00:00I had a chance to sit down exclusively with McKinsey's global managing partner, Bob Sternfeld, earlier today,
00:05and he talked about what really his clients are keeping an eye on.
00:10Here's a portion of that conversation.
00:14You know, one of the things that I've learned is this journey on continuing to find best talent and diversify that
00:25is one that you never really get there on.
00:28And so when you pull back, it's great to pick individual marks.
00:34But in the last four years, we've doubled the number of women partners in McKinsey.
00:40We've reached parity for the first time in our inbound hiring.
00:45And we're taking our own medicine, and you've seen some of this from the work we've published,
00:49to identify where the broken run moves.
00:52You know, now we're focused on sponsorship in the middle, middle tenure years
00:57to ensure that you have disproportionate odds of success going forward.
01:01And everybody should have sponsorship, by the way.
01:03But we're really focused in on that to ensure that we don't slip back or lose ground.
01:08So we're accelerating around our advancement in women.
01:11But I think we could do more.
01:14I think we can go faster.
01:15Overall, with regards to your total employee count, are you still looking to trim headcount, or are you adding?
01:22You know, we've always been adding, despite what you read.
01:27McKinsey's made up of two sets of folks.
01:31We have some folks that you probably are thinking about, which are our client-deployed people that go out to our clients.
01:39They live there, you know, most of the week and help drive the change that's enabled.
01:44And that's about half of our population.
01:46The other half provide support to those folks, usually from remote locations.
01:52And, you know, we have two different things going on at the same time.
01:56We're continuing to add folks who are client-deployed.
02:02And we see an ever-increasing need of that.
02:05And we're aggressively in the market right now looking to expand that.
02:09But we are rethinking our center-based operations by leveraging all of this new technology.
02:15And my suspicion is going forward, we will continue to look to ways to change that model.
02:23And that we will upskill folks more.
02:26We'll probably have fewer folks in the non-client-deployed areas.
02:30But they will be leveraged by today's technology and AI.
02:33And that's what you see going on around us, where we've figured out a way to continue to grow this body.
02:41But we're looking to optimize this body.
02:43And so I think we can do both at the same time.
02:46How have you employed AI and some of these new technologies so far?
02:50And I mean that more so, not just on what's going on in the back office, if you will, but also for the client-facing employees.
02:58Well, you know, I'd maybe start with the client.
03:01And so let's start with what's going on in enterprise, both in America and around the world.
03:06And, you know, I think we are facing almost a gold rush type of mentality about the pace and scale of technological change that we're seeing around us.
03:19Things are moving really fast.
03:21And I do think that there's wonderful promise associated with this.
03:26But it's going to be hard to get there.
03:29And I think we're not talking yet enough about how hard it is to really change enterprise, to rewire enterprise, to realize the value from this new technology.
03:41And so what we're seeing in our own proprietary research is no different than some of the other public reports around this.
03:49Enterprise spend on technology is up.
03:51But real value delivery is yet to be had.
03:55And when you get to that, some of the underlying causes are you've got to think about domain-specific applications around this.
04:05And what matters in a bank is different than what matters in a semiconductor company.
04:09You've got to think about changing the org model.
04:11You know, what does the org model look like in five years' time?
04:14And what does that mean for the skills profile as you think about the skills that employees need to be able to leverage this technology?
04:22So that's going on in our clients.
04:23It's no different than in ourselves.
04:26You know, we're a 40,000-person organization spread across the globe.
04:31And what we're finding is, one, how do we think about the highest application areas?
04:37And I mentioned our knowledge centers are one of the biggest areas that we're applying this technology.
04:42But how do we also arm those client-facing consultants with tools that make them, I like to call it, make you superhuman, not superfluous?
04:51Because I often get asked, and maybe you'll get to this, you know, I get asked by a new young hire, is AI going to take my job?
04:58Is this going to work me out of a job?
05:00And I say, well, it depends.
