McKinsey & Company is a privately owned management consulting firm that focuses on solving issues of concern to senior management in large corporations and organizations. Known among its employees simply as "The Firm" McKinsey & Company was founded in Chicago in 1926 by James O. ("Mac") McKinsey. McKinsey was a professor at the University of Chicago who pioneered budgeting as a management tool. Marshall Field's became a client in 1935, and soon convinced James McKinsey to leave the firm and become its CEO; however, he died unexpectedly in 1937.
Today McKinsey has over 7,500 consultants in 90 offices across 51 countries. They help solve strategic, organizational, ...view middle of the document...
So, whether the changes they have made are sufficient to maintain the firm's vital knowledge development process, we will get the solution according to the following questions’ analysis.
1. How was this little of “accounting and engineering advisors” able to grow into the world’s most prestigious consulting firm 50 years later? What was the unique source of competitive advantage developed by James O. McKinsey and later Marvin Bower?
• An “accounting and engineering advisors” company became a well-known consultant firm because James began with recruiting experienced executives, and training them in the integrated approach. In addition, One firm policy that formed by Bower which required all consultants to be recruited and advance on the firm wide basis , clients to be treated as the company’s responsibilities and the profit to be shared from a firm pool, not as office pool was also the key success of the firm. Moreover, James encouraged those executives to synthesize data and think for themselves to come up with the new ideas which may benefit to the company’s development. From the employees perspective; they have enough confident to show their clients that they can solve the problems.
• The unique source of competitive advantage that Marvin Bower is that he outlined his vision for the firm as one focused on issue of importance to top-level management, adhering to the highest standards of integrity, professional ethics, and technical excellence by using the mission of serving the clients superbly well. He used the McKinsey’s style to train the new employee; he had thought against the theory that consulting firms typically hired people with industrial management experience who were in their mid-40s. The theory was that on-the-job experience mattered more than education. Age and experience would add credibility in what was a young industry. But Bower was prepared to go against the prevailing wisdom. He felt that these middle-age hires brought baggage with and tried to keep motivating them. He urged workers to adopt an entrepreneurial approach. Those who came up with the best ideas were paid handsomely. Bower began to carefully shape the firm into its present form by insisting on a few core principles:
Client interests must be placed before those of the firm.
Engagements should only be undertaken when the value to the client was expected to exceed the firm's fees.
The firm's ownership should be restricted to active partners.
Firm members must be professionals trained and motivated to do outstanding work and make a permanent career with the firm.
2. How effective was Ron Daniel in leading McKinsey to respond to challenges identified in the Commission on Firm Aims and Goals? What contribution did Fred Gluck make to the required changes?
In the commission on Firm Aims and Goals, they issued several challenges which included McKinsey grew slowly in Europe and the U.S; neglect the development of technical...