9 Big Problems with McKinsey 9 Box Grid for Talent
9 Big Problems with McKinsey 9 Box Grid for Talent in SMEs
The McKinsey 9 box talent matrix is used by a huge number of companies around the world as a way to identify and calibrate talent performance and potential of a team or hierarchical level.
It is drawn as a grid so you can effectively identify talent by plotting their performance and potential on it – with the y axis labelled as potential and the x axis labelled as performance. You can identify people as low, medium or high on each axis, which means you have 9 possible boxes that you could assign an individual to. These boxes are given descriptors so the top right box, represents High Performance and High Potential (box 9, or top right) and labelled “Future Leader”.
What do you do with it?
Most companies get together to discuss their direct reports / departments and then plot their initials on the grid, based on where you think they fit in the Performance:Potential scale as High, Medium or Low on each. Once you have plotted all your people on this grid it enables you to prioritise investment, attention, and focus on groups of people in each box. You may want to invest in training, or development in your high potential, or even tie in your high performers into Long Term Incentive Plans (LTIPs) so they don’t leave you in the lurch. Then you may generate actions for under performers that have to be achieved before next time. You then may review this on a 6 or 12m basis to keep the conversation going.
Why is it so popular?
CEOs want to know that their best people will stay, that there is a pipeline for more people to do their best, and there are mechanisms for managing poor performers.
If these are sorted, then HR is doing a good job. Well Done!
Every cloud has a silver lining - what is it good for?
Some of you may be aware of my personal dissociation with this model not because it is not a useful description or yardstick, but because of how it is used to classify people, or put them into boxes, but before we get into the problems (see problem 1) I wanted to set the record straight about what it is good for.
I can actually think of one good thing to use it for. If you have absolutely no idea what to do about talent and you simply want to get your senior team talking about who and what to do to develop and grow your business succession pipeline then this model will help you start that conversation. It is simple and straightforward and easy to implement, getting everyone in a room to discuss who they like and dislike (see problem 4).
However, if you want something that actually works, or delivers results, positive change, improved performance, succession, improved mobility, or talent retention then you will be sorely disappointed with it for the reasons outlined in the attached.
Problem 1 with the McKinsey 9 box talent matrix for SMEs:
Cutting corners and Getting lost in translation
The biggest fundamental issue with the 9 box grid is that to make it easier to interpret we often forget how it was conceived, and leap straight into where we should plot people. We ignore the descriptors and decide instead to draw a graph on a white board with High Medium and Low on each access. Then we have a discussion about our people and plot them on the graph. We end up with loads of discussion about why someone is high or low, and then hey presto we have 10% in the top right, 10% in bottom left, 10% spread around the outside and 70% in the middle. Then we invest in the top right future leaders and, lets be honest, do nothing with the rest. Then we review it a year later, no-one really wants to, and guess what, very little has changed.
Problem 2 with the McKinsey 9 box talent matrix for SMEs:
It doesn't compare apples with apples
The second biggest problem for me is that plotting people on one grid ignores the fact that each role is context dependent. An individual's performance and potential is completely dependent on their role and circumstances, (and often function or department) which is completely different to anyone else you are plotting, even if they are in the same team. As a result you can not possibly compare or associate other people on the same grid, without the data being completely meaningless to the individual.
Problem 3 with the McKinsey 9 box talent matrix for SMEs:
Adding insult to injury
By placing an individual, (i.e. as a future leader) is relative to where they are now. It does not account for the organisational level that an individual is currently at. If you are Tier -1 it is very unlikely that you will be identified as a future leader, without upsetting everyone else at Tier 0 for starters, but mainly because the skill set is so incredibly different between levels. For example; You may have potential to go further, but it has no bearing on whether you could be a 'leader'. What about the person's competencies, skills, learning agility etc? All not accounted for and therefore devalues the use of the 'labelling' strategy in the first place, (which you probably forgot to use anyway, see problem 1). So many times people have been moved into roles as a result of their previous performance, only to find they can not transition into the new role in the expected timescale of their sponsor. So, what do we do? We blame the process or worse the person who was moved, label them as incompetent or write it down as a margin of error without considering the real issues about why they could not transition.
Problem 4 with the McKinsey 9 box talent matrix for SMEs:
Your guess is as good as mine
Whilst we like to share examples of when someone did a good job, or a bad job, each role, especially at senior level, is individual and whilst our memory is often no more than 3 months, their overall output for the last 1 or two years may or may not be considered, leading to complete inconsistency. Those assessing it are also rarely qualified to feedback on the quality of output for the role (i.e. HR people, sorry), as they are not functional experts, so have little understanding of whether or not the person can perform or has potential. So, it all boils down to whether you like them or not.
