McKinsey & Company
Encyclopedia
McKinsey & Company, Inc. is a global management consulting
firm that focuses on solving issues of concern to senior management
. McKinsey serves as an adviser to many businesses, governments, and institutions. It is recognized as one of the most prestigious firms in the consulting industry and has been a top employer for new MBA
graduates since 1996.
) is elected for a three-year term by the firm's other senior partners. Each managing director can serve a maximum of three terms, a policy instituted by Rajat Gupta
. At a strategic level, a number of committees are charged with the development of policies and making critical decisions. Committee memberships, senior roles, and the managing director position all rotate regularly among the firm's senior partners and directors.
Former managing director Rajat Gupta explains McKinsey's structure as follows:
McKinsey operates under a practice of "up or out", meaning that consultant
s must either advance in their consulting careers within a pre-defined timeframe or leave the firm. "25% of the firm is new every year," Gupta says, "so half the people have less than two to three years' tenure in the firm, and their values need to be reinforced."
All leadership positions, including the position of managing partner, rotate among the senior partners and directors.
McKinsey has about 9,000 consultants in 99 locations in 56 countries, working with more than 90% of the 100 leading global corporations and two-thirds of the Fortune 1000 list. Forbes
estimated the firm's 2009 revenues at $6.6 billion. The notion of company growth has been controversial from the 1970s as the firm began its global expansion; McKinsey opened many new offices under Rajat Gupta's tenure in the late 1990s. The election of British-born Ian Davis
as Gupta's successor was seen as "a return to McKinsey's heritage".
Another controversial McKinsey practice is its non-exclusivity policy: a conflict of interest could arise as different teams of consultants might work for direct competitors in an industry. This works to McKinsey's advantage, because it does not rule out working for potential clients. Furthermore, knowing that a competitor has hired McKinsey has historically been strong motivation for other companies to seek McKinsey's assistance themselves. The policy also means McKinsey can keep its list of clients confidential. However, because of this there is great emphasis placed on client confidentiality within the firm, and consultants are forbidden from discussing details of their work with members of other teams. While still working for McKinsey, consultants are prohibited from serving direct competitors unless they wait two or more years between the date they cease serving one competitor and begin serving the next; in some cases, consultants are forbidden from ever serving a competitor.
This philosophy has come under increased scrutiny with the Galleon case, with some questioning whether the firm is a discreet broker of confidential or even inside information
marketed as "best practices".
in 1926 by James O. ("Mac") McKinsey
as James O. McKinsey and Company. Previously, McKinsey served as an accounting professor at the University of Chicago
Booth School of Business
and is considered the father of managerial accounting. In 1935 Marshall Field's
became a client and in 1935 convinced McKinsey to leave the firm and become its CEO. This led to a merger between James O. McKinsey and Company and Scovell, Wellington & Company as McKinsey, Wellington & Company. The new firm had both an accounting practice and a management engineering practice.
In 1937 James O. McKinsey died unexpectedly of pneumonia, which led to the division of McKinsey, Wellington & Company in 1939. C. Oliver Wellington returned to manage Scovell, Wellington & Company full time and took the accounting practice with him. The management engineering practice was split into two affiliated firms: McKinsey & Company and McKinsey, Kearney & Company. McKinsey & Company was led by Guy Crockett, Dick Fletcher, and Marvin Bower
. McKinsey, Kearney & Company was led by Andrew Thomas Kearney
.
By 1952 McKinsey & Company formally parted ways with McKinsey, Kearney & Company, which was renamed A.T. Kearney & Company
. At the time, McKinsey was led by Marvin Bower as then-managing director. Bower had joined the firm in 1933 and served as managing director from 1950 to 1967. During his tenure he oversaw the firm's rise to global prominence and established many of its guiding principles. Even after formally leaving McKinsey in 1967, Marvin continued to provide guidance and counsel to the Firm for many years. He is called the father of modern management consulting.
Ron Daniel
was Bower's protégé and managing director from 1976 to 1988. He remains a senior partner and “the bridge between McKinsey's founding generation and the present.” The firm takes mentorship very seriously; Daniel mentored Rajat Gupta
, who mentored Anil Kumar
, who advised current managing director Dominic Barton
. Gupta and Kumar were later entangled in the Galleon scandal.
Auckland
Bangkok
Beijing
Chennai
Gurgaon
Hanoi
Hong Kong
Istanbul
Jakarta
Kuala Lumpur
Manila
Melbourne
Mumbai
Seoul
Shanghai
Singapore
Sydney
Taipei
Tokyo
Abu Dhabi
Amsterdam
Antwerp
Athens
Barcelona
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Bucharest
Budapest
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Silicon Valley
Stamford
Toronto
Washington, D.C.
The Firm is organizationally divided into partners and non-partners. It is generally not possible to join the firm as a partner; instead, partners are promoted internally from the existing ranks of principals and associates. According to the Firm's career website, "successful consultants who join McKinsey early in their career can expect election to principal (the first stage of partnership) within five to seven years. ... There is no limit to the size of our partnership." Successful partners are sometimes elected senior partner after at least seven years as partner, though there are fast-rising exceptions (notably Ron Daniel
, Rajat Gupta
, and Anil Kumar
) who become senior partner ~10 years after joining the firm as associates.
Officially, "senior partner" is the highest position (other than the rotating managing director) at McKinsey, though top senior partners are distinguished by reputation and influence. The firm's mandatory retirement age is 60, after which directors become "senior partner emeritus."
, and The Boston Consulting Group (BCG). This top tier of the consulting industry is commonly termed the MBB by executive recruiters and industry insiders.
Although these three firms compete directly across all major sectors and geographies, each firm possesses its own unique profile that defines its sustainable competitive advantage in the marketplace. McKinsey & Co., on account of its experience, deep board/C-level relationships and scale, is currently the strongest player in the MBB tier with particular strongholds in general strategy, financial services, operations and IT (through its BTO subsidiary). McKinsey holds the highest market share among the three firms globally with geographic strength across the Americas, Europe and Asia.
BCG displays competitive strength in general strategy and holds the second-highest market share globally after McKinsey. Having pioneered private equity (PE) consulting, Bain & Co. is the strongest player in the PE/LBO space, servicing most of the major private investment firms globally; Geographically, Bain displays a strong market share in the Americas but is weak in Europe, Asia and other emerging markets.
. It also publishes McKinsey on Business Technology, McKinsey on Payments, McKinsey on Corporate and Investment Banking, and McKinsey on Finance. Several business books have been authored by McKinsey consultants, including Valuation: Measuring and Managing the Value of Companies, The Alchemy of Growth, Creative Destruction, and The War for Talent
. Former consultant Tom Peters
authored the well-known book In Search of Excellence
based on a project initiated by Ron Daniel
in 1977.
This system was created and chaired by former senior partner Anil Kumar
as an early example of knowledge process outsourcing
.
These funds have had over $5 billion in assets under management
(AUM).
From the firm's website:
MIO is "responsible for pension and discretionary partner investments, with a particular focus on alternative investments."
Notable longtime McKinsey partners include:
Academics who were formerly McKinsey consultants include:
The policy of client confidentiality is maintained even among former employees; as a result, journalists and writers have had difficulty developing fully informed accounts of mistakes which McKinsey employees may have made. It naturally also prohibits quantifying the benefits that good advice may have delivered. Despite this difficulty in attributing mistakes to McKinsey employees and alumni, some suggestions have been put forward:
Among other books and articles, The Witch Doctors, written by The Economist
editor-in-chief John Micklethwait
and Adrian Wooldridge
, presents a series of blunders and disasters alleged to have been McKinsey's consultants' fault. Similarly, Dangerous Company: The Consulting Powerhouses and the Businesses They Save and Ruin by James O'Shea and Charles Madigan
, critically examines McKinsey's work within the context of the consulting industry.
co-founders Rajat Gupta
and Anil Kumar
(with Gupta also having served as managing director of the firm) were charged by the SEC for illegally tipping the Galleon Group
hedge fund with insider information
about Goldman Sachs
, Procter & Gamble
, and other McKinsey clients. Gupta and Kumar were close friends of each other and of Galleon founder Raj Rajaratnam
.
