It takes trust and vision

MCKINSEY director Michael Rennie believes creating a climate where people are both trusted and optimally productive is imperative to building company wealth.

Backed by a six-year McKinsey research project involving 5,000 companies, Mr Rennie proposes the biggest challenges for chief executives in all industries are finding the right people for their organisations, and then aligning and motivating them.

And altering mindsets to challenge and change is an integral part of this, he says.

Trusted, trustworthy people, each with a meaningful responsibility and sharing the same company vision can perform the most demanding tasks and achieve for an organisation things that would otherwise be viewed as ‘almost impossible’.

Organisations with a clear vision and which can impart this vision to ‘empowered’ employees were able to give shareholders a 20 per cent higher return than those that merely ran by rules, the McKinsey research found.

Mr Rennie says this fundamental shift in organisational wealth creation theory complements the idea that companies with ideas and information are today’s winners.

Offering an industry example, Mr Rennie says mining and production operations can readily be contracted out, while a company’s wealth is built on finding the next ore body or reservoir and developing the right relationships, not only among employees, but also with suppliers and regulators.

Developing a visionary approach throughout an organisation is not incompatible with a performance ethic, Mr Rennie says.

The creativity engendered in empowering each person within an organisation will drive ideas, create opportunities and deliver performance.

Describing this approach as co-creative, Mr Rennie explains: “You need an organisation where not just a few people are working out the answer and telling everybody else what to do – which is what we used to do – but actually everyone is constantly looking at ways for improving their part of it.”