MC Kinsey

Why “The McKinsey Way”?
Being an avid reader, I have always considered books to be a person’s best friend. However, I never read
anything with the motive of any specific gains from a particular book. My reading is mostly driven by how
interesting a book is to read and I had mostly restricted myself to fiction. I did read non fiction like The
Business Maharajas by Gita Piramal, Blink by Malcolm Gladwell and a few others, but I was always rather
wary of reading a lot of non fiction because barring a few, I found most of them written in a style that was
un appealing to me. However, I came across McKinsey Way while surfing through book titles in a shop
and was fascinated by the title, as McKinsey is one my dream companies. I expected the book to be
more like a documentary on how McKinsey managed to attain the iconic status that it holds today.
McKinsey & Company
Founded in 1923, McKinsey is one of the world’s most famous strategic consulting firms. One of the
largest firms around – with 84 offices across 45 countries and an employee base of more than 7000
professionals – McKinsey’s prestige is unparalleled. Its clients include most of the Fortune 100
companies, many U.S. state and federal agencies as well as many foreign governments.
‘ The Firm’ – as it is called by its past and present employees - seeks to employ the cream of each year’s
business school graduates and lures them with high salaries and also the prospect of a rapid rise through
McKinsey’s meritocratic hierarchy. However, more than these, the most alluring thing about the
organization remains the prestige attached to its name and the glamour that comes with working for
McKinsey.
Like any strong organization, McKinsey has a powerful corporate culture based on shared values and
common experiences. Rigorous training precedes every induction in the formidable office and those who
meet its standards are aptly rewarded by a rapid rise through its echelons.
Ethan M. Rasiel
Ethan M. Rasiel joined McKinsey & Co., New York in 1989 and worked there until 1992. While at “the
Firm,” his clients included major companies in the finance, telecommunications, computing and consumer
goods sectors. He has also worked as an investment banker and an equity fund manager. He has a
bachelor’s degree from Princeton and an MBA from Wharton. He now lives with his wife and family in
Chapel Hill, North Carolina. Another of his prominent works includes a book called ‘The McKinsey Mind’.
The Book
The book is structured into five separate parts, each dealing with a specific area. Broadly classified, the
first three parts deal with the McKinsey ‘way’. In other words, those are the portions of the book that
explain how people at McKinsey view business problems and what kind of approach do they follow in
trying to solve these problems. Part four of the book is more about ‘survival strategies’ in a pressure
cooker environment compiled with special reference to life at McKinsey. According to the author, this part
of the book is a summary of what he gained in terms of learning while working with ‘the Firm’. The last
part of the book deals mainly with the memories of his time at McKinsey.
‘The McKinsey Way of Thinking about Business Problems’
How McKinsey approaches its business problems and how it goes about finding a solution to them – are
the questions that form the core of the first part of the book. According to the author, solving a business
problem at McKinsey begins with building a solution that is based on facts, is rigidly structured and is
hypothesis driven. In other words, an initial hypothesis is developed and then tested based on ‘mutually
exclusive & collectively exhaustive’ facts. In fact, the hypothesis so developed, should be tailored around
all the relevant facts available at that point of time. For ‘the Firm’, each client is unique, but that does not
mean that every problem is unique as well. Thus, the employees not really expected to ‘re-invent the
wheel’ each time they are faced with a business problem. In fact they are encouraged to seek help from
people who have faced similar problems before. However, it should be borne in mind that one size does
not fit all. Thus, similar problems of two different clients require customized solution for each.
McKinsey employees’ gospel while solving a business problem can be enlisted as follows:
• The 80/20 rule – 80% of all the results are driven by 20% of people
• Don’t lose focus while analyzing a mountain of data
• Find the key factors that affect the problem and thus, the solution
• Must pass the 30 second ‘Elevator Test’
• While working on a problem, make a note of daily learning
• Don’t try to do everything in a single day
• Don’t lose sight of ‘the big picture’
• Don’t be afraid to admit ignorance, but don’t be ignorant too often either
‘The McKinsey Way of Working to Solve Business Problems’
Part two of the book deals with how the Firm implements its problem solving model on a day to day basis.
This process can be segmented as
:
• The Selling Process: The process of surviving and succeeding begins with marketing yourself. In
order for people to come to you for solutions, they must know that (a) they have or could have a business
problem and (b) that you have the best solutions and the ones that suit your requirements. McKinsey’s
approach to marketing itself is different from most other organizations. It believes in being ‘at the right
time and making sure that right people know who you are.’
In the corporate world, word of mouth publicity is the fastest and the most important. Thus, your
commitment to the client and your ability to live up to it, is critical. Setting realistic targets and achieving
them will not only keep the morale of your own team high, but will also keep the client satisfied and
generate positive word of mouth publicity about the organization.
• Organizing a Team: ‘At McKinsey, you never work alone’. Thus, McKinsey relies on teams for
everything. It firmly believes that teams always make for better results and has thus put together a
number of strategies to assemble and maintain high performance teams. Given a choice to select your
own teams, it becomes very important to select the right kind of people in the team on the basis of the
skills required to solve a particular problem. It also identifies that apart from the right skill set, bonding
within the team is a must in order to achieve the most out it.
One very important aspect of team work is to manage hierarchy. More often than not, managing the
boss becomes more difficult than managing all the rest. Thus, the recommended strategy is - ‘make the
boss look good, your boss makes you look good too.’ This will however, also be dependent on the kind of
hierarchy that exists in the organization, but the aforesaid can more or less be called ‘the rule of thumb’.
• Conducting Research: Research is the starting point of looking for a solution. Before a team can
construct an initial hypothesis, disaggregate it into its various components and uncover its key drivers, it
has to have information. This information can be collected using various sources like a common
database, or more importantly, people who have worked on similar problems before you.
• Brainstorming: Brainstorming is where the teams actually come together to uncover the solution to the
problem. These meetings are a ground for everyone to put forward their ideas and interpretations of the
situation at hand, based on facts. This implies that homework about the facts is a must before a
brainstorming session. Such meetings are the breeding ground for ‘the solution.’
‘The McKinsey Way of Selling Solutions’
The best solutions, no matter how well researched, how thoroughly analyzed, how glitteringly, flawlessly
structured is worth exactly nothing if the clients don’t buy into it. Hence, in order to ‘make change happen’,
it is very important to sell your solutions to the clients in an effective manner. The most important aspects
of this are:
• Making a Presentation: Presentation is the single most effective interface between the company and
the client. This is how you showcase your solution to the client and hence it helps to be structured and
concise. Also, using facts to substantiate the suggested solution and making it viewer friendly by using
charts, graphs etc. make the presentation more effective. McKinsey strongly recommends a keeping out
of the ‘surprise element’ from the presentation and believes in briefing everyone about the issue
beforehand.
• Internal communication: The success of a team based operation depends on the openness of two
way communication. Information flow throughout the organization is like the life blood of the organization.
However, a free flow of information does not preclude the need for confidentiality.
• Dealing with the Client: Managing the client is just as important as managing your own teams. In
order to make your solution effective, it is very important to involve the client in the process of arriving at
the solution. In the process, you will have to gain acceptance at various levels in an organization and
might also have to deal with a lot of ‘liability behavior’. Also, in order for the suggested solution to yield
effective results, it becomes very important that there is rigorous implementation of the solution.
‘Surviving at McKinsey’
Part four of the book deals with coping with a high pressure life particularly with reference to the ‘survival
strategies’ employed by McKinsey-ites. The author shares tips about coping up with the continuous
expectations of multi-tasking in a pressure cooker environment. Some of these strategies in a nutshell
would be:
• Take advantage of other’s experience if you can
• Proper planning and a good, stable attitude goes a long way
• A good assistant is a lifeline – treat your assistants and other co-workers well
• Do a little advance work
• Lay down rules for a ‘work-life’ balance and stick to them
‘Life after McKinsey’
In the concluding part of the book, the author shares his memories. Citing examples from a lot of other
alumni, this part is a scrapbook of the lessons learned, goals accomplished or missed at McKinsey. The
author tells how the Firm leaves an impression for life on all the people that it deals with.
Critical Appreciation
“If more business books were as useful, concise and just plain fun to read as The McKinsey Way, the
business world would be a better place”
Julie Bick, Bestselling Author
Lucid yet powerful, extremely interesting and most importantly, a book that not just advises but proves the
point with real life instances in each case. In the light of this, The McKinsey Way can be analyzed on
three important parameters:
• Structure:
One of the biggest strengths of the book is its crisp structure. All the ideas have been presented
chronologically beginning with how to address the problem, moving on to how to approach the solution
and finally how to make the solution saleable. However, in spite of such segregation, the book is not
compartmentalized. In other words, there is a common thread that runs throughout the book connecting
one part to another which is what also make it easily comprehensible and more interesting to read.
• Form:
A very important aspect of the book is its conciseness and brevity. The author has divided the
substance into chapters and he makes an effort to keep them short and to the point. This not only makes
the book less formidable in terms of size, but also saves the reader the trouble of sifting through a
mountain of words to figure out the important learning.
The book is written on what I would call the ‘lowest common denominator’. By this I mean that writing
a book about a formidable organization and its strategies would provide a temptation to make it for a
dense reading. However, the author resists this temptation and uses extremely lucid language and
simplistic approach to explain the various aspects of the organization that makes it fairly easy for a
layman to understand it.
• Content:
The content of the book is its backbone. It simplistically presents perhaps some of the most powerful
and effective ideas of business. More than that, the author emphasizes that though these are strategies
applied by an organization of the stature of McKinsey, there is nothing extraordinary about them. They are
in fact, those perspectives that one needs to include in one’s day to day life.
The strategies suggested – beginning with a hypothesis, extensive research to validate or debunk it,
proper structuring and presentation of the proposed solution to increase its acceptability – are some of the
most important things that the author talked about. The scoring point of the book is the fact that it does
not attempt to tell us something that we don’t already know. All it seeks to do is, to make us realize how
effective these strategies are, if applied properly.
Another aspect that adds to the books’ value is the fact that all its suggestions are not mere figments
of imagination but are duly substantiated with real life examples.
However, the book does score low on a few points. For instance, there are a lot of instances where the
book becomes a little repetitive not only in terms of the examples used but also in terms of the value that
it seek to add. Also, a lot of times, such a simplistic manner of writing, takes away the impact of the entire
issue and makes it look more like a collection of anecdotes. Thus, the seriousness of the content is lost.
Learning from the book
• The book has made me realize the importance of research as being one of the most powerful tools in
trying to solve a complicated business problem
• Team work makes for better results. Moreover, I also learned the importance of building a skillful
team and the importance as well as the difficulties faced in trying to keep the team motivated even in
rough waters.
• Communicating effectively is very important in terms of determining how well your point will be
received by others.
• The magic lies not in the strategy, but in the implementation of it
• Finally, I realized that non-fiction books not only add value but can also make for a really interesting
reading.
Conclusion
When I picked up the book, I expected it to be like a documentary on McKinsey & Co. However, what it
turned out to be was absolutely beyond my expectations. I was delighted by the way the subject matter
was presented. Also, most surprisingly, I did not find the book scoring low on the interest generation and
interest sustenance factors that most non-fiction books lose out on. Though I did think the book would be
even better with a few small changes as mentioned above, the overall experience of reading The
McKinsey Way was one that was entertaining and enriching at the same time.
THE McKINSEY WAY
ETHAN M. RASIEL
Review by:
Pooja Baid
PGP 2006-2008
Roll No. 089
McKinsey & Company
Introduction
Overview
In the industry and among its employees, McKinsey & Company is known simply as "The Firm" – need
we say more? With 82 offices and around 7,000 consultants worldwide, McKinsey serves more than two
thirds of the Fortune 1000, or 85 of the world's top 100 companies. McKinsey's founder, James O.
McKinsey, pioneered the idea of management consulting when he launched the firm in 1926. But it's
Marvin Bower, with McKinsey since 1933, who is credited with shaping the firm's values, including a
relentless drive for excellence, a mandate of putting the clients' needs before the firm's, and an insistence
on discretion in financial matters. Indeed, the notoriously tight–lipped company rarely publishes the
names of its clients, which include huge global companies, innovative startups, wealthy commercial
banks, leading venture capital firms and vast technology companies. McKinsey also provides pro bono
assistance to educational, social, environmental and cultural organizations. McKinsey emerged from the
Internet gold rush days relatively unscathed compared to competitors, though it suffered its own PR
challenges as it found its name linked with scandal–plagued companies like Enron and Global Crossing.
In recent years, the firm has turned its attention toward the IT sector and outsourcing, in an attempt to
respond to the shifting trend in the consulting market toward more "tangible" services, such as systems
integration. On the pure strategy side, McKinsey also has faced a competitive threat from rivals like Bain
