McKinsey

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McKinsey CompanyThe Firm

• Dangerous Company
• The Gold Boys Network
• Crystal Diane Byrd
• IST 325
• Spring 2003

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McKinsey Company

• Agenda
• Introduction and Company Overview
• McKinseys Mission
• Aspirations and Values
• Business Focus
• Clients
• Founders
• Forging Professional Values
• Tapping Harvard
• McKinseys Golden Connection
• A World Class Leader
• A Tough Employer
• One Womans Claim
• Casting a Wider Net
• Lessons Learned

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McKinsey Company

• Introduction and Company Overview
• One firm simply means that we're all in this
  together and that all our incentives, evaluation
  processes, and the like apply firm wide
• Rajat Gupta
• CEO, McKinsey Company
• Founded Private company 1926
• Founder James Mac McKinsey managed by Marvin
  Bower
• Size Over 100 offices in 40 countries, employs
  13,000
• Revenues 3.4 billion (2001)
• Source The Gale Group

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McKinsey Company

• McKinseys Mission
• Win access to the ear and whisper the right
  message, and your influence will find its true
  measure
• OShea and Madigan
• Dual Mission To their clients and themselves to
  improve performance and attract exceptional staff
• Mission is supported by four aspirations and
  enduring values that guide all of the business
  efforts

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McKinsey Company

• Aspirations and Values
• Serve clients as Primary Counselors on overall
  performance.
• Give each client the best of the firm.
• Superior Talent to initiate the best of
  consulting.
• Govern Ourselves through a values-driven
  partnership.

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McKinsey Company

• Business Focus
• Focus of business advising top management of
  leading companies and institutions of strategy,
  organization, technology and operation
• Business interests automotive and assembly,
  banking and securities, business building and
  business technology offices, electric power and
  natural gas, insurance, media and entertainment,
  telecommunications
• Success strict policy of privacy, founded on
  application of values, discipline, reputation and
  access over time, Art of networking Gold Boys
  Network, Strict performance standards and
  training, 5- step process and 7- S Model

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McKinsey Company

• 7-S Model

Source www.mckinsey.com
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McKinsey Company

• Clients
• Successful Hewlett Packard, Johnson and
  Johnson, General Motors and Siemens
• Unsuccessful Enron, Swiss-Air, Kmart, Global
  Crossing

Source Business week
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McKinsey Company

• James O. McKinsey
• Former accounting professor at the University of
  Chicago
• Source www.mckinsey.com
• McKinsey's Goal To help senior management in
  various companies solve their major business
  problems
• Mc Kinsey new theory That so-called management
  engineers could go beyond rescuing sick
  companies.

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McKinsey Company

• Marvin Bower
• Founders of modern management consulting
• 
  
  Source www.mckinsey.com
• Assumed Responsibility of the company after the
  death of James O McKinsey
• Bower was a member of McKinsey from 1933 until
  his retirement in 1992

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McKinsey Company

• Marvin Bower
• Philosophy   Management consulting should be
  held to the same high standards for professional
  conduct and performance as law and medicine.
• He insisted that client interests be placed
  before the firm's
• Engagements be undertaken only when our value to
  the client was expected to exceed our fees
• Bower restricted the firm's ownership to active
  partners
• He instilled professionalism through training

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McKinsey Company

• Forging Professional Values
• McKinseys 5 Step Process
• Take top management perspective
• Establish a solid fact base
• Work with clients, not for them
• Preserve confidentiality
• Bring the best of the firm to each client

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McKinsey Company

• Forging Professional Values (cont)
• This is about how we manage ourselves and what
  kind of organization we want to be
• Rajat Gupta, Managing Director
• on McKinseys Four Core Value
• Source www.mckinsey.com
• Impact Driven Professional Support We want to
  make a difference in the institutions we serve
  individually, while collectively serving enough
  leading institutions so as to have broader impact
  on the business community and society

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McKinsey Company

• Forging Professional Values (cont)
• Rajat Gupta, Managing Director on McKinseys Four
  Core Value
• Caring Meritocracy Without a true meritocracy,
  we won't be able to maintain our quality
  standards or attract the kind of people we want
  to attract
• Self- Governing, Unified Firm Partnership
  This is not a firm of leaders and followers it
  is a firm of leaders who want to have the freedom
  to do what they think is right for the
  institution
• Delivering the Best if knowledge and being the
  best aren't part of our core values, then we're
  missing something

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McKinsey Company

• Tapping Harvard
• The secret of success is constancy to purpose
• Marvin Bower, quoting British
• Prime Minister Benjamin Disraeli.
• The Trend Recruiting staff from the Harvard
  Business School began with Marvin Bower one of
  the founders of McKinsey and Company.
• The Program Students were presented with case
  studies and problems and had one day within which
  to come up with a solution.
• The Product A graduate capable of thinking on
  his/her feet.

