BUSINESSWEEK ONLINE : AUGUST 28, 2000 ISSUE
THE 21ST CENTURY CORPORATION -- THE NEW LEADERSHIP Q&A with McKinsey's Lowell Bryan "Managers are becoming nodes" During a series of interviews on the management of global companies in the 21st century, Business Week spoke with Lowell Bryan, a senior partner and director at consultancy McKinsey & Co. in New York. Bryan leads McKinsey's global industries practice and is the author of Race for the World: Strategies to Build a Great Global Firm and Market Unbound: Unleashing Global Capitalism. He specializes in the financial-services industry and advised the Senate Banking Committee on the savings-and-loan crisis. Q: How will global companies be managed in the 21st century? A: Describing it is hard because the language of management is based on command-and-control structures and "who reports to whom." Now, the manager is more of a network operator. He is part of a country team and part of a business unit. Some companies don't even have country managers anymore. Q: What is the toughest challenge in managing global companies today? A: Management structures are now three-dimensional. You have to manage by geography, products, and global customers. The real issue is building networked structures between those three dimensions. That is the state of the art. It's getting away from classic power issues. Managers are becoming nodes which are part of geographical structures and part of a business unit. Q: What are the telltale questions that reflect whether a company is truly global? A: CEOs should ask themselves four questions: First, how do people interact with each other: Do employees around the world know each other and communicate regularly? Second, do management processes reflect a network or an old-style hierarchy? Third, is information provided to everyone simultaneously? And fourth, is the company led from the bottom up, not the top down? Q: Why do multinationals that have operated for decades in foreign markets need to overhaul their management structures? A: The sheer velocity of decisions that must be made is impossible in a company depending on an old-style vertical hierarchy. Think of a company [like] Cisco that is negotiating 50 to 60 alliances at one time. The old corporate structures [can't] integrate these decisions fast enough. The CEO used to be involved in every acquisition, every alliance. Now, the role of the corporate center is different. Real business decisions move down to the level of business units. Q: If there is no clear hierarchy, and managers have conflicting opinions, how does top management know when to take a decision? Doesn't that raise the risk of delay and inaction? A: In the old centralized model, there was no communication. If you have multiple minds at work on a problem, the feedback is much quicker. If five managers or "nodes" in the network say something is not working right, management better sit up and take notice. Q: Are there any secrets to designing a new management architecture? A: Many structures will work. [H]aving the talent and capabilities you need to make a more fluid structure work [is key]. [But] it's much harder to do. The key is to create horizontal flow across silos to meet customers needs. The question is how you network across these silos. [G]etting people to work together [is paramount]. That's the revolution that is going on now. Q: What is the role of the CEO? A: The CEO is the architect. He puts in place the conditions to let the organization innovate. No one is smart enough to do it alone anymore. Corporate restructuring should liberate the company from the past. As you break down old formal structures, knowledge workers are the nodes or the glue that hold different parts of the company together. They are the network. Nodes are what it is all about. Q: How do you evaluate performance in such a squishy system? A: The role of the corporate center is to worry about talent and how people do relative to each other. Workers build a set of intangibles around who they are. If they are not compensated for their value-added, they will go somewhere else. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS The New Leadership The Boss in the Web Age TABLE: The Boss in the Web Age TABLE: Now and Then: How CEOs Will Change over the Next 20 Years See the World, Erase Its Borders TABLE: Going Global: The Growing Importance of Worldwide Markets Up from Bean Counter TABLE: Desired Skills An Executive Whose Time Has Gone From Gearhead to Grand High Pooh-Bah TABLE: Not Just Any CIO Mining a Company's Mother Lode of Talent TABLE: What Does a Knowledge Manager Do for a Living? Hey, Are You Listening to Me? TABLE: What It Will Take to Keep Me as a Customer Perspectives: Getting Rid of Guesswork Wanted: Eclectic Visionary with a Sense of Humor TABLE: A Resume for the 21st Century Write Your Own Title Essential Reading for Modern Managers ONLINE ORIGINAL: Q&A with McKinsey's Lowell Bryan ONLINE ORIGINAL: Q&A with INSEAD's Subramanian Rangan ONLINE ORIGINAL: Custom-Designing the Global Corporation INTERACT E-Mail to Business Week Online

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