and Boston Consulting Group.
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McKinsey & Company
The Scoop
Shaping management theory
In 1926, lawyer, CPA and University of Chicago management professor James Oscar "Mac" McKinsey
founded the firm that still bears his name. In those early days of consulting, McKinsey was fascinated by
the emerging science of management, and sought to give both management and financial advice to high–
ranking personnel at accounting and other corporations. McKinsey envisioned bringing "management
engineers" to not only rescue faltering companies, but also to help thriving companies do even better. His
five partners included A.T. Kearney and protege Marvin Bower, who would go on to shape the McKinsey
firm we know today. A few years after setting up shop, McKinsey accepted a temporary offer to run and
restructure the Chicago department store Marshall Field's. Bower ran the consulting partnership until
McKinsey's death in 1937. A quarrel over leadership between Bower and Kearney led to a split, and the
two went their separate ways in 1939, with Kearney retaining the Chicago office and naming it after
himself, and Bower naming the New York branch McKinsey & Company., in honor of his mentor. As for
the other partner, Kearney, his name is now associated with another strategy consulting firm, A.T.
Kearney, still numbered among McKinsey's competitors.
Learning the rules
"The Firm" derives much of its mysterious prestige from its powerful five–part code of conduct, instituted
by Bower and still followed today. Bower directed McKinsey employees to put client interests ahead of
firm interests, serve the client in a superior manner, adhere to high ethical standards, preserve the
confidence of clients, and be ready to differ with client managers and tell them the truth, however painful.
Over time, Bower also began directing his recruiting efforts toward graduate students the firm could mold
into broad–based consultants, instead of experts who had built up years of experience in a single
industry. McKinsey & Company thus became the first consulting firm to hire directly from business
schools. Another tradition set by Bower was a reticence to discuss financial matters openly, which
persists to this day. Maintaining that the firm would make more money if it didn't concern itself with profits,
Bower never charged clients performance–based or results–based fees. Ensuring that this decorum
regarding all things financial would stick for the long haul, Bower declined
to take the company public (at what would have been an enormous profit) when he retired in 1963,
instead selling his shares back to the firm for book value. Future partners have continued this practice.
Bower shaped McKinsey culture in other, more subtle ways. All executives were required to wear hats
and long socks (to avoid displaying "raw flesh") – though there may be more bare heads and bare skin on
display these days, many McKinseyites still prefer long socks. Like many of its peers, McKinsey really
took off during the postwar period, when companies turned their attention to expanding profits. The 1950s
saw McKinsey adding an expanding number of bluechip companies to its clientele, as well as adding
engagements with major government and military organizations, defense contractors. In 1959, the firm
went international with an office in London, and opened offices in Melbourne, Amsterdam, Düsseldorf,
Paris, Zurich and Milan shortly thereafter.
The lure of the new
The firm started to face fiercer competition – and lose market share – in the 1970s, a time of corporate
buzzwords, such as the Boston Consulting Group's "growth–share matrix." Rejecting trendy marketing
theories on principle, McKinsey lost business to BCG and other upstarts. These less–stodgy firms soon
began luring away top b–school grads, the engine driving much of McKinsey's success. But the firm
created another tradition of its own when, in 1986, it began an MBA summer internship program in
response to the extravagant signing bonuses competitors like Bain and BCG were using to woo top
candidates like Harvard's Baker Scholars. The program was soon to become a norm across the industry,
as well as among others like investment banks. In 1989, the firm's acquisition of the Information
Consulting Group proved somewhat awkward when a culture clash between the companies caused many
former ICG employees to jump ship. The firm righted itself later in the 1980s as the global economy
began booming again, and the 1990s were a success story. To date, the revenue has more than doubled
since 1993, and the firm doubled its professional staff and opened a total of 20 offices in the 1990s. In
1999 alone, the firm opened offices in Antwerp, Belgium; Athens; Dubai, United Arab Emirates; Manila,
Philippines; and Rio de Janeiro.
Consultants without borders
In fact, McKinsey has been described by managing partner Ian Davis, in a June 2004 interview with the
Financial Times of London, as "a truly global firm." Its consultants are citizens of 95 countries. McKinsey's
governing shareholder committee is controlled by a non–American majority, and about 60 percent of
revenues come from overseas, with further growth expected from new markets in Russia, Eastern Europe
and China. The firm has solidified its Asian presence in recent years, conducting more than 500
engagements in China over the last decade. In October 2003, the firm established its Asia–Pacific
regional headquarters in Shanghai, and the office has worked with some of that nation's most prominent
clients, including Singapore Airlines and the chewing–gum–averse national government. In March 2000,
McKinsey opened a new office in Tel Aviv, from which it has offered assistance to Israeli corporations,
startups and government entities such as the Ministry of Communications and the Postal Authority. The
newest office on McKinsey's list is in Zagreb, Croatia, opened in early 2003.
It's in India
India is also big on the firm's radar, especially as the trend toward offshoring (a term Davis argues is
misleading) continues. In February 2000, McKinsey enhanced its presence in India with the launch of
India Venture 2000, which was created to help Indian entrepreneurs establish and grow new IT or e–
commerce businesses. The firm's office in New Delhi is one of its fastest growing sites, and in India, the
firm helped the State Bank of India reengineer its business processes in May 2003; advised liquor
company Shaw Wallace on opening new breweries in September 2003; consulted with engineering and
construction firm Larsen & Toubro on strategy matters; and advised Prime Minister Atal Behari Vajpayee
on foreign investment issues. McKinsey maintains one office in Delhi staffed 24/7 with 300 workers who
provide the firm with support for visual presentations and graphics, and another near Delhi employing 12
highly–educated staffers who perform statistical research for McKinsey consultants. But, as Davis argued
to the Financial Times, "From McKinsey's point of view, offshoring doesn't mean anything for us. Offshore
from were to where?" He added, "We have 40 different nationalities working in the London office. So
offshoring to India wouldn't mean anything because you could argue we are as much Indian as anything
else." And it isn't all about outsourcing, offshoring, or whatever else you might call it. In fact, McKinsey
has approximately 130 consultants on the subcontinent
5
McKinsey & Company The Scoop
as of 2004, and the firm's efforts in India have established it as one of that nation's most prestigious
employers. Many Indian consultants have graduated McKinsey to lead major corporations and projects of
their own (ex–director Ashok Alexander went on to head the Bill and Melinda Gates Foundation in India,
and fellow alumnus Pulak Prasad is a leader at Warburg Pincus, to name just a couple). "We are a
breeding ground for leaders and we start working on people from Day One," Pramath Sinha, an India–
based McKinsey principal, told The Economic Times of India. Along with its consulting peers, McKinsey
took a hit from the dot–com bubble and the effects of September 11. The dot–com boom was good to the
firm for a while, and it took on more than 1,000 web–related engagements during 1999 and 2000, reaping
record revenues of $3.4 billion in 2000. The firm was somewhat shielded when the bubble burst as it had
limited the practice of accepting equity stakes from clients in lieu of start–up fees, a common practice
among competitors. But McKinsey still suffered when it was stuck with some of these worthless shares,
and income from many previously high–flying e–commerce clients quickly dried up.
Jumping ship
The firm's Internet troubles actually started before the bubble burst, as many of McKinsey's best
consultants jumped ship to latch on to alluring web–related ventures. In 1999, the firm's San Francisco
office saw a third (150 members) of its staff walk out the door. One year later, though, McKinsey had
more employees than it knew what to do with. Out of the 3,100 MBAs who were extended offers in 2000,
McKinsey expected 2,000 acceptances, but the firm received more than 2,700. "We honored every offer
and didn't push people out," then–managing partner Rajat Gupta told BusinessWeek in July 2002, "and
we had no professional layoffs other than our traditional up–or–out stuff." This "stuff" was reportedly on
the rise as of 2001, when 9 percent of all analysts and associates were shown the way out, compared
with just 3 percent a year earlier, the New York Times reported. The post–September 11 recession led to
some belt tightening among non–consulting McKinseyites; in November 2001, the firm announced that it
would cut 5 to 7 percent of its 3,000 support staff in the United States and Canada. Other cost–trimming
measures, the Times reported, include cutbacks on travel, training retreats, and "even the Reese's
Peanut Butter Cups at the firm's New York reception desk."
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Bankruptcy blues
McKinsey rarely publicizes the names of its clients, but its association with some troubled companies has
put the firm in the headlines. In recent years, McKinsey's association with bankrupt entities including
Enron, Swissair, Global Crossing and Kmart occasioned some grumbling among outside observers about
the value of the high–priced advice it provides. In May 2003, McKinsey's services were called into
question during bankruptcy hearings for client United Airlines. Bankruptcy lawyers charged that the firm's
restructuring–advice fees, which included a $1 million–a–month flat fee for McKinsey, were unwarranted
for a company that couldn't manage to pay its debts. UAL dismissed the concerns and retained
McKinsey. McKinsey was also caught up in a client's bad luck when it made headlines for failing to predict
an $800 million takeover bid of client Ocean Spray by rival Northland Cranberries Inc. in early 2003.
McKinsey had advised Ocean Spray since late 2002 and, against the wishes of the company's struggling
growers, had advised the cooperative's management to avoid selling any of its businesses. The collective
rejected Northland's overture in February 2003, but the pro–sale growers won a vote to replace Ocean
Spray's board of governors with a new, smaller panel, and the company cut 58 of its executives the
following month.
The sinking "E"
But Enron provided the firm's biggest PR headache in recent years, especially since disgraced CEO Jeff
Skilling joined the doomed enterprise from McKinsey, where he'd worked with the fledgling company to
develop a transaction– and services–based, minimal asset approach to corporate operations. To make
matters worse, the firm touted the Enron model as a success story after Skilling left to head the
corporation. As it transpired, the transactions and services on which Enron grew its numbers were largely
illusory, the result of exchanges between Enron subsidiaries. When the model could no longer sustain
itself and the word got out, Enron collapsed, taking much of the stock market with it. McKinsey
consultants working out of Enron's Houston offices had racked up millions in fees – topping out at more
than $10 million during one year – for dispensing strategy advice. None of its work for Enron, however,
had anything to do with the shady dealings that led to the Tilting E's ruin. Looking back, Ian Davis told the
Financial Times, "I think our reputation was dented" by the Enron affair, though "People know we had
nothing to do with any wrongdoing."
7
Growing pains
Aside from its association with troubled clients in a turbulent economy, McKinsey's struggles in recent
years have come from internal growing pains, as well. The firm's obsession with excellence reflects the
company mantra, "100 percent to the third power," meaning that the firm seeks to bring 100 percent of
firm capabilities to bear on 100 percent of McKinsey clients, 100 percent of the time. However, an internal
report from 2001, quoted in a May 2002 Wall Street Journal article, shows this thorough approach to be a
possible weakness. The article, "Growth at McKinsey Hindered Use of Data," cites an internal study,
referred to as Project Coolkat, which concluded that rapid expansion had hindered the firm's ability to
keep track of its own information, leading to poor client performance. "It takes much too long to find the
right knowledge," the report states, "and in many cases, the best existing knowledge is not identified and
brought to the client." Furthermore, the report calls the work satisfaction and professional development of
McKinsey research staff "unsatisfactory ... Moving forward, this is not acceptable." The firm notes that
"most of our most important knowledge is in the heads of our most senior people, exchanged primarily
through conversations – not through knowledge workers or electronically. At no point over the last decade
has McKinsey ever been anything but the best consulting firm in delivering business knowledge to
clients." Shortly thereafter, the firm launched a new initiative to improve researcher training and a major
budget increase for McKinsey's "knowledge–management" processes and systems, $35.8 million in 2002
versus just $8.3 million in 1999. But a senior partner quoted in the WSJ article was quick to point out that
there was "no demonstrable link – in fact there's no link whatsoever – between our decision to invest in
upgrading our knowledge–management systems and any specific client."
Where the elite meet
There's no doubt that McKinsey's obsession with excellence and client privacy have given the firm a
sheen of prestige and even elitism. McKinsey, which rarely reveals the names of clients and issues few
press releases detailing its activities, is sometimes characterized as a "secret society." But McKinsey
takes issue with this: "Only after many years have passed and if our clients themselves publicly refer to
our involvement, do we acknowledge that we have served a company," the firm contends. "This policy is
not the result of some cultivated secrecy or mystique. It is what we believe is professional behavior and
the appropriate posture given our conviction that we supplement our clients' leadership, but never replace
it." Of course,
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McKinsey consultants often end up heading their clients' firms. Its staff roster of PhDs and Rhodes
scholars is also closely guarded, though some personalities are too well–known to keep under wraps. In
February 2003, news was leaked that former First Daughter Chelsea Clinton got a $100,000 offer to join
McKinsey as an analyst in the London office. But Clinton, a graduate of the Oxford international relations
master’s program, held out for an assignment in New York in order to be closer to her parents. She got
the $120,000–a–year job in March 2003, and has reportedly been pulling 80–hour weeks as she works on
projects dealing with health care. McKinsey's intelligence arsenal is bolstered by a global network of more
than 900 knowledge professionals, most of whom are aligned to specific industry, functional or
geographic knowledge domains. These professionals do research on topics related to specific client
engagements, allowing consultants to focus on the client proprietary dimensions of a study. In addition to
