CASE ANALYSIS

McKinsey & Company : Management Knowledge and Learning

Background
• James O. McKinsey founded McKinsey in 1926,. • 75 years later, the firm has grown into a global partnership serving three of the world's five largest companies and two-thirds of the Fortune 1000. • "management engineers" --rescuing sick companies to helping healthy companies thrive and grow.

who they are..
• the trusted advisor and counselor to many of the most influential businesses and institutions in the world. • problem solvers with a passion for excellence. • don’t regard individuals based on their title, but their competence and leadership. • come from all over the world, with rich experience and all kinds of backgrounds and areas of expertise.

Q 1:
How was this little firm of ‘accounting and engineering advisors’ able to grow into the world’s most prestigious consulting firm 50 years later ? What was the unique source of competitive advantage developed by James O. Mckinsey and later Marvin Bower ?

• The company had experienced expansion into a global market and many changes in management and structure. • Recruited experienced executives and professional consultants . • The company was staffed by professionals with different levels of authority ,and the consultants worked within a matrix arrangement with a professional core. • All McKinsey managers participating in the development of the strategic plan and cascading the goals and objectives throughout the firm the positive impact of management by objectives • Decentralizing the centers –15 centers [“practice leadership” ]

James O.

Marvin Bower

• Recruited experienced executives and trained them on an integrated approached he coined as the General Survey Outline • Undeviating sequence of analysis -goals, strategy, policies, organization, facilities, procedures & personnel • Freestyle of training --synthesize data & independent thinking

• Focused on issue of importance to top-level management • ‘People development is company's primary purpose’--professionals trained and motivated to do outstanding work • Client benefits must be more important than those of the firm.

Q2: How effective was Ron Daniel in leading Mckinsey to respond to challenges identified in the commission on firm Aims and goals? What contribution did Fred Gluck make to the required changes?

• Daniel appoints one of firm’s partners to be the full-time director of training. • Improve consultants’ skills and expertise. • Created industry-based clientele sectors in different functions, and cut some geographic offices that remained the primary organizational entity. • Leverage the firm’s functional expertise, especially for strategy and organization sectors.

Fred Gluck’s contributions
1.Centers of Competence --created 15 Centers of Competence, which can help consultants and to ensure the renewal of the intellectual resources for the firm. 2.Knowledge Infrastructure --knowledge management project
• build a common database of knowledge accumulated from clients work and developed in the practice area • hire a full time coordinator. • create a career path for deep functional specialists

3.Create a Client Impact Committee

Q3: Judging by the evidence in the three mini-case of front-line activities in the mid-1990s,how effective has the firm been in its two-decade long change process ?

• High level knowledge related to different fields, and also experiences and capabilities from worldwide, efficiency to solve different kinds of problems from different counties. • High-educated, full knowledge and enough experience employees participated to using an effective way to persuade clients. • A more interdependent network, created and developed. • Training new generation directors and new team workers, give them more opportunities to practice in daily operation.

Q4: What is your evaluation of Rajat Gupta’s ‘four-pronged’ approach to knowledge development and application within Mckinsey ? As a senior partner,what specific advice would you give him?

• capitalize on the firm’s long term investment supported by the Knowledge infrastructure • Practice Olympics. • Tapped both internal and external expertise to develop “state-of-the-art” formulations. • Create pools of dedicated resources protected from daily pressures and clients demands, and focused on long-term research agendas.

Recommendation
• Mr. Gupta’s initiatives and MBO --- Helps growth but made it impossible to link the knowledge and expertise of the organization. • High on cost • Have to focus, not overlooking customer and market. • Should using traditional communication methods to motivate employees and develop personal relationships.

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