McKinsey Culture Clash – Intercultural Dynamics at Play in New Policies

Julia Root

As many CEOs know (and greatly enjoy the challenge), managing an international business is a complex, multi-faceted operation with demanding stakeholders. On top of keeping oversight of competitive strategy and diverse client needs across the globe, corporate leadership also needs to stay in tune to what’s happening inside the organization and the company culture.

A recent New York Times article documented the internal cultural strife facing McKinsey & Company, the highly regarded consulting firm with nearly 20,000 employees located around the world. The new Global Managing Director, Dominic Barton, is seeking to calm the waters and reassure a nervous client base after two former executives were convicted of insider trading in 2010. Barton has been focused on changing company culture, to make more explicit what employees can and can’t do regarding their personal investments given the firm’s business dealings with Fortune 1,000 companies.

A culture shift is no easy job, even for a company that is based in one country and serves a similar client-base. But for companies like McKinsey that are true international businesses, with clients and employees who come from diverse cultural backgrounds and nationalities, it can be a minefield.

In the case of McKinsey, Mr. Barton’s biggest critics are his very own employees. As noted in the article, he has been accused of “Americanization” of the company and operating a “nanny state” by “imposing American standards that don’t work globally”. Taking into account different legal systems, European colleagues reacted differently than others in the organization seeing the new policies as “impractical”.

 Mr. Baron has his work cut out for him. Not only must he restore good faith in McKinsey, but he must also soothe the internal strife and how employees of different nationalities perceive the new policies. As Mr. Baron well knows, company culture sets the tone for business and simply put, cannot be overlooked. When corporate culture and business strategy become misaligned, the signs of wear and tear seem to be harmless at first. As described in the article, one can imagine the water cooler talk. Employees complain about the “childish” new policy and comparing enforcements of new procedures under a dictator in Eastern Germany. But not paying attention to intercultural dynamics and why certain employees feel so outraged or unhappy can only make the situation worse.

With so many business strategists in one company, McKinsey will likely get it right. The company will find a way to develop a policy that is inclusive of different cultural backgrounds while modernizing and strengthening its corporate culture.