Grit(10)

None of us knew much about management in general, or about any industry in particular. But that was about to change: in a single month, we would complete a crash course called the “mini-MBA.” Since we were all vetted to be superfast learners, there was no question that we would successfully master a massive amount of information in a very short amount of time.

Newly equipped with a casual acquaintance with cash flow, the difference between revenue and profit, and some other rudimentary facts about what I now knew to call “the private sector,” we were shipped off to our designated offices around the world, where we would join teams of other consultants and be matched up with corporate clients to solve whatever problems they threw our way.

I soon learned that McKinsey’s basic business proposition is straightforward. For a very large sum of money per month, companies can hire a McKinsey team to solve problems too thorny to be solved by the folks who are already working on them. At the end of this “engagement,” as it was called in the firm, we were supposed to produce a report that was dramatically more insightful than anything they could have generated in-house.

It occurred to me, as I was putting together slides summarizing bold, sweeping recommendations for a multibillion-dollar medical products conglomerate, that, really, I had no idea what I was talking about. There were senior consultants on the team who may have known more, but there were also more junior consultants who, having just graduated from college, surely knew even less.

Why hire us, then, at such an exorbitant cost? Well, for one thing, we had the advantage of an outsider’s perspective untainted by insider politics. We also had a method for solving business problems that was hypothesis and data driven. There were probably lots of good reasons CEOs brought in McKinsey. But among them, I think, was that we were supposed to be sharper than the people who were already on-site. Hiring McKinsey meant hiring the very “best and brightest”—as if being the brightest also made us the best.



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According to The War for Talent, the companies that excel are those that aggressively promote the most talented employees while just as aggressively culling the least talented. In such companies, huge disparities in salary are not only justified but desirable. Why? Because a competitive, winner-take-all environment encourages the most talented to stick around and the least talented to find alternative employment.

Duff McDonald, the journalist who’s done the most in-depth research on McKinsey to date, has suggested that this particular business philosophy would be more aptly titled The War on Common Sense. McDonald points out that the companies highlighted in the original McKinsey report as exemplars of their endorsed strategy didn’t do so well in the years after that report was published.

Journalist Malcolm Gladwell has also critiqued the The War for Talent. Enron, he points out, epitomized the “talent mindset” approach to management advocated by McKinsey. As we all know, the Enron story doesn’t have a happy ending. Once one of the largest energy trading companies in the world, Enron was named America’s Most Innovative Company by Fortune magazine six years in a row. Yet, by the end of 2001, when the business filed for bankruptcy, it had become clear that the company’s extraordinary profits were attributable to massive and systematic accounting fraud. When Enron collapsed, thousands of its employees, who had no hand at all in the wrongdoing, lost their jobs, health insurance, and retirement savings. At the time, it was the largest corporate bankruptcy in U.S. history.

You can’t blame the Enron debacle on a surfeit of IQ points. You can’t blame it on a lack of grit, either. But Gladwell argues convincingly that demanding Enron employees prove that they were smarter than everyone else inadvertently contributed to a narcissistic culture, with an overrepresentation of employees who were both incredibly smug and driven by deep insecurity to keep showing off. It was a culture that encouraged short-term performance but discouraged long-term learning and growth.

The same point comes through in the postmortem documentary on Enron called, appropriately enough, The Smartest Guys in the Room. During the company’s ascendency, it was a brash and brilliant former McKinsey consultant named Jeff Skilling who was Enron’s CEO. Skilling developed a performance review system for Enron that consisted of grading employees annually and summarily firing the bottom 15 percent. In other words, no matter what your absolute level of performance, if you were weak, relative to others, you got fired. Inside Enron, this practice was known as “rank-and-yank.” Skilling considered it one of the most important strategies his company had. But ultimately, it may have contributed to a work environment that rewarded deception and discouraged integrity.



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Is talent a bad thing? Are we all equally talented? No and no. The ability to quickly climb the learning curve of any skill is obviously a very good thing, and, like it or not, some of us are better at it than others.

So why, then, is it such a bad thing to favor “naturals” over “strivers”? What’s the downside of television shows like America’s Got Talent, The X Factor, and Child Genius? Why shouldn’t we separate children as young as seven or eight into two groups: those few children who are “gifted and talented” and the many, many more who aren’t? What harm is there, really, in a talent show being named a “talent show”?

In my view, the biggest reason a preoccupation with talent can be harmful is simple: By shining our spotlight on talent, we risk leaving everything else in the shadows. We inadvertently send the message that these other factors—including grit—don’t matter as much as they really do.