How strategic listening can engage employees in an open and realistic way

April 13, 2012

In the winning entries in a contest co-sponsored McKinsey & Company with Gary Hamel’s Management Innovation eXchange (MIX) and Harvard Business Review, the authors of seven articles reveal executive thinking on the importance of engaging employees in an open and realistic way. Source: Organization Practice

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The Beyond Bureaucracy Challenge is the second of three contests in a yearlong competition in which executives describe inspiring management innovations. (In September, we published the winners of the first phase, the Management 2.0 Challenge.) In this second phase, managers were asked to describe practices that better engage their employees, empower them to manage themselves, or provide a perspective on the organization from the outside in. A panel including McKinsey partners and external experts chose seven winners from a field of 106 entries. These winners come from a wide range of companies, including technology leaders, industrial organizations in Brazil and Norway, and a Japanese insurance company.
While the programs differ in form, they share an awareness of the connection between employee engagement and organizational productivity. Here we briefly describe each winning entry and suggest some related reading from the the McKinsey Quarterly. Visit the MIX site to see the complete list of entries and to learn about the third phase of the competition: the Long-Term Capitalism Challenge.Editors’ note: The judges for the MIX contest include business leaders, academics, editors, and McKinsey consultants. The analysis and opinions expressed in the winning essays do not necessarily reflect the views of McKinsey & Company or of its individual consultants.

[Here are the first two of the seven.]

1. Letting employees choose their next assignment

This entry (“WeOrg: The freedom to choose”) describes how managers of a product team at Microsoft offered employees the chance to pick their next assignment, rather than having the leaders hand down those decisions. In this case, to retain top talent in a competitive market and to boost employee satisfaction, team leaders pitched their projects to employees, allowing them to evaluate the opportunities and chart their own course. Some managers worried that participants would only join teams with the coolest leaders. But employees soon realized the potential for greater advancement on teams with fewer members, which helped balance the distribution.

Please see also James Eddy, Stephen J. D. Hall, and Stephen R. Robinson, “How global organizations develop local talent.”

2. Taking a realistic approach to budgeting

Executives at Norwegian oil and gas company Statoil were looking for ways to make it more nimble and more realistic about its goals. This entry (“Taking reality seriously—towards a more self-regulating management model at Statoil”) describes their new approach to year-end budgeting, which breaks it out into three different sets of numbers. These included targets (“what we want to happen”), forecasting (“what we think will happen, whether we like what we see or not”), and resource allocation (“trying to use our resources in the most optimal and efficient way”). Separating the numbers gave managers the freedom to be realistic about each. For example, they can present ambitious sales targets without compromising the integrity of their forecasts.

Please see also Kevin Coyne’s “Enduring Ideas: The business system.”

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