Group 5- McKinsey & Company

7/27/2019 Group 5- McKinsey & Company

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McKinsey & Company

Presented By:

RohitMuskaanRuchikaSushant


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McKinsey & Company

Introduction and Company Overview

One firm simply means that we're all in this together and that all ourincentives, evaluation processes, and the like apply firm wide

Rajat Gupta

CEO, McKinsey & Company

FoundedPrivate company1926

FounderJames Mac McKinsey managed by MarvinBower

SizeOver 100 offices in 40 countries, employs 13,000

Revenues$3.4 billion (2001)Source: The Gale Group


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McKinsey & Company

James O. McKinsey

Former accounting professor at the University of Chicago

Source: www.mckinsey.com

McKinsey's GoalTo help senior management in various

companies solve their major business problems

Mc Kinsey new theoryThat so-called managementengineers could go beyond rescuing sick companies.


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James O Mckinskey(Mac)

Mac added to his different tack, using

his accounting background to offer

advice about budgeting, Cost controland accounting, what came to be called

as managerial Accounting.

Many of its competitors were not able to

sustain beyond the first generation.


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McKinsey & Company

Marvin Bower

Founders of modern management consulting


Assumed Responsibility of the company after the death ofJames O McKinsey

Bower was a member of McKinsey from 1933 until hisretirement in 1992


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McKinsey & Company

Marvin Bower

Philosophy Management consulting should be held tothe same high standards for professional conduct and

performance as law and medicine.

He insisted that client interests be placed before the firm's

Engagements be undertaken only when our value to theclient was expected to exceed our fees

Bower restricted the firm's ownership to active partners

He instilled professionalism through training


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McKinsey & Company

Dual MissionTo their clients and themselves to improve

performance and attract exceptional staff

Mission is supported by four aspirations and enduring

values that guide all of the business efforts


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McKinsey & Company

Aspirations and Values

Serve clients as Primary Counselors on overall

performance.

Give each client the best of the firm.

Superior Talent to initiate the best of consulting.

Govern Ourselves through a values-driven partnership.


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McKinsey & Company

Business Focus

Focus of businessadvising top management of leadingcompanies and institutions of strategy, organization,technology and operation

Business interestsautomotive and assembly, bankingand securities, business building and business technologyoffices, electric power and natural gas, insurance, mediaand entertainment, telecommunications

Successstrict policy of privacy, founded on applicationof values, discipline, reputation and access over time, Artof networkingGold Boys Network, Strict performancestandards and training, 5- step process and 7- S Model


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McKinsey & Company

7-S Model



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McKinsey & Company

Clients

SuccessfulHewlett Packard, Johnson and Johnson,

General Motors and Siemens

UnsuccessfulEnron, Swiss-Air, Kmart, Global Crossing

Source: Business week


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McKinsey & Company

Forging Professional ValuesMcKinseys 5 Step Process

Take top management perspective

Establish a solid fact base

Work with clients, not for them

Preserve confidentiality

Bring the best of the firm to each client


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McKinsey & Company

Forging Professional Values (cont)

This is about how we manage ourselves and what kind of organization

we want to be Rajat Gupta, Managing Dir ector

on McKinseys Four Core Value


Impact Driven Professional SupportWe want tomake a difference in the institutions we serve individually,while collectively serving enough leading institutions so asto have broader impact on the business community andsociety


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McKinsey & Company

Forging Professional Values (cont)Rajat Gupta, Managing Director on McKinseys Four Core Value

Caring MeritocracyWithout a true meritocracy, wewon't be able to maintain our quality standards or attractthe kind of people we want to attract

Self- Governing, Unified Firm Partnership This isnot a firm of leaders and followers; it is a firm of leaderswho want to have the freedom to do what they think isright for the institution

Delivering the Bestif knowledge and being the bestaren't part of our core values, then we're missingsomething


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McKinsey & Company

Tapping Harvard

The secret of success is constancy to purposeMarvin Bower, quoting British

Prime Minister Benjamin Disraeli.

The TrendRecruiting staff from the Harvard BusinessSchool began with Marvin Bower one of the founders ofMcKinsey and Company.

