McKinsey

1
McKinsey Company

• Managing Knowledge Learning

2
From the beginning

• Founded in 1926 by James Mac McKinsey
• An integrated approach McKinsey called his
  General Survey Outline
• an analysis of a companies goals, strategies,
  policies, organization, facilities, procedures,
  and personnel

3
From the Beginning

• One Firm Policy
• Requires consultants to be recruited and advanced
  on a firm-wide basis, clients be treated as a
  McKinsey Company responsibilities, and profits
  be shared from a firm pool, not an office pool.

4
From the Beginning

• Every assignment should bring the firm something
  more than revenue
• Experience
• Prestige

5
From the Beginning

• Extraordinary domestic growth through the 1950s
  provided a basis for international expansion that
  accelerated the rate of growth in the 60s.
• Offices were opened in
• London, Geneva, Amsterdam, Dusseldorf, and Paris.

6
Growing Concern

• The economic turmoil of the oil crisis
• Slowing of the divisionalization process
• Growing sophistication of client management
• Entrance of new competitors like Boston
  Consulting Group (BCG)

7
Steps to Change

• Commission on firm Aims and Goals 1971
• The firm had been growing too fast
• Our preoccupation with the geographic expansion
  and new practice responsibilities has caused us
  to neglect the development of our technical and
  professional skills
• Too willing to take routine assignments from
  marginal clients and the quality of work done has
  been uneven.
• Consultants lacked the deep industry knowledge or
  specialized expertise that clients were
  demanding.

8
Steps to Change

• Recommit itself to the continuous development of
  its members.
• Slow growth
• Associate to MGM ratio be reduced from 7 to 1
  back to 5 or 6 to 1.

9
Steps to Change

• Emphasize T-Shaped consultants those who
  supplemented a broad generalist perspective with
  an in-depth industry or functional specialty.

10
Steps to Change

• Appoint a full-time director of training
• Training and development of consultants
• Move towards a product driven approach
• Create industry-based Clientele Sectors in
  consumer products, banking, industrial goods,
  insurance, and so on

11
Steps to Change

• Assemble working groups in two areas
• Strategy
• Organization
• Knowledge development
• Ongoing and institutionalized
• 15 centers of competence to help develop
  consultants and the ensure the continued renewal
  of the firms intellectual resources

12
Steps to Change

• Change the internal status hierarchy
• Snowball making practice development,
  internal effort for improving knowledge
• Snowball throwing client development,
  external consulting
• Everyone must become snowball makers and snowball
  throwers

13
Building a Knowledge Infrastructure

• McKinsey Staff Paper series (1978)
• Consultants published key findings. The problem
  was that this was too time consuming.
• Practice Bulletins
• Two page summaries of important new ideas that
  identified the experts who could provide more
  detail.

14
Building a Knowledge Infrastructure

• Knowledge Management Project (1987)
• The firm had to build a common database of
  knowledge accumulated from client work and
  development.
• Each practice area (Clientele Sector and
  Competence Sector) must hire a full time practice
  coordinator who could ask as an intelligent
  switch
• The firm had to expand its hiring practices and
  promotion policies to create a career path for
  deep functional specialists whose narrow
  expertise would make them more I-shaped than the
  normal profile of a T-Shaped consultant

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Building a Knowledge Infrastructure

• Firm Practice Information System
• Computerized database of client engagements
• Computer based Practice Development Network
  (PDNet)

16
Building a Knowledge Infrastructure

• The Knowledge Resource Directory (KRD)
• A listing of all firm experts and key document
  titles by practice area

17
Building a Knowledge Infrastructure

• From T-shaped to I-shaped Consultants
• Transition to deep functional specialists with
  narrow expertise
• Cause some uncomfortable feelings for the firm
  and some technical expertise consultants

18
Building a Knowledge Infrastructure

• The knowledge infrastructure and transition of
  KcKinsey Company led to a revived growth and
  new offices in Rome, Helsinki, Sao Paulo, and
  Minneapolis.
• 41 offices now

19
Refining Knowledge and Management

• Ted Hall weeds Glucks garden of 1,000 flowers
• Replaced the leader-driven knowledge creation and
  dissemination process with a stewardship model
  of self-governing practices focused on competence
  building.
• Integrating groups and knowledge Sectors into 7
  Functional Capability Groups.

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Client Impact

• CPDC Clientele and Professional Development
  Committee
• All Partners Conference Client Impact Committee
• Shift from Engagement Team (ET) to the Client
  Service Team (CST)
• Add long term value and increase the effectives
  of individual engagements

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Three Consultant Profiles

• Jeff Peters, Sydney Office
• John Stuckey assembles a 5 member team for a
  financial industry project in Australia
• Group leverages the international knowledge of
  the Firm to create a great set of recommendations
  for client.
• Is McKinsey becoming too introverted?

22
Three Consultant Profiles

• Warwick Bray and European Telecoms
• Exhibits inter-cooperation between branch offices
  and the companies Intranet.
• Can using information from other sectors pose
  danger?

23
Three Consultant Profiles

• Stephen Dull and the Business Marketing
  Competence Center
• Developed Business to Business (BtoB) Initiative
  
• New competence center focused on cutting-edge
  issues in marketing. (e.g. segmentation,
  multi-buyer decision making, and marketing
  partnerships).
• Is technology eroding personal relationships?

24
A New Focus

• Rajat Gupta becomes MD (1994)
• Capitalize in the firms long term investment in
  practice development driven by Clientele Industry
  Sectors and Functional Capability Groups
  supported by PDNet and EPIS.
• Practice Olympics
• Knowledge development approach
• Six special incentives
• Expand on the model of the McKinsey Global
  Institute, a firm sponsored research center.
• Change center and operations center

25
Technopoly

• The Dark Side to Technology and how Mckinsey can
  avoid it.

26
Future Directions

• http//youtube.com/watch?v9J18vf5Ey2Q