Liz is also a member of McKinsey’s Shareholders Council, the firm’s board of directors equivalent.
In her insightful talk, she explores the transformative power of building organizational capabilities to drive growth, innovation, and resilience in an ever-changing business landscape. Liz introduces the VECTOR framework—a holistic approach to identifying and cultivating a company’s unique “superpower.” She outlines how businesses can harness the synergy of vision, people, culture, technology, structure, and processes to achieve lasting competitive advantage. This talk serves as both a roadmap and a call to action for leaders aiming to catalyze meaningful and sustainable change within their organizations.
“It’s almost impossible to change on a sustained basis if you don’t address all elements of the VECTOR framework, particularly culture and routines, which often hold organizations back," Segel shared.
The VECTOR framework is a comprehensive approach designed to guide organizations in building institutional capabilities that can drive long-term growth and transformation.
It begins with Vision which involves defining a clear and compelling direction for the organization. This vision outlines where the company wants to go, why it is pursuing this path, and how the desired capability will create tangible value, whether through financial performance, customer satisfaction, or operational excellence. Drawing inspiration from analogous companies or industries can help shape this vision and provide a benchmark for success.
The second component, Employees, emphasizes leveraging and up-skilling the existing workforce. Building new capabilities often requires empowering employees with the tools, training, and support needed to adapt. While introducing new expertise into the organization can be beneficial, the focus is primarily on transforming how current employees approach their roles. This includes fostering collaboration and ensuring that individuals at all levels understand their part in the change process.
Culture is another critical element, as entrenched behaviors and mindsets can hinder progress. The framework encourages organizations to align cultural norms with their strategic goals, creating an environment open to experimentation, learning, and growth. Similarly, Technology plays a pivotal role, as it often underpins new capabilities. Investing in the right tools, platforms, and data infrastructure is essential, but success also depends on integrating technology with existing processes and workflows in a way that scales effectively.
The framework also addresses Organization, highlighting the importance of structural changes to support new capabilities. This might include creating new functions, such as a dedicated data science or pricing team, or adjusting incentives and performance metrics to align with desired outcomes. Lastly, Routines refer to the processes that embed new capabilities into daily operations. These processes should be repeatable, scalable, and adaptable, ensuring that the changes become ingrained in the organization’s way of working.
