October 13, 2011

One on One with McKinsey’s Lenny Mendonca



The long-term success of a business depends, in part, on how it adapts to changes in society—and the long-term success of societies depends upon the ability of businesses to be competitive, create jobs, and play constructive roles in their communities. But this "contract" between business and society is rapidly evolving, says Lenny Mendonca, Director with McKinsey & Company. “It’s long been true that business has both a near-term and longer-term interest in ensuring that a broader society in which they operate is functioning well and creates the kind of environment for future success,” he says. Still, it’s even more urgent given the state that we’re in today. Mendonca will dive deeper into this topic in his keynote presentation “The Changing Nature of Business in Society—and Its Implications for the Profession” at the Consulting Summit Nov. 9 at the Union League Club in New York. Mendonca sat down with Consulting One-on-One to discuss the increasing expectation for businesses to play a greater role in helping shape solutions.

Consulting: What is the current state of the relationship between the public and private sectors?

Mendonca:
I think it’s even more urgent now for businesses to take a more active role than it has over the last couple of decades. This has happened before at certain moments in history. For example, coming out of World War II, many of the institutions in the world needed to be re-invented and there was a large gap in the capacity of various countries around the world to do that. Business stepped up in a large way and helped encourage the development of the Marshall Plan and the development of a large amount of civic and civil infrastructure around the country and around the world. Today, when we have deeply troubled economic and institutional challenges, it really is in business’ best interest to step in and solve those problems. It was a business group—the Committee for Economic Development—that really drove the policy and action and the political support for the Marshall Plan and they, and others, are trying to help encourage that engagement again today.

Consulting: Are business leaders aware of this reality?

Mendonca:
I think most business leaders acknowledge and are engaged in some way in helping solve challenges in their communities. How they do that varies widely and is of a continuous level of frustration with many business leaders. Unfortunately, we’re in an environment where there is often business pitted against government and generally are not engaged in the broader success of communities and countries and global challenges. I don’t think business leaders are—or should—wait for the government. Government has its own interest and politicians have their own individual interest and the most forward-looking business leaders are actually taking more responsibility and stepping forward to help encourage that discussion. And I do think it is partly the role of leaders, including leaders in the consulting profession, to help encourage that debate.

Consulting: So, do you view the profession’s role as a catalyst to bring the two sides together?

Mendonca:
I think leading business professionals, which includes consultants, are part of the civic and business leadership and have an opportunity—and even an obligation—to help role model and bring their distinctive capabilities to bear. We certainly think there is a role for firms like McKinsey to be able to bring the analytical capability, objectivity and ability to span the public and private sector. Plus, we bring the ability to have both a global perspective and a perspective that spans the sectors to bring solutions to the kinds of problems I’m talking about it. We certainly are actively engaged in that and would encourage other consulting leaders to do so.

Consulting: As far as the implications and opportunities for the profession, do you see this as a real business driver over the next several years?

Mendonca:
I don’t think the profession should view this as a near-term business opportunity any more than our clients should view this as a near-term revenue opportunity. I think this is about being engaged as citizens and leaders in the world, and the most important driver of long-term success is making sure that we’re creating an attractive business environment and an attractive overall economic environment that works for everyone. It’s in all of our interest so this is as much a professional obligation as it is a business opportunity.

Consutling: Are you optimistic that what needs to happen will happen?

Mendonca:
I would say we are realistic about the short-term prospects for this. We are in an extremely unhelpful political environment, and that’s exacerbated by the fact that we are in a very important and delicate presidential election cycle. In the intermediate term, we are quite optimistic about this and we are seeing business leaders take action. It’s not a question of “if” but “how.” It’s going to take the full innovation, leadership, talent, capital and creativity of business leaders to actually solve this, but we’re seeing more and more people step up. And, certainly, McKinsey will be a very important part of that conversation.

Consulting: Is there a short answer to how this gets done?

Mendonca:
Well, there is no silver bullet. If there’s one element that is essential it is that business leaders today—and even more so in the future—are going to have to be more fluent operating across the public, private and social sectors in ways that are not the historical pattern, at least recently. So, the real need to be a tri-sector athlete is an important part to what we think is going to be part of the answer.


For additional information on the Consulting Summit, Lenny Mendonca’s presentation or to register for the event, please visit www.ConsultingSummit.com.

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