Careers at McKinsey & Company
McKinsey’s mission is to help its clients make distinctive, lasting, and substantial improvements in their performance and to build a great firm that attracts, develops, excites, and retains exceptional people.
James O. McKinsey was an accounting professor at the University of Chicago who published a number of articles. These writings led to him being hired for consulting jobs on the side. In 1925, after providing advice on inefficiencies for the U.S. Army, he decided to launch his own firm. Called James O. McKinsey & Company, it promoted the use of accounting principles as a management tool.
In recruiting employees, James hired several industrial managers in their 40s, believing their age and experience would make them credible. He also brought in Tom Kearney and Harvard Law School graduate Marvin Bower as partners. The firm grew fast, opening a second office in New York City in 1932. James died in 1937 of pneumonia; over the next decade McKinsey restructured several times.
In 1950 Bower became Managing Director. He began altering the company’s hiring practices, looking to top business schools for talent. He believed that education was more important than experience when it came to consulting. While his approach faced resistance for a few years, it eventually gained respect, and McKinsey became populated with young MBAs from places like Harvard and Wharton.
Bower also emphasized improving client performance over generating money for McKinsey, putting customers first. His perspective led to strong performance, and by the late 1950s the firm had five offices in the U.S. He is credited with shaping the company into the world-class firm it became. By the time he stepped down in 1967, its staff had grown to 200+ and billings had risen to $200 million.
Benefits at McKinsey & Company
Business model of McKinsey & Company
McKinsey has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at businesses, non-profits, governments, and non-governmental organizations desiring management consulting services.
McKinsey offers two primary value propositions: innovation and brand/status.
The company places a strong emphasis on innovation. It maintains New Ventures, a group focused on generating innovations and incorporating them into client work. The team includes over 800 data scientists and analysts, as well as software engineers, mathematicians, entrepreneurs, and implementation experts. Thus far, it has developed 35+ solutions, including Growth Tech, McKinsey Implementation, and Recovery & Transformation Services, all originating from small projects.
The company has established a powerful brand as a result of its success. It is widely viewed as the world’s most prestigious management consulting firm. It maintains over 10,000 consultants and almost 2,000 research and information professionals. It has 110+ global offices serving 80% of the world’s largest firms and an extensive list of non-profits and governments. Lastly, more former and current Fortune 500 CEOs are alumni of McKinsey than of any other corporation. They include Facebook COO Sheryl Sandberg, Google CEO Sundar Pichai, and Morgan Stanley CEO James Gorman.
McKinsey’s acquires new consulting projects via the relationships built by their partners. The company promotes its offering through its social media pages and participation in various conferences.
McKinsey’s customer relationship is primarily of a dedicated personal assistance nature. Customers receive in-person assistance from staff members as part of consulting engagements. That said, there is a self-service component. The company’s website features numerous self-help resources, including articles, reports, eBooks, podcasts, and answers to frequently asked questions.
McKinsey’s business model entails designing and developing problem-solving offerings for clients.
McKinsey maintains the following partnership programs:
McKinsey Solutions – The company works with firms that own data and startups that analyze data in innovative ways to develop solutions that address important issues for clients. Specific partners include ClickFox, Henry Rak Consulting Partners (HRCP), and Finalta.
Social Impact Partnerships – The company collaborates with various types of institutions to tackle major societal issues that impact its clients. Specific partnerships include the following:
- World Economic Forum – McKinsey works with the organization to promote innovative thinking on important global issues such as energy sufficiency and digital media.
- Focusing Capital on the Long Term (FCLT)– McKinsey works with investment management organizations to generate practical solutions for significant short-termism by investors and firms.
- New Climate Economy – McKinsey works with this organization to conduct research on the benefits and costs of climate action in order to help businesses prioritize their responses.
- CDP (Carbon Disclosure Project) – McKinsey works with cities and companies to measure and publicize their environmental information and put it at the center of decision-making efforts.
- UN Women – McKinsey works with this council to offer advice to organizations on furthering economic empowerment for women, in the workplace and otherwise.
McKinsey’s main resources are its human resources. Its consultants come from a wide range of backgrounds, and include medical doctors, business managers, engineers, civil servants, research scientists, and entrepreneurs. They lend their insight across 22 industries and 12 business areas. Beyond consultants, it maintains the following groups of core employees:
Digital Labs – This team includes technologists who build custom software and apps, develop rapid prototypes, and incorporate recommendations into clients’ current technology platforms.
McKinsey Analytics – This team includes data experts who develop and operate advanced data models that enable customers to create insights and make stronger, faster decisions.
McKinsey Recovery & Transformation Services – This team includes turnaround executives from a wide variety of industries who help guide failing businesses back to long-term health.
McKinsey has a value-driven structure, aiming to provide a premium proposition through significant personal service. Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of customer support and operations and research and development, both fixed costs.
McKinsey has a single revenue stream, the fees charged to its clients for its range of services. These fees vary by type of client and individual project.
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