business research, this group also plays a lead role in the creation, codification, organization and
dissemination of McKinsey's vast knowledge base and spearheads the design, development and
deployment of all knowledge related technologies. Recent enhancements include new search technology
applied across its vast document collection and a unique expertise location approach that enables
consultants to identify colleagues from around the world who might be able to help them with a specific
problem. Indeed, this group may be tapped at any point during their careers, even after leaving the firm.
Like the Hotel California, McKinsey is a place from which alumni can check out any time they like, but
they can never leave. The firm publishes a volume listing every living person who has ever worked for the
firm, where they live, and their current occupation. Its cover cautions: "This directory is to be used
exclusively by alumni of the firm." There are approximately 10,000 McKinsey alumni all over the world,
and each year they're invited to a party where they can mingle with current consultants. This alumni
network is likely to become ever more far reaching–the firm currently employs 6,000 consultants from 90
countries. McKinsey alumni, as previously noted, have often left the firm to take on more visibly
prestigious roles – in addition to the infamous Jeff Skilling, more successful careers have been forged by
alumni such as Bruce Henderson, a former McKinseyite who was named CEO of Imation Corp. in May
2004, and J.D. Hickey, a 33–year–old McKinsey alum who was appointed to lead Tennessee's health
care program, TennCare, after having advised the program with the firm for three years. The complex
web of current and former McKinseyites forms a unique decentralized structure for such a large
corporation. Operating as a
9
partnership, McKinsey is run through a network of offices that runs as a unified firm. In fact, the firm is
reluctant to admit it has a global headquarters at all (though it runs much of its backbone administrative
work from New York City). The ownership and management of the firm is vested entirely in about 800
active directors and principals (which roughly correspond to senior and junior partners). McKinsey's
managing director is elected every three years by these directors, in a process some compare to the
election of a new pope. In March 2003, Ian Davis, who headed the firm's British office for eight years, was
tapped to replace Rajat Gupta, who served the company's maximum of three three–year terms. Davis, a
holder of undergraduate degrees in policy, philosophy and economics from Oxford University, has been
with McKinsey since 1979.
The Davis era
Davis' election was seen as heralding changes for the firm. Gupta, who presided over McKinsey during its
– and the economy's – period of dizzyingly rapid expansion, became associated with that aggressive
growth strategy. But observers say Davis, who publicly emphasizes McKinsey's "core mission and
values," such as a client–centered, meritocratic approach, may usher in a calmer era at the consultancy.
Consultants say that he is putting the recommitment to McKinsey's core values in action. In June 2004,
the company held a special day of workshops to discuss the core values of the firm and commitments to
serving clients. In July 2004, Davis told the Financial Times of London that the heady years of the dot–
com boom "did put severe strain on our basic values. In the kerfuffle, I think some of them got lost. We
didn't knowingly move away from them, but my sense is that after this period we need to affirm our basic
approach and values." (Another of those values – privacy and lack of personal status–seeking – is
illustrated by the fact that Davis didn't give his first interview to the press until more than a year after his
election as managing partner.) Though the firm guards its staff rolls as closely as its client list, it's clear
that the company has taken pains to retain its best and brightest during the weakened post–September
2001 economy. Now that the economy is on the rebound, so are invitations to join McKinsey. In 2003, the
firm significantly expanded its campus recruiting activities on MBA, law, MD, PhD and undergraduate
campuses. In the 2003–2004 campus recruiting season, the firm hired over 1,600 consultants, about a 60
percent increase over the previous year. In addition, McKinsey has hired several hundred summer
associates – graduate students who are going into their last year of school. The North American offices
have scheduled a conference for all of thier 10
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summer associates in ski paradise (though probably not during the summer) Vail, Colorado.
Natural selection
Despite its reputation as an "up or out" firm when it comes to advancement, McKinsey considers its
promotion policies to be based on the natural progression of consultants at the firm, with advancement
and compensation based on a fair review system. On average, only one in four or five consultants who
starts at McKinsey finishes the vaunted journey to principal. "It's a pretty competitive process," says an
insider, "though lots of people don't want to make partner, so they leave." VOX (visibility, options,
expression of preference), a system implemented in early 2000, gives consultants greater influence over
the engagements they work on. McKinsey is also eager to get even more out of the best and brightest
that it hires. For incoming associate hires without a financial or business background, the firm offers the
Mini MBA, a three–week program that provides an opportunity to learn core business skills. In addition, all
associates and business analysts attend Basic Consulting Readiness, a curriculum that prepares them for
client engagements. In addition, one– to two–week role–change courses are provided at each career
milestone. McKinsey also provides an array of workshops and learning opportunities in a range of topics,
including communications, functional skills, coaching and team leadership, and negotiating skills.
Publish or perish
McKinsey has built a solid reputation as a publisher of management–related booklets, documents, papers
and magazines, including the well–regarded McKinsey Quarterly. McKinsey partners also often write
books independently of the firm. In addition to Tom Peters and Bob Waterman's best–selling In Search of
Excellence, books penned by McKinsey alums include 2000's Measuring and Managing the Value of
Companies by Tom Copeland, Tim Koller and Jack Murrin, and 2001's The War for Talent by Ed
Michaels, Helen Handfield–Jones and Beth Axelrod; 20/20 Foresight: Crafting Strategy in an Uncertain
World, by Hugh Courtney; and Creative Destruction, by Richard Foster and Sarah Kaplan (which
unfortunately highlights Enron as a shining corporate example in passages written before the company's
collapse). The big book in 2002 was Dangerous Markets: Managing in Financial Crises, by Dominic
Barton, Roberto Newell and Gregory Wilson. 2003 saw the publication of Banking in Asia: Acquiring a
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Profit Mindset, by Tab Bowers, Greg Gibb and Jeffrey Wong. The McKinsey Quarterly, now available in
an online version, has more than 300,000 subscribers and runs articles on e–commerce,
telecommunications, strategy and other fields. McKinsey also analyzes its own business approach,
hoping to understand the difference between change that is fundamental and change that is
fundamentally faddish. For example, the firm acknowledged that McKinsey itself had put client service
ahead of wealth creation for clients during the recent Internet euphoria, but now applies the principles of
strategic thinking, industry and functional knowledge, and analytical rigor to today's environment. Thanks
in part to the vast amounts of research produced by the firm, McKinsey is known as a preeminent
information source on globalization, governance, organizational performance and corporate strategy. The
McKinsey Global Institute (MGI), established in 1990, operates as an independent economics think tank
within McKinsey, conducting research and developing positions on issues affecting businesses and
governments worldwide. The Institute's approach "combines the rigor of academia with the real–world
experience of business," according to the firm. Through its research, MGI has amassed a fact base that
covers more than 15 countries, four continents and more than 28 sectors. Located just steps from the
White House in Washington, D.C., the Institute been estimated to spend more than $100 million a year on
its information gathering and internal research. Reports released in 2003 include a study of multinational
company investment in developing economies; an analysis of the benefits and impact of offshoring
worldwide; and reports on improving productivity and competitiveness in Europe.
Going nonprofit
Another of McKinsey's specialty areas, the nonprofit world, got a jumpstart in 2001 when the firm
launched the McKinsey Institute on the Nonprofit Sector, appointing Senator Bill Bradley as chairman of
its advisory board. The practice coordinates the firm's community and pro bono activities. Each office
devotes 5 to 10 percent of its consultants' time to work for nonprofits, and more than half of its North
American partners are on the boards of at least one nonprofit organization. The firm served more than
200 nonprofit and/or public sector clients in 2003, representing an in–kind contribution of well over $100
million. These clients include museums, theaters operas, festivals, multinational NGOs and development
agencies, philanthropic organizations, schools, conservation organizations, land trusts, zoos and more.
Following the events of September 11, the New York office devoted itself to nine 12
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separate pro bono projects. These included serving the Lower Manhattan Development Corporation,
overseeing the development of a victim database for New York State Attorney General Elliot Spitzer and
studying how New York Police Department and Fire Department members reacted during the World
Trade Center attacks. The Big Apple office has also done work for the United Way, the World Economic
Forum and the New York City Opera.
On the tech track
In a hyper–competitive consulting arena, McKinsey's efforts at going high–tech in response to more IT–
centric rivals like Accenture has gotten off to a rocky start. The firm admits that previous attempts to build
a major IT consulting capability, through acquisition and then through the creation of an IT practice, "could
not achieve sufficient scale to ensure long–term success." As a result, the firm formed the Business
Technology Office (BTO), in 1997, the only McKinsey office not tied to one specific geographic location.
The office helps companies implement IT strategies, improve their operations, strengthen the value of
their customer relationships and craft innovative approaches to IT architecture and IT management in
areas such as post–merger integration, prioritization of IT investments and strengthening of the IT
organization. The strategy seemed to pay off – the number of consultants in the BTO grew by 30 percent
in 2003. Still, word on the street indicates that McKinsey, along with many of its high–powered peers, may
be facing competition in the high–tech arena from newer consultancies with IT–centered backgrounds,
especially those spun off from high–tech companies themselves, such as IBM's Global Business Services
unit. Private equity is another new area for McKinsey, and it offers advice in strategy/organization,
opportunities for growth, deal assessment and due diligence, and cross–portfolio support. The firm's
recent projects have been global in scale: In 2004, as in previous years, a group of McKinsey delegates
joined the World Economic Forum in Davos, Switzerland, addressing topics such as the benefits and
challenges of offshoring, business opportunities and trends in China, and the balance between risk and
control in managing corporations. In May 2003, the firm took on the role of investment advisor for the
privatization of the oil group Unipetrol in the Czech Republic. In July 2003, the firm issued a report on the
use of the English language in South Korea. Also in 2003, McKinsey began conducting a comprehensive
analysis of the global coffee industry on a pro bono basis, in addition to advising the Colombian Coffee
Federation on a new retail strategy. In May 2004, the firm was tapped by the Confederation of Indian
Industry to study and suggest changes to the laws governing mining operations in India. At U.N.
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headquarters in June 2004, McKinsey issued a report on the Global Compact with the business
community, which U.N. Secretary–General Koffi Annan had proposed five years earlier (the compact,
aimed at summoning corporate responsibility for issues such as human rights, labor, and the environment
in developing nations, is working, the report concluded). Closer to home, Tennessee's largest insurer,
TennCare – now run by a former McKinseyite – has paid the firm more than $4 million as it works to
reform the troubled health care system, with a $1.8 million two–month contract renewal signed in June
2004. McKinsey also has been under contract to produce a report suggesting ways to improve the city
government in Dallas.
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McKinsey & Company
Organization
Managing Director: Ian Davis
Appointed managing director in March 2003, Davis, 52, had already spent 23 years at the firm. Based in
London, he is McKinsey's tenth managing director. He holds a degree in politics, philosophy and
economics from Oxford, and joined McKinsey in 1979 after a seven–year stint at paper manufacturer
Bowater. His work for the consultancy has been wide–ranging, but mostly has fallen within the consumer
and retail industries. Davis got good practice in leadership heading the firm's U.K. operations, among the
firm's larger offices, for eight years. Before that, he ran the firm's consumer industries practice in Europe.
Unlike many of McKinsey's directors, who are known as a little bit dull, Davis is said to be outgoing,
charming and highly visible, especially in his native Britain. Oddly, too, for a McKinsey man, he doesn't
have a graduate degree. He's also veddy British – again, a departure for McKinsey, where each
managing director before Davis' predecessor, Rajit Gupta, was American. Davis' grandfather was a
professor at Oxford, his daughter is a fifth–generation Oxford student and his three brothers are all "highly
distinguished," as a BusinessWeek article described them – one's the CEO of publisher Reed Elsevier,
one's a judge and the other, a lawyer. And fittingly, Davis is a "keen sportsman," fond of cricket, rugby
and tennis. Though Davis had some big shoes to fill – Gupta presided over a period of unprecedented
growth at the firm – his first year at the firm was met with favorable reviews. The Financial Times of
London, in the first interview with Davis (published a year after his appointment, in July 2004), describes
him as "fluent" and "approachable," "happier talking about the future than the past," but not averse to
analyzing the mistakes the firm made during the Internet boom. According to the article, Davis' spare,
unlived–in London office is a testament to his hands–on management style, which involves traveling the
globe and visiting 25 countries during his first 12 months.
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McKinsey & Company Organization
Practice areas
Industry Practices
• Automotive & Assembly • Banking & Securities • Chemicals • Consumer/Packaged Goods • Corporate
Finance & Strategy • Electric Power & Natural Gas • High Tech • Insurance • Marketing • Media &
Entertainment • Metals & Mining • Nonprofit • Operations Strategy & Effectiveness • Organization &
Leadership • Payor/Provider • Petroleum • Pharmaceuticals & Medical Products • Private Equity • Pulp &
Paper • Retail • Telecommunications • Travel & Logistics
Locations
U.S. locations:
• Atlanta, GA • Boston, MA • Charlotte, NC • Chicago, IL • Cleveland, OH • Dallas, TX 16
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• Detroit, MI • Florham Park, NJ • Houston, TX • Los Angeles, CA • Miami, FL • Minneapolis, MN • New

