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Manage knowledge and learning
McKinsey in 1996 is one of the biggest consulting companies in the world and is famous for his knowledge. Within the company the revenue had more than doubled within the past 6 years and the focus was on knowledge development next to serving its customers. In 1994 there were 4 new plans made to stimulate these 2 objectives further. These were set by its current management director Rajat Gupta. The 4 key points are: • Capitalize firm’s long term investment in practice development driven by Clientele Industry Sectors, Functional Capability Groups, and the knowledge infrastructure of PDNet and FPIS and through new channels. • Use the new developed approach of the Practice Olympics throughout the entire firm, which is focused on the development of ideas within the company and those ideas are judged by the board of directors so there will be an internal competition focused on knowledge. • The launch of 6 special multi year internal assignments which were focused on tapping into the internal and external expertise to develop “state of the art” formulations of key issues. This was done so the firm’s functional knowledge was improved so McKinsey could focus more on longer term, bigger commitment and cross-functional development. • The last idea was aimed at expanding the model of the McKinsey Global Institute. This meant that they would try to create other pools of dedicated resources protected from daily pressures and client demands next to being focused on long term research agendas. Gupta knew that it could be possible that McKinsey would loose client work today but if it was in the best interest of the company for the future he said that they would be willing to. So he also could leave the firm stronger than he found it, which had been a key element for the leaders of McKinsey over the past decades.
Lisa Trubia, Daniel Sanders, Rutger van Wesel, Martijn Telderman Fred van Veldhoven, Aishlinn van Nikkelen Kuijper
Not only the employees itself but also the idea driven personal networks they build up throughout the company. If it does this effectively the others will come back which is the start of a network. Rutger van Wesel. Also they try not to find a solution for the company’s current problem but moreover to find a new approach on the deeper lying problems and strategies of the firm. The employees from McKinsey are also very important. Another key element from McKinsey is the fact that they are not only there to serve the customer. An important idea from McKinsey is the one firm policy. Nowadays some feared that the company was getting away from this policy. In order to stimulate its employees. This is focused on the building of individual and team capability as opposed to a focus on the development of knowledge. McKinsey developed certain promotion plans.McKinsey & Company Key Issues Manage knowledge and learning McKinsey is not alone in the market for consulting. Each of these problems is treated as unique and focused on building a client relationship. In order to keep up with its competition McKinsey has practiced various strategies and ideas. By doing this there became clarity in the succession of people. the clients to be treated as McKinsey responsibilities and profit sharing from a firm pool as opposed to an office pool. Also there is a focus on the client’s problem. It has strong competition from for example the Boston Consultancy Group. Lisa Trubia. These are mainly built up when one department provides help to another. which boosted the confidence of the employees. McKinsey can’t keep on disaggregating their units to create niches for everyone because they have exhausted the capability of their integrating mechanisms. Aishlinn van Nikkelen Kuijper 3 . They are more focused on creating knowledge (within its company and in its employees) and also on the benefits for the company as a whole. McKinsey works with an “engage-explore-apply-share” model. which consists of the recruiting of employees on a world wide base. Daniel Sanders. • There were concerns that the growth might stretch the fabric of the place. Martijn Telderman Fred van Veldhoven. But there are also others.
not just an archival record. After a lot of begging. the less time they spend thinking creatively about the problem. Martijn Telderman Fred van Veldhoven. Not only to support knowledge transfer. They are very uncertain about their promotion prospects. IT can sometimes lead to information overload.McKinsey & Company • Manage knowledge and learning To support high growth rates McKinsey must be more aggressive in using technology. McKinsey increasingly encouraged its consultants to publish their key findings. accurate. Rutger van Wesel. but also in allowing partners to mentor more young associates. McKinsey launched the McKinsey Staff Paper series in an attempt to deal with the problem. More difficult was the task of capturing the knowledge that had accumulated in the practice areas since much of it had not been formalized and none of it had been prioritized or integrated. it can drive out communication and people start believing that e-mailing someone is the same thing as talking to them. The former reluctance to document concepts had long constrained the internal transfer of ideas and the vast majority of internally developed knowledge was never captured. • One of the Commission’s central proposals (settled in 1971) was that the MGM ratio would be reduced from 7 to 1 back to 5 or 6 to 1. • There is also a dark side on technology. This is a computerized data base of client engagements. Aishlinn van Nikkelen Kuijper 4 . • In addition. In the late 1970s. The task of implementing focused first on the Firm Practice Information System (FIPS). the more time employees at McKinsey spend searching out the ideal framework or the best expert. But in 1995 this MGM ratio was already 8 to 1 (Exhibit 1) • Some experts inside McKinsey seem to be uncertain about their future at the company. and timely so that it could be accessed as a reliable information resource. cajoling and challenging each practice to Lisa Trubia. Daniel Sanders. So teams shouldn’t stop meeting and practice conferences should not be held on discussion forums online. This FIPS needed to be updated with new systems and procedures to make the data more complete. Support systems To handle the internal information much thought was given to building a knowledge infrastructure.
