McKinsey & Co.

Managing Knowledge and

Learning

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

Marvin Bower

Young lawyer w/ Harvard MBA

Upgraded the firms 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

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 indepth industry or functional specialty

Ron Daniel

Managing Director in 1976, Regional Manager for NY Office

Competitor BCG focused on thought leadership vs McKinseys client relationship focus.

Debated on updating the firms commitment to serving its clients and developing its consultants
Created industry-based Clientele Sectors
* Consumer products * Banking
*Industrial Goods * Insurance * etc.
Development of firms functional expertise where knowledge and information was diffused and
minimally codified

Product focus vs customer focused

Fly in Fly out

Leveraged Company Expertise

Strategy
Organization
Operations

Strategy created concern as was

BCG used experience curves and growth-share matrix

McKinsey had a generalist model

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 firms existing knowledge in the organization arena.

1980s, growth resumed with a cautious optimism

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)

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

Bill Matassoni
Firms 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 oldone firm concept as
they grew

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

Congruence Model
Component Tasks
Work Flows/Processes

Strategic Choices
Strategy
Objectives
Vision

Critical Tasks

People

Human Resources Capabilities

Competencies

Executive Leadership
Competencies
Demography
Group Process

Culture

Norms, Values
Communications Networks
Informal Roles
Informal Power

Formal Organizations Strategic Grouping

Formal Linking
Rewards
Information Systems
Human Resource
Management Systems
Career Systems

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

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

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

Dulls new center was successful and had new

options available to him
Writing a book
Enhance internal credibility and external visibility

Rajat Gupta

Capitalize on the firms 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