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Company Brief
McKinsey & Company
Docid: 00015184
Publication Date: 2009
Report Type: VENDOR
Preview
McKinsey & Company is a consulting firm that provides strategic
advice to a variety of industries. It is owned by its 2,000-plus partners
and operates with consultants in over 130 cities in over 65 countries. Its
clients include enterprises in the pharmaceutical, automotive, chemical,
financial, and telecommunications industries. The company has maintained a
top position in the market and has consolidated and acquired several of
its competitors. This company brief looks at its history and recent
activities.
Report Contents:
Fast Facts
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Name: McKinsey & Company
Headquarters
55 East 52nd Street
21st Floor
New York, NY 10022 US
Phone: (212) 446-7000
Fax: (212) 446-8575
Web: http://www.mckinsey.com/
Type of Vendor: Strategic Management Consultancy
Founded: 1926
Service Areas: Global
History
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McKinsey & Company is a global consulting and research firm that
serves public and private firms, institutions, non-profit organizations,
and government agencies. It consists of over 9,000 consultants and
approximately 2,000 research and information professionals. It is owned by
over 1,400 partners. The company provides consulting services to some of
the world’s largest firms but prefers to keep its finances and customer
data private. It does report that it invests over $400 million USD per
year in knowledge management. In addition to private consulting, McKinsey
conducts and publishes industry research through the McKinsey Global
Institute and The McKinsey Quarterly.
McKinsey & Company was founded in 1926 by University of Chicago
accounting professor James McKinsey with partners A.T. Kearney and Marvin
Bower. The firm offered financial and management advice to corporations,
with a focus on top management. In 1939, following McKinsey’s death,
Kearney and Bowers divided the firm. Kearney established A.T. Kearney
through the Chicago office; Bowers continued to run the McKinsey practice
from New York. McKinsey opened its first non-US office in London in 1959.
Over time, the company also established offices in Melbourne, Amsterdam,
Dusseldorf, Paris, Zurich, and Milan. In response to heightened
competition and receding market share, the firm pushed foreign expansion
in the 1970s.
Buoyed by booming economic growth, McKinsey realized sales of more than
$600 million USD in the 1980s, with half of its revenues generated outside
the US. In 1994, the partners elected Rajat Gupta as the first
foreign-born managing director. Between 1994 and 1997, McKinsey
established offices in Bangkok, Beijing, Bogota, Kuala Lumpur, Moscow,
Perth, Shanghai, and Singapore. McKinsey created @McKinsey in 1999 to help
speed the development of Internet start-ups. The firm’s annual sales in
2000 exceeded $3 billion USD for the first time. The next year, the firm
acquired Chicago-based specialized marketing and branding provider
Envision in a bid to augment McKinsey’s strategic business consulting with
branding strategy, an area formerly dominated by the advertising industry.
Ian Davis was elected managing director in 2003, succeeding Rajat Gupta.
In 2009, the firm chose Dominic Barton as managing director, effective
July 1, 2009. In 2014, McKinsey opened an office in Nairobi to expand its
presence in Africa. In 2015, the firm reported plans to acquire Lunar, a
top design firm. McKinsey launched the Digital McKinsey initiative in
June, 2016. In September of 2016, the firm acquired PriceMetrix, a
practice management analytics software vendor. In 2017, the firm reported
that it would be expanding its Costa Rican office with the opening of 250
places in its design center in San Jose. In September 2019, McKinsey
acquired Houston-based Westney Consulting, in a move to enhance its
presence in the capital projects & infrastructure arena. Also in 2019,
McKinsey moved into new London offices located in London’s Knowledge
Quarter, an area of over 100 academic, cultural, research, scientific, and
media organizations. In 2020, it is involved in a High Court trial over
claims that it failed to pay property charges for the London offices it
moved out of in 2019.
