2019 Vault Rankings
“Unparalleled international and development opportunities”
“Hard choice to be made for work/life balance”
"Pinnacle of the industry."
"One of the classic top management consultancies."
"Prestigious, interesting work, but poor work-life balance."
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 a decades-long commitment to confidentiality that causes the firm to shroud 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, McKinsey has completed almost 4,000 projects for social-sector organizations (foundations and nonprofits), local, regional, national, and international governments and public-sector bodies over the last five years.
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 is the nonprofit organization Generation , which 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. Generation works to help close the skills gap-identifying jobs and providing cutting-edge training, job placements, and support. Generation began as a program of the McKinsey Social Initiative, the firm's non-profit organization built to develop innovative approaches to complex social challenges.
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.
As an example, the firm's entry-level consulting track – typically either a business analyst or a fellow position – is specifically structured to help undergraduates develop business skills and knowledge before making their next career move. Common options that Fellows 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, joining an organization like UN Women or WEF on a secondment, concentrating on marketing and sales topics or joining one of the newer areas such as McKinsey Analytics or Digital McKinsey), 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 34,000 former consultants have gone on to found their own businesses, while more than 450 ex-McKinseyites are leading $1 billion enterprises worldwide, including almost 50 leaders in equivalent public and social sector organizations.
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.
McKinsey experts frequently produce works of business scholarship, whether in the form of reports and studies, or through the McKinsey Quarterly - the firm's 50-year old business journal which combines powerful insights from McKinsey with ideas from other world-leading experts and practitioners to help readers stay at the cutting edge of management thought, become more effective leaders, and boost the performance of their organizations. Additionally, McKinsey Insights offers many publications digitally via an app for your iOS or Android device.
McKinsey also operates a knowledge network that is unique among competitors. Its 2000+ 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. The Lauder Institute at the University of Pennsylvania ranked MGI the number one private sector think tank in its 2016 Global Go To Think Tank Index, an annual report issued by the University of Pennsylvania Think Tanks and Civil Societies Program. 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).
As part of the firm's focus on knowledge, McKinsey joined with the Financial Times to sponsor an award, the Bracken Bower Prize, to honor the best business book of the year. Judges include academics, authors and business people like Reid Hoffman, co-founder of LinkedIn. The Bracken Bower Prize is named after Brendan Bracken, chairman of the FT from 1945 to 1958, and Marvin Bower, managing director of McKinsey from 1950 to 1967, who were instrumental in laying the foundation of the two institutions. The prize encourages young writers and researchers to identify and analyze the business trends of the future and opportunities for growth.
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. The firm invests its resources in research on topics such as education, in extensive pro bono and volunteer work, and in the non-profit, McKinsey Social Initiative. It has published a Social Impact Report, in an attempt to capture in one place some of the ways it strives to have a broader impact on society.
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.
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, for example in mobility and in energy.
Through MGI, the firm publishes research on pressing socio-economic issues which it hopes helps to build a better society by providing business and political leaders with the insights they need to make good decisions. Issues covered by recent reports include tackling natural resource challenges, improving urban transport and providing affordable housing.
IN THE NEWS
Every year, thousands of designers gather for Milan Design Week, held in the city where some would argue the first industrial designer, Leonardo Da Vinci, did his finest work. Known in Italian as Salone del Mobile di Milano, it’s the largest trade fair of its kind, showcasing the latest cutting-edge products in furniture and design. We spoke at the event and McKinsey Design sent a delegation of designers there for the week. Here’s what we saw and heard…
Talent is now the determiner of business success, and agility is its philosophical underpinning, according to the interesting new book, Talent Wins: The New Playbook for Putting People First (HBRP, 2018) by Dominic Barton, the global managing partner of McKinsey & Company, and his colleagues Dennis Carey and Ram Charan.
As a result, talent needs to move to the very top of the CEO’s agenda. The book, along with the accompanying article, “An agenda for the talent-first CEO,” is a handbook specifically directed at CEOs and intended to help them do exactly this.
McKinsey Global Institute’s latest research on artificial intelligence focuses on how AI will affect business, analyzing 400 use cases — from airlines avoiding flight cancellations to online retailers recommending items — across 19 industries.
In aggregate, McKinsey projects that AI could eventually drive between $3.5 trillion and $5.8 trillion of annual economic value in those industries — a wide range, and with no timeline on that forecast.
Europe is bouncing back after a “lost” decade. Business and citizen optimism has returned and eurozone GDP in 2017 expanded at its fastest pace since the 2008 financial crisis. This changing mood creates an opportunity for European political and business leaders to take the action needed to ensure that growth and well-being are sustained in the long term, and that trust in Europe’s institutions is strengthened.
That a company with more diverse representation in senior management will likely achieve greater profits is not breaking news. Those realities came to light in a 2015 report from McKinsey & Company, and in another, a year later, from the Peterson Institute for International Economics. Compounding these findings is another report from McKinsey, a management consulting firm, titled “Delivering Through Diversity,” released last week, which shows that gender diversity in management positions actually increases profitability more than previously thought.
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