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.You re right.We probablyare trying to control too many things centrally.Therefore, let uschange. And so we progressed.17Marvin s role in helping to overcome the cultural resistance went wellbeyond directing his team to uncover the facts.He was a key presence atall of the team s many presentations to the Committee of ManagingDirectors (such meetings were held every other month), setting the stage 11131_Edersheim_c06_f.qxd 2/10/04 3:25 PM Page 154154 McKinsey s Marvin Bowerfor each interaction by creating a philosophical foundation for the conclu-sions and recommendations.Every team member remembers those meetings and describes MarvinBower as brilliant and at his best as he held the full group of managingdirectors spellbound.Capturing the undivided attention of this group wasno small feat all seven of the managing directors were stellar businessstatesmen at the international level.And, as Hugh Parker recalls:They listened with respect because what he said was said so welland made so much sense that it was almost irrefutable, his logic.Marvin could put over a presentation with enormous conviction.He had conviction and it came across.In a couple of hours of pre-sentation, with slides or without, he more or less lectured them onwhat management was all about.18In addition to the cultural resistance, there were legal issues and barri-ers that needed to be overcome.As the recommendations moved toward amore decentralized form of organization, Shell s legal department becamevery concerned.There is a Napoleonic law in Venezuela that says that tax-ation vests at the point of the mind and management of the company.So,for example, if the mind and management of Shell Venezuela were foundto be in London and The Hague, then the Venezuelan government couldtax all of Shell s worldwide activities.A team of lawyers, management, andconsultants worked the issue and constructed a solution by creating servicecompanies based in London and The Hague, much to the relief of themanaging directors and much to the relief of McKinsey & Co.The RecommendationsWhat resulted from this consulting engagement was a matrix organization(in which managers have both geographic and functional responsibilities)for Royal Dutch Shell quite an achievement in several regards.First, itwas one of the first of such organizational structures in Europe.Second,implementing this new organization would be difficult because it requiredfundamental changes to the company that seemed to conflict with ele-ments of its culture, which had developed over the previous 150 years.Nonetheless, the Marvin-led team had conducted itself flawlessly, provid-ing Loudon with the ammunition he needed and turning the whole of the 11131_Edersheim_c06_f.qxd 2/10/04 3:25 PM Page 155Inspiring Organizational Courage 155Committee of Managing Directors into a receptive and strong advocate ofthe recommended changes and path.In reflecting on the recommendations, John Macomber believes that thereason it worked was they knew that Hugh and I and the rest of the teamwere absolutely rock solid as far as our integrity was concerned.There wasnever any question about McKinsey hanging around there for more billings.It was clear that the team s motivation was to help them, not just to get paid.And they knew that.19As pointed out earlier, the Committee of Managing Directors main-tained a healthy skepticism and demanded a strong, solid rationale for therecommendations.And although he was chairman, John Loudon ostensi-bly was no more powerful or influential than any of the other six members.In reality, however, he held tremendous power.Marvin was well aware thatLoudon was the client, so Marvin worked hard at convincing Loudon ofthe merits of the overall matrix organization concept, knowing that onceLoudon bought in, he would encourage the rest of the committee to acceptthe bulk of the recommendations, subject to any necessary revisions thatmight arise during implementation.The recommendations were based on the belief that management ineach operating company needed to be responsible for the performance andlong-term viability of its own operations
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