York, NY • Palo Alto, CA • Pittsburgh, PA • San Francisco, CA • Seattle, WA • Stamford, CT •
Washington, DC
International locations:
• Amsterdam, The Netherlands • Antwerp, Belgium • Athens, Greece • Auckland, New Zealand •
Bangkok, Thailand • Barcelona, Spain • Beijing, China • Berlin, Germany • Bogota, Colombia • Brussels,
Belgium • Budapest, Hungary • Buenos Aires, Argentina • Caracas, Venezuela • Cologne, Germany •
Copenhagen, Denmark • Delhi, India • Dubai, United Arab Emirates • Dublin, Ireland • Dusseldorf,
Germany • Frankfurt, Germany • Geneva, Switzerland
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• Gothenburg, Sweden • Hamburg, Germany • Helsinki, Finland • Hong Kong, China • Istanbul, Turkey •
Jakarta, Indonesia • Johannesburg, South Africa • Kuala Lumpur, Malaysia • Lisbon, Portugal • London,
England • Madrid, Spain • Manila, Philippines • Melbourne, Australia • Mexico City, Mexico • Milan, Italy •
Monterrey, Mexico • Montreal, Quebec • Moscow, Russia • Mumbai, India • Munich, Germany • Oslo,
Norway • Paris, France • Prague, Czech Republic • Rio de Janeiro, Brazil • Rome, Italy • Santiago, Chile •
São Paulo, Brazil • Seoul, Korea • Shanghai, China • Singapore • Stockholm, Sweden • Stuttgart,
Germany • Sydney, Australia • Taipei, Taiwan • Tel Aviv, Israel • Tokyo, Japan
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• Toronto, Ontario • Verona, Italy • Vienna, Austria • Warsaw, Poland • Zagreb, Croatia • Zurich,
Switzerland
Structure
McKinsey is privately held. Managing Director: Ian Davis
Key Competitors
Bain & Co.: Among the world's leaders in international strategy consulting, Bain, which split off from the
Boston Consulting Group in 1973, boasts a consulting staff of more than 2,100. The firm's client base
consists primarily of diversified, international corporations in all sectors of business and industry, such as
financial services, e–commerce, retail, health care, consumer products and technology. According to the
company, its clients have historically outperformed the stock market by three to one. Booz Allen Hamilton:
Booz Allen racked up $2.7 billion in sales in 2004, and is a powerhouse in government–side consulting,
landing major contracts with the Department of Health and Human Services, NASA and other agencies.
Booz Allen garners 80 percent of its revenue from previous clients. Not a pure strategy firm, it puts an
emphasis on transforming businesses rather than merely prescribing change. The firm reports spending
one–third to one–half of its time helping clients implement its recommendations. Booz's industry practices
compete with McKinsey. Boston Consulting Group: BCG insists it's McKinsey's main competition, and
McKinsey reluctantly agrees. BCG, a global powerhouse employing more than 2,600 consultants in 60
offices in 37 countries. Founded in 1963 by Bruce D. Henderson as the management and consulting
division of the Boston Safe Deposit and Trust Company, BCG has been the driving force behind a
number of major management consulting innovations and concepts in its 39 years, including "time–based
competition," "deconstruction," and "capability–driven competitive strategies."
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Mercer Management Consulting: Formed in 1990 by the merger of Temple, Barker & Sloane and
Strategic Planning Associates, and owned by professional services giant Marsh & McLennan, Mercer has
grown rapidly, opening offices in Europe, the Pacific Rim and Latin America, and acquiring a number of
boutique consultancies. Today, Mercer Management Consulting has approximately 1,400 consultants and
support personnel in 22 offices worldwide. Though it was initially considered a brazen startup in a field
dominated by giant, established firms such as McKinsey, Mercer has expanded its practice quickly by
aggressively pursuing clients and rooting its work in a series of well–publicized books. It has developed
special industry expertise in communications, energy, financial services and manufacturing. Monitor
Group: Though much smaller than McKinsey, this heavily strategy–oriented consultancy sees itself as a
strong competitor. Founded in 1983 by a group of professors and consultants, including Michael Porter (a
consulting guru and creator of popular case interview framework Porter's Five Forces), Monitor tries to
bridge the gap between academic ideas and business realities. The firm has developed a number of
practices and expanded its client list to include everything from Fortune 500 companies and international
firms to government agencies and major nonprofit organizations. Through its 28 offices in 23 countries, it
offers advisory services in areas including private equity and venture capital, e–commerce incubation,
and mergers and acquisition–related transactions.
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McKinsey & Company
Vault Newswire
July 2004
Managing director Ian Davis gives his first interview to the media, for London's Financial Times.
July 2004
McKinsey alumnus J.D. Hickey, who advised the TennCare program while with the firm, is appointed by
Tennessee's governor to lead the state's health care system as director.
June 2004
Tennessee health insurer TennCare signs a contract extension with the firm for an additional $1.8 million.
June 2004
McKinsey issues a report to the United Nations on Kofi Annan's Global Compact with the world's business
community.
May 2004
The Confederation of Indian Industry hires McKinsey to review the nation's mining laws.
August 2003
The Czech government approves McKinsey's role in advising the privatization sale of Unipetrol.
August 2003
The governor of Tennessee announces McKinsey will review the state's healthcare program.
May 2003
A newspaper reports McKinsey is advising the State Bank of India on restructuring.

