McKinsey & Company

Presented By:
Rohit
Muskaan
Ruchika
Sushant
McKinsey & Company

Introduction and Company Overview

One firm simply means that we're all in this together and that all our
incentives, evaluation processes, and the like apply firm wide
Rajat Gupta
CEO, McKinsey & Company
Founded Private company 1926

Founder James Mac McKinsey managed by Marvin
Bower

Size Over 100 offices in 40 countries, employs 13,000

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


McKinsey & Company
James O. McKinsey
Former accounting professor at the University of Chicago







Source: www.mckinsey.com

McKinsey's Goal To help senior management in various
companies solve their major business problems

Mc Kinsey new theory That so-called management
engineers could go beyond rescuing sick companies.

James O Mckinskey(Mac)
Mac added to his different tack, using
his accounting background to offer
advice about budgeting, Cost control
and accounting, what came to be called
as managerial Accounting.

Many of its competitors were not able to
sustain beyond the first generation.
McKinsey & Company
Marvin Bower
Founders of modern management consulting






Source: www.mckinsey.com
Assumed Responsibility of the company after the death of
James O McKinsey

Bower was a member of McKinsey from 1933 until his
retirement in 1992






McKinsey & Company
Marvin Bower

Philosophy Management consulting should be held to
the same high standards for professional conduct and
performance as law and medicine.

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

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

Bower restricted the firm's ownership to active partners

He instilled professionalism through training


McKinsey & Company



Dual Mission To their clients and themselves to improve
performance and attract exceptional staff

Mission is supported by four aspirations and enduring
values that guide all of the business efforts


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.


McKinsey & Company
Business Focus

Focus of business advising top management of leading
companies and institutions of strategy, organization,
technology and operation

Business interests automotive and assembly, banking
and securities, business building and business technology
offices, electric power and natural gas, insurance, media
and entertainment, telecommunications

Success strict policy of privacy, founded on application
of values, discipline, reputation and access over time, Art
of networking Gold Boys Network, Strict performance
standards and training, 5- step process and 7- S Model
McKinsey & Company
7-S Model

Source: www.mckinsey.com
McKinsey & Company

Clients

Successful Hewlett Packard, Johnson and Johnson,
General Motors and Siemens


Unsuccessful Enron, Swiss-Air, Kmart, Global Crossing

Source: Business week
McKinsey & Company
Forging Professional Values
McKinseys 5 Step Process


Take top management perspective

Establish a solid fact base

Work with clients, not for them

Preserve confidentiality

Bring the best of the firm to each client

McKinsey & Company
Forging Professional Values (cont)

This is about how we manage ourselves and what kind of organization
we want to be
Rajat Gupta, Managing Director
on McKinseys Four Core Value



Source: www.mckinsey.com
Impact Driven Professional Support We want to
make a difference in the institutions we serve individually,
while collectively serving enough leading institutions so as
to have broader impact on the business community and
society



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

Caring Meritocracy Without a true meritocracy, we
won't be able to maintain our quality standards or attract
the kind of people we want to attract
Self- Governing, Unified Firm Partnership This is
not a firm of leaders and followers; it is a firm of leaders
who want to have the freedom to do what they think is
right for the institution
Delivering the Best if knowledge and being the best
aren't part of our core values, then we're missing
something





McKinsey & Company
Tapping Harvard

The secret of success is constancy to purpose
Marvin Bower, quoting British
Prime Minister Benjamin Disraeli.
The Trend Recruiting staff from the Harvard Business
School began with Marvin Bower one of the founders of
McKinsey and Company.

The Program Students were presented with case
studies and problems and had one day within which to
come up with a solution.

The Product A graduate capable of thinking on
his/her feet.




McKinsey & Company
Tapping Harvard (cont)
The Question of Ethics

In a business that lives on impressions, dazzling the client is
important
OShea and Madigan

The Influence Bower influenced the way business was
run and classes were taught at the Harvard Business
School and who was in charge.

The Patronage The Matsushita Chair of Leadership,
established in 1981

McKinsey & Company
Tapping Harvard (cont)


The Competition With the growth of consulting, even
Bowers persuasive patronage could not keep competitors
for Bakers Scholars at bay

The Problem Solver True to his character as success as
a management consultant and as a result a problem solver,
Bower was able to go back to the top of his game
McKinsey & Company
McKinseys Golden Connection

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

The Name McKinseys name and reputation
apparently opened the doors of many major corporations
in corporate America to many of its veterans who
transitioned out of McKinsey

The People Mckinseys people are valued for the type
of experience that they bring to the table


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

McKinsey & Company
McKinseys Golden Connection (cont)

The Tie That Binds These men are united not only in
their connection to McKinsey & Company, but also in the
personal qualities that they have in common as a result of
their common business heritage.

