McKinsey & Company Asia

THE SCOOP 

The McKinsey mystique

McKinsey & Company is a privately owned management consulting firm. Roundly considered to be the most prestigious company of its kind, it has achieved a level of renown so great as to be known even to laymen, despite shrouding details of its work-and its client list-in secrecy. In its practice areas, it addresses strategic, organizational, operational and technological issues, always with a focus-according to the firm-of doing what is right for the client's business, not what is best for McKinsey's bottom line. As for the range of those specialties, the list of industrial sectors the firm serves encompasses everything from commodities and natural resources to the worlds of media, entertainment and high tech. While it doesn't give up the names of its clients, the firm does claim to serve roughly 90 of the top-100 corporations worldwide and more than 80 of the 100 largest U.S.-based companies. On the public/social sector side, meanwhile, the firm has served 30 governments in OECD (Organisation for Economic Cooperation and Development) countries and more than 60 governments in developing nations in the past five years-not to mention more than five out of the ten largest foundations in the U.S.

In addition to its regular consulting brief, the firm also regularly creates new initiatives that both utilize the unique capabilities the firm has at its disposal, as well as serving to bolster McKinsey's reputation for tackling the biggest problems around. One such example of this is the McKinsey Center for Government. The McKinsey Center for Government (MCG) is a global hub for research, collaboration, and innovation in government performance. Drawing on external experts and McKinsey practitioners, MCG provides governments with new and proven knowledge and tools to confront critical challenges and opportunities. MCG connects government leaders to learn from one another to deliver value for citizens they serve.

 

The early days

In 1926, James O. McKinsey, CPA and University of Chicago accounting professor, founded the business to give local companies financial and accounting advice. Before long, he realized that clients' financial data could be interpreted to help make better management decisions. Thanks to this innovation, McKinsey is credited with the idea of using consultants, or "management engineers" for the first time. And although the firm is his namesake, it was one of his protégés, Marvin Bower, who is most remembered for shaping the direction of the firm. 

Most notably, Bower is known for molding the McKinsey culture, mainly through a three-part code of conduct outlining certain ideals consultants were to uphold-something that remains in place today. Among these values are putting client interests ahead of those of the firm, giving superior service and maintaining the highest ethical standards. Consultants are also instructed to be absolutely truthful with the client, regardless of whether the client disagrees. Perhaps the most infamous part of the code is to protect the privacy of clients; to this day, McKinsey never publicizes its big-name clients, nor does it tout successful engagements. Despite this, the firm doesn't lack for publicity, since the secrecy surrounding its work is itself often the focus of media attention.

 

Degrees of success

Another of Bower's policies was to concentrate hiring efforts on recent MBAs from top schools, as opposed to bringing on experienced managers from other organizations-an approach that broke new ground when instituted in the 1930s and 40s. Over the next couple of decades, the firm developed a reputation as being the  MBA employer of choice. While that reputation still persists in some quarters, it has failed to reflect the realities of the firm's composition for at least the past couple of decades. Not because MBA students no longer want to work for the firm-they continue to apply in droves every recruiting season-but because McKinsey seeks exceptional people, regardless of where that talent may be, so the firm has hired more and more people with other advanced degrees. JDs, MDs and PhDs are just as likely to be found wandering the McKinsey halls as B-school grads. As McKinsey's client needs have evolved, it has also begun to hire more specialized and experienced profiles such as people with change management expertise or digital design and development experience. 

However, business generalists continue to be the backbone of the firm's operations; accordingly, most McKinsey consultants start out without a specialty. 

The firm's business analyst track is specifically structured to help undergraduates develop business skills and knowledge before making their next career move. Common options that BAs pursue after their initial two years with McKinsey include transferring to a McKinsey office in a different country, choosing a career path within the firm that interests the individual (examples include delving into a global health project or concentrating on marketing and sales topics), accepting firm sponsorship to return to school, or simply continuing along the path to partnership, as grad school is not a requirement for advancement at the firm. 

Those that choose to move beyond the firm-regardless of their tenure when they depart-tend to have a better-than-average chance of finding success. Over a quarter of the firm's more than 27,000 former consultants have gone on to found their own businesses, while over 300 ex-McKinseyites currently serve as CEOs of organizations with revenues in excess of $1 billion. Many McKinsey alumni also take on leadership roles in government or in the social sector.

 

One-firm partnership

As a single, global entity, McKinsey has no headquarters office. Instead, the firm operates what it calls a "one-firm" partnership model, with offices across the world sharing values and cultural norms. That setup allows the firm to assemble teams to serve clients regardless of geographical concerns. Although consultants are attached to a particular office, they work with colleagues from multiple locations and often choose to transfer to international offices for engagements or for the long term. According to the firm, this model grounds consultants in a close-knit office community, while providing access to a global network of colleagues.

 

Knowledge factory

McKinsey experts frequently produce works of business scholarship, whether in the form of reports and studies, or in the pages of the McKinsey Quarterly, the firm's 50-year-old business journal and platform for expounding on issues of management, strategy and finance. The publication also includes articles by external experts. And the firm recently launched a blog-Voices on Society-which covers topics related to global society, featuring essays by world experts, as well as its own consultants.