"All we can consistently measure is that we are completely inconsistent>" Anon
Potential can certainly not be measured objectively and is purely the opinion of the people who are subjectively considering the individual, who are likely to not be experts in that field (sorry again, HR) and are therefore ill-equipped to pass their opinion of how they will perform if invested in as a future leader any more so than Mystic Meg herself (share if you remember Mystic Meg)!
Problem 5 with the McKinsey 9 box talent matrix for SMEs:
73.6% of all statistics are Made up
As Mark Suster puts it this is due to our natural inclination for amplification and skewing of results to suit our own aims. So leading on from Problem 4, performance is absolutely the wrong criteria to measure objectively on an individual level for something as important as talent succession or development, with or without key performance 'statistics'.
If you use objective data, which is very difficult to attribute or analyse without subjective swing (for example, using sales figures to determine the marketing directors performance) most management data that is KPI driven is also about their team, or business performance, not about the individual...so performance can not be measured accurately about the individual without including external measures that would then need to be subjectively attributed (see problem 4). Big Data is not Complete Data, so anything you use will be subjectively weighted to suit the opinion you have of the person..."OK, they have a 150% attrition rate in their team but hey, that's OK because they made a 9% margin growth for us last year!"
Problem 6 with the McKinsey 9 box talent matrix for SMEs:
Method to my madness
Potential can not possibly be a correlated measure for someone who is a high performer. Think about it. If anything, it is the opposite. A low performer has greater potential to improve than a high performer. It's basic physics. Someone who produces 10 widgets an hour will have a far lower potential to improve by even 10% compared to someone in the same role that produces 1 widget an hour who could improve their own performance by 100%, and overall team production 10%, simply by getting to 2 per hour. So, focus on poor performance could yield huge increases on overall team performance rather than investing in high potential. In the real world what would happen is that person 1 would be promoted to supervisor, taking their best widget producer off the line and leaving their worst under huge pressure to make up the 1000% team output gap left by promoting someone who was good it into a role they know nothing about.
Problem 7 with the McKinsey 9 box talent matrix for SMEs:
Barking up the wrong tree
The focus on potential and performance is completely irrelevant to the role of 'Future Leader', which is the aspirational target of anyone who is plotted on the grid in the first place. We all know people who can be described as natural leaders, and in actual fact they are rarely the high performers. Would you want a high potential person as a leader, or would you want a steady pair of hands who is used to performing at that level. This is the reason so many High Potentials never see their potential realised in the business because the risks of an unknown entity taking the reins far outweigh the gains in promoting organically. Need I mention the lack of account for the person's behaviour, attitude, competency or professional capability in performing at the next level, which the grid does not account for.
Problem 8 with the McKinsey 9 box talent matrix for SMEs:
Don't count your chickens before they hatch
We have established that an individual's performance is relative to their own history and without accurate tracking it is impossible to objectively assess (problem 4). If you do have their performance history then the question remains, what has that got to do with their potential performance in a more senior role? In actual fact performance is completely useless when identifying successors as what you really want to know is how good they will be in the succession position, not their current or historic positions. Yet this distinction is rarely made when calibrating their position on the grid.
Problem 9 with the McKinsey 9 box talent matrix for SMEs:
Back to the drawing board
Last, (for now) but not least, is the distribution that results from this type of profiling. It does not take a genius to work out where the majority of people sit within this model...yes, you guessed it - in the middle! 60-70% of the people discussed will sit there, middle of the road 'Core Employees'. As a result 10% or so will be considered as low performers to be managed out (or left alone because no-one wants to actually sort them out), about 10% will get to be 'future leaders' whether they want to be seen as such or not, and about 20% will be scattered amongst the rest, possibly as trusted professionals (bottom right) - or more accurately described as 'those people that we absolutely don't want to promote but probably should give a bonus to and keep them sweet'. You won't believe how many PAs fit that category, as direct reports to the CEO, and plotted on the same grid as the other direct reports (the directors that run the business) and present in the same room whilst the CEO is doing the exercises, priceless!
Whilst I could go on forever about the issues with this matrix for plotting or identifying talent there are alternatives, and we would be very happy to share them with you.
Please contact us for more information about how you can accurately identify and effectively utilise your talent to far greater effect than wasting 100s of hours plotting them on this grid!
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