A McKinsey leader lays out a positive vision of tech’s future

As a senior partner at McKinsey, James Manyika has made a name for himself in professional services, helping senior executives set a strategic course for their firms. MIT Sloan principal research scientist Andrew McAfee describes him as the “consummate professional.”

But Manyika said he doesn’t think of what he does as professional.

“I think about what I do as trying to work on large problems and advise leaders who are trying to do something about those problems, or try to provide perspectives that inform those problems,” Manyika said during a podcast interview with McAfee. “We're not just trying to give advice, but we're also trying to make sure people actually have the impact and the results that they want ... Yes, it's still categorized as professional services, but I think we're doing our range quite differently.”

From the interview, here are Manyika’s insights on pushing private sector laggards to digitize, broadening access to jobs in the tech sector, and why the public sector gets a bad rap on innovation.

The U.S. has achieved only 18 percent of its “digital potential”

Manyika also serves as chairman and director of the McKinsey Global Institute, the firm’s business and economics research arm. He said one of the institute’s most surprising pieces of recent research looked into the so-called productivity paradox, where productivity growth in large economies has been stagnant for more than a decade.

A slow pace of digitization has played a key role here, Manyika said. According to McKinsey’s research, the U.S. economy has only achieved only 18 percent of its “digital potential.” Client-server architecture is pervasive, he noted, but industries such as health care, construction, manufacturing, and retail have typically been slow to adopt cloud computing, electronic payments, and device connectivity based on Internet Protocol standards. Amazon is often held up as an example of modernizing the retail industry, but even though it represents nearly 50 percent of online retail in the U.S., the online retail sector only represents 10 percent of all retail nationwide.

Despite this slow pace of technology adoption, Manyika said he is optimistic about the potential impact of technology as a whole.

“We still have a bunch of things to solve that come with technology, but I think … we should embrace automation. These systems are going to drive productivity and growth,” he said. “Now, we should be thoughtful about the impacts of that. We know there's going to be impacts on jobs, and work, and skills, and so forth. We need to work to solve those things.”

Deliberate action is required to diversify tech

Silicon Valley firms often find candidates for jobs through personal references, professional networks, and alumni organizations.

“A lot of those things make it very difficult to actually find talent that looks like people of color or women,” Manyika told McAfee.  

One strategy to address this challenge is to implement a policy like the National Football League’s Rooney Rule, which requires teams to interview at least one minority candidate for coaching or front-office roles. “Even though you have this insider referral network, at least make sure you're seeing three or four other candidates,” Manyika said.Another strategy — Manyika’s life hack, a common feature on McAfee’s podcast —is a more informal process of extending meeting invitations to those who are otherwise unlikely to be represented — whether it’s someone young, poor, less educated, or from a minority group.

“Anybody who has access, like you and me, anytime we go to an important meeting, take a friend or colleague who has no access,” he said.

There are tech boosters in the public sector

Contrary to stereotypical belief, Manyika said, the federal government is not “dramatically different” from the private sector, particularly when it comes to embracing technology innovation. Manyika does have some public sector experience — from 2012 to 2016 he served as vice chair of President Barack Obama’s Global Development Council.

“The problem is, when we think about the private sector and technology, we think of the frontier companies we all know and love — but you forget that there's other companies in the economy,” he said.

In both the public and private sectors, Manyika said, there are senior executives who are excited about technology, middle managers who are skeptical, and young employees who are considering new ways to use technology even if their roles don’t allow them access to that tech. If there is a difference, he added, it’s the relative size of these three groups in government agencies as compared to private companies.

“There's a lot of very smart, bright people in government who actually want to serve the country and do the right thing — but structurally, it's harder,” Manyika said. “The idea that these people are not smart enough or are not thinking enough is an unfair critique.”