| When it comes to simple remedies, few are more seductive than those claiming to help companies create a healthy organization. One-dimensional messages about how to achieve sustainable organizational excellence remain in circulation even though most CEOs and other senior executives instinctively know that any large company's people, processes, teams, and control systems require artful handling. The head of one North American auto manufacturer, for example, asserted in a recent edition of the Financial Times that a new culture allowing employees to speak out "boldly" would drive the company's future success. In the same edition, a major investor in a fast-food business insisted that direct equity compensation for senior managers was the missing key to organizational efficiency.
Without hard data, bold claims are hard to resist. But new McKinsey analysis of more than 230 businesses around the world provides evidence for a much more subtle picture. This research, aggregating results from the past four years, shows that strong organizational performance is really fueled not by isolated interventions but by a combination of three or four carefully selected complementary ones—what we call management "practices." Executives can use a wide range of them to improve the organizational performance of a company—in other words, its ability to unite around common goals, to execute efficiently, and to renew itself over the longer term by, for example, refreshing product lines, replacing people, and upgrading capabilities.
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