The SEC alleged in its civil administrative action that Gupta, who had since retired as a senior partner of McKinsey and was serving on the board of Goldman Sachs, had passed information to Galleon about Goldman that yielded nearly $
20 million in profits and losses avoided. The SEC also alleged that Gupta passed information to Rajaratnam within 4 minutes of the completion of a special Goldman Sachs board meeting to approve a capital injection by Warren Buffett
during the height of the financial crisis in 2008
. Gupta also stood to profit as would-be chairman of Galleon International and chairman of New Silk Route.
Gupta has maintained his innocence and countersued the SEC; in August 2011, both Gupta's and the SEC's suits were dropped. Gupta surrendered to the FBI on criminal charges on October 26, 2011; the case is ongoing.
Kumar, who pleaded guilty and was fined nearly $3 million for his role in the scandal, provided insider information on the acquisition of ATI Technologies
by AMD while at McKinsey. He was the government's "star witness" in U.S. v Rajaratnam.
In U.S. v Rajaratnam, it was also revealed that a third McKinsey partner, David Palecek — now deceased at age 37 — had been involved in the insider trading scandal, though did not accept money from Rajaratnam.
The firm has come under significant controversy for having its former leaders and senior partners (Gupta and Kumar) as well as a “rising star” junior partner (Palecek) all implicated with the Galleon Group and insider trading. In the Financial Times, J. Robert Brown, Jr.
, a securities law professor at the University of Denver
Sturm College of Law
, said “Every reputable company and advisory entity, including investment banks and McKinsey, has got to be horrified by this.”
Management consulting
Management consulting indicates both the industry and practice of helping organizations improve their performance primarily through the analysis of existing organizational problems and development of plans for improvement....
firm that focuses on solving issues of concern to senior management
Senior management
Senior management, executive management, or management team is generally a team of individuals at the highest level of organizational management who have the day-to-day responsibilities of managing a company or corporation, they hold specific executive powers conferred onto them with and by...
. McKinsey serves as an adviser to many businesses, governments, and institutions. It is recognized as one of the most prestigious firms in the consulting industry and has been a top employer for new MBA
Master of Business Administration
The Master of Business Administration is a :master's degree in business administration, which attracts people from a wide range of academic disciplines. The MBA designation originated in the United States, emerging from the late 19th century as the country industrialized and companies sought out...
graduates since 1996.
Organization
McKinsey & Company, while formally organized as a corporation, functions as a partnership in all important respects. Its managing director (currently Dominic BartonDominic Barton
Dominic "Dom" Barton is a longtime top senior partner and director at management consultancy McKinsey & Company, serving as its current managing director since 2009...
) is elected for a three-year term by the firm's other senior partners. Each managing director can serve a maximum of three terms, a policy instituted by Rajat Gupta
Rajat Gupta
Rajat Kumar Gupta was the managing director of management consultancy McKinsey & Company from 1994 to 2003 and a business leader in India and the United States...
. At a strategic level, a number of committees are charged with the development of policies and making critical decisions. Committee memberships, senior roles, and the managing director position all rotate regularly among the firm's senior partners and directors.
Former managing director Rajat Gupta explains McKinsey's structure as follows:
It is very much, in many dimensions, like an academic organization. We have senior partners who are very much like tenured faculty: they are leaders in their own right. [...] We have about 80 to 100 performance cells -- a geographic office or industry practice or functional practice. They are very much autonomous and they are not organized in any hierarchy beyond that. We don't have any regional structures or sectoral structures. So all these performance units, in a theoretical sense, report to me, which means they don't report to anybody, because nobody can have 80 or 100 people reporting to them.
McKinsey operates under a practice of "up or out", meaning that consultant
Consultant
A consultant is a professional who provides professional or expert advice in a particular area such as management, accountancy, the environment, entertainment, technology, law , human resources, marketing, emergency management, food production, medicine, finance, life management, economics, public...
s must either advance in their consulting careers within a pre-defined timeframe or leave the firm. "25% of the firm is new every year," Gupta says, "so half the people have less than two to three years' tenure in the firm, and their values need to be reinforced."
All leadership positions, including the position of managing partner, rotate among the senior partners and directors.
McKinsey has about 9,000 consultants in 99 locations in 56 countries, working with more than 90% of the 100 leading global corporations and two-thirds of the Fortune 1000 list. Forbes
Forbes
Forbes is an American publishing and media company. Its flagship publication, the Forbes magazine, is published biweekly. Its primary competitors in the national business magazine category are Fortune, which is also published biweekly, and Business Week...
estimated the firm's 2009 revenues at $6.6 billion. The notion of company growth has been controversial from the 1970s as the firm began its global expansion; McKinsey opened many new offices under Rajat Gupta's tenure in the late 1990s. The election of British-born Ian Davis
Ian Davis
Ian Davis was a longtime top senior partner and director at management consultancy McKinsey & Company, serving as managing director from 2003 to 2009. He succeeded Rajat Gupta on July 1, 2003. He joined McKinsey in 1979, retired in 2010 and currently serves as a senior partner emeritus.Davis was...
as Gupta's successor was seen as "a return to McKinsey's heritage".
Another controversial McKinsey practice is its non-exclusivity policy: a conflict of interest could arise as different teams of consultants might work for direct competitors in an industry. This works to McKinsey's advantage, because it does not rule out working for potential clients. Furthermore, knowing that a competitor has hired McKinsey has historically been strong motivation for other companies to seek McKinsey's assistance themselves. The policy also means McKinsey can keep its list of clients confidential. However, because of this there is great emphasis placed on client confidentiality within the firm, and consultants are forbidden from discussing details of their work with members of other teams. While still working for McKinsey, consultants are prohibited from serving direct competitors unless they wait two or more years between the date they cease serving one competitor and begin serving the next; in some cases, consultants are forbidden from ever serving a competitor.
This philosophy has come under increased scrutiny with the Galleon case, with some questioning whether the firm is a discreet broker of confidential or even inside information
Inside Information
Inside Information is the sixth studio album by American rock band Foreigner, released in 1987. The album hit #15 on the Billboard 200 Albums Chart and was certified Platinum in the U.S. for sales exceeding one million copies....
marketed as "best practices".
History
McKinsey & Company was founded in ChicagoChicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
in 1926 by James O. ("Mac") McKinsey
James O. McKinsey
James Oscar McKinsey was the founder of McKinsey & Company.Management theory was still in its infancy when James O. McKinsey founded the firm that bears his name in 1926...
as James O. McKinsey and Company. Previously, McKinsey served as an accounting professor at the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
Booth School of Business
Booth School of Business
The University of Chicago Booth School of Business is a graduate business school located in Chicago, Illinois, at the University of Chicago. Formerly known as the University of Chicago Graduate School of Business, Chicago Booth is the second oldest business school in the U.S., the first such school...
and is considered the father of managerial accounting. In 1935 Marshall Field's
Marshall Field's
Marshall Field & Company was a department store in Chicago, Illinois that grew to become a major chain before being acquired by Macy's Inc...
became a client and in 1935 convinced McKinsey to leave the firm and become its CEO. This led to a merger between James O. McKinsey and Company and Scovell, Wellington & Company as McKinsey, Wellington & Company. The new firm had both an accounting practice and a management engineering practice.
