Every Employee An Entrepreneur

 

It seems an unusual soruce for the most provocative information about small and medium-size companies to emerge in the 1980s: McKinsey & Co., one of the nation's leading management consulting firms, adviser to the giants of American business. But consider what the firm has produced. Allan A. Kennedy's Corporate Cultures (co-authored with Terrence E. Deal). Thomas J. Peters and Robert H. Waterman Jr.'s In Search of Excellence. Richard E. Cavanagh and Donald K. Clifford Jr.'s The Winning Performance of the Mid-Sized Growth Companies. Together these works brought a new vocabulary and new tools to the study of growth and the entrepreneur. Allan Kennedy's Corporate Cultures, published in June of 1982, would form the basis for many of the innovative ideas that would emerge from McKinsey. Kennedy brought an anthropological perspective to organizational theory; for better or worse, he argued, each company has its own unique culture, values, and standards communicated internally by style and dress, expectations and assumptions within the organization. Kennedy's study was theoretical, a search for a concrete framework to explain how companies actually work. His colleagues, on the other hand, would take an empirical approach, looking at excellent companies and trying to discover the roots of their success. At the core of both approaches, however, was the theory of an internalized culture.

Kennedy brought both the insights of the outsider and the approach of the scientist to his study. Born in 1943 in Montreal; reared in Cape Breton Island, Nova Scotia; and educated at Montreal's McGill University, Kennedy remains a Canadian citizen today, both bemused and bedazzled by the energy and spirit of the American entrepreneur. Trained as a nuclear physicist at Massachasetts Institute of Technology, he followed a convoluted career path -- a compater programmer for John Hancock Mutual Life Insurance Co., an organizer for the Student Nonviolent Coordinating Committee, a stint with IBM Corp. -- before coming to McKinsey in 1969.

At McKinsey, Kennedy found a home "It was a very rich smorgasbord for someone who is curious and wants to poke around, "he remembers. "The firm stays vibrant by letting people come in to pursue what ever interests them. "For the next 13 years, working for clients that included a half dozen of the Fortune 50, Kennedy would pursue what he now calls "a realworld business post-doctoral degree." But there were frustrations as well. Kennedy was fascinated by the booming computer companies, by the entrepreneurs of California's Silicon Valley and Boston's Route 128, few of which were on Mckinsey's client list. He chafed under the firm's proscription against junior staff actually going out and selling Mckinsey's services.

So just over a year ago, he took the entrepreneural plunge himself establishing Selkirk Associates Inc., an applications-software development house in Boston. INC.'s editors interviewed him there.

INC: Where did your work on Corporate Cultures begin?

KENNEDY: In 1975 I was put in charge of a McKinsey team that was sent to a company for cost reduction. It had a very straightforward problem. Its Japanese competitor was selling a product in the United States for less than it cost the U.S. company to manufacture it. We had about 250 middle managers working on the cost reduction team at its peak. We turned in something like 270 detailed, fully staffed recommendations for specific cost reductions. It was very detailed work, the best analytical work I ever saw at McKinsey.

INC: And?

KENNEDY: And after six months we'd increased costs by a couple million bucks. People within the company thought the analysis was so good that department after department was setting up a new department of cost effectiveness, then hiring staff. As consultants, we were damned worried about that -- you really do try to help your client as a consultant, contrary to popular wisdom. But for some stupid reason, they had all these recommendations, and they just weren't having an effect. And we started saying, "It's the culture in this damned place; they've grown so long and are so much into growth that people don't want to talk about the retrenching that cost reduction implies. People will attend a meeting and say, "Yeah, we ought to do that. But not me, I'm out launching a new product." It was sort of a cultural organizational problem that they just couldn't address.

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