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McKinsey & Company Vault Newswire
May 2003
In bankruptcy court, lawyers argue that the $1 million–per–month flat fee for consulting services that
bankrupt carrier United Airlines pays McKinsey is unwarranted for a company that couldn't pay its debts.
Rejecting the argument, United continues to retain McKinsey during its restructuring.
April 2003
For the seventh year in a row, McKinsey tops the list of where MBA students would most like to work,
according to a Universum study.
March 2003
It is announced Ian Davis will succeed Rajat Gupta as managing partner of the firm.
February 2003
The press reports that former First Daughter Chelsea Clinton will join the firm.
October 2002
McKinsey begins to perform an assessment of the New York City school system for chancellor Joel Klein.
September 2002
It's revealed that McKinsey is helping the West Bengal government to encourage investment in local
industries.
September 2002
McKinsey releases a controversial report detailing what New York's fire and police departments did right –
and wrong – in response to the September 11, 2001, attacks.
2001
McKinsey clients Enron, Swissair and Kmart file for bankruptcy.

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August 2001
Branding strategy has, historically, been a closely guarded facet of the advertising business. Not
anymore. In a move that may be the beginning of a turf war between the advertising and consulting
industries, McKinsey purchases Chicago–based branding consultancy Envision.
March 2001
In an interview with the Financial Times, McKinsey managing director Gupta frets that the attrition rate at
McKinsey has fallen to 12 percent per year, 5 percent below the "equilibrium level" of 17 percent. Gupta
also notes that during the height of dot–com fever, turnover rose to 21 percent at the firm.
May 2000
McKinsey signs on as the strategic advisor to Apollis AG, a new company founded by General Atlantic
Partners that will create and support wireless applications in Germany and soon, throughout Europe. This
alliance signals McKinsey's increasing efforts to expand into the trendy wireless space.
March 2000
McKinsey says it will raise associates' pay. Crain's New York Business reports that the total
compensation package for incoming MBAs will be in the $150,000 range.
February 2000
In a hotly contested battle, managing partner Rajat Gupta is reelected for his third three–year term. A
report the following month in The Economist maintains that Gupta withstood internal challenges to the
throne from Ian Davis, manager of McKinsey's London office; Clay Deutsch, former head of the
Cleveland/Pittsburgh office; and Michael Patsalos–Fox, the New Jersey office manager, among others.
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January 2000
A McKinsey study of the Indian technology industry concludes that the industry could grow to $87 billion
by 2008 if the government can improve its telecommunications infrastructure. In addition, McKinsey says
that the IT industry has the potential to provide India with 2.2 million new jobs, attract foreign investment
totaling $5 billion and account for more than 7.5 percent of India's GDP by 2008.
November 1999
In an effort to recruit and retain the best b–school grads and ward off growing competition from dot–com
companies, McKinsey decides to offer its associates the opportunity to invest in Internet startups. Junior
consultants can also, for the first time, buy stakes in investment funds that would not normally be open to
them.
September 1999
McKinsey puts Ogilvy & Mather, the venerable agency known for its work with IBM, American Express
and Ford, in charge of its first–ever advertising campaign.
August 1999
President Clinton announces his intention this month to name Dr. Martin Baily to chair the Council of
Economic Advisers (CEA). Baily is a principal at McKinsey, based at the McKinsey Global Institute in
Washington, D.C.
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McKinsey & Company
Our Survey Says
The chosen few
A life with The Firm is "crazy and exhilarating," sources say. "It is a place where you meet tons of people
who are extremely smart, but unique in a very diverse fashion," says an insider. Your colleagues might
include a quantum physicist, "top lawyers," people who hold "PhDs twice over in information science,"
even an "orchestra director." Indeed, "There is an overpowering feeling at McKinsey & Company that you
are among the chosen few, that you are the best and the brightest. Having survived the grueling interview
process, you do indeed feel that you have reached some sort of career pinnacle," a consultant relates.
Others describe life at McKinsey more simply as "a roller coaster." And as you might expect, "whenever
you stick overachievers together, it's competitive. But there's no backstabbing," says a source. Another
insider says, "To outsiders, we must look extremely competitive. We're told we should never feel
comfortable doing what we're doing, that we should always be reaching to do more. But the people who
come here thrive on challenge, and you're only competing with yourself." McKinsey gets kudos for its
professional culture as well. Consultants say the firm's "values–driven culture rewards people for doing
the right thing, not the profitable thing." Another insider agrees, "You are always encouraged to improve
yourself. The work is stimulating, for you have the opportunity to tackle complex issues for blue chips. The
resources at our disposal can be impressive." "You work with the best people and the projects provide
you with opportunities to learn, present to executives and build a strong network," says a colleague. Still,
despite all the prestige and glamour, "All that glitters is not gold," remarks one consultant. "You expect
this place to be an Eden, but it's not. There are stains on the carpet. Sometimes you work on a project
and it winds up being fairly uninteresting. Sometimes a client changes his mind on a project plan and the
result sucks." McKinsey's rigorous selectivity is wellknown. Insiders say it's "not easy" to get an offer from
McKinsey, partly because "the job market has changed," and "the bar is set much higher now." "Relative
to other consulting firms," boasts one insider, "it is the most or among the most selective." This means
that "when people get offers from us and from others, the vast majority end up coming here." But it isn't
enough just to be an Ivy–league MBA with a gleaming transcript, insiders note: "Given two people with
the same analytical skills, we always want someone who is fun," says one McKinsey recruiter.
25
McKinsey & Company Our Survey Says
The Firm's formalities
The McKinsey mystique comes in part from its unique culture, reflected in the ways in which staffers
interact with each other and their company. "McKinsey employees are taught to refer to McKinsey as the
'Firm,' never as merely a company. We were always guided by firm policy and procedures," says an
insider. While the firm is described as "nonhierarchical from a problem–solving standpoint (i.e., everyone
participates fairly equally)," it's still "very hierarchical when it comes to tactical issues (e.g., attending
client meetings, putting together presentations, controlling your hours)." But don't get the impression
McKinsey limits its consultants – in fact, says a source, "I believe there are few places where you are
more dared to take a challenge: it is the rule rather than the exception to be tasked with a chunk of work
which is bigger than you have previously handled." As the pinnacle of consulting (to many, anyway),
McKinsey also puts its consultants to the test with late nights and plenty of hotel time. "Working hours are
hard to control. My goal is to work between 55 hours and 60 hours per week, and I think I manage that
about 70 percent of the time," says a source. Another says that while there's a "pretty good balance in
terms of hours and keeping weekends free … being out of town is always tough." But a colleague
suggests this may depend on who's managing your projects: "Your time is almost entirely controlled by
the EM, with late night conference calls with the partners, who frequently show up late. Get lucky enough
to have an EM who cares about lifestyle (they're rare), and you might get out at 8 p.m. regularly. Get the
more typical EM in a busy office that's overscoping and understaffing projects, and the late nights are the
usual." Another senior consultant says that while increased work–life balance is now "part of the
conversation" at McKinsey, a "sustainable life" is still a challenge. Of course, as one associate puts it, "If
balance is important to you, consulting is not the place you want to be, and definitely not McKinsey." But,
the source adds, "we try to do 'sanity checks' on the workload, because all these overachievers will kill
themselves with the pace." Another insider notes that those sanity checks "are a matter of common
sense. When you work 70 to 75 hours per week for a while, you realize it just isn't sustainable." As for
travel, insiders report that there's "a lot," "which does not add to the happiness." For their troubles,
however, consultants can expect plenty of "creature comforts during travel" like nice hotels and first class
seats on long flights.
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The royal treatment
Indeed, consultants at McKinsey get the "royal treatment" as a reward for their travails, sources suggest.
Salaries at the firms are reportedly among the highest in the industry. One McKinsey insider notes,
"Future increases in pay are based on the previous year's pay, so you basically have to push for a large
first–year package to make the biggest bucks later on." One McKinseyite warns: "You cannot negotiate
with McKinsey. Your pay each year gets decided." Pay at the firm is based on individual performance;
McKinsey's senior partners receive salaries in excess of $1 million a year. In addition, "The firm tosses a
substantial amount into your 401(k) every year, based on performance of the firm and your own
performance. There's also a regular performance bonus that starts at $10,000 and goes up beyond
$25,000 in year one," an insider reports. Others report receiving signing bonuses, a low–rate home loan,
and an interest–free loan for "settling in." The company provides a choice of health plans, two of which
offer fully paid premiums, along with "fully–paid dental, life, STD and LTD, flexible spending plans and
opportunities for group discounts with car insurance and mortgages." Adoption assistance and "generous
" maternity leave are also provided, and office perks include free beverages, free lunches and dinners
when work is pressing, and free cab rides to and from work during early and late hours. The firm also
offers "monthly social events (bowling nights, creative art gatherings) and lots of opportunities to pick up
free tickets to various sporting events." After reaching the rank of engagement manager, McKinseyites
receive a personal assistant. The company is also generous to those who decide that McKinsey just isn't
for them (estimates of turnover range from 20 to 25 percent annually). When the time has come to part,
one insider says, "The firm will continue to pay your salary until you find a job you like. Not just until you
find a job, but one you like."
No such thing as "good enough"
For those who remain, the firm has a reputation for being, in the words of one consultant, "up–or–out,
baby!" – but it also helps ambitious consultants move vertically. "McKinsey is all about the performance
review, constantly giving every consultant the next, very specific list of things to work on and 'upping' the
bar each time you succeed. If you love to constantly be challenged to the next level, you'll love it here,"
says a source, who adds, "If incessant evaluation will make you crazy as a loon, try somewhere else."
One source, with previous experience at other consulting firms, notes, "Among all my colleagues at other
firms, I think McKinsey has the most focus on constantly
27
evaluating you. 'Meets expectations' is a failing grade around here – you're always supposed to do more,
to add value that you weren't asked for." That leads to a lot of performance pressure, which isn't always
good. He continues, "The expectations are so high, you never feel that your work is good enough. You
want to be recognized a little, take a short breather, maybe say, 'That's good enough.' Management is so
used to overachievers that they don't remember the 'I care about you' human factor, the praise you need
for a job well done." A colleague adds, "Sometimes you'll wish they didn't advance you so fast. Just when
you begin to get confident at one position, they'll fling you into the next." Another describes the corporate
ladder at McKinsey as "fairly self–weeding," noting that "fewer than 10 percent starting at McKinsey at
entry–level move up to partner. Some people thrive on the hard work and competitiveness; many others
find greener pastures." A typical path for McKinsey promotions is described as "about two years to
manager, another two years to junior partner (associate principal), and another two years to partner." To
help its consultants become ever more promotable, says a consultant, the firm invests in intense
mentoring and on–the–job learning. MBA–level consultants are able to take a training program called ILW
after two years on the job. "It is some of the best training in the world – you lean about problem solving
and communication. It's done all over the world in groups of about 20. In my group, we had people from
13 different countries." McKinseyites learn from the masters, too, as interaction with firm and client
higher–ups is the norm: "You can easily meet the partners," says a source. Another says that "I've
interacted with around a dozen CEOs in my five years with McKinsey."
Minority report
McKinsey insiders say that the firm's "diversity is pretty broad from the perspective of background, but not
nearly enough from a gender or racial perspective." A consultant notes that "women are fairly numerous
(30 percent) in the associate class, but dwindle quickly as you move up the ranks – probably due to
lifestyle issues as much as anything else." The company reportedly has launched initiatives to encourage
workplace diversity, though another source observes that "newly–minted MBA consultants tend to be
white and male." "African–Americans are the most under represented of all minorities at McKinsey," says
a colleague. As for gays and lesbians, the firm "offered domestic partner benefits early on," a source
reports. Another consultant has "worked with gays at all levels in the firm (associate to
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director) who were very successful, open about their sexual orientation and open to bringing their
significant others to firm events." The firm is known for performing "a lot of community work." This
includes "pro bono consulting, voluntary support of United Way [and] various initiatives driven by
individuals."
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McKinsey & Company
Getting Hired
Early birds only
Students wishing to join McKinsey's hallowed ranks should start gathering resources for the highly
competitive process early. Both MBA and undergrad scholars should check with their school campus
career centers as early in the year as possible to find out whether McKinsey recruits on their campuses. If
so, sign up quickly for an interview – the slots are likely to go fast! Those who aren't lucky enough to be
graced by an on–campus visit shouldn't fret. McKinsey accepts applications online from students who
don't attend the firm's target schools, as well as from working professionals and non–MBA advanced
degree holders. The career section of McKinsey's web site includes helpful information for job candidates
from undergraduate, MBA and advanced degree programs, as well as experienced professionals. It also
walks applicants through a sample case study. Insiders tell us there is "no internship program for
analysts," though the firm, of course, offers MBA–level internships. Undergrads who join the firm as
analysts are "retained for 18–24 months," according to sources; after that, the entire class is cut loose to
go back to school or seek employment at another firm. A return trip to the mother ship is quite possible. "If
they like you and want you back, they pay for grad school," says one source. One insider thinks the
company could improve by "adjusting the promotion system to promote high–performing analysts without
an MBA." In the past, there have been instances of analysts being promoted straight into the associate
ranks, but more than one insider describes these as "extremely rare." We are told "there are no
promotions when times are bad."
Interviewing
During the interview process, the site says, McKinsey looks for people with strengths in problem solving,
influencing others, leading others and building relationships, and achieving goals. Prospective candidates
can find interviewing tips and a practice case study online. McKinsey encourages candidates to use its
online application system. After the boom period of the late 1990s, the interview process has changed,
insiders note. "Now there's a much bigger structure – cases, group interviews and presentations," a
source reports. Another says it's "very rigorous." A third calls the screening "fair and objective." He notes,
"You'll take some
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McKinsey & Company Getting Hired
tests that are like part of the GMAT – in fact, we used to use old GMAT exams as our tests."
Patience is a virtue
Those who have their hearts set on McKinsey should come equipped with patience to burn. "The hiring
process began one year prior – with my first year in business school," a source relates. "McKinsey held
several formal and informal information sessions on campus. They also helped with interview preparation,
including one–on–one and one–on–six interview workshops." Another describes a full two years of
bravely trying to get a foot in the door In the first year, "McKinsey took me out to dinner over the summer,
while I was at another company. Second year included more information sessions, workshops and
dinners. Again, I interviewed with the same office, this time I was successful." This source continues, "The
case interview process was important, but it became clear to me that it wasn't the most important.
Handling consulting cases isn't that hard, and it doesn't have to be done perfectly. The key was getting to
know the members of the office, and finding a fit with their culture. By taking them up on nearly every offer
for dinner or event, I got to know them well enough to get an offer." Applicants can expect at least two