In 1937 James O. McKinsey died unexpectedly of pneumonia, which led to the division of McKinsey, Wellington & Company in 1939. C. Oliver Wellington returned to manage Scovell, Wellington & Company full time and took the accounting practice with him. The management engineering practice was split into two affiliated firms: McKinsey & Company and McKinsey, Kearney & Company. McKinsey & Company was led by Guy Crockett, Dick Fletcher, and Marvin Bower
Marvin Bower
Marvin Bower was the son of the deputy recorder at Cuyahoga County. He grew up in Cleveland, Ohio and attended public schools there. He earned his bachelor's degree from Brown University in 1925. His father advised him to study law, and Bower graduated from Harvard Law School in 1928...
. McKinsey, Kearney & Company was led by Andrew Thomas Kearney
Andrew Thomas Kearney
Andrew Thomas Kearney was the founder of A.T. Kearney, one of the world's oldest management consulting firms.Andrew Thomas Kearney joined James O. McKinsey's firm 3 years after it was founded in 1926. Andrew Thomas Kearney was McKinsey's first partner and head of its first office in Chicago...
.
By 1952 McKinsey & Company formally parted ways with McKinsey, Kearney & Company, which was renamed A.T. Kearney & Company
A.T. Kearney
A.T. Kearney is a global management consulting firm, focusing on strategic and operational CEO-agenda concerns. It was founded in 1926, and its head office is in Chicago, Illinois...
. At the time, McKinsey was led by Marvin Bower as then-managing director. Bower had joined the firm in 1933 and served as managing director from 1950 to 1967. During his tenure he oversaw the firm's rise to global prominence and established many of its guiding principles. Even after formally leaving McKinsey in 1967, Marvin continued to provide guidance and counsel to the Firm for many years. He is called the father of modern management consulting.
Ron Daniel
Ron Daniel (businessman)
D. Ronald "Ron" Daniel was a longtime top senior partner and director at management consultancy McKinsey & Company, serving as managing director from 1976 to 1988. He graduated from Wesleyan University with a B.A. in mathematics and received an M.B.A. from Harvard Business School.-Career:Daniel...
was Bower's protégé and managing director from 1976 to 1988. He remains a senior partner and “the bridge between McKinsey's founding generation and the present.” The firm takes mentorship very seriously; Daniel mentored Rajat Gupta
Rajat Gupta
Rajat Kumar Gupta was the managing director of management consultancy McKinsey & Company from 1994 to 2003 and a business leader in India and the United States...
, who mentored Anil Kumar
Anil Kumar
Anil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
, who advised current managing director Dominic Barton
Dominic Barton
Dominic "Dom" Barton is a longtime top senior partner and director at management consultancy McKinsey & Company, serving as its current managing director since 2009...
. Gupta and Kumar were later entangled in the Galleon scandal.
Asia-Pacific
AucklandAuckland
The Auckland metropolitan area , in the North Island of New Zealand, is the largest and most populous urban area in the country with residents, percent of the country's population. Auckland also has the largest Polynesian population of any city in the world...
BangkokBangkok
Bangkok is the capital and largest urban area city in Thailand. It is known in Thai as Krung Thep Maha Nakhon or simply Krung Thep , meaning "city of angels." The full name of Bangkok is Krung Thep Mahanakhon Amon Rattanakosin Mahintharayutthaya Mahadilok Phop Noppharat Ratchathani Burirom...
BeijingBeijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
ChennaiChennai
Chennai , formerly known as Madras or Madarasapatinam , is the capital city of the Indian state of Tamil Nadu, located on the Coromandel Coast off the Bay of Bengal. Chennai is the fourth most populous metropolitan area and the sixth most populous city in India...
GurgaonGurgaon
Gurgaon is the second largest city in the Indian state of Haryana. Gurgaon is the industrial and financial center of Haryana. It is located 30 km south of national capital New Delhi, about 10 kilometers from Dwarka Sub City and 268 km south of Chandigarh, the state capital...
HanoiHanoi
Hanoi , is the capital of Vietnam and the country's second largest city. Its population in 2009 was estimated at 2.6 million for urban districts, 6.5 million for the metropolitan jurisdiction. From 1010 until 1802, it was the most important political centre of Vietnam...
Hong KongHong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
IstanbulIstanbul
Istanbul , historically known as Byzantium and Constantinople , is the largest city of Turkey. Istanbul metropolitan province had 13.26 million people living in it as of December, 2010, which is 18% of Turkey's population and the 3rd largest metropolitan area in Europe after London and...
JakartaJakarta
Jakarta is the capital and largest city of Indonesia. Officially known as the Special Capital Territory of Jakarta, it is located on the northwest coast of Java, has an area of , and a population of 9,580,000. Jakarta is the country's economic, cultural and political centre...
Kuala LumpurKuala Lumpur
Kuala Lumpur is the capital and the second largest city in Malaysia by population. The city proper, making up an area of , has a population of 1.4 million as of 2010. Greater Kuala Lumpur, also known as the Klang Valley, is an urban agglomeration of 7.2 million...
ManilaManila
Manila is the capital of the Philippines. It is one of the sixteen cities forming Metro Manila.Manila is located on the eastern shores of Manila Bay and is bordered by Navotas and Caloocan to the north, Quezon City to the northeast, San Juan and Mandaluyong to the east, Makati on the southeast,...
MelbourneMelbourne
Melbourne is the capital and most populous city in the state of Victoria, and the second most populous city in Australia. The Melbourne City Centre is the hub of the greater metropolitan area and the Census statistical division—of which "Melbourne" is the common name. As of June 2009, the greater...
MumbaiMumbai
Mumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...
SeoulSeoul
Seoul , officially the Seoul Special City, is the capital and largest metropolis of South Korea. A megacity with a population of over 10 million, it is the largest city proper in the OECD developed world...
ShanghaiShanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
SingaporeSingapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
SydneySydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
TaipeiTaipei
Taipei City is the capital of the Republic of China and the central city of the largest metropolitan area of Taiwan. Situated at the northern tip of the island, Taipei is located on the Tamsui River, and is about 25 km southwest of Keelung, its port on the Pacific Ocean...
TokyoTokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
Europe, the Middle East, and Africa
Abu DhabiAbu Dhabi
Abu Dhabi , literally Father of Gazelle, is the capital and the second largest city of the United Arab Emirates in terms of population and the largest of the seven member emirates of the United Arab Emirates. Abu Dhabi lies on a T-shaped island jutting into the Persian Gulf from the central western...
AmsterdamAmsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...
Antwerp AthensAthens
Athens , is the capital and largest city of Greece. Athens dominates the Attica region and is one of the world's oldest cities, as its recorded history spans around 3,400 years. Classical Athens was a powerful city-state...
BarcelonaBarcelona
Barcelona is the second largest city in Spain after Madrid, and the capital of Catalonia, with a population of 1,621,537 within its administrative limits on a land area of...
BerlinBerlin
Berlin is the capital city of Germany and is one of the 16 states of Germany. With a population of 3.45 million people, Berlin is Germany's largest city. It is the second most populous city proper and the seventh most populous urban area in the European Union...
BratislavaBratislava
Bratislava is the capital of Slovakia and, with a population of about 431,000, also the country's largest city. Bratislava is in southwestern Slovakia on both banks of the Danube River. Bordering Austria and Hungary, it is the only national capital that borders two independent countries.Bratislava...
BrusselsBrussels
Brussels , officially the Brussels Region or Brussels-Capital Region , is the capital of Belgium and the de facto capital of the European Union...
BucharestBucharest
Bucharest is the capital municipality, cultural, industrial, and financial centre of Romania. It is the largest city in Romania, located in the southeast of the country, at , and lies on the banks of the Dâmbovița River....