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McKinsey Company

• Tapping Harvard (cont)
• The Question of Ethics
• In a business that lives on impressions,
  dazzling the client is important
• OShea and Madigan
• The Influence Bower influenced the way business
  was run and classes were taught at the Harvard
  Business School and who was in charge.
• The Patronage The Matsushita Chair of
  Leadership, established in 1981

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McKinsey Company

• Tapping Harvard (cont)
• The Competition With the growth of consulting,
  even Bowers persuasive patronage could not keep
  competitors for Bakers Scholars at bay
• The Problem Solver True to his character as
  success as a management consultant and as a
  result a problem solver, Bower was able to go
  back to the top of his game

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McKinsey Company

• McKinseys Golden Connection
• United Nations of business consulting, with
  one crucial difference It works. OShea and
  Madigan
• The Name McKinseys name and reputation
  apparently opened the doors of many major
  corporations in corporate America to many of its
  veterans who transitioned out of McKinsey
• The People Mckinseys people are valued for the
  type of experience that they bring to the table

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McKinsey Company

• McKinseys Golden Connection (cont)
• Louis V. Gerstner, Jr. IBM.
• 
  Sourcewww.ibm.com
• Harvey Golub, former Chairman and CEO
• of American Express Company
• 
  
  Source www.americanexpress.com
• Michael H. Jordan, former chairman of
  international food and beverage at PepsiCo Inc
• 
  
  
  www.eoriginal.com

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McKinsey Company

• McKinseys Golden Connection (cont)
• The Tie That Binds These men are united not
  only in their connection to McKinsey Company,
  but also in the personal qualities that they
  have in common as a result of their common
  business heritage.
• Aggressive
• Visionary
• Possessed intellectual vigor
• Bold
• Zealous
• Loyal

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McKinsey Company

• McKinseys Golden Connection (cont)
• The Assumption Herein lies the true power of
  McKinsey
• The Measure of Success For a consulting company
  the weight given to their advice and the
  implementation of their recommendations are
  critical to their success, therefore by
  exercising intellectual vigor at the top of
  companies is the key to their success.

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McKinsey Company

• A World Class Leader
• Mckinseys business is influence versus special
  expertise
• Traditionally and deliberately, it deals first
  with the top level of business leadership
• Rule of Confidentiality The one rule most
  Mckinsey consultants and former consultants seem
  to value above all others

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McKinsey Company

• A World Class Leader (cont)
• Our point of view is simply that some people
  will continue here, some will go on to be leaders
  elsewhere...
• Rajat Gupta
• McKinsey is high-caliber partnership where
  consensus of the partners dictates the course of
  events
• The Firm recognizes that it is frequently
  involved in growing the executives who will run
  corporations all over the world
• Outstanding people are hired in their own right,
  whether they are continuing at Mckinsey and are
  very successful at Mckinsey or not

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McKinsey Company

• A Tough Employer (cont)
• Mckinsey Co. is one the most selective employer
  when it comes to the level of scrutiny its
  employees must face
• According to The Firm, the same standards are
  applied to everyone base on their Mission and
  Guiding Principles Statement

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McKinsey Company

• A Tough Employer (cont)
• Mckinsey consultant start out as associates.
• After two or three years at The Firm, the
  consultant who does well comes an engagement
  manager.
• Two or three more years after that, the title
  senior engagement manager is conferred.
• At any time during the course of this
  experiential leap, The Firm can decide the
  character just isnt going to make it.

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McKinsey Company

• A Tough Employer (cont)
• Corporate culture
• 1st circle gets the best cases, the best
  mentoring, and the best avenues to partnership
• 2nd circle receives challenging cases and a good
  chance at advancement.
• 3rd circle some cases but not much attention and
  not much prospect at partnership
• 4th circle received difficult clients, minimal
  chance for advancement and little attention from
  partners.