rounds of interviews, with five to six interviews in the final round. Consensus among all participating
parties –which may include senior associates, engagement managers and partners – is required to seal
the deal. Not to add any pressure, but if your heart is set on working at McKinsey, you should ace the
interview and know where you want to be stationed. An insider let us know about an informal hiring policy:
"If you apply to one region, you can't apply to another for one year." One BTOer says that candidates
specifically interested in working for the technology practice should have techie backgrounds, as one
might intuit. BTO is considered an "office," just like a geographic location." Continues the BTO consultant,
"After you get past the first round, you interview with an office. If there are people who would be a good
match for us, we try to interview them. In technology, there are some things that you just can't learn on
the fly."
One applicant's case study
An applicant for a business analyst position in the U.K. reports his interview experience: "In the U.K.,
McKinsey screens resumes/CVs and invites people who make that cut to take a 70–minute test. [Out of
hundreds of applicants
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from each, only 90 applicants from Oxford and 90 from Cambridge were invited to take the test.] The test
counts as the first–round interview. People who pass are invited to a second–round, real–life interview at
McKinsey's fantastically cool London offices. The test supposedly measures basic skills that McKinsey
deems necessary for success in consulting. It had no questions harder than anything on the GRE, and it
was all multiplechoice. Some questions were just reading comprehension, some involved making a
judgment based on almost enough information and some were basically math problems." A week later, he
continues, "I had two one–on–one, 45–minute interviews, back–to–back, with a 10–minute break in
between with two different associates. Both interviews started with about five minutes of chat about my
background and my current academic interests. The only personal question in the first one was to
describe something I'd worked on in the past six to 12 months that had turned out well. In the second
interview, the only personal question was to describe something that had turned out well in the past six to
12 months on which I had worked with more than one other person. In each interview, the interviewer
stopped me after every couple of sentences to ask how I had settled on the action I had just mentioned,
or why I had decided to speak to someone whom I had said I had contacted, or something else to discern
what I had thought I was doing at the time. Though it was unnerving to be interrupted so frequently, the
'hows' and 'whys' were surely relevant. Plus, I had the chance to show off my ability to finish a thought
when someone has cut me off in the middle." "In each interview the 15–minute–ish 'walk me through what
you did and how' question was followed by a challenging case study of about 25 minutes. There were no
brainteasers, but each case study had a market–sizing problem, a couple of simple math problems (i.e.,
50,000 times 500) and a tiny dose of algebra (i.e., solving for x or figuring a percentage). I did not make it
to the third (final) round, which would have been a day of group and individual exercises. My overall
experience with McKinsey was great, though. The recruitment staff was unfailingly kind and extremely
helpful. My travel expenses to London were reimbursed, which was certainly to be expected, but still
appreciated. When I got the call to say I had not made it to the last round, the super–nice recruitment lady
gave me the interviewers' feedback. Hearing so quickly what was really good, what was marginal and
where things had gone wrong was a real comfort. When I asked if it might be worth my while to work on a
couple of not–hot things and reapply next year, the lady replied with an enthusiastic yes. Then she told
me what had been compelling about my cover letter so that I would know what not to change. Though I
was
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disappointed not to make it all the way, I got the distinct impression that that I did well to get as far as I did
and that I was being taken seriously. I also gained a better understanding of McKinsey's recruiting
philosophy and processes, which should serve me well if I decide to try again."
Round and round
This applicant's process sounds more or less typical, though McKinsey is reportedly tinkering with its
interview format. The first round of reviews at McKinsey typically consists of two on–campus sessions,
each lasting about half an hour, although the format varies from campus to campus. The first half–hour
interview is intended to "get to know you." You and your interviewer will discuss your experience,
personality, whether you would be a good fit with the firm and what you want out of a career. (Incidentally,
the consultants that interview on–campus come from McKinsey offices all over the country and the world;
interviewees in New York, for example, can encounter consultants from Los Angeles and Caracas.) The
second interview of round one is typically a case interview and immediately follows the first interview. "My
No.1 one piece of advice for interviewees is, it's all about problem solving – practice, practice, practice
your cases!" exhorts a BTO insider. The case interview is with one consultant, and lasts half an hour to 45
minutes. The consultant starts off by explaining the ground rules: she'll give you a case interview that
presents a business scenario for you to discuss. At McKinsey, the interview will almost always involve an
industry the interviewer has worked in recently. You should feel free (and are expected) to ask any
questions if you need additional information. As you go along, the interviewer will throw out new
information and inquire how this additional data affects your conclusions. A notepad and pen in this
round, to take notes and make basic calculations, is a must! It is also vital is to ask the right sort of
questions – questions that will give you the information you need to make a recommendation – and not to
rush into your answer. Failing to ask the most obvious questions before jumping to conclusions won't get
you to the second round.
Moving on
In the second and third rounds, expect more case studies and personal interviews. Insiders say interview
rules aren't static, but recent case studies have focused on theoretical client situations. A candidate might
be asked to determine the profitability of a computer manufacturer or the revenue opportunities of a pen
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during these case interviews is significant, too – it's "not only how brilliantly you formulate a solution, but
how well you can communicate that solution," an insider says. As in the first round, candidates are
encouraged to ask questions in order to ascertain specific information on the cases. While the first two
rounds of interviewing are usually held on campus or at an established recruiting site, the third round is
most always at the McKinsey office where the candidate is hoping to work. Traveling expenses are, of
course, on the company's tab. These days, two people may interview you simultaneously in the first
round; you may go through three or four interviews that day. In successive interviews, you may be
interviewed by up to five McKinseyites at the same time. At all hiring levels, McKinsey has reportedly
increased its use of case interviews and decreased its reliance on guesstimates. This emphasis on case
interviews reflects McKinsey's newfound understanding that an answer to an absurd and farfetched
guesstimate isn't necessarily reflective of a candidate's full analytical capacity. McKinsey reportedly is
also experimenting with group exercises. In these group cases, approximately six candidates solve a
case jointly over a period of an hour. Use the group exercise to demonstrate "how you work with others,
how you behave in a group"; it is an opportunity to "be open, be forthright and show your personality," but
"don't be competitive against each other," insiders advise. These cases are now held on–campus at some
universities. After the final round of interviews, the candidate typically goes home and is notified by phone
the following day. To make the hiring decision, a campus team meets at the end of the final round. "It's
like a town hall meeting," declares one insider. "We talk very openly." For those who worry that McKinsey
analyzes their every word and gesture, this report will do little to quell raw nerves. McKinsey recruitment
teams do look at the smallest details of each applicant, even employing "high–tech screens" to examine
"resume," "intelligence" and "which events" the person attended. "Candidates really will get a fair
hearing," proclaims one zealous McKinseyite, "[At the final round] we presume that candidates are
innocent until proven guilty."
Inside info
If McKinsey can't decide upon an applicant, even after the third interview, it takes other avenues of
opportunity: "[We] find out more about this person from the people we have on campus [former business
analysts]." Those enrolled in business school classes with McKinsey alums should take note. Fortunately,
those lucky enough to pass McKinsey's mafia–like initiation
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processes will find themselves welcomed with open arms. "We consider them part of the McKinsey
family," reveals another insider. About 75 to 80 percent of McKinsey job offers are accepted. Disbelief,
curiosity or a fondness for radar surveillance prompts McKinsey to keep track of any candidate who turns
down a job offer. The firm is under the impression that anyone who turns down an offer does so because
of an "entrepreneurial situation, like starting a business. Other people join large and small consulting firms
or investment banking companies."
Solving the cases
Throughout the interview process, candidates will encounter a mixture of case questions and resume with
"no brainteasers or market sizings." Sources recommend that candidates "prepare for and be comfortable
with the case process." This is because "everyone has to be a great problem solver, so be ready to
demonstrate that through the case interview process." Also, "be personally comfortable." During the case
sections, insiders advise candidates to have "an open dialogue where we can see how people think."
Don't search only for "a right answer or right framework." The worst method is "force fitting something that
doesn't make any sense because they think we're looking for it." McKinsey is looking for four key qualities
during the interview process: "problem–solving ability, leadership, personal impact/presence, and drive
and aspiration." This apparently means asking, "Is this person going to make a difference in the world?"
General or particular
McKinsey newbies generally take one of two paths: People who wish to incorporate their knowledge of a
range of industries (or no industries at all) can join as "generalist consultants!" while those who have
expertise in a specific area come onboard as 'specialized consultants." Although the firm is veering more
and more toward industry–specific expertise, it emphasizes that both career paths offer "continuous
learning and a high degree of intellectual stimulation, as well as rapid advancement for successful
performers." A BTO insider describes the firm's "hourglass model" of specialization: "You start out as a
broad generalist, then start to pull in and specialize, and then after you've made partner you're expected
to broaden out again. Everyone, even the most highly specialized expert, is expected to excel in basic
consulting skills." Although many analysts stay the industry standard of two years, a handful stay for
three. McKinsey says that an employee must "earn the right to stay a third year" and is "encouraged to be
in another office, usually another 36
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country if possible. Of course, you must speak the language. "Some offices are experimenting with having
a third–year [employee] work at a company. Some do pro bono work. Some will do a non–consulting job –
like in McKinsey corporate communications." Although the majority of new consultants come to McKinsey
directly from campuses or post–doctoral research programs, some come from successful careers in such
specialized areas as brand management, corporate finance, information technology, law and medicine.
MBA candidates currently attending business school should follow the recruiting procedures of their
placement office. All other candidates can submit applications via McKinsey's web site.
Questions to expect
Take advantage of McKinsey's thorough online case study, a self–testing program which walks you
through a real case interview and its component questions, on the careers section of the web site. Here
are some others you can use for practice: 1. Case: You are the head of a large corporation. Your
company must build a new paper plant. You must decide which country to build the plant in. What factors
would you consider? The point of the case interview is to evaluate your analytic capabilities and your
eloquence. You are expected to ask the interviewer questions to obtain additional information before
answering the case (as any good consultant would do). Some questions to ask for this case would be:
"What does the corporation I head do? What does the company plan to do with the paper produced by
the plant? Use the paper in its own manufacturing process? Sell it to other companies? Do we even need
to build the plant? Can we satisfy this need in another way?" Factors to consider in answering this case:
each country's labor costs, political stability, government treatment of foreign investments, price of raw
materials, proximity to raw materials for the plant, relevant shipping costs, tax laws, skill and availability of
local labor force, access to local capital markets, etc. As the interview goes on, the interviewer will
typically add information or constraints to the case (for example, he could tell you that you must decide
only between Brazil and China as a paper plant location).
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2. Case: It's 1982. You're a consultant sitting on a plane next to your client, who is the CEO of American
Airlines. The client tells you that American can't seem to keep many repeat customers and wants to
institute something called a "frequent flyer" program to reward loyal passengers with "points" they can
redeem for free flights. He turns to you and asks you to analyze the merits and faults of the program. 3.
What is it about consulting that interests you? Be honest, but try not to let the dollar signs in your eyes
shine too brightly. 4. Why would you be a good fit at McKinsey? Talk about your thirst for knowledge,
addiction to problem solving and desire to be among the best of the best in your chosen field. 5. Case:
You are a manufacturer of laundry detergent and thinking about shifting into the dry cleaning business.
Decide if this is a feasible and/or lucrative option. McKinsey wants to know if you fathom the many factors
that go into making such a momentous business decision. Here are a few crucial questions you need to
ask your interviewer: Can the assets be transferred from business to business? What is the determined
location – both geographical and on an operational level – of this new dry cleaners? Will it be accessible
to substantial number of customers? Is building a new brand in dry cleaning going to be important or can
we depend on an existing clientele? Obviously, there are dozens, if not hundreds, of other factors to take
into consideration. McKinsey doesn't necessarily expect you to acknowledge all of them. 6. Case: You are
a gumball manufacturer in Cleveland. Business has declined for the last five years. What are some things
you can do to improve growth? You need to assess what has halted growth during the past five years.
The two vital elements of profit, revenue and costs, also need to be evaluated. 7. Case: You are an
automobile manufacturer and you want to move into the luxury sector. Do you build your own brand or
buy an existing one?
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Questions to ask
1. For prospective analysts: What sort of assistance does McKinsey provide in preparing analysts for
acceptance into business school? How solid is McKinsey's acceptance rate? Given McKinsey's four–star
reputation, an interviewer won't have any trouble expounding the firm's impressive business school stats.
However, by asking these questions, a candidate opens up the floor for the interviewer to discuss related
perks: exceptional prestige within the field, an incredibly powerful alumni list and tremendous
connections. 2. For prospective associates: Please describe how McKinsey evaluates promotion at the
firm. McKinsey's "up–or–out" policy is a point of contention among many, including McKinsey staff. Any
question concerning promotion implies that you are interested in learning more about the firm's supposed
"cutthroat culture." 3. What most distinguishes McKinsey from its competitors? Your interviewer will
welcome the chance to brag a bit, and you can learn more about The Firm's philosophies. 4. How much
responsibility will I be given in my first year? Both analysts and associates are given a considerable
amount of independent work their first year at McKinsey. Your interviewer will likely reiterate this fact and
cite the tasks typically completed by incoming McKinseyites. Remember that McKinsey is looking for
employees who are motivated, ambitious and ripe for work–related conquest. There is no such thing as
"too much responsibility." 5. How does McKinsey apply some of the advice it gives clients to its own
practice? Keep your interviewer on her toes. Not every consulting company actually practices what it
preaches. 6. Please tell me more about the training McKinsey provides. Flaunt the fact that you require
constant mental stimulation and a high learning curve.
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7. How would you describe McKinsey's culture? Employees of McKinsey swear that their corporate
culture is unlike any other in the industry. Find out what makes it so, and use the opportunity to see how
you might fit in. 8. What effect is McKinsey's increasing industry and IT emphasis having on its
commitment to strategy?
Compensation
The salary information reprinted below was supplied by some of the McKinsey & Company employees
who participated in Vault's 2004 Management Consulting Survey. Engagement manager, four to five