The Program Students were presented with casestudies and problems and had one day within which to

come up with a solution.

The Product A graduate capable of thinking onhis/her feet.


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McKinsey & Company

Tapping Harvard (cont)

The Question of Ethics

In a business that lives on impressions, dazzling the client is

important

OShea and Madigan

The Influence Bower influenced the way business wasrun and classes were taught at the Harvard Business

School and who was in charge.

The PatronageThe Matsushita Chair of Leadership,established in 1981


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McKinsey & Company

Tapping Harvard (cont)

The CompetitionWith the growth of consulting, even

Bowers persuasive patronage could not keep competitors

for Bakers Scholars at bay

The Problem SolverTrue to his character as success as

a management consultant and as a result a problem solver,

Bower was able to go back to the top of his game

M Ki & C


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McKinsey & Company

McKinseys Golden Connection

United Nations of business consulting, with one crucial difference: Itworks. OShea and Madigan

The NameMcKinseys name and reputation

apparently opened the doors of many major corporationsin corporate America to many of its veterans who

transitioned out of McKinsey

The PeopleMckinseys people are valued for the typeof experience that they bring to the table

M Ki & C


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McKinsey & Company

McKinseys Golden Connection (cont)

Louis V. Gerstner, Jr. IBM.

Source:www.ibm.com

Harvey Golub, former Chairman and CEO

of American Express Company

Source: www.americanexpress.com

Michael H. Jordan, former chairman of international food

and beverage at PepsiCo Inc

www.eoriginal.com

M Ki & C


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McKinsey & Company


The Tie That BindsThese men are united not only intheir connection to McKinsey & Company, but also in the

personal qualities that they have in common as a result oftheir common business heritage.

Aggressive

Visionary

Possessed intellectual vigor

BoldZealous

Loyal

M Ki & C


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McKinsey & Company


The AssumptionHerein lies the true power of

McKinsey

The Measure of SuccessFor a consulting company the

weight given to their advice and the implementation of

their recommendations are critical to their success,

therefore by exercising intellectual vigor at the top ofcompanies is the key to their success.

M Ki & C


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McKinsey & Company

A World Class Leader

Mckinseys business is influence versus special expertise

Traditionally and deliberately, it deals first with the top

level of business leadership

Rule of ConfidentialityThe one rule most Mckinsey

consultants and former consultants seem to value above

all others

M Ki & C


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McKinsey & Company

A World Class Leader (cont)

Our point of view is simply that some people will continue here, some will goon to be leaders elsewhere...

Rajat Gupta

McKinsey is high-caliber partnership where consensus ofthe partners dictates the course of events

The Firm recognizes that it is frequently involved ingrowing the executives who will run corporations all overthe world

Outstanding people are hired in their own right, whetherthey are continuing at Mckinsey and are very successful atMckinsey or not

M Ki & C


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McKinsey & Company

A Tough Employer (cont)

Mckinsey & Co. is one the most selective employer when

it comes to the level of scrutiny its employees must face

According to The Firm, the same standards are applied toeveryone base on their Mission and Guiding Principles

Statement

M Ki & C


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McKinsey & Company


Mckinsey consultant start out as associates.

After two or three years at The Firm, the consultant who

does well comes an engagement manager.

Two or three more years after that, the title senior

engagement manager is conferred.

At any time during the course of this experiential leap, The

Firm can decide the character just isnt going to make it.

McKinsey & Company


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McKinsey & Company


Corporate culture

1stcircle gets the best cases, the best mentoring, and thebest avenues to partnership

2ndcircle receives challenging cases and a good chance atadvancement.

3rdcircle some cases but not much attention and not muchprospect at partnership

4thcircle received difficult clients, minimal chance foradvancement and little attention from partners.

McKinsey & Company


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McKinsey & Company

A Tough Employer

Only one in five make it to principal

Anyone who makes it through that gateway is then at stepthree: an elect/non-elect decision by a subcommittee of

The Firm's board of director

This brings us to the case of Suzanne Porter

McKinsey & Company


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McKinsey & Company

One Womans Claim

Suzanne Porter

Suzanne Porter joined McKinsey in 1986 after graduating

from University of Texas

Suzanne Porter planned to work for a consulting company

before she went on leave from her job to attend business

school at the University of Texas.