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McKinsey Company

• A Tough Employer
• Only one in five make it to principal
• Anyone who makes it through that gateway is then
  at step three an elect/non-elect decision by a
  subcommittee of The Firm's board of director
• This brings us to the case of Suzanne Porter

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McKinsey Company

• One Womans Claim
• Suzanne Porter
• Suzanne Porter joined McKinsey in 1986 after
  graduating from University of Texas
• Suzanne Porter planned to work for a consulting
  company before she went on leave from her job to
  attend business school at the University of
  Texas.
• Porter was interested in Mckinsey Company, and
  she submitted her resume at the Mckinseys public
  forums at University of Texas.

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McKinsey Company

• One Womans Claim
• Suzanne Porter
• Porter worked with EDS, Republic Financial
  Services, Enron, American General, Tenneco, Zale,
  and Childrens Hospital accounts at the Mckinsey
• Advanced to senior management in the beginning of
  1991
• By August 1991, Porter was told that her
  performance on her most recent engagement was not
  satisfactory

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McKinsey Company

• One Womans Claim
• Suzanne Porter
• Later, her partners also told Porter that she was
  years behind in her development.
• In June 1992, the Mckinsey Texas partners decided
  not to recommend her for election to principal.
• Suzanne Porter stayed at Mckinsey until April 30,
  1993.

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McKinsey Company

• One Womans Claim
• Suzanne Porter
• Porters Claim she was victim of discrimination
  because she was a woman.
• Claimed that she was the target of inappropriate
  comments from men in the firm over time
• Claimed that she was hindered in her attempts
  to get a job at Bain Co.
• Porter and her witnesses alleged that women at
  Mckinsey were not as well brought along as men.

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McKinsey Company

• One Womans Claim
• Suzanne Porter
• McKinseys Defense disagrees on all points, and
  won summary judgments dismissing a number of the
  claims
• The firm says she was fired because she had
  difficulty working with others, required a high
  degree of supervision, lacked analytical rigor,
  and reached conclusions with insufficient data.
• The Outcome The Texas office got some
  sensitivity training it didnt anticipate, and a
  woman was finally elected to the principal level
  at McKinsey.

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McKinsey Company

• Casting a Wider Net
• Looking beyond Harvard
• Since 1986 McKinsey has been increasingly
  recruiting graduates with broader educations and
  experiences.
• 1995 43 of its 756 new consultants were not
  business school grads. Why?
• Pool of business school standouts was not large
  enough
• The company has evolved and grown and has become
  dependent upon a different set of skills
• Mckinsey's modern agenda has changed into
  analysis of the global economy

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McKinsey Company

• Casting a Wider Net (cont)
• Predicting Change (Practice what you preach)
• Before McKinsey went global, many of its clients
  were confused as to why they would take such a
  risk when they were already so successful.
• Why do anything different? That is always the
  challenge for successful organizations. Of
  course, what we tell our clients is that that is
  just the time when you invest and do something
  different to maintain that success. In a narrow
  sense we were taking some of our own medicine.
• Bill Lewis
• The Global Institute

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McKinsey Company

• Casting a Wider Net (cont)
• Going Global
• In the 1980s, questions arose about the world
  economy from CEOs in the US and in Europe
• Held international conferences for 3 years
• Opened global offices in Washington D.C.
• Consultants analyze the world economy
• Produce reports available to anyone

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McKinsey Company

• Casting a Wider Net
• Organizational Values
• Leave The Firm stronger for the next generation
• Rajat Gupta
• Mckinsey spends a great deal of time checking on
  its own health
• Maintaining a first class image even in the
  light of the down fall of Enron, a company in
  which McKinsey had a major involvement
• Establish multi-level relationships with clients,
  not just with CEOs
• Establish tight partnerships. Meritocracy.

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McKinsey Company

• Casting A Wider Net (cont)
• They remain the high priest of consulting, with
  the most formidable intellectual firepower, the
  classiest client portfolio, and the greatest
  global reach of any adviser to management in the
  world
• Source Business Week
• The Goal McKinseys goal is stability, not to
  be wedded to any one business area in particular
  hence the wide variety of business services that
  they offer.
• The Future Although not the biggest consulting
  company in the world, McKinsey continues to shine
  based on their reputation and golden connection

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McKinsey Company

• Lessons Learned
• The most important body part of a person in power
  is the ear
• Maintain a first class image and reputation
• Invest in a wide range of business services
• Take top management perspective
• Establish a solid fact base
• Work with clients, not for them
• Preserve confidentiality
• Bring the best of the firm to each client
• Establish and maintain a golden connection