 400 sales conducted daily group huddles systems
representatives and managers and extensive one-on-one
participated in the academy coaching Large group meetings were
interspersed with fieldwork and
An accreditation offered in Supervisors in each region were coaching by McKinsey experts
the academy increased the able to lean in and coach other and internal mentors
attractiveness of training to teams as needed
employee participants The team created a mentor/role
model culture to make leadership
development a way of life

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What is the impact?
McKinseys approach consistently delivers bottom line
impact, across multiple industries and contexts.

$600M
Operations transformation
Increased plant reliability and product yields, reduced energy
consumption
60 full-time change agents and 2,500 frontline personnel trained
Centralized Operations Excellence function created

$500M
Capital productivity and project delivery
250 employees certified
25 core processes codified

$400M
Procurement
Case-based experiential program for 400 person sourcing group,
learn-as-you-do team approach, with coaching
Internal team drove roll-out with advanced program participants
leading

$400M
Sales force effectiveness
Trained SWAT team of supervisors in technical and leadership skills to
scale up change program across centers
3,000 representatives, 250 managers, and 40 centers were impacted

$300M
Leadership and talent
Developed institutional capabilities in a three-stage process: In-line
academies, Center of Excellence, and formal mechanisms
Impacted 100 managers, 60 change leaders, and 2,500 frontline staff

$180M
Manufacturing transformation
Do-coach-leave model built cadre of change agents with skills to
drive transformation at site level
Created Centers of Innovation and Excellence to enable cross-unit
functional quality

$130M
Retail pricing
Created a certification process to guide the learning journey through a
multi-touch, adaptive, blended learning program
Established a 12-member pricing expert team to develop and evolve
organization-wide pricing skills

$32M
Healthcare
Created a forum and one-on-one coaching program across many
hospitals
Opportunity to collaborate with like-minded colleagues across region,
including on-line forum to create impact

* All amounts stated in table are USD

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We have built up assets and intellectual
property to deliver capability building
Library of 600 interactive in-person Global capability centers and Individual assessments for
and 50eLearning modules model factories diagnostics and benchmarking
A repository of training materials Global network of facilities and Allows McKinsey to assess teams
that are tailored for each specific resources provide experiential talent in a truly objective way
client program learning opportunities for
clients to build functional and Enables quick assessment of skills
Includes modules on functional leadershipskills and identification of focus areas for
and industry topics, as well as capability building program
leadership and management skills Programs range from brief
workshops to multi-day learning Provides an accurate point of
Coaching networks to build events and many of the McKinsey view for CXO to determine teams
business management skills Capability Center experiences progress before, during, and after
Coaches available to work with can be mobile capability building program
your teams throughout the
transformation See more at www.capability- Objective standards for corporate
center.mckinsey.com certification programs
Global coaching network and Programs designed to assist our
implementation experts to train clients in ongoing performance
your employees in ongoing management
coaching skills

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McKinseys Capability Center Network
serves our clients world wide

5 8
7 9 10
6 11

2 12
1
3 15 16

13
17

14

1 Design to Value Lab 7 Capability


 Center Karlsruhe 13 McKinsey
 Capability Center
Silicon Valley Gurgaon
8 Center
 for Industrial Productivity
2 Design to Value Lab Chicago Darmstadt 14 Green
 Campus Singapore

3 McKinsey Capability Center 9 McKinsey


 Capability Center 15 McKinsey
 China Leadership
Atlanta Munich Institute Beijing

4 Brazil Model Factory Salvador 10 Model


 Factory for Energy 16 China
 Center for Operations
Productivity Garching Excellence Beijing
5 Lean Education and Research
Network Amsterdam 11 Lean
 Experience Factory Venice 17 Design
 to Value Lab Taipei

6 Capability Center Lyon 12 Model


 Factory Yekaterinburg

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Contacts

mckinsey_capability_building@mckinsey.com

Claus Benkert
Director, Munich

Co-leader McKinsey Capability Building EMEA


Extensive experience leading industrial electronics,
semiconductor, and telecommunications transformations

Richard Benson-Armer
Director, Stamford

Co-leader McKinsey Capability Building Americas


Extensive experience leading commercial transformations
across consumer and media sectors

Tomas Koch
Director, Seoul

Co-leader McKinsey Capability Building Asia


Extensive experience leading oil and gas operations
transformations

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McKinsey Capability Building
August 2014
Copyright McKinsey & Company
Design contact: New Media Australia
www.mckinsey.com

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