Developing the Individual

Excerpt from “What It Takes: Seven Secrets of Success from the World’s Greatest Professional Firms,” by Charles D. Ellis (John Wiley & Sons, Inc., 2013).

By Charles D. Ellis

In the early years of their careers at each of the great professional firms, beginners experience a powerful surge in learning. Typically called training, in the best programs, it is at least equally education. Training is learning how to reproduce what predecessors have developed as best practices; training suggests that the most an associate can learn is how to do what can be instructed—it implies that the associate often will do less and can never do better. Education is learning how to understand issues so thoroughly that appropriate new resolutions—new best practices—will be developed. Learning to reproduce what a leader already can do is always far less important than learning how to be an effective leader.

Here are how five great firms invest time and energy in developing the skills of each individual.

Goldman Sachs

Several years ago, Goldman Sachs, concerned about the need for many more well-developed leader-managers as a result of the firm’s increasing complexity and global size, saw a need for a more systematic approach to developing the effectiveness of its more than 1,000 managing directors.

Pine Street, as the program was called, expanded its focus to include what was identified as “leadership acceleration” for a group of nearly 100 fast-rising managing directors. (Goldman Sachs University would continue to focus on the skills training needs of vice presidents and below.) The message given the selected managing directors was the same message John Whitehead and John Weinberg had given each new partner 30 years ago: “Congratulations on your well-deserved promotion. We expect even more of you now. So take the pace up even higher and show us you can be a real leader.”

Pine Street quickly learned that to be embraced by the firm, courses had to be made specific to each division and that professors from great universities who didn’t fully understand Goldman Sachs were not nearly as credible as the firm’s senior leaders. More than 80 percent of Pine Street courses are taught by the firm’s top-line executives. Executive coaching was added, and when members of the management committee reached out for coaching themselves, it was quickly seen as not “remedial” but developmental. Each coaching relationship lasts several months, and to avoid organizational politics, all coaches are external. Several dozen managing directors participate.

Cravath, Swaine & Moore

Persuaded that the best way to train young lawyers is to bond associates directly with a specific small team of partners and associates, Cravath typically will have two, three, or four partners work closely with an assigned group of associates over 12 or 18 months—12-month intervals in corporate law and 18-month intervals in litigation. Everyone on the team is motivated to produce the best results for the client and to help each lawyer develop. Associates get invaluable experience in understanding each client’s total problem, the firm’s specific strategy for dealing most effectively with the particular matter, and why the division of work into specific components makes sense, all of which increases each associate’s future effectiveness.

Cravath partners believe associates will have learned in the 12 or 18 months of a rotation most of the transferable useful knowledge of that specialty they could learn if they stayed in it for the rest of their careers. So it’s time to move on to a different team. The more diversity of substantial experience—the more different ways of thinking conceptually and tactically about how best to deal with complex new problems—the better an associate becomes as a many-faceted problem solver and the lower the risk of getting professionally “grooved” or caught in a rut.

Mayo Clinic

To be a great Mayo doctor, the new resident must understand that professionalism at the point of care means solving problems as part of a team, not alone. Residents also find they can no longer depend as before on memory. Now they depend on discovery—on figuring things out. Radiologist Stephen Swensen contended: “Nobody who is at Mayo Clinic could ever have been as good outside Mayo.”

Each year, the typical Mayo Clinic employee participates in 17 different courses, some lasting a few hours and some lasting several days. Before nurses can go into the operating room, they must practice for 12 weeks in a simulation center not unlike the Link Trainers airline pilots use. With thousands of courses on offer, annual course registrations for all three Mayo campuses run more than 940,000. Some courses are aimed at helping employees be more effective in their current positions, while others are designed to help in career development. In addition, 3,500 employees receive tuition support for external career development courses. Mayo courses cover a wide range of subjects. The many courses have two objectives: enhance the performance capabilities of individuals in their current positions and enable them to take on larger responsibilities. The objective, said Dr. Michael Brennan, “is to prepare the workforce of the future with Mayo values.”

Capital Group

Capital’s annual individual 360-degree review process (reflecting evaluations by co-workers at various levels) covers 10 criteria that have been identified over many years as the factors that make a difference in achieving superior long-term results. Everybody is encouraged to rate everybody he or she works with. Analysts evaluate each other, analysts rate portfolio managers, and vice versa, so the process is truly balanced.

The evaluations are compiled, with scores reported in quintiles, and shared with the associate in a session that usually takes an hour or more. The review process is combined with annual self-appraisals and careful development of each associate’s “franchise plan” of personal and career progress to help find the role that the associate can perform most effectively.

McKinsey

In the late 1950s and early 1960, with MBAs coming to McKinsey in groups of 50 or 60 each year, the firm developed an intensive two-week Introductory Training Program, or ITP, for groups of 25 at a time. A central purpose was to be sure young consultants quickly would learn to work together as teams, develop strong bonds with each other and to the firm, and get immersed in McKinsey’s values and their operational validity.

All McKinsey consulting is done by teams, so effectiveness when working on teams is crucial to the success of every consultant. Teams are led by “engagement directors” who work with the client to define each engagement’s purpose, scope, timing, and fees. The engagement director is responsible for the quality of the work, maintaining good relations with the client, protecting the firm and its reputation, managing costs, ensuring ethical behavior and developing future principals and directors.

Reprinted by permission from the publisher, John Wiley & Sons, Inc., from “What It Takes: Seven Secrets of Success from the World’s Greatest Professional Firms” by Charles D. Ellis Copyright (c) 2013. For more information, visithttp://www.amazon.com/What-It-Takes-Greatest-Professional/dp/1118517725/ref=tmm_hrd_title_0

Charles D. Elliswas founder and for 30 years the managing partner of Greenwich Associates, the international business strategy consulting firm that serves leading financial service organizations around the world. He is author of 17 books, including the bestselling “Winning the Loser’s Game”; has taught investing at both Harvard and Yale; and has served as a trustee of Yale, Exeter, Robert Wood Johnson Foundation, and Whitehead Institute.

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