Martijn Telderman Fred van Veldhoven. • They suggested that the firm expand its hiring practices and promotion policies to create a career path for deep functional specialist who would become more Ishaped than the normal profile T-shaped consultant.McKinsey & Company Manage knowledge and learning develop and submit documents that represented their core knowledge. This has since been a great resource that found almost immediate enthusiastic acceptance. In the past. structured strategies. However McKinsey. Aishlinn van Nikkelen Kuijper 5 . The KRD became known as the McKinsey Yellow pages. Daniel Sanders. were deeply embedded in the firm’s values. increasingly believed that consultants should focus more on specialized knowledge development. they proposed that each practice area hire a full time practice coordinator who could act as an “intelligent switch” responsible for monitoring the quality of data ad for helping consultants access the relevant information. An assembly of all firm experts and key document titles by practice area published in a small book that fitted in every employee’s briefcase. To ensure that the data bases were maintained and used. A third and smart implementation was the Knowledge Resource Directory (KRD). McKinsey finally launched its Practice Development Network (PDNet). the emphasis was on a broad based problem solving skills and client development orientation. Rutger van Wesel. Lisa Trubia. a Knowledge Management Project was launched in 1987. Develop T-shaped into I-shaped consultants The basic concept of shaping T-consultants into I-consultants deals with the transformation of employee skills. This would enable them to serve the customer better with more specialized. Believing that the firm’s organizational infrastructure needed major overhaul. and made three recommendations: • • The term had to make a major commitment to build a common database of knowledge accumulated from client work and developed in the practice areas.
and Switzerland. client impact. This all took place during the 1960s. it seized the opportunity to test the "one firm" approach in the laboratory of the world. but it tended to focus on the immediate task rather than on the client’s long term need. International expansion The period immediately following World War II ushered in an era of internationalism. The 1970s proved to be our most challenging decade. Italy. He also created a Client Impact Committee. delivered a three of four month assignment for a client. France.McKinsey & Company Client impact committee Manage knowledge and learning With responsibility for knowledge management. One of the most important initiatives of the committee was to persuade the partners to redefine the firm’s key consulting unit from the engagement team (ET) to the client service team (CTS). Bolstered by the emergence of a more highly integrated world economy. the manager director began to focus on a new theme. Germany. McKinsey established its first international office in London in 1959. Lisa Trubia. Who were linked across multiple ETs. Daniel Sanders. The globalization of corporations helped fuel demand for McKinsey’s services worldwide. Tariff barriers tumbled in the European Common Market throughout the 1960s. It established offices in the Netherlands. Rutger van Wesel. McKinsey’s growth slowed and its competitors gained ground. was a highly efficient and flexible unit. A troubled world economy and social unrest undermined confidence. spurring many major American and European companies to reach beyond national borders. It also added Canada and Australia to their international network. the notion of a legitimate role as a consultant to teams had evolved to a need for specialists to be “engagement director capable”. Many of these budding multinationals sought McKinsey's advice on how to organize as conglomerates. When a South American oil company engaged McKinsey to assess its global operations. The traditional ET. Martijn Telderman Fred van Veldhoven. Aishlinn van Nikkelen Kuijper 6 . The CST concept was that the firm could add long-term value and increase effectiveness of individual engagements if it could unit a core of individuals. and commit them to working with the client over an extended period.
South Africa. Korea. continually extending the depth and reach of our knowledge. India.McKinsey & Company Manage knowledge and learning Realizing that a course correction was needed. McKinsey also reinforced its practices through increased recruitment of both functional and industry experts. it had threatened a precious commodity: the client relationships. and a sharper focus on the quality of their knowledge. Indonesia.500 and doubling that number by 1999. It also began to serve clients in Turkey. and organization – fueled the internal reinvention. among others. entering the decade with a professional staff of nearly 2. It discovered that in growing too fast. In the 1980s the globalization expanded and with that came the need for McKinsey to develop deeper and broader expertise. strategy. and Southeast Asia and added new locations in Europe and in North and South America. A substantial investment in knowledge development – particularly in the key areas of expertise. Aishlinn van Nikkelen Kuijper 7 . opening offices in Taiwan. Rutger van Wesel. McKinsey was called upon to restructure entire industries. McKinsey also invested heavily in codifying its knowledge and making it accessible through an infrastructure of more than 60 areas of specialized expertise. and Russia. The unprecedented globalization of the 1990s redefined the parameters of business. It expanded the scope of its recruiting to increase its diversity. McKinsey also expanded into nearly 20 additional countries. McKinsey fortified their commitment to excellence in client service through more rigorous selection and evaluation of its people. McKinsey flourished in the expanding economy. Martijn Telderman Fred van Veldhoven. Lisa Trubia. McKinsey subjected the firm to the trademark McKinsey in-depth analysis. Daniel Sanders. The clients draw on this reservoir of knowledge as a source of competitive advantage.
Nowadays. Rutger van Wesel. The change of the consultant himself was a matter that McKinsey recognized.McKinsey & Company Case Conclusion Manage knowledge and learning The little firm of “accounting and engineering advisors” was able to grow into the world’s most prestigious consulting firm. Consultants were encouraged to publish their work. Lisa Trubia. Working more specialized rather than on a broad company base. This biggest problem internally was how to manage the information that existed in the company and let the company benefit from it. McKinsey goes on with this focus on sharing information throughout the company. Daniel Sanders. This required efforts of people to communicate their findings. Aishlinn van Nikkelen Kuijper 8 . In order to make the knowledge infrastructure work the consultant needed to change from a T-shaped into an I-shaped consultant. Martijn Telderman Fred van Veldhoven. All this enabled McKinsey to gain a unique competitive advantage. McKinsey was able to do this by focusing its company business on a one firm vision. which helps it to maintain its advantage and grow even further. But one of the most important issues remained. Support systems like PDNet and FPIS were created.
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