| McKinsey Classics | July 2022 |
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| A decade ago, a McKinsey study of R&D laboratories found that many of them didn’t really know if their productivity was good, bad, or indifferent, mainly because researchers tend to overrate themselves—70 percent claimed that their labs were at least in the top quarter for productivity. Don’t work in one? Substitute “organization” for lab and “executive” or “employee” for researcher. Such illusions can develop anywhere, and the path to improvement is essentially the same. |
| The best labs, our study discovered, know how to manage talent. That may not mean hiring the best—not every organization can—but rather managing researchers effectively through selection, recruitment, development, and rewards. Average labs, for instance, typically hire people with specific technical proficiencies. Top ones want curious scientists who can adapt to new roles. Top labs reward the work of high performers (particularly by giving them better assignments) and explicitly link financial rewards to performance. Many weak labs simply move underperformers to other facilities. The best try to help people improve and encourage those who don’t to move on, which can make room for new researchers and therefore help build diverse, high-performing teams. So does encouraging rotation to other research areas and geographies. |
| Of the practices that influence an organization’s productivity, talent management is often the one most in need of improvement. Read our 2011 classic “How the best labs manage talent.”
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| — Roger Draper, editor, New York |
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| Did You Miss Our Previous McKinsey Classics? |
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| To learn about the most important trends in risk and how companies can respond to them, read “The future of bank risk management.”
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