Porter was interested in Mckinsey Company, and she

submitted her resume at the Mckinseys public forums at

University of Texas.

McKinsey & Company


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McKinsey & Company

One Womans Claim

Suzanne Porter

Porter worked with EDS, Republic Financial Services,

Enron, American General, Tenneco, Zale, and Childrens

Hospital accounts at the Mckinsey

Advanced to senior management in the beginning of 1991

By August 1991, Porter was told that her performance onher most recent engagement was not satisfactory

McKinsey & Company


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McKinsey & Company

One Womans Claim

Suzanne Porter

Later, her partners also told Porter that she was years

behind in her development.

In June 1992, the Mckinsey Texas partners decided not torecommend her for election to principal.

Suzanne Porter stayed at Mckinsey until April 30, 1993.

McKinsey & Company


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McKinsey & Company

One Womans Claim

Suzanne Porter

Porters Claimshe was victim of discriminationbecause she was a woman.

Claimed that she was the target of inappropriate commentsfrom men in the firm over time

Claimed that she was hindered in her attempts to get a jobat Bain & Co.

Porter and her witnesses alleged that women at Mckinseywere not as well brought along as men.

McKinsey & Company


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One Womans ClaimSuzanne Porter

McKinseys Defensedisagrees on all points, and wonsummary judgments dismissing a number of the claims

The firm says she was fired because she had difficultyworking with others, required a high degree of supervision,lacked analytical rigor, and reached conclusions withinsufficient data.

The OutcomeThe Texas office got some sensitivitytraining it didnt anticipate, and a woman was finallyelected to the principal level at McKinsey.

McKinsey & Company

McKinsey & Company


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McKinsey & Company

Casting a Wider Net

Looking beyond Harvard

Since 1986 McKinsey has been increasingly recruitinggraduates with broader educations and experiences.

199543% of its 756 new consultants were not businessschool grads. Why?

Pool of business school standouts was not large enough

The company has evolved and grown and has become

dependent upon a different set of skills

Mckinsey's modern agenda has changed into analysis ofthe global economy

McKinsey & Company


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McKinsey & Company

Casting a Wider Net (cont)

Predicting Change (Practice what you preach)

Before McKinsey went global, many of its clients were

confused as to why they would take such a risk when they

were already so successful.

Why do anything different? That is always the challenge

for successful organizations. Of course, what we tell our

clients is that that is just the time when you invest and do

something different to maintain that success. In a narrowsense we were taking some of our own medicine.

Bill Lewis

The Global Institute

McKinsey & Company


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McKinsey & Company

Casting a Wider Net (cont)

Going Global

In the 1980s, questions arose about the world economyfrom CEOs in the US and in Europe

Held international conferences for 3 years

Opened global offices in Washington D.C.

Consultants analyze the world economy

Produce reports available to anyone

McKinsey & Company


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McKinsey & Company

Casting a Wider Net

Organizational Values

Leave The Firm stronger for the next generationRajat Gupta

Mckinsey spends a great deal of time checking on its ownhealth

Maintaining a first class image even in the light of thedown fall of Enron, a company in which McKinsey had amajor involvement

Establish multi-level relationships with clients, not justwith CEOs

Establish tight partnerships. Meritocracy.

McKinsey & Company


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McKinsey & Company

Casting A Wider Net (cont)They remain the high priest of consulting, with the most formidable

intellectual firepower, the classiest client portfolio, and the greatestglobal reach of any adviser to management in the world

Source: Business Week

The GoalMcKinseys goal is stability, not to be weddedto any one business area in particular hence the wide

variety of business services that they offer.

The FutureAlthough not the biggest consultingcompany in the world, McKinsey continues to shine based

on their reputation and golden connection

McKinsey & Company


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McKinsey & Company

Lessons Learned

The most important body part of a person inpower is the ear

Maintain a first class image and reputation

Invest in a wide range of business services

Take top management perspective

Establish a solid fact base

Work with clients, not for them

Preserve confidentiality

Bring the best of the firm to each client

Establish and maintain a golden connection

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Group 5- McKinsey & Company

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