Bob Sternfels, new leader of consulting company, discusses how to accelerate decision-making, rethink performance appraisals, and avoid future scams
McKinsey’s reputation also faced challenges. In February, the company announced it had struck a $573 million settlement on its previous work advising OxyContin maker Purdue Pharma LP and other drugmakers to aggressively market opioid painkillers. McKinsey acknowledged there was no wrongdoing. The firm has also drawn scrutiny in recent years for its work with some foreign governments, including Saudi Arabia.
Mr Sternfels, a 27-year McKinsey veteran who previously served effectively as the firm’s chief operating officer, has said he will build on the changes Mr Snyder made to prevent future scandals . In his first months on the job, Mr. Sternfels embarked on listening tours, meeting with more than 300 CEOs and speaking with McKinsey employees around the world. The firm employs more than 30,000 people, and Mr. Sternfels said he wants to change the way McKinsey operates, accelerate decision-making and emphasize employee tenure.
The 52-year-old executive spoke to Businesshala about his approach. Here are the edited excerpts.
Businesshala: What are some of your first priorities in the job?
Mr. Sternfels: Three words come to mind: daring, inclusive and sharp.
As we think about helping leaders today, there are many forces that converge. Technology has been adopted at a rate we’ve never seen; Climate change is the lead of this generation [challenge], Geopolitics is probably as uncertain as in 1946, 1989—you choose the timing. And talent markets are completely upside down; 40% of people want to change jobs.
What our customers are saying is that as leaders, none of them want to miss the moment. And so my goal is to see how we can have the courage to help them do something they normally wouldn’t.
Inclusive is really about us; We have come a long way in terms of the structure of our firm, but I think we have only scratched the surface.
While fast, the world is never going to slow down again, and our customers are demanding that we move faster than they can. So how can we build a model that can actually move more quickly?
Businesshala: At McKinsey, it seems that the partners always run their fiefdoms with relative autonomy. But now we’re in a world where customers in New York and San Francisco care about what you’re doing in the Middle East. Can the partnership model survive?
Mr. Sternfels: I think it could. Customers demand the absolute best insights on something, not regional insights on something. Therefore, in some ways a global partnership model—done right—allows the most famous method to be imported anywhere in the world. There are differences of opinion on what kind of customers we should serve, which country should we be in? For the partnership model to work, you really need to invest in sharing perspectives and having honest debates and involving all partners on some of these decisions.
Businesshala: Your predecessor helped oversee systems and processes to assess new customers, or to avoid doing certain things. Do you think the approach is still in effect, or does something different need to be done to avoid future scams?
Mr. Sternfels: I guess I approach this with humility: do you know what’s going to happen in the future with certainty? No, but I will say that, I didn’t join the firm yesterday, and I’ve been with us for 27 years. In my previous role, which was designing and implementing those risk and client protocols with Kevin [Sneader], He was in, she was in. Everyone knows this internally.
You can have a delegated model that empowers people if you have strong accountability and compliance. So we’ve made a big move on customer selection, where we now run everything through a single framework. Apart from the selection process, we are engaging professionals; We have appointed a new Chief Compliance Officer. So we are not going back. Does this ensure that we will never be probed in the future? I can’t say, but I think this is a firm that is constantly evolving.
Businesshala: What advice has proved helpful when you take on different assignments in the firm, as you contemplate your own career?
Mr. Sternfels: It certainly hasn’t been a linear path. I think the biggest thing for me is that I think about the individual chapters as how do you move from the passion to prove yourself to the better you are? What is this probably going to be good for my evaluation or promotion, and more so, what do I want to do as a professional?
I started on the West Coast at the start of the dot-com boom in the ’90s, but quickly moved to South Africa. It was a great experience for me to work with people from different backgrounds. The advice most people had at the time was: Why would you want to leave the heart of innovation in Silicon Valley to move to Africa?
The biggest pivot we can make in our talent-development processes is to create a culture that develops people to value people. and we’re wiring a whole bunch of changes around that to try to bring people back [doing] What you want to do as a professional, not what people are telling you in terms of the evaluation process.
Businesshala: Could this change affect how one becomes a participant in McKinsey?
Mr. Sternfels: This can change everything. i will give you a worldly [example], Internally, we have an app that we built to find the firm. It can find coworkers, it can search for expertise, all kinds of things. One of the first things that historically pulls up your profile are your name, your title, and your tenure. I got rid of tenure on it. People were shouting: “How can you do this? It’s such a great search tool.”
One reason for this is that we are going away from time as an estimate of your skills, and instead be more specific about what your skills are. So you can join us with 20 years of experience but your tenure in the firm may be six months. This is not a good approximation to your skills. And if you take it further, it means more flexibility for the partner in time, more flexibility on the way the partner goes, and more flexibility in the ways they make an impact over time.
Businesshala: What is driving you to make some of these changes?
Mr. Sternfels: The root of this was customer and talent. Our work with our clients has been really important over the past 20 years. Similarly, the profile of people joining the firm has become quite wide. [Years ago]There is nothing wrong with that most of the people came straight from MBA, but today it is 19% of our class. The majority come from a very broad set of sources: both senior staff, technical talent. Right now there are more than 370 universities from where we recruit. So if the profiles are broad and the kind of support we’re providing is comprehensive, a homogeneous time-based [evaluation] The system no longer works, and you need much wider paths for development.
Businesshala: You are in contact with many CEOs. What kind of questions are they asking now?
Mr. Sternfels: This is a moment, and this is a moment unlike any other. So it’s an almost existential question: I don’t want a board, or my predecessor, or the press, to look back and say, How did that person remember that? There is a real imperative to drive growth, especially for CEOs: How do I grow out of this pandemic? The flip side is, am I thinking about inclusion? It has aspects of everything from, “I’m not getting the talent I need to do what I need,” to “Am I thinking broadly about rescheduling the workforce?”
The last thing I would say on everyone’s mind is the climate; The assumption that this can’t be the next CEO’s problem. this is my problem. About 75% of our customers have made a net-zero commitment, and I am sure we will be on our way to 100% very soon. But beneath that, they’re asking: Is my approach good enough? Is it fast enough?
Write Chip Cutter at [email protected]