years’ experience: $125,000 $40-$60,000 signing bonus Associate principal,four to five years’
experience: $150,000 $75,000 signing bonus
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McKinsey & Company
On the Job
For a (corporate–sanctioned) peek into several McKinseyites' workdays, visit the firm's web site, which
features "Day in the Life" profiles from around the world.
A day in the life
Associate, BTO (a client site day)
8:00 a.m.: A bit jet–lagged from travel yesterday (Monday), sleepwalk to your desk and start tackling
voice mails and e–mails. 9:00 a.m.: All caught up, check in with colleague about how his recent training
session went. 9:30 a.m.: You and your colleague head to your "team room" at the client site, where you
hold a meeting with the five members of your team plus a few representatives from the client's office.
10:30 a.m.: After the client reps leave, continue the meeting in private with your colleagues, talking about
how you'll apply the McKinsey problem–solving model to this engagement. 11:30 a.m.: Adjourn the
meeting and begin tackling the development of a "hypothesis tree," which you'll apply to this client's
project. To begin, you need to gather knowledge from McKinsey's online resource, Knowledge Net, as
well as from firm partners and experts. (This is never any problem – in fact, "I'm impressed with access to
partners here – they'll always call you back and make time for you.") 1:00 p.m.: Yikes! Was that your
stomach growling? Time flies when you're deep in thought! Run up to the client's cafeteria and grab a
quick bite. 2:00 p.m.: Call a junior member of the team to ask about some fact–gathering he's doing for
you. 3:00 p.m.: In another meeting with your team, start to compare notes on your hypothesis–building
process. You'll want to come to some consensus about this before involving senior partners.
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McKinsey & Company On the Job
5:00 p.m.: Meet with senior–level staffers at the client site to discuss progress. "We're always running
things by the client so there are no surprises." 6:00 p.m.: Back at your computer, look up a little more
background info online and respond to e–mails. 7:30 p.m.: Pack up the laptop (you'll need to keep
working on this after dinner) and go to meet colleagues at a nice restaurant downtown, courtesy of The
Firm. 9:30 p.m.: At the hotel, fire up the laptop and prep for tomorrow's meeting with clients. 11:30 p.m.
Doze off in front of Letterman.
Analyst (an office day)
6:30 a.m.: Climb out of bed, pull on sweatpants and head to the gym. 9:00 a.m.: Get into the office and
eat breakfast (sesame bagels and "darn good" cream cheese provided by McKinsey). 9:15 a.m.: Read
The New York Times online; check voice mail and e–mail. 9:45 a.m.: Spend remainder of morning
working independently on client–related spreadsheets and phone interviews. 1:00 p.m.: Eat lunch with a
co–worker at a local restaurant. 2:00 p.m.: Attend meetings with team members (one senior partner, one
regular partner, one engagement manager [EM] and one associate) to discuss a current client. 6:00 p.m.:
Eat on the run. 7:00 p.m.: Get call about a volunteer activity you do through McKinsey ("There's usually
one conversation unrelated to firm work per day"). 8:00 p.m.: Finish spreadsheets left over from the
morning. 8:45 p.m.: Leave to grab dinner and drinks with a friend.
Analyst (a client site day)
7:00 a.m.: Haul your tired body out of bed, shower and down two cups of coffee.
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8:00 a.m.: Arrive in the "team room" of the client site, greet other McKinsey team members and client
affiliates. 8:30 a.m.: Discuss the agenda for the day 9:45 a.m.: Get to work on collecting data and creating
a graph for a future presentation Noon: Eat lunch with the team. 1:15 p.m.: Engage in impromptu group
problem solving complete with brainstorming, flipchart scrawling and Q&A sessions. 3:00 p.m.:
Conference call with several partners from a small financial services company. 4:00 p.m.: Meet with team
for a brief project update. 7:45 p.m.: Leave with team for a swanky dinner at a swanky restaurant ("On
McKinsey, thanks. McKinsey encourages camaraderie between its consultants, and will pay for it"). 9:30
p.m.: Open door to hotel room door and crash into bed. Flip channels and check out the paucity of late
night TV options. Settle on a pay–per–view movie and fall asleep before the end.
Associate
7:30 a.m.: Alarm goes off. 9:15 a.m.: Arrive at the office . 9:30 a.m.: Sit down with research professionals
to figure out what data is needed for the day. 10:00 a.m.: Call president of a division of a large media
company to arrange a tour of his facility in order to perform industry research for a client. 11:00 a.m.: Prep
for team presentation. 11:30 a.m.: Meet with team to go over presentation for the board of directors
tomorrow. 2:00 p.m.: Eat lunch in McKinsey cafeteria. 3:30 p.m.: Attend meeting with mid–level manager
at client site to discuss issues related to study.
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5:30 p.m.: Meet with research professional to review data she compiled. Become disappointed after
hearing that critical international data was difficult to obtain. Decide on alternative approach. 6:30 p.m.:
Work on slides to prepare for board of directors meeting 8:00 p.m.: Meet with production staff to make
graphs and slides for tomorrow's meeting 8:30 p.m.: Meet with the team to go over presentation materials
for tomorrow 10:30 p.m.: Leave for dinner with friend and then head home
Job descriptions
Business Analyst (or Fellow)
Coming out of undergrad, newbies enter McKinsey as business analysts or "fellows." Holders of
advanced degrees other than MBAs also may be assigned this position. Analysts typically stay at
McKinsey for two or three years before entering graduate school or pursuing other job opportunities.
Placed on engagement teams of four to five consultants including a partner, Business analyst stay on an
engagement fulltime. Duties may include "identifying issues, forming hypotheses, designing and
conducting analyses, synthesizing conclusions, and helping to implement change," according to
McKinsey. They may also frequently make presentations to, and discuss issues with, senior management
of the client company.
Daily activities include:
Interviewing with industry experts, government officials and client's customers and competitors. Meeting
with research staff and gathering data to complete study. Creating financial models using Excel.
Gathering analysis needed to prepare graphs, charts and slides needed for client report. Traveling to
client to tour facilities and collect documents. Presenting information to clients.
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Associate
Associates, who typically have earned an MBA or another advanced degree, are staffed on teams that
normally include a partner, a senior associate and one to four other associates. Associates are problem
solvers that take responsibility for designing and carrying out the analyses needed to resolve issues that
the team has identified. Associates often meet with client executives and contacts, make presentations,
and write work plans and reports. As they gain experience, associates may earn the title of engagement
manager, taking responsibility for the day–to–day management and performance of the team and coach
other team members. Associates with little or no business experience may take a "mini–MBA" course that
covers key finance concepts and consulting frameworks. BTO associates are expected to have "work
experience with a technology company, an IT consulting firm or high–performing corporate IT department,
and in IT design or architecture or in managing large IT projects," along with "a broad understanding of
current IT trends, their impact on business strategies, and their implications for senior management in
creating and sustaining competitive advantage and transforming business processes."
Daily activities include:
Meeting with key industry experts, government officials and client's customers and competitors. Meeting
with research staff and determining data needed to perform study. Creating financial models using Excel.
Assigning graphs, charts and slides needed for client report to analysts. Traveling to client to meet with
client team, plan strategy for study and assign needed tasks among McKinsey and client teams.
Attending presentation of study results to client; leading select sections of presentation.
Specialists/experts
Candidates with deep knowledge of an industry or topic may enter the firm as specialists or experts.
These professionals, with an advanced degree and two to four years of industry experience, work with
client teams as well as
45
spending part of their time building on their expertise in the field. Insiders say specialists receive training
in basic consulting skills – it's not enough to be a know–it–all, you also have to "know how to bring ideas
to the clients," a source says.
Summer associate
McKinsey's summer associate program is designed for students pursuing an MBA or another advanced
degree. Typically, summer associates will work on an engagement team for 10 to 12 weeks. Summer
associates at McKinsey are reportedly treated "just like regular associates." The summer begins with a
day and a half of orientation, which may include some computer software training. Summer associates
may contribute to reports, interview members of client companies and make presentations. Contact with
senior management is generally above average, depending on the office; such contact is apparently more
difficult at overseas offices than in the United States. However, most summer associates report that "the
attitudes of the consultants toward us are very receptive." Some summer associates spend as much as
60 percent of their time in team meetings and the balance in data gathering; others may work more
independently on quantitative projects. The firm says that summer associates may be extended an offer
to join the firm upon successful completion of their duties; insiders put the percentage of successful
summer associates at up to 90 percent. Summer associates recommend that interns "take initiative
immediately" and "get into it from day one. The summer is very short." Other former McKinsey summer
associates advise: "To increase your chances of a full–time job offer, socialize outside of work with office
mates frequently."
Career path
For undergraduates
McKinsey says that over the past two years, successful analysts have joined the firm from nearly 300
schools worldwide. As you might expect, McKinsey recruits at top colleges across the country, but hires
most of its new analysts from Ivy League, Stanford and MIT, as well as from top European schools. The
typical analyst stays at McKinsey for two years, which is the designated length of the business analyst
program. A few analysts may be
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invited to remain for a third year, which is spent at a different office of the analyst's choice, often
overseas, though this has become more competitive in the recent economic downturn. In general,
analysts are not promoted directly to associate positions without further schooling, usually business
school, though McKinsey does promote some top–performing analysts directly.
For MBAs and others with graduate degrees
MBAs and other advanced degree holders are interviewed for associate positions. The firm reportedly has
recently modified its career path for MBA holders; previously, an associate moved up to engagement
manager in her second or third year at the firm (if she survived that long), then became a senior
engagement manager by the fourth or fifth year. However, the firm recently instituted an accelerated path
to partnership based on "personal readiness." With the change, high performers can become a partner as
early as their fourth year with the firm, though they have the option of waiting until year 10 or 11.
McKinsey still retains its "up–or–out" policy, however, requiring consultants to leave the firm if they
languish at any one level for too long. New McKinsey associates enter as either generalists or specialists.
Most everyone now develops a specialty by approximately her fourth year. After that, a source reports,
even the most specialized experts are expected to "broaden out" again, in what's known as an "hourglass
model." Be advised that promotion at McKinsey is contingent upon an unusually intense and detailed
feedback process. To move up in the ranks, McKinsey demands "superior quality work and commitment
to client service." Prospective partners must also be willing to care for people and develop their skills,
inspire others, be pleasant, dedicate themselves to clients, exhibit "partnership behavior" and have
personal integrity and maturity. To ensure these standards are met, McKinsey employees are subjected
to frequent contribution to the partnership through teamwork, and collaboration and assumption of the
responsibility of self–assessments by other McKinseyites. They receive reviews at the midpoint and end
of each study in addition to a formal review process at the end of each year. Senior partners may spend
"up to a third of their time" serving on committees that examine the work of their co–workers and
subordinates.
47
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McKinsey & Company
Final Analysis
Even in an era of shrinking corporate budgets, McKinsey is regarded as the gold standard in
management and strategy consulting. Under the leadership of new managing director Ian Davis, the firm
is expected to continue pursuing its traditional values, adhering to a strict, insiders–only approach to its
practice. A successful stint at McKinsey places consultants in a privileged group – alumni are welcomed
at the highest ranks of corporations, government agencies, educational organizations, and just about
anywhere else you can think of. And while at the firm, consultants get the royal treatment – we rarely (if
ever) hear grumbling about pay or perks from these insiders. Recruiting has remained strong at McKinsey
even as the economy has slowed. Internally, the firm is working on ways to address market needs, adding
more IT capacity in the BTO segment and working to gain a strong position in global outsourcing. In
pursuing these goals, the firm has expanded its reach beyond the usual ranks of newly–minted MBAs,
seeking specialists and holders of advanced degrees from other areas. For all of its secret society rep,
insiders consistently describe McKinsey as a pleasant place to work – one source notes with obvious
relief that the firm is "much more down–to–earth and action–oriented than I'd expected." So pull up your
socks, aspiring consultants: You couldn't do much better than a career with McKinsey.
49
Wondering what it's like to work at a specific employer?
M | A.T. Kearney | ABN Amro | AOL Time Warner | AT&T | AXA | Abbott Laboratorie Accenture | Adobe
Systems | Advanced Micro Devices | Agilent Technologies | Alco nc. | Allen & Overy | Allstate | Altria
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| FedEx Corporation | Feder eserve Bank of New York | Fidelity Investments | First Data Corporation |
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apital | John Hancock Financial | Johnson & Johnson | Johnson Controls | KLA–Tenc orporation | Kaiser
Foundation Health Plan | Keane | Kellogg Company | Ketchum imberly–Clark Corporation | King &
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Lazard | Lehman Brothers ockheed Martin | Logica | Lowe's Companies | Lucent Technologies | MBI |
MBNA Manpower | Marakon Associates | Marathon Oil | Marriott | Mars & Company McCann–Erickson |
McDermott, Will & Emery | McGraw–Hill | McKesson | McKinsey ompany | Merck & Co. | Merrill Lynch |
Metropolitan Life | Micron Technology Microsoft | Miller Brewing | Monitor Group | Monsanto | Morgan
Stanley | Motorola BC | Nestle | Newell Rubbermaid | Nortel Networks | Northrop Grumman orthwestern
Mutual Financial Network | Novell | O'Melveny & Myers | Ogilvy & Math Oracle | Orrick, Herrington &
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www.vault.com Pfizer Go to PeopleSoft | PepsiCo | harmacia | Pillsbury Winthrop | Pitney Bowes |
Preston Gates & Ellis ricewaterhouseCoopers | Principal Financial Group | Procter & Gamble Company
roskauer Rose | Prudential Financial | Prudential Securities | Putnam Investments
Read what EMPLOYEES have to say about: • • • • • Workplace culture Compensation Hours Diversity
Hiring process
Read employer surveys on THOUSANDS of top employers.
McKinsey & Company
Recommended Reading
Articles:
Skapinker, Michael. "Seasoned Survivor at the Head of the Firm." Financial Times (London), June 7,
2004. "The Aspen Seven" Fortune, August 23, 2004. London, Simon. "Buried Treasure." Financial Times,
December 10, 2003. Warner, Melanie. "The Incredible Shrinking Consultant." Fortune (Europe), May 26,
2003. Byrne, John A. "At McKinsey, the Winner Is..." BusinessWeek Online, March 7, 2003. "McKinsey &
Company Misplayed in Unicom's CDMA Strategy?" SinoCast China Business Daily News, Oct. 25, 2002.
Articles by McKinsey consultants:
Farrell, Dana. "Can Germany Benefit From Offshoring?" The Wall Street Journal, August 23, 2004.
Daruvala, Toos. "When, Where, How, and Other Questions on Going Offshore." American Banker, July 3,
2003. Hunt, David, and Mark Williams. "Analysts Are No Longer Going to Be Stars." Financial Times,
April 30, 2003. Nevens, Mike. "Time for a High–Tech Shakeout." Financial Times, January 6, 2003.
Gupta, Rajat and Paul Coombes. "Accentuating the Positive." Global Agenda (magazine of the World
Economic Forum Annual Meeting) 2003. Selected books by McKinsey consultants: Bower, Marvin. The
Will to Lead. McKinsey's paterfamilias on management. Peters, Thomas J. and Robert H. Waterman, Jr.
In Search of Excellence. The management bible. Copeland, Tom, Tim Koller and Jack Murrin. Valuation:
Measuring and Managing the Value of Companies. The handbook for valuation. Michaels, Ed, Helen
Handfield–Jones and Beth Axelrod. The War for Talent.
51
McKinsey & Company Recommended Reading
Courtney, Hugh. 20/20 Foresight: Crafting Strategy in an Uncertain World. Baghai, Mehrdad, Stephen
Coley, and David White. The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise.
Woetzel, Jonathan. Capitalist China: Strategies for a Revolutionized Economy. Foster, Richard, and
Sarah Kaplan. Creative Destruction: Why Companies That Are Built to Last Underperform the Market –
and How to Successfully Transform Them. Barton, Dominic, Roberto Newell and Gregory Wilson.
Dangerous Markets: Managing in Financial Crises. Bryan, Lowell, et. al. Race for the World. Katzenbach,
Jon R. et. al. Real Change Leaders.
52
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Why “The McKinsey Way”?

