McKinsey & Co.

1. McKinsey & Co. Managing Knowledge and Learning

2. Mckinsey- Accounting and Engineering Advisors 1962 • James (Mac) Mckinsey, University of Chicago professor • General Survey Outline - Undeviating sequence of analysis • Goals • Strategy • Policies • Organization • Facilities • Procedures • Personnel • Encouraged the to think for themselves

3. Marvin Bower • Young lawyer w/ Harvard MBA • Upgraded the firm’s image to “efficiency experts” or “business doctors” • Vision • Focus on issues important to top-level mgmt • High standards of integrity, professional ethics, and technical experience, able attract and develop men of outstanding qualifications and committed to raising its stature and influence • Serve its clients superbly well • ONE FIRM policy • Required all consultants to be recruited and advanced on a firm wide basis • Clients to be treated as responsibilities • Profits to be shared from a firm pool • Every assignment should bring more than revenue – experience/prestige

4. Decade of Doubt • 1970s, growth began to stall and the conclusion was the company has been growing too fast • Associate to MGM ratio to be reduced from 7:1 to 5/6:1 • Emphasis to be placed on the “T-shaped” consultants” – those who supplemented a broad generalist perspective with an in-depth industry or functional specialty

5. Ron Daniel • Managing Director in 1976, Regional Manager for NY Office • Competitor BCG focused on “thought leadership” vs McKinsey’s “client relationship” focus. • BCG used experience curves and growth-share matrix • McKinsey had a generalist model • Debated on updating the firm’s commitment to serving its clients and developing its consultants • Created industry-based Clientele Sectors * Consumer products * Banking *Industrial Goods * Insurance * etc. • Development of firm’s functional expertise where knowledge and information was diffused and minimally codified • Strategy • Organization • Operations • Strategy created concern as was • Product focus vs customer focused • “Fly in Fly out” • Leveraged Company Expertise • Assemble working groups to develop knowledge in two areas: strategy and organization • 3 day meetings to share ideas and develop an agenda for the strategy practice • 2nd group was brought together to articulate the firm’s existing knowledge in the organization arena. • 1980s, growth resumed with a cautious optimism

6. Revival and Renewal • Centers of Competence • Virtual Centers • Knowledge development had to be a core activity, ongoing, institutionalized, responsibility of everyone • Changed internal hierarchy • “Snowballing” • Building a Knowledge Infrastructure • Firm refocused on individual consultant training • Centers of Competence began generating new insights, and many began to feel the need to capture and leverage learning • Non-packaged ideas 1978 launched the McKinsey Staff Paper series. (capturing internal developed knowledge)

7. Knowledge Management • 1987, Fred Gluck (managed the super group) launched a Knowledge Management Project. 3 recommendations were made: • Firm had to make a major commitment to build a common database of knowledge accumulated from client work • Ensure databases were maintained and used. Hire fulltime practice coordinator. • Firm expand its hiring practices and promotion policies to create a career path for deep functional specialist “I” vs “T” shaped

8. Bill Matassoni • Firm’s Director of Communications • Brook Manville, Yale Ph.D teamed to implement Knowledge Management • First focused on FPIS, Firm Practice Information System • Installed new systems and procedures to make data more complete, accurate, and timely, not just an archival record • Practice Development Network(PDNet) • Knowledge Resource Directory (KRD) Assembled a listing of all firm experts and key document titles by practice area and published it in a small book. • Reflection: the infrastructure changes was not to create a new McKinsey, as to keep the old”one firm” concept as they grew

9. Managing Success • Clientele and Professional Development Committee • Objective of replacing the leader-driven knowledge creation and dissemination process with a “steward model” of self-governing practices focused on competence building. • Engagement Team • Assembled to deliver a three or four month assignment for a client • Highly efficient and Flexible unit • Focused on immediate task rather than long term need • Client Service Team • Add long term value • Increase the effectiveness of individual engagements • Develop Multiple Career Paths

10. Congruence Model • Executive Leadership • Competencies • Demography • Group Process • Component Tasks • Work Flows/Processes • Strategic Choices • Strategy • Objectives • Vision

11. Jeff Peters and Sydney Assignment • Challenges • Industry expertise “conflicted out” • Resources were unavailable due to timing in Australia • Resolved • 20% of consultant hired for project were inter-office loans • Internal specialists were assembled to consult the team • Utilized the KRD, FPIS, and PDNet resources

12. Warwick Bray and European Telecoms • Warwick Bray was an “I” specialist and was overwhelmed by demands for help • Leveraged the practice coordinator, creating development and growth. • Practice Development documentation is created by individuals associates who would step back after several engagements and write a paper on their new insights. • It was a new generation of practice leadership • Attract the best associates • Developed a consistent pool of specialists

13. Stephen Dull • Turn that frown upside down • Mckinsey focused on client personal relationships, whereas Dull was more focused on industrial marketing • This led to Dull focusing on a B to B strategy • GDL decided that 20-25% should be functioning experts • Dull’s new center was successful and had new options available to him • Writing a book • Enhance internal credibility and external visibility

14. Rajat Gupta • Capitalize on the firm’s long term investment in practice development • FPIS • PDNet • Practice Olympics • Experiment began in German Office • 2-6 teams from office around the world were encouraged to develop ideas that grew out of recent client engagements and formulize them for presentation at a regional competition • 6 Special Intiatives-led by senior partners, focused on emerging issues • Internal and External Expertise to develop “state of the art” formulations of each key issue. • Focused on the shape and function of the corporation of the future • Creating and managing strategic growth • Capturing global opportunities