05:02If you define your job as it is today, probably.
05:06But if you use this as a moment to figure out what are all the things that AI can do, and then you use the time that is freed up to go help solve even more complicated problems with the client, no.
05:20Because this is a belief that, look, there'll always be something more complicated.
05:24There'll always be something more aspirational that our clients want to tackle.
05:28And so we're on this race to figure out, how do you redesign work as you arm people with these new and amazing tools?
05:36How much is this discussion of AI dominating the requests that you're getting from clients for help right now?
05:46If I looked at the two biggest topics worldwide, and it varies based on where you are in the world, you've got a great appreciation for this.
05:54But the two biggest ones are technology writ large, which AI is at the center, but I widen it to technology.
06:03That's about 40% of the work that we're doing right now worldwide.
06:09I'd say quickly followed with, in some way, shape, or form, how do I make my organization more resilient, given everything that's going on in the world?
06:19And a belief that resilience is going to matter because I will withstand future shocks.
06:25So I need to innovate with this technology, but I need to make myself resilient at the same time.
06:31Can you help me with both of those?
06:32Are clients generally constructive about current conditions right now, not just here in the United States, but around the globe?
06:39I mean, there's been a lot of geopolitical shocks, obviously a lot when it comes to various policies coming out of the U.S. government, as well as Europe, and now over in Asia.
06:48Are they comfortable with where we're going?
06:52You know, I think the role of a CEO is not necessarily to ever be comfortable in any context.
06:59And if you're an investor and you find a really comfortable CEO, that may tell you something, right?
07:07And so there is this idea, I think, a role of a CEO is at one point is to be aspirational.
07:13How do you set an aspiration for change?
07:16And back to the technology point, I think you do see a lot of excitement that, although it may be hard, the potential for these new technologies to transform who I am exists.
07:27Drug discovery, you know, radically shortening the cycle times, amazing customer experience, you name it, right?
07:33But on the other, that the world is getting to be a more volatile place on any dimension.
07:41You talk about a bit of government policy, but it's not the only variable in this.
07:46How are the economies performing, the role of government, you know, demographic change that you haven't dealt with, you kind of name it.
07:53And so a belief that I need to change my organization model to be able to do two things at the same time.
08:02And I like sports, right?
08:04I can't just play defense.
08:07If I just play defense, I'll be able to withstand the shocks, but I'll come out average.
08:12I can't just play offense.
08:14If I play offense, I might win, but I might blow myself up.
08:17So how do I play offense and defense at the same time with a recognition that I'm going to have more things thrown at me going forward?
08:24As a matter of course, that things won't go back to normal, that we're in a new normal now.
08:32How do I navigate through this?
08:33It's also a bit of a chaotic normal.
08:35And I'm wondering if that's actually helped McKinsey's business.
08:39You know, the first thing I would say is I think that idea of more chaotic depends on where in the world you sit.
08:49You know, if you talk with CEOs in Brazil, they might say, to your point, it's been chaotic for a long time.
08:57And we just have the muscle to navigate through, whether it's inflation, whether it's a pandemic, et cetera.
09:04Like this is the normal of operating as a CEO in Brazil.
09:07I think it is a bit different operating in the U.S. and in Europe.
09:12And so that idea of more volatility going forward, I think, is now sinking home in some of the largest economies.
09:26You know, it's lonely, I think, particularly as a CEO right now, on how do you navigate through this?
09:33Because you have a lot of different stakeholders.
09:35You might have a board that is really focused on, are you sure you're doing everything you can to protect the institution?
09:42You might have employees that say, what's the security for me?
09:46You have a different interaction with governments around the world.
09:49And their involvement or not with your business has changed.
09:53You have technology providers saying that, are you really moving fast enough on this technology?
09:58And then you have this belief of, look, I was brought here as CEO for a reason, which was to lead us in a way that is going to differentiate myself from my competition.
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