Aggressive
Visionary
Possessed intellectual vigor
Bold
Zealous
Loyal
McKinsey & Company
McKinseys Golden Connection (cont)


The Assumption Herein lies the true power of
McKinsey

The Measure of Success For a consulting company the
weight given to their advice and the implementation of
their recommendations are critical to their success,
therefore by exercising intellectual vigor at the top of
companies is the key to their success.

McKinsey & Company
A World Class Leader


Mckinseys business is influence versus special expertise

Traditionally and deliberately, it deals first with the top
level of business leadership

Rule of Confidentiality The one rule most Mckinsey
consultants and former consultants seem to value above
all others

McKinsey & Company
A World Class Leader (cont)

Our point of view is simply that some people will continue here, some will go
on to be leaders elsewhere...
Rajat Gupta

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

The Firm recognizes that it is frequently involved in
growing the executives who will run corporations all over
the world

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

McKinsey & Company
A Tough Employer (cont)

Mckinsey & Co. is one the most selective employer when
it comes to the level of scrutiny its employees must face

According to The Firm, the same standards are applied to
everyone base on their Mission and Guiding Principles
Statement
McKinsey & Company
A Tough Employer (cont)

Mckinsey consultant start out as associates.

After two or three years at The Firm, the consultant who
does well comes an engagement manager.

Two or three more years after that, the title senior
engagement manager is conferred.

At any time during the course of this experiential leap, The
Firm can decide the character just isnt going to make it.
McKinsey & Company
A Tough Employer (cont)
Corporate culture

1
st
circle gets the best cases, the best mentoring, and the
best avenues to partnership

2
nd
circle receives challenging cases and a good chance at
advancement.

3
rd
circle some cases but not much attention and not much
prospect at partnership

4
th
circle received difficult clients, minimal chance for
advancement and little attention from partners.

McKinsey & Company
A Tough Employer


Only one in five make it to principal

Anyone who makes it through that gateway is then at step
three: an elect/non-elect decision by a subcommittee of
The Firm's board of director

This brings us to the case of Suzanne Porter

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
One Womans Claim
Suzanne Porter

Porter worked with EDS, Republic Financial Services,
Enron, American General, Tenneco, Zale, and Childrens
Hospital accounts at the Mckinsey

Advanced to senior management in the beginning of 1991

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


McKinsey & Company
One Womans Claim
Suzanne Porter

Later, her partners also told Porter that she was years
behind in her development.

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

Suzanne Porter stayed at Mckinsey until April 30, 1993.
McKinsey & Company
One Womans Claim
Suzanne Porter

Porters Claim she was victim of discrimination
because she was a woman.

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

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

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




One Womans Claim
Suzanne Porter

McKinseys Defense disagrees on all points, and won
summary judgments dismissing a number of the claims

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

The Outcome The Texas office got some sensitivity
training it didnt anticipate, and a woman was finally
elected to the principal level at McKinsey.






McKinsey & Company
McKinsey & Company
Casting a Wider Net
Looking beyond Harvard
Since 1986 McKinsey has been increasingly recruiting
graduates with broader educations and experiences.

1995 43% of its 756 new consultants were not business
school grads. Why?

Pool of business school standouts was not large enough

The company has evolved and grown and has become
dependent upon a different set of skills

Mckinsey's modern agenda has changed into analysis of
the global economy




McKinsey & Company
Casting a Wider Net (cont)
Predicting Change (Practice what you preach)

Before McKinsey went global, many of its clients were
confused as to why they would take such a risk when they
were already so successful.

Why do anything different? That is always the challenge
for successful organizations. Of course, what we tell our
clients is that that is just the time when you invest and do
something different to maintain that success. In a narrow
sense we were taking some of our own medicine.
Bill Lewis
The Global Institute

McKinsey & Company
Casting a Wider Net (cont)
Going Global

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

Held international conferences for 3 years

Opened global offices in Washington D.C.

Consultants analyze the world economy

Produce reports available to anyone


McKinsey & Company
Casting a Wider Net
Organizational Values
Leave The Firm stronger for the next generation
Rajat Gupta
Mckinsey spends a great deal of time checking on its own
health

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

Establish multi-level relationships with clients, not just
with CEOs

Establish tight partnerships. Meritocracy.


McKinsey & Company
Casting A Wider Net (cont)
They remain the high priest of consulting, with the most formidable
intellectual firepower, the classiest client portfolio, and the greatest
global reach of any adviser to management in the world
Source: Business Week

The Goal McKinseys goal is stability, not to be wedded
to any one business area in particular hence the wide
variety of business services that they offer.

The Future Although not the biggest consulting
company in the world, McKinsey continues to shine based
on their reputation and golden connection


McKinsey & Company
Lessons Learned

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