McKinsey & Company

‘The McKinsey Way of Thinking about Business Problems’

• Don’t lose focus while analyzing a mountain of data

• Must pass the 30 second ‘Elevator Test’

• While working on a problem, make a note of daily learning

• Don’t try to do everything in a single day

• Don’t lose sight of ‘the big picture’

‘The McKinsey Way of Working to Solve Business Problems’

‘The McKinsey Way of Selling Solutions’

• Take advantage of other’s experience if you can

• Proper planning and a good, stable attitude goes a long way

• Do a little advance work

• Lay down rules for a ‘work-life’ balance and stick to them

‘Life after McKinsey’

Julie Bick, Bestselling Author

Learning from the book

• The magic lies not in the strategy, but in the implementation of it

THE McKINSEY WAY

Roll No. 089

McKinsey & Company

McKinsey & Company

Shaping management theory

Learning the rules

The lure of the new

Consultants without borders

© 2004 Vault Inc.

The sinking "E"

Where the elite meet

© 2004 Vault Inc.

The Davis era

© 2004 Vault Inc.

© 2004 Vault Inc.

On the tech track

© 2004 Vault Inc.

Managing Director: Ian Davis

• Atlanta, GA • Boston, MA • Charlotte, NC • Chicago, IL • Cleveland, OH • Dallas, TX 16

© 2004 Vault Inc.

• Detroit, MI • Florham Park, NJ • Houston, TX • Los Angeles, CA • Miami, FL • Minneapolis, MN • New

© 2004 Vault Inc.

McKinsey is privately held. Managing Director: Ian Davis

© 2004 Vault Inc.

A newspaper reports McKinsey is advising the State Bank of India on restructuring.

McKinsey clients Enron, Swissair and Kmart file for bankruptcy.

© 2004 Vault Inc.

© 2004 Vault Inc.

Our Survey Says

The chosen few

The Firm's formalities

© 2004 Vault Inc.

The royal treatment

No such thing as "good enough"

© 2004 Vault Inc.

Vault Consulting Job Board

VaultMatch Resume Database

Early birds only

One applicant's case study

© 2004 Vault Inc.

Round and round

© 2004 Vault Inc.

Solving the cases

© 2004 Vault Inc.

© 2004 Vault Inc.