Is the McKinsey Model of Internal Democracy Worth Emulating by Other Corporates?

What is the McKinsey Model of Internal Democracy and How it Works and its Advantages

The famous business consulting firm, McKinsey follows a model of internal democracy that is unique and can be said to be pioneering.

This is because the CEO or the Chief Executive Officer and other senior leaders are directly elected by the pool of Partners who have voting rights to choose one among the contenders for the top post.

Unlike conventional selection methods where the CEO is chosen by the Board of Directors or other stakeholders, McKinsey has elections which decide who becomes the CEO.

Indeed, it can be said that this model of Internal Democracy is something that is worth a study by other corporates as to whether they can follow and emulate this process.

Apart from fostering internal democracy, such elections also ensure that Diversity and Inclusivity as well as respecting the choices of employees are paramount.

In short, by giving its partners a chance to elect the CEO, McKinsey is democratizing the selection process as well as ensuring transparency and fairness in the system.

Therefore, it can be said that other corporates too would benefit from such internal democracy where the employees exercise their democratic rights.

Why Internal Democracy Can Lead to Internal Divisions and Impact Cohesion

Having said that, it would be premature to say that Internal Democracy ought to the Holy Grail of Organizational Behaviour and Organizational Development.

Indeed, there are many drawbacks to this model as we explain in detail in this section. For instance, formation of Power Centres, Lobbies, Vested Interests with Agendas, and the Disgruntlement which follows the election are all aspects that can be avoided.

In addition, democratic processes do not always yield the optimal outcomes in the same manner in which democratic countries usually do not throw up the best candidate and instead, chose whoever First Past the Post is.

In other words, there must be circumspection regarding how and why democratic models work and for whose benefit.

Moreover, as the recent elections in McKinsey proved, there is much bitterness and polarization among its partners after the process was over leading to some within The Firm itself questioning the need for such elections.

Therefore, it can be argued that there needs to be Due Diligence done before one concludes that Internal Democracy works and how.

Apart from that, there is also the aspect of how the losing side would react after the results and the real impact on organizational cohesion.

Is Internal Democracy an Idea Whose Time has come and how Firms can implement it

On the other hand, Internal Democracy in Organizations is an Idea Whose Time has come.

For instance, right from NR Narayana Murthy of Infosys to other business leaders, there have been many calls and suggestions for fostering Internal Democracy in corporates.

These business leaders often speak how their respective organizations would benefit if there is more transparency and fairness in the selection and promotion process.

Indeed, Infosys is an example of a corporate where periodic bouts of disruption happen whenever CEOs are chosen. This is because the Outsider vs. Insider Debate, Allegations of Favouritism, and the very real aspect of a large workforce having power centres with their own agendas fuelling envy and spite within the organization.

In addition, Internal Democracy would obviate the need for Parachuting External leaders as CEOs and instead, allow the organization to tap its pool of employees, rich in talent.

Indeed, if not anything, Internal Democracy would offer a good starting point in ensuring accountability and responsibility among the leaders as well as the rank and file employees.

Already there are many corporates who conduct Straw Polls and other methods to pick and choose leaders and hence, throwing open the elections would democratize the process.

The Evolution of OB and OD Theories for the Knowledge Economy and Their Impact

In recent years, OB and OD theories have evolved with the times and now, there are many management experts who are calling for Internal Democracy within organizations.

Their contention is that by letting employees choose CEOs, organizations can ensure more participation by the employees and a sense of belonging and ownership that they feel when they have their say.

Indeed, there is nothing better than making employees feel that they are wanted and are respected for their choices.

Moreover, this model also ensures that Unionization of the Knowledge Workers does not lead to confrontation as the Rank and File, through their participation would make them deliberative instead of destructive whenever there are problems within the organization.

Indeed, in the same manner in which Manufacturing Firms often have a Seat on the Board for the Union Leaders, Services Firms too can ensure a constructive engagement with their employees.

When there is much talk about Unionization of Software Professionals, it is time for Corporates to take their views into account and Internal Democracy is the first step towards making the employees responsible stakeholders in the overall organizational ecosystem.

Further, there is much to be gained from democracy rather than top down autocracy.

New Thinking for New Realities

Last, as the corporate world moves through the Fourth Industrial Revolution, older models of OB and OD need to be discarded or modified to take into account the New Realities.

In times when the Digital Age has empowered the Rank and File employees and placed the World in the Cup of their Hands, it is time corporates too woke up to the realities of Informed Employees and give them a say in the running of the firms.

To conclude, the McKinsey model can be emulated after adequate Due Diligence by other corporates in a bid to actualize an empowered workforce.



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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


Managerial Economics