BudapestBudapest
Budapest is the capital of Hungary. As the largest city of Hungary, it is the country's principal political, cultural, commercial, industrial, and transportation centre. In 2011, Budapest had 1,733,685 inhabitants, down from its 1989 peak of 2,113,645 due to suburbanization. The Budapest Commuter...
CairoCairo
Cairo , is the capital of Egypt and the largest city in the Arab world and Africa, and the 16th largest metropolitan area in the world. Nicknamed "The City of a Thousand Minarets" for its preponderance of Islamic architecture, Cairo has long been a centre of the region's political and cultural life...
CasablancaCasablanca
Casablanca is a city in western Morocco, located on the Atlantic Ocean. It is the capital of the Grand Casablanca region.Casablanca is Morocco's largest city as well as its chief port. It is also the biggest city in the Maghreb. The 2004 census recorded a population of 2,949,805 in the prefecture...
CologneCologne
Cologne is Germany's fourth-largest city , and is the largest city both in the Germany Federal State of North Rhine-Westphalia and within the Rhine-Ruhr Metropolitan Area, one of the major European metropolitan areas with more than ten million inhabitants.Cologne is located on both sides of the...
CopenhagenCopenhagen
Copenhagen is the capital and largest city of Denmark, with an urban population of 1,199,224 and a metropolitan population of 1,930,260 . With the completion of the transnational Øresund Bridge in 2000, Copenhagen has become the centre of the increasingly integrating Øresund Region...
DubaiDubai
Dubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...
Dublin DüsseldorfDüsseldorf
Düsseldorf is the capital city of the German state of North Rhine-Westphalia and centre of the Rhine-Ruhr metropolitan region.Düsseldorf is an important international business and financial centre and renowned for its fashion and trade fairs. Located centrally within the European Megalopolis, the...
FrankfurtFrankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...
GenevaGeneva
Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...
GothenburgGothenburg
Gothenburg is the second-largest city in Sweden and the fifth-largest in the Nordic countries. Situated on the west coast of Sweden, the city proper has a population of 519,399, with 549,839 in the urban area and total of 937,015 inhabitants in the metropolitan area...
HamburgHamburg
-History:The first historic name for the city was, according to Claudius Ptolemy's reports, Treva.But the city takes its modern name, Hamburg, from the first permanent building on the site, a castle whose construction was ordered by the Emperor Charlemagne in AD 808...
HelsinkiHelsinki
Helsinki is the capital and largest city in Finland. It is in the region of Uusimaa, located in southern Finland, on the shore of the Gulf of Finland, an arm of the Baltic Sea. The population of the city of Helsinki is , making it by far the most populous municipality in Finland. Helsinki is...
IstanbulIstanbul
Istanbul , historically known as Byzantium and Constantinople , is the largest city of Turkey. Istanbul metropolitan province had 13.26 million people living in it as of December, 2010, which is 18% of Turkey's population and the 3rd largest metropolitan area in Europe after London and...
JohannesburgJohannesburg
Johannesburg also known as Jozi, Jo'burg or Egoli, is the largest city in South Africa, by population. Johannesburg is the provincial capital of Gauteng, the wealthiest province in South Africa, having the largest economy of any metropolitan region in Sub-Saharan Africa...
KievKiev
Kiev or Kyiv is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300. However, higher numbers have been cited in the press....
LagosLagos
Lagos is a port and the most populous conurbation in Nigeria. With a population of 7,937,932, it is currently the third most populous city in Africa after Cairo and Kinshasa, and currently estimated to be the second fastest growing city in Africa...
LisbonLisbon
Lisbon is the capital city and largest city of Portugal with a population of 545,245 within its administrative limits on a land area of . The urban area of Lisbon extends beyond the administrative city limits with a population of 3 million on an area of , making it the 9th most populous urban...
LondonLondon
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
LuxembourgLuxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
LyonLyon
Lyon , is a city in east-central France in the Rhône-Alpes region, situated between Paris and Marseille. Lyon is located at from Paris, from Marseille, from Geneva, from Turin, and from Barcelona. The residents of the city are called Lyonnais....
MadridMadrid
Madrid is the capital and largest city of Spain. The population of the city is roughly 3.3 million and the entire population of the Madrid metropolitan area is calculated to be 6.271 million. It is the third largest city in the European Union, after London and Berlin, and its metropolitan...
ManamaManama
Manama is the capital and largest city of Bahrain, with an approximate population of 155,000 people.Long an important trading center in the Persian Gulf, Manama is home to a very diverse population...
MilanMilan
Milan is the second-largest city in Italy and the capital city of the region of Lombardy and of the province of Milan. The city proper has a population of about 1.3 million, while its urban area, roughly coinciding with its administrative province and the bordering Province of Monza and Brianza ,...
MoscowMoscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
MunichMunich
Munich The city's motto is "" . Before 2006, it was "Weltstadt mit Herz" . Its native name, , is derived from the Old High German Munichen, meaning "by the monks' place". The city's name derives from the monks of the Benedictine order who founded the city; hence the monk depicted on the city's coat...
OsloOslo
Oslo is a municipality, as well as the capital and most populous city in Norway. As a municipality , it was established on 1 January 1838. Founded around 1048 by King Harald III of Norway, the city was largely destroyed by fire in 1624. The city was moved under the reign of Denmark–Norway's King...
ParisParis
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...
PraguePrague
Prague is the capital and largest city of the Czech Republic. Situated in the north-west of the country on the Vltava river, the city is home to about 1.3 million people, while its metropolitan area is estimated to have a population of over 2.3 million...
RiyadhRiyadh
Riyadh is the capital and largest city of Saudi Arabia. It is also the capital of Riyadh Province, and belongs to the historical regions of Najd and Al-Yamama. It is situated in the center of the Arabian Peninsula on a large plateau, and is home to 5,254,560 people, and the urban center of a...
RomeRome
Rome is the capital of Italy and the country's largest and most populated city and comune, with over 2.7 million residents in . The city is located in the central-western portion of the Italian Peninsula, on the Tiber River within the Lazio region of Italy.Rome's history spans two and a half...
SofiaSofia
Sofia is the capital and largest city of Bulgaria and the 12th largest city in the European Union with a population of 1.27 million people. It is located in western Bulgaria, at the foot of Mount Vitosha and approximately at the centre of the Balkan Peninsula.Prehistoric settlements were excavated...
StockholmStockholm
Stockholm is the capital and the largest city of Sweden and constitutes the most populated urban area in Scandinavia. Stockholm is the most populous city in Sweden, with a population of 851,155 in the municipality , 1.37 million in the urban area , and around 2.1 million in the metropolitan area...
StuttgartStuttgart
Stuttgart is the capital of the state of Baden-Württemberg in southern Germany. The sixth-largest city in Germany, Stuttgart has a population of 600,038 while the metropolitan area has a population of 5.3 million ....
Tel AvivTel Aviv
Tel Aviv , officially Tel Aviv-Yafo , is the second most populous city in Israel, with a population of 404,400 on a land area of . The city is located on the Israeli Mediterranean coastline in west-central Israel. It is the largest and most populous city in the metropolitan area of Gush Dan, with...
VeronaVerona
Verona ; German Bern, Dietrichsbern or Welschbern) is a city in the Veneto, northern Italy, with approx. 265,000 inhabitants and one of the seven chef-lieus of the region. It is the second largest city municipality in the region and the third of North-Eastern Italy. The metropolitan area of Verona...
ViennaVienna
Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...
WarsawWarsaw
Warsaw is the capital and largest city of Poland. It is located on the Vistula River, roughly from the Baltic Sea and from the Carpathian Mountains. Its population in 2010 was estimated at 1,716,855 residents with a greater metropolitan area of 2,631,902 residents, making Warsaw the 10th most...