Key Executives
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McKinsey recruits high quality talent from prestigious MBA programs in
the US, and its tough performance reviews have yielded high employee
turnover rates. McKinsey’s alumni often accept high-ranking positions with
client companies – a trend that is so strong that McKinsey maintains an
alumni Web portal and news digest. McKinsey recruits researchers and
consultants in emerging markets and industry hotspots such as Japan,
China, India, and South Korea. McKinsey expects the leading partners in
each consulting discipline to be in the top 50 in the world.1
McKinsey & Company’s select key executives include:
- Fabian Billing – Senior Partner, Düsseldorf
- Aaron De Smet – Senior Partner, Houston
- Amadeo Di Lodovico – Senior Partner, Dubai
- Oliver Engert – Senior Partner, New York
- Chris Gagnon – Senior Partner, Austin
- Arne Gast – Partner, Kuala Lumpur
- Mary Meaney – Senior Partner, Paris
- Bill Schaninger – Senior Partner, Philadelphia
- Haimeng Zhang – Senior Partner, Hong Kong
Major Practice Areas
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McKinsey & Company offers a wide range of business consulting
practices. The firm also runs the McKinsey Global Institute, a
self-funded, independent research group within McKinsey & Company. The
primary purpose of the Institute is to conduct original research and
develop substantive points of view on the critical economic, social, and
geopolitical issues facing its clients. McKinsey also publishes The
McKinsey Quarterly research digest, and it has launched a
separate consulting initiative focused on climate change.
The firm focuses on strategy consulting for a broad range of industries
and public sector clients, from government agencies to non-profit
organizations. The company now focuses on a wider customer base than its
original bent toward senior management at large corporations. Verticals
targeted by its practices include the automotive, banking, energy, health
care, insurance, manufacturing, public utilities, retailing, and
transportation industries. Although most of its services focus on
strategy, McKinsey also derives significant portions of its revenue from
marketing, operations, and organizational consulting. McKinsey’s
consulting practices are divided into two principal practice areas:
Industry Practices (aligned with specific verticals like financial
services) and, more broadly, Functional Practices (like business
technology), as outlined in Table 1.
McKinsey offers the McKinsey Insights app, which was released in July
2013. This free app provides users with access to the McKinsey
Quarterly and McKinsey Global Institute reports. Users can browse
the app’s content by industry, function, region, or theme. Users can also
register to receive personalized content according to topics of interest.
|
Practice Area |
Description |
|---|---|
| Industry Practices |
|
| Functional Practices |
|
Major Competitors
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The company’s competitors include the following:
- Accenture: http://www.accenture.com/
- Bain & Company: http://www.bain.com/
- Capgemini: http://www.capgemini.com/
- Deloitte: http://www.deloitte.com/
- EY: http://www.ey.com/
- Gartner: http://www.gartner.com/
- IBM: http://www.ibm.com/
- Kearney: http://www.kearney.com/
- KPMG: http://www.kpmg.com/
- PricewaterhouseCoopers: http://www.pwc.com/
Recent Activity
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McKinsey does not readily provide news releases; however, there has been
some recent negative news about its corporate activities. In September
2020, McKinsey reported that it is being sued by the company that owns
London offices it moved out of last year. Also in September 2020, McKinsey
received approval for a $39.5 million agreement to resolve claims alleging
it improperly profited off its employees’ 401(k) plans. The company
reportedly did this by filling them with investment options that paid fees
to a McKinsey subsidiary. The settlement is expected to benefit about
33,000 people who invested in the retirement plans.
McKinsey has also seen an increase in demand for its services as a result
of the pandemic. It has secured more than $100 million in US local, state,
and federal pandemic-related contracts, according to ProPublica.
Specifically, in New Jersey, McKinsey won a $13.3 million contract with
the Department of Health to develop strategies for reopening, assessing
testing, evaluating healthcare capacity, and deploying testing and contact
tracing.
References
1 Andrew Hill, “Inside McKinsey,” Financial Times,
November 25, 2011.
About the Author
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Sherry Kercher is an editor for Faulkner Information
Services. She holds a master’s degree in library and information science,
and tracks and writes about storage, communication networks and equipment,
and Internet technologies.
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