McKinsey also operates a knowledge network that is unique among competitors. Its 1,700 knowledge professionals deliver capabilities that range from advanced research and analytics to deep expertise in functions, industries and geographies. They operate as an integral part of client teams through a combination of onsite and remote involvement, and play critical roles in developing new knowledge and building proprietary knowledge assets. 

Additionally, the firm operates the McKinsey Global Institute, a research group concentrating on critical economic trends around the world. All MGI studies are funded by McKinsey, rather than any outside business, government or other entity. Its research is conducted by dedicated staff, as well as McKinsey consultants serving on assignments of up to one year (after which they return to client work).

                                                             

Social betterment

The firm is committed to social impact, and uses its intellectual, financial and convening power to help address some of the world's most pressing problems. This is done through McKinsey's work with private, public and social sector organizations, through investments in research on topics such as education, and through extensive pro bono and volunteer work. The firm draws on functional and industry expertise to support organizations that are seeking to tackle the toughest societal challenges. Each year, McKinsey helps leading foundations, nonprofits, and multilateral institutions address issues such as disease, poverty, climate change, and natural disasters.

For example, the Generation program focuses on making a contribution to reducing the high rate of youth unemployment-some 75 million young people around the world are out of work and three times as many are underemployed. The Generation program works to help close the skills gap-identifying jobs and providing cutting-edge training, job placements, and support. Generation is a program of the McKinsey Social Initiative, the firm's non-profit organization built to develop innovative approaches to complex social challenges.

The firm also invests to advance an understanding of sustainability and resource productivity issues, including carbon abatement; the economics of strategic resources such as water, land, energy, and materials; and the circular economy. McKinsey aims to lay out the challenges for sustainable growth and climate resilience, and propose pathways for transformational change. 

The firm actively disseminates its knowledge and perspectives on the social sector through its website, mckinseyonsociety.com and on Twitter through @McKinseySociety.

 

IN THE NEWS


March 2014
 

New book argues the business world is fast approaching a shortage of valuable natural resources
Enormous growth in developing cities is going to create an unprecedented demand for oil, gas, steel, precious metals, water and other precious resources. If we keep on our current course of consumption, commodity prices, food prices and pollution levels are likely to spike, greatly increasing risks for businesses. In their insightful book "Resource Revolution: How to Capture the Biggest Business Opportunity in a Century"McKinsey's Matt Rogers and Stanford Professor Stefan Heck lay out a compelling road map for how managers need to change the way they think about resources if they want to not only survive but also thrive in the 21st Century. Read more.

 

January 2014

New book reflects on how global companies can succeed in India
In "Reimagining India: Unlocking the Potential of Asia's Next Superpower" McKinsey brings together leading thinkers from around the world to explore and debate the challenges and opportunities facing the country. As the foreword notes, "While McKinsey consultants have contributed a few essays to this volume, 'Reimagining India' is not the product of a McKinsey study; neither is it meant as a 'white paper' nor coherent set of policy proposals. Rather, our aim was to create a platform for others to engage in an open, free-wheeling debate about India's future." Read more.

 

October 2013

Research from the McKinsey Global Institute on Open Data
Open data-machine-readable information, particularly government data, that's made available to others-has generated a great deal of excitement around the world for its potential to empower citizens, change how government works, and improve the delivery of public services. It may also generate significant economic value, according to a McKinsey Global Institute report. Our research suggests that seven sectors alone could generate more than $3 trillion a year in additional value as a result of open data, which is already giving rise to hundreds of entrepreneurial businesses and helping established companies to segment markets, define new products and services, and improve the efficiency and effectiveness of operations. Read more.


Innovations could reshape the way McKinsey engages with clients
One of the most intriguing of these innovations is McKinsey Solutions, software and technology-based analytics and tools that can be embedded at a client, providing ongoing engagement outside the traditional project-based model. McKinsey Solutions marked the first time the consultancy unbundled its offerings and focused so heavily on hard knowledge assets. The launch of McKinsey Solutions is dramatically different because it is not grounded in deploying human capital. Why would a firm whose primary value proposition is judgment-based and bespoke diagnoses invest in such a departure when its core business was thriving? Read more.

 

May 2013 

New initiative "Focusing Capital on the Long Term"

McKinsey's Global Managing Director Dominic Barton and CPPIB CEO Mark Wiseman called on business leaders to focus their thinking and actions on long-term value creation. They announced the creation of a joint initiative, "Focusing Capital on the Long Term," which builds on Barton's multi-year effort to promote long-term thinking among CEOs, corporate board members and professional investors. Read more

Bonus: Read Vault's coverage of McKinsey CEO Dominic Barton's commitment to 'Capitalism for the Long Term.' 

 

Demand for consultants is booming

According to The Economist, elite management consulting firms are in high demand and have enjoyed years of double-digit growth despite recent global economic gloom. Demonstrating that clients are clearly finding value in what consultants have to offer, the article highlighted McKinsey's $400m annual investment in "knowledge development" and its "university-like capabilities" to impart it to its consultants.

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McKinsey & Company Asia


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  • Managing Director: Dominic Barton
  • 2014 Employees: 19,000

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