ZagrebZagreb
Zagreb is the capital and the largest city of the Republic of Croatia. It is in the northwest of the country, along the Sava river, at the southern slopes of the Medvednica mountain. Zagreb lies at an elevation of approximately above sea level. According to the last official census, Zagreb's city...
ZürichZürich
Zurich is the largest city in Switzerland and the capital of the canton of Zurich. It is located in central Switzerland at the northwestern tip of Lake Zurich...
The Americas
Atlanta BogotáBogotá
Bogotá, Distrito Capital , from 1991 to 2000 called Santa Fé de Bogotá, is the capital, and largest city, of Colombia. It is also designated by the national constitution as the capital of the department of Cundinamarca, even though the city of Bogotá now comprises an independent Capital district...
BostonBoston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
Buenos AiresBuenos Aires
Buenos Aires is the capital and largest city of Argentina, and the second-largest metropolitan area in South America, after São Paulo. It is located on the western shore of the estuary of the Río de la Plata, on the southeastern coast of the South American continent...
CalgaryCalgary
Calgary is a city in the Province of Alberta, Canada. It is located in the south of the province, in an area of foothills and prairie, approximately east of the front ranges of the Canadian Rockies...
CaracasCaracas
Caracas , officially Santiago de León de Caracas, is the capital and largest city of Venezuela; natives or residents are known as Caraquenians in English . It is located in the northern part of the country, following the contours of the narrow Caracas Valley on the Venezuelan coastal mountain range...
CharlotteCHARLOTTE
- CHARLOTTE :CHARLOTTE is an American blues-based hard rock band that formed in Los Angeles, California in 1986. Currently, they are signed to indie label, Eonian Records, under which they released their debut cd, Medusa Groove, in 2010. Notable Charlotte songs include 'Siren', 'Little Devils',...
ChicagoChicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
Cleveland Dallas Detroit Houston LimaLima
Lima is the capital and the largest city of Peru. It is located in the valleys of the Chillón, Rímac and Lurín rivers, in the central part of the country, on a desert coast overlooking the Pacific Ocean. Together with the seaport of Callao, it forms a contiguous urban area known as the Lima...
Los AngelesLos Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
Mexico CityMexico City
Mexico City is the Federal District , capital of Mexico and seat of the federal powers of the Mexican Union. It is a federal entity within Mexico which is not part of any one of the 31 Mexican states but belongs to the federation as a whole...
Miami Minneapolis MonterreyMonterrey
Monterrey , is the capital city of the northeastern state of Nuevo León in the country of Mexico. The city is anchor to the third-largest metropolitan area in Mexico and is ranked as the ninth-largest city in the nation. Monterrey serves as a commercial center in the north of the country and is the...
MontréalMontreal
Montreal is a city in Canada. It is the largest city in the province of Quebec, the second-largest city in Canada and the seventh largest in North America...
New JerseyNew Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
New YorkNew York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
Philadelphia Pittsburgh Rio de JaneiroRio de Janeiro
Rio de Janeiro , commonly referred to simply as Rio, is the capital city of the State of Rio de Janeiro, the second largest city of Brazil, and the third largest metropolitan area and agglomeration in South America, boasting approximately 6.3 million people within the city proper, making it the 6th...
San Francisco SantiagoSantiago, Chile
Santiago , also known as Santiago de Chile, is the capital and largest city of Chile, and the center of its largest conurbation . It is located in the country's central valley, at an elevation of above mean sea level...
São PauloSão Paulo
São Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...
Seattle Silicon ValleySilicon Valley
Silicon Valley is a term which refers to the southern part of the San Francisco Bay Area in Northern California in the United States. The region is home to many of the world's largest technology corporations...
StamfordStamford
-Places:In the United Kingdom:*Stamford, Lincolnshire, a town in England*Stamford Hill, London*Stamford Bridge, East Riding of Yorkshire**Battle of Stamford Bridge*Stamford Bridge , the home ground for Chelsea Football Club...
TorontoToronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...
Washington, D.C.Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
Recruiting
Marvin Bower broke with then-common industry practice by hiring recent graduates from the best business schools rather than among experienced managers. Today the firm is among the top recruiters of graduates of the top-ranked business programs in the US and overseas, in addition to hiring a significant number of people with other advanced degrees in science, medicine, engineering and law. The firm is notable for the number of Rhodes Scholars it is able to attract.The Firm is organizationally divided into partners and non-partners. It is generally not possible to join the firm as a partner; instead, partners are promoted internally from the existing ranks of principals and associates. According to the Firm's career website, "successful consultants who join McKinsey early in their career can expect election to principal (the first stage of partnership) within five to seven years. ... There is no limit to the size of our partnership." Successful partners are sometimes elected senior partner after at least seven years as partner, though there are fast-rising exceptions (notably Ron Daniel
Ron Daniel
Professor Ron Daniel is University Lecturer in Engineering Science at Oxford University, and Fellow and Tutor in Engineering at Brasenose College, Oxford. He is co-founder of Eykona Technologies....
, Rajat Gupta
Rajat Gupta
Rajat Kumar Gupta was the managing director of management consultancy McKinsey & Company from 1994 to 2003 and a business leader in India and the United States...
, and Anil Kumar
Anil Kumar
Anil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
) who become senior partner ~10 years after joining the firm as associates.
Officially, "senior partner" is the highest position (other than the rotating managing director) at McKinsey, though top senior partners are distinguished by reputation and influence. The firm's mandatory retirement age is 60, after which directors become "senior partner emeritus."
Competitors
Three firms compete in providing management consulting services to Fortune 500 and large enterprises, consistently recruiting top talent from elite colleges and professional/graduate schools globally: McKinsey & Company, Bain & CompanyBain & Company
Bain & Company is a global management consulting firm headquartered in Boston, Massachusetts. Bain is considered one of the most prestigious consulting firms in the world, with 47 offices in 30 countries and over 5,500 professionals on staff globally...
, and The Boston Consulting Group (BCG). This top tier of the consulting industry is commonly termed the MBB by executive recruiters and industry insiders.
Although these three firms compete directly across all major sectors and geographies, each firm possesses its own unique profile that defines its sustainable competitive advantage in the marketplace. McKinsey & Co., on account of its experience, deep board/C-level relationships and scale, is currently the strongest player in the MBB tier with particular strongholds in general strategy, financial services, operations and IT (through its BTO subsidiary). McKinsey holds the highest market share among the three firms globally with geographic strength across the Americas, Europe and Asia.
BCG displays competitive strength in general strategy and holds the second-highest market share globally after McKinsey. Having pioneered private equity (PE) consulting, Bain & Co. is the strongest player in the PE/LBO space, servicing most of the major private investment firms globally; Geographically, Bain displays a strong market share in the Americas but is weak in Europe, Asia and other emerging markets.
Publishing
McKinsey publishes several journals, most notably McKinsey QuarterlyMcKinsey Quarterly
The McKinsey Quarterly is a business magazine focusing on management and organizational theory. It has been edited and published by the management consultancy McKinsey & Company since 1964 and appears quarterly with one special issue per year....
. It also publishes McKinsey on Business Technology, McKinsey on Payments, McKinsey on Corporate and Investment Banking, and McKinsey on Finance. Several business books have been authored by McKinsey consultants, including Valuation: Measuring and Managing the Value of Companies, The Alchemy of Growth, Creative Destruction, and The War for Talent
The war for talent
The war for talent is a term coined by Steven Hankin of McKinsey & Company in 1997, and by Ed Michaels, Helen Handfield-Jones, and Beth Axelrod, Harvard Business Press, 2001 ISBN 1578514592, ISBN 9781578514595. The war for talent refers to an increasingly competitive landscape for recruiting and...
. Former consultant Tom Peters
Tom Peters
Thomas J. "Tom" Peters is an American writer on business management practices, best-known for In Search of Excellence .-Life and career:Peters was born in Baltimore, Maryland...
authored the well-known book In Search of Excellence
In Search of Excellence
In Search of Excellence is an international bestselling book written by Tom Peters and Robert H. Waterman, Jr.. First published in 1982, it is one of the biggest selling and most widely read business books ever, selling 3 million copies in its first four years, and being the most widely held...
based on a project initiated by Ron Daniel
Ron Daniel (businessman)
D. Ronald "Ron" Daniel was a longtime top senior partner and director at management consultancy McKinsey & Company, serving as managing director from 1976 to 1988. He graduated from Wesleyan University with a B.A. in mathematics and received an M.B.A. from Harvard Business School.-Career:Daniel...
in 1977.
Knowledge management system
McKinsey invests significantly in its knowledge management system to support field consultants. The system includes generalist researchers, industry- and function-specific experts and librarians, and access to journals and databases. McKinsey maintains an organisation called the McKinsey Knowledge Centre (McKC) that provide rapid access to specialized expertise and business information. In addition, consultant-authored internal "practice development" documents capture generalizable insights from client engagements. There are also methods to access individual consultants with expertise from previous client studies or previous employment, for background assistance (competitive information is not shared).This system was created and chaired by former senior partner Anil Kumar
Anil Kumar
Anil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
as an early example of knowledge process outsourcing
Knowledge process outsourcing
Knowledge process outsourcing is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost...
.
Asset management
McKinsey maintains a secretive and low-profile family of hedge funds and private equity firms collectively known as the McKinsey Investment Office (MIO Partners) for its own exclusive use. MIO is a wholly owned subsidiary of McKinsey and Company and reports to its finance and investments committee, which is chaired by a top senior partner (formerly William Meehan).These funds have had over $5 billion in assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
(AUM).
From the firm's website:
This firm manages a wide array of investment vehicles for the Firm’s Partners and pension plans, with significant expertise in alternative strategies including hedge funds and private equity. A principle objective of the Investment Counseling Function is to help our investing partners create long term wealth by constructing appropriate investment portfolios and avoiding expensive and/or inefficient products. At the same time, the products and services offered must save Partners time relative to those which are available externally. This firm’s role is to provide investment education, counseling and select products to Partners.
MIO is "responsible for pension and discretionary partner investments, with a particular focus on alternative investments."
Notable current and former employees
McKinsey has produced more CEOs than any other company and is referred to by Fortune magazine as "the best CEO launch pad". More than 70 past and present CEOs at Fortune 500 companies are former McKinsey employees. Among McKinsey’s most notable alumni are:- Vittorio ColaoVittorio ColaoVittorio Colao is an Italian businessman, the current Chief Executive of Vodafone Group.-Biography:The son of an officer in the Carabinieri, Colao was born in Brescia. After studying business at Bocconi University and holding an MBA with Honours from Harvard Business School, he spent time in...
, CEO of VodafoneVodafoneVodafone Group Plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers , with around 341 million proportionate subscribers as of... - Chelsea ClintonChelsea ClintonChelsea Victoria Clinton is a television journalist, currently serving as Special Correspondent for NBC News, and philanthropist, working through the Clinton Global Initiative. She is the only child of former U.S...
, daughter of former President Bill ClintonBill ClintonWilliam Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation... - Louis V. Gerstner, Jr.Louis V. Gerstner, Jr.Louis V. Gerstner, Jr. KBE was chairman of the board and chief executive officer of IBM from April 1993 until 2002 when he retired as CEO in March and chairman in December. He is largely credited with turning around IBM's fortunes.He was formerly CEO of RJR Nabisco, and also held senior positions...
, former chairman and CEO of IBMIBMInternational Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
and chairman of The Carlyle Group - James P. GormanJames P. GormanJames P. Gorman has been CEO of Morgan Stanley since 1 January 2010. He was formerly Co-President and Co-Head of Strategic Planning at the firm.- Business career :...
, President and CEO of Morgan StanleyMorgan StanleyMorgan Stanley is a global financial services firm headquartered in New York City serving a diversified group of corporations, governments, financial institutions, and individuals. Morgan Stanley also operates in 36 countries around the world, with over 600 offices and a workforce of over 60,000.... - Stephen GreenStephen GreenStephen Green, Steve Green and Steven Green may refer to:* Stephen Green , Baron Green of Hurstpierpoint and Minister of State for Trade and Investment.* Stephen Green...
, chairman of HSBCHSBCHSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine... - Bobby JindalBobby JindalPiyush "Bobby" Jindal is the 55th and current Governor of Louisiana and formerly a member of the United States House of Representatives. He is a member of the Republican Party....
, current Governor of Louisiana - Marius KloppersMarius KloppersDr Marius Kloppers is CEO of BHP Billiton, the world's largest mining company. He is presently the group president of BHP's non ferrous metals division.- Education :...
, CEO of BHP BillitonBHP BillitonBHP Billiton is a global mining, oil and gas company headquartered in Melbourne, Australia and with a major management office in London, United Kingdom... - James McNerneyJames McNerneyW. James McNerney, Jr, is an American business executive. He is the current CEO of Boeing Company.- Education :...
, chairman and CEO of BoeingBoeingThe Boeing Company is an American multinational aerospace and defense corporation, founded in 1916 by William E. Boeing in Seattle, Washington. Boeing has expanded over the years, merging with McDonnell Douglas in 1997. Boeing Corporate headquarters has been in Chicago, Illinois since 2001... - Helmut PankeHelmut PankeHelmut G.W. Panke served as chairman of the board at BMW AG from May 2002 through August 2006.-Education:...
, former chairman and CEO of BMW AG - Corrado Passera, Italian Minister of Development and Minister of Infrastructures, ex-CEO of Intesa SanpaoloIntesa SanpaoloIntesa Sanpaolo is a banking group resulting from the merger between Banca Intesa and Sanpaolo IMI based in Turin, Italy. It has clear leadership in the Italian market and a minor but growing international presence focused on Central-Eastern Europe, the Middle East and North Africa Intesa Sanpaolo...
- Jonathan SchwartzJonathan I. SchwartzJonathan Ian Schwartz is the co-founder and Chief Executive Officer of Picture of Health. He was formerly the President and CEO of Sun Microsystems prior to its acquisition by Oracle, and previously the founder and Chief Executive Officer of Lighthouse Design, Ltd., a software company focused on...
, former CEO of Sun MicrosystemsSun MicrosystemsSun Microsystems, Inc. was a company that sold :computers, computer components, :computer software, and :information technology services. Sun was founded on February 24, 1982... - Christopher A. SinclairChristopher A. SinclairChristopher A. Sinclair is an American businessman. He is the current Chairman of the Executive Committee of Mattel, Inc., the world's largest toy company. He is the former Chariman and CEO of Pepsi-Cola and the former executive chairman and CEO of Cambridge Solutions Ltd. the second largest...
, former chairman and CEO of PepsiCoPepsiCoPepsiCo Inc. is an American multinational corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company... - Jeffrey SkillingJeffrey SkillingJeffrey Keith "Jeff" Skilling is the former president of Enron Corporation, headquartered in Houston, Texas. In 2006 he was convicted of multiple federal felony charges relating to Enron's financial collapse, and is currently serving a 24-year, four-month prison sentence at the Federal...
, former CEO of EnronEnronEnron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with... - Kevin SharerKevin W. SharerKevin W. Sharer is Chairman of the Board and Chief Executive Officer of Amgen Inc. He also serves on the Board of 3M, Northrop-Grumman, and the California Institute of Technology. Bio at http://www.referenceforbusiness.com/biography/S-Z/Sharer-Kevin-W-1948.html.- Compensation :While CEO of Amgen in...
, CEO of AmgenAmgenAmgen Inc. is an international biotechnology company headquartered in Thousand Oaks, California. Located in the Conejo Valley, Amgen is the world's largest independent biotech firm. The company employs approximately 17,000 staff members. Its products include Epogen, Aranesp, Enbrel, Kineret,... - Peter WuffliPeter WuffliDr. Peter A. Wuffli was appointed President of the Group Executive Board of UBS AG in December 2001 and Group Chief Executive Officer in September 2003...
, former CEO of UBS AGUBS AGUBS AG is a Swiss global financial services company headquartered in Basel and Zürich, Switzerland, which provides investment banking, asset management, and wealth management services for private, corporate, and institutional clients worldwide, as well as retail clients in Switzerland...
Notable longtime McKinsey partners include:
- Dominic BartonDominic BartonDominic "Dom" Barton is a longtime top senior partner and director at management consultancy McKinsey & Company, serving as its current managing director since 2009...
, current managing director - Ron DanielRon Daniel (businessman)D. Ronald "Ron" Daniel was a longtime top senior partner and director at management consultancy McKinsey & Company, serving as managing director from 1976 to 1988. He graduated from Wesleyan University with a B.A. in mathematics and received an M.B.A. from Harvard Business School.-Career:Daniel...
, senior partner emeritus - Ian DavisIan DavisIan Davis was a longtime top senior partner and director at management consultancy McKinsey & Company, serving as managing director from 2003 to 2009. He succeeded Rajat Gupta on July 1, 2003. He joined McKinsey in 1979, retired in 2010 and currently serves as a senior partner emeritus.Davis was...
, senior partner emeritus - Anil KumarAnil KumarAnil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
, former senior partner - Rajat GuptaRajat GuptaRajat Kumar Gupta was the managing director of management consultancy McKinsey & Company from 1994 to 2003 and a business leader in India and the United States...
, senior partner emeritus - Michael Patsalos-FoxMichael Patsalos-FoxMichael Patsalos-Fox is a longtime top senior partner of management consultancy McKinsey & Company. He graduated from the University of Sydney with a B.S. in pure mathematics and received an MBA from IMEDE.-Career:...
, senior partner
Academics who were formerly McKinsey consultants include:
- Guhan Subramanian, professor at Harvard Business School and Harvard Law School
- Gabriella Blum, professor at Harvard Law School
- Michael Simkovic, professor at Seton Hall Law School
Criticism
According to firm policies, firm members may not discuss specific client situations. The firm also maintains a deliberate and low-profile external image. Maintaining client confidentiality protects client interests and allows McKinsey continued license to operate. However, it also blocks public scrutiny and assessment of its client base, success rate, and profitability. This confidentiality also helps conceal McKinsey's fee structure.The policy of client confidentiality is maintained even among former employees; as a result, journalists and writers have had difficulty developing fully informed accounts of mistakes which McKinsey employees may have made. It naturally also prohibits quantifying the benefits that good advice may have delivered. Despite this difficulty in attributing mistakes to McKinsey employees and alumni, some suggestions have been put forward:
- In June 2011 McKinsey & Company created some controversy by releasing a study on the effects on small businesses of the US Administration’s health care bill. The study’s findings contradicted most previous estimates made by renowned research institutes and the independent Congressional Budget OfficeCongressional Budget OfficeThe Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
. McKinsey’s initial decision not to disclose any information regarding its methodology, the questionnaire used and the target group that was polled, caused widespread criticism. This lack of transparency led to accusations of partisanship and casted serious doubts upon the company’s claim to independence and objectivity. McKinsey finally bowed to the pressure by the media and the White HouseWhite HouseThe White House is the official residence and principal workplace of the president of the United States. Located at 1600 Pennsylvania Avenue NW in Washington, D.C., the house was designed by Irish-born James Hoban, and built between 1792 and 1800 of white-painted Aquia sandstone in the Neoclassical...
and released the questionable survey, arguing that “[t]he survey was not intended as a predictive economic analysis of the impact of the Affordable Care Act”. They furthermore admitted having used suggestive language by saying “[w]e understand how the language in the article could lead the reader to think the research was a prediction, but it is not.”, Their decision to stand by the findings were met with additional criticism. The New York Times quoted the chairman of the Senate Finance Committee as saying that “[t]his report is filled with cherry-picked facts and slanted questions. [...] It did not provide employers with enough information for them to make honest choices and fair evaluations. Rather than correct the major deficiencies in their report, McKinsey has chosen to again stand by their faulty analysis and misguided conclusions.”
- In 2010 Rainforest Foundation UK released a report revealing the poor quality of the recommendations McKinsey had given to developing countries on how to reduce deforestation. The NGO pointed out that the company’s work has serious methodological flaws and as a result systematically underestimates the destructive impacts of industrial agriculture while exaggerating those of subsistence farming. Adding to this, a GreenpeaceGreenpeaceGreenpeace is a non-governmental environmental organization with offices in over forty countries and with an international coordinating body in Amsterdam, The Netherlands...
investigation brought to light that McKinsey’s advise does not only fail to address some of the main drivers of deforestation such as logging and mining, but that the company’s proposals would actually reward those industries. Greenpeace pointed out that if McKinsey’s recommendations were followed, large-scale monoculture plantations would expand into ecologically important areas. Discussing McKinsey’s decision not to publish the data and assumptions underlying their recommendations, senior personnel at the World Bank has criticized the company’s lack of transparency, noting ‘that the blackbox is a problem for everybody’. Potential conflicts of interests could arise from the fact that if McKinsey’s policy recommendations were implemented, they would heavily benefit industries like logging, mining and paper with whom McKinsey maintains close business relations. McKinsey’s refusal to disclose its business clients has added to those concerns. The firm’s work was subsequently criticized by think tanks and in academic reviews. Researchers from the University College LondonUniversity College LondonUniversity College London is a public research university located in London, United Kingdom and the oldest and largest constituent college of the federal University of London...
called attention to the fact that by not considering highly relevant implementation barriers such as forest governance and the costs of enforcement and the installation of sufficient institutional frameworks, McKinsey promotes an overly simplistic view of environmental policy-making. A study by the Stockholm Environment InstituteStockholm Environment InstituteThe Stockholm Environment Institute, or SEI, is a non-profit, independent research and policy institute specialising in sustainable development and environmental issues.-Mission:...
which was granted access to McKinsey’s data set found considerable discrepancies between the company’s estimates of the costs for reducing deforestation rates and those assumed by most renowned scientific models. While the quality of the company’s advise has become a widely discussed question at the World BankWorld BankThe World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
and in United NationsUnited NationsThe United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
meetings on climate change, McKinsey is reported to continue its work in rainforest nations such as Papua New GuineaPapua New GuineaPapua New Guinea , officially the Independent State of Papua New Guinea, is a country in Oceania, occupying the eastern half of the island of New Guinea and numerous offshore islands...
(PNG), where the company has ‘refused to comply with PNG laws and register with the Investment Promotion Authority and Internal Revenue Commission’., ,
- EnronEnronEnron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
was headed by McKinsey alumni and was one of the firm's biggest clients before its collapse. In particular, McKinsey's "deep-seated belief that having better talent at all levels is how you outperform your competitors", a HR program implemented at Enron with McKinsey's knowledge, resulted, in the opinion of one author, a workplace culture of prima donnas that "took more credit for success than was legitimate, that did not acknowledge responsibility for its failures, that shrewdly sold the rest of us on its genius, and that substituted self-nomination for disciplined management." Jeff Skilling, sentenced to 24 years in federal prison as the CEO of Enron, was formerly a partner at McKinsey and "loyal alum." However, Enron's failure was fraud-related and would have been in the domain of auditors to detect, not by authors of its HR policies.
- Another notably troubled company associated with McKinsey is SwissairSwissairSwissair AG was the former national airline of Switzerland.It was formed from a merger between Balair and Ad Astra Aero , in 1931...
, which entered bankruptcy after McKinsey recommended The Hunter Strategy.
- Misguided analysis, such as its recommendation in 1980 to AT&TAT&TAT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...
that cellular phones — admittedly then a tiny market — would be a niche marketNiche marketA niche market is the subset of the market on which a specific product is focusing; therefore the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact...
.
- Several civil suits have been filed against home insuranceHome insuranceHome insurance, also commonly called hazard insurance or homeowner's insurance , is the type of property insurance that covers private homes...
and vehicle insuranceVehicle insuranceVehicle insurance is insurance purchased for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise therefrom...
companies after the insurers were advised by McKinsey, and allegedly paid the insured parties significantly less than the actual value of the damage. McKinsey was cited in a February 2007 CNNCNNCable News Network is a U.S. cable news channel founded in 1980 by Ted Turner. Upon its launch, CNN was the first channel to provide 24-hour television news coverage, and the first all-news television channel in the United States...
article with developing controversial car insurance practices used by State FarmState farmState farm can refer to:*Sovkhoz, a type of state-owned farm in the Soviet Union*Volkseigenes Gut, a type of state-owned farm in East Germany*Państwowe Gospodarstwo Rolne, a type of state-owned farm in People's Republic of Poland...
and AllstateAllstateThe Allstate Corporation is the second-largest personal lines insurer in the United States and the largest that is publicly held. The company also has personal lines insurance operations in Canada. Allstate was founded in 1931 as part of Sears, Roebuck and Co., and was spun off in 1993...
in the mid-1990s to avoid paying claims involving soft tissue injurySoft tissue injuryA Soft tissue injury is the damage of muscles, ligaments and tendons throughout the body. Common soft tissue injuries usually occur from a sprain, strain, a one off blow resulting in a contusion or overuse of a particular part of the body...
.
- General ElectricGeneral ElectricGeneral Electric Company , or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States...
's CEO Jeff Immelt in defending GE Capital's poor performance, maintained that no one had foreseen the crisis. He maintained that he had sought external opinions from McKinsey in 2007 before the global financial crisis which suggested that that "money from nations with a trade surplus, like China, and sovereign wealth funds, among other investors, would provide enough liquidity in the financial system to fuel lending and leverage for the foreseeable future."
- Concerns from teachers and parents regarding their consultation for public school districts. Recently, McKinsey worked for the Minneapolis Public SchoolsMinneapolis Public SchoolsMinneapolis Public Schools or Special School District Number 1 is a school district that covers all of the city of Minneapolis, Minnesota. Minneapolis Public Schools enroll 36,370 students in public primary and secondary schools...
, where the firm recommended that the district cut "high costs" such as teacher health care, and recommended converting the 25 percent of schools that scored the lowest on standardized tests to privatized charter-school status. Teachers in Seattle passed a resolution of non-compliance with McKinsey's study of the Seattle Public SchoolsSeattle Public SchoolsSeattle Public Schools is the school district serving Seattle, Washington, USA. Its headquarters are in the John Stanford Center for Educational Excellence.-List of schools:...
in protest.
Among other books and articles, The Witch Doctors, written by The Economist
The Economist
The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...
editor-in-chief John Micklethwait
John Micklethwait
John Micklethwait is the editor-in-chief of The Economist.-Biography:Micklethwait was born in 1962 and educated at the independent school Ampleforth College and Magdalen College, Oxford, where he studied history. He worked for Chase Manhattan Bank for two years and joined The Economist in 1987...
and Adrian Wooldridge
Adrian Wooldridge
Adrian Wooldridge is the Management Editor and 'Schumpeter' columnist for The Economist magazine. Until July 2009 he was The Economist's Washington Bureau Chief and 'Lexington' columnist....
, presents a series of blunders and disasters alleged to have been McKinsey's consultants' fault. Similarly, Dangerous Company: The Consulting Powerhouses and the Businesses They Save and Ruin by James O'Shea and Charles Madigan
Charles Madigan
Charles M. Madigan is an educator who has been an editor, journalist and columnist in Chicago, Illinois.-Life:Madigan grew up in Altoona, Pennsylvania and attended Pennsylvania State University....
, critically examines McKinsey's work within the context of the consulting industry.
Galleon insider trading scandal
In March 2011, longtime McKinsey top senior partners and Indian School of BusinessIndian School of Business
The Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
co-founders Rajat Gupta
Rajat Gupta
Rajat Kumar Gupta was the managing director of management consultancy McKinsey & Company from 1994 to 2003 and a business leader in India and the United States...
and Anil Kumar
Anil Kumar
Anil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
(with Gupta also having served as managing director of the firm) were charged by the SEC for illegally tipping the Galleon Group
Galleon Group
Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009. The firm was at the center of a 2009 insider trading scandal that resulted in investors pulling capital from the firm rapidly...
hedge fund with insider information
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
about Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, Procter & Gamble
Procter & Gamble
Procter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....
, and other McKinsey clients. Gupta and Kumar were close friends of each other and of Galleon founder Raj Rajaratnam
Raj Rajaratnam
Raj Rajaratnam is an American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. On October 16, 2009, he was arrested by the FBI on allegations of insider trading, which also caused the Galleon Group to close. He stood trial in U.S. v...
.
The SEC alleged in its civil administrative action that Gupta, who had since retired as a senior partner of McKinsey and was serving on the board of Goldman Sachs, had passed information to Galleon about Goldman that yielded nearly $
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
20 million in profits and losses avoided. The SEC also alleged that Gupta passed information to Rajaratnam within 4 minutes of the completion of a special Goldman Sachs board meeting to approve a capital injection by Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
during the height of the financial crisis in 2008
Late-2000s financial crisis
The late-2000s financial crisis is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s...
. Gupta also stood to profit as would-be chairman of Galleon International and chairman of New Silk Route.
Gupta has maintained his innocence and countersued the SEC; in August 2011, both Gupta's and the SEC's suits were dropped. Gupta surrendered to the FBI on criminal charges on October 26, 2011; the case is ongoing.
Kumar, who pleaded guilty and was fined nearly $3 million for his role in the scandal, provided insider information on the acquisition of ATI Technologies
ATI Technologies
ATI Technologies Inc. was a semiconductor technology corporation based in Markham, Ontario, Canada, that specialized in the development of graphics processing units and chipsets. Founded in 1985 as Array Technologies Inc., the company was listed publicly in 1993 and was acquired by Advanced Micro...
by AMD while at McKinsey. He was the government's "star witness" in U.S. v Rajaratnam.
In U.S. v Rajaratnam, it was also revealed that a third McKinsey partner, David Palecek — now deceased at age 37 — had been involved in the insider trading scandal, though did not accept money from Rajaratnam.
The firm has come under significant controversy for having its former leaders and senior partners (Gupta and Kumar) as well as a “rising star” junior partner (Palecek) all implicated with the Galleon Group and insider trading. In the Financial Times, J. Robert Brown, Jr.
J. Robert Brown, Jr.
Jay Brown is a law professor with specializations in corporations and corporate governance, business law, administrative law and securities regulation. He currently teaches at the University of Denver Sturm College of Law.-Education:...
, a securities law professor at the University of Denver
University of Denver
The University of Denver is currently ranked 82nd among all public and private "National Universities" by U.S. News & World Report in the 2012 rankings....
Sturm College of Law
Sturm College of Law
The University of Denver Sturm College of Law is one of two law schools in the state of Colorado, and the only law school in the Denver metro area. Founded in 1892, the Sturm College of Law is one of the first in America's Mountain West...
, said “Every reputable company and advisory entity, including investment banks and McKinsey, has got to be horrified by this.”