MCKINSEY AND COMPANY

MANAGING KNOWLEDGE AND

LEARNING

-GROUP 4

AYAN KONAR
MEGHA PANT
NIKHIL KUSHWAHA
PRIYANSH AGGARWAL
SHIKHAR GUPTA
TRIPTI JAIN
 WHAT IS MCKINSEY 2

McKinsey was founded in 1926, by a

University of Chicago professor named James
McKinsey.

From 1926, till today, it has become the largest

consulting firm, serving majority of the
Fortune 500 and Fortune 1000 companies.
WHAT DID JAMES MCKINSEY FOCUSED ON
Time- 1926

• Mac began recruiting experienced executives and

training them in the integrated approach he called
his General Survey outline.

• Saturday morning he would lead consultants

through an undeviating sequence of analysis-goals,
strategy, policies, organization, facilities,
procedures, and personnel-while still encouraging
them to synthesize data and think for themselves.
MARVIN BOWER ENTERS
Time- 1932

• Bower was a lawyer with a Harvard MBA. Within two years, he

became the manager of the New York Office.

FOCUS ON PROFESSIONALISM

• Bower undertook to imbibe in his associates the sense of

professionalism he had experienced in his time in the law
partnership.
• He wanted to create McKinsey as a body of efficiency experts or
business doctors.
• Focused on high standards of ethics, excellence and qualification all
of which helped in serving clients well.
MARVIN BOWER POLICIES
Time- 1932-1967
ONE FIRM POLICY
• As new offices opened, Bower became a strong advocate of the One Firm policy that
required all consultants to be recruited and advanced on a firm-wide basis, clients to be
treated as Mckinsey & Company responsibilities, and profits to be shared from a firm
pool, not an office pool.

FOCUS ON GENERALISTS
• In 1950, he became the Managing partner , and brought a series of major changes.
Bower focused on Generalists and believed that they could grasp the issue and find the
solution.

RAPID GROWTH
• The firm's extraordinary domestic growth through the 1950s provided a basis for
international expansion that accelerated the rate of growth in the 1960s. Following the
opening of the London Office in 1959, offices in Geneva, Amsterdam, Düsseldorf, and
Paris followed quickly
A PERIOD OF DOUBT
Time- 1967-1976
• There were newly emerging competitors like BCG. McKinsey growth had stopped.

Reasons
• The Commission on Firm Aims and Goals found that the firm's rapid growth has led to a neglect in
developing technical and professional skills.
• McKinsey focused too much on geographic expansion and new practices, at the expense of skill
development.
• The firm accepted routine assignments from marginal clients, resulting in uneven work quality.
• Consultants were excellent generalists but often lacked deep industry knowledge or specialized expertise
demanded by clients.
Proposals
• The Commission recommended the firm focus on continuous member development, requiring slower
growth.
• It suggested reducing the associate to manager ratio from 7:1 to 5 or 6:1.
• Emphasis should be on developing "T-Shaped" consultants with both a broad perspective and in-depth
specialty.
RON DANIEL- THE NEW MD
Time- FROM 1976
Reasons for McK failure

• McKinsey loses clients and recruits to BCG.

• BCG competes with a focus on "thought leadership" from a centralized resource base in Boston.
• BCG utilized powerful tools like the experience curve and growth-share matrix.

With this Daniel concluded that his firm could not run with the generalist model.

Proposals by Daniel
• Ron Daniel appointed a respected senior partner as McKinsey's first full-time director of training and
emphasized developing consultant skills, along with client service.
• Daniel initiated structural changes by creating industry-based Clientele-Sectors (e.g., consumer
products, banking, industrial goods, insurance) across geographic offices.
• He also encouraged development of functional expertise in strategy, organization, and operations.
• There were some criticisms, but Daniel decided to proceed ahead with this.
RON DANIEL- THE NEW MD
Time- FROM 1976
New structural changes

• Daniel formed working groups focused on strategy and organization, central to McKinsey's practice.
• Fred Gluck, advocating for a shift from the generalist approach, led the strategy group.
• In June 1977, Gluck convened a "Super Group" of younger partners with strategy expertise for a three-day
meeting to refine the strategy practice's agenda.

• Daniel formed working groups focused on strategy and organization, central to McKinsey's practice.
• Fred Gluck, advocating for a shift from the generalist approach, led the strategy group.
• Daniel tasked Bob Waterman, involved in a study on "excellent companies," and Jim Bennett, a senior
partner, to consolidate McKinsey's knowledge on organization.
• They recruited Tom Peters, a young Ph.D. in organizational theory, as one of their first members for this
initiative.
REVIVAL OF MCKINSEY
Time- FROM 1980'S

• In 1980, Daniel asked Gluck to join the central group at the Firm Office and focus on the
knowledge-building agenda.
• He advocated for knowledge development to be a core, ongoing, and institutionalized
activity involving everyone, not just a few.

• Daniel established 15 Centers of Competence as virtual entities, not physical locations,

focused on areas of management expertise such as strategy, organization, marketing, change
management, and systems.
• The role of these centers, as described in a 1982 memo to partners, was to develop
consultants and ensure ongoing renewal of the firm's intellectual resources.
• Gluck appointed highly motivated experts in each field as practice leaders to assemble
core groups of partners active in the practice area.
• Activities initiated by the leadership of each center aimed to build a shared body of
knowledge among core group members and occasionally practice network members.
MCKINSEY STAFF PAPER SERIES

• The knowledge which was generated internally was not captured or leveraged. There
was firm's reluctance to document and leverage internal knowledge effectively.
• McKinsey initiated the McKinsey Staff Paper series in 1978, gradually encouraging
consultants to publish their key findings by the early 1980s.

Knowledge Management Project

• To overhaul the firm's organizational infrastructure, Gluck initiated the KMP, with 3
recommendations. Bill Matassoni was given the task to implement these recommendations

1. Build a common database of knowledge from client work and practice areas.
2. Hire full-time practice coordinators in each practice area to maintain and monitor the
quality of databases and assist consultants in accessing relevant information.
3. Expand hiring and promotion policies to accommodate deep functional specialists, creating a
career path for more specialized expertise.
MCKINSEY STAFF PAPER SERIES
• The knowledge which was generated internally was not captured or leveraged. There
was firm's reluctance to document and leverage internal knowledge effectively.
• McKinsey initiated the McKinsey Staff Paper series in 1978, gradually encouraging
consultants to publish their key findings by the early 1980s.

Knowledge Management Project

• To overhaul the firm's organizational infrastructure, Gluck initiated the KMP, with 3
recommendations. Bill Matassoni was given the task to implement these recommendations

1. Build a common database of knowledge from client work and practice areas.
2. Hire full-time practice coordinators in each practice area to maintain and monitor the
quality of databases and assist consultants in accessing relevant information.
3. Expand hiring and promotion policies to accommodate deep functional specialists, creating a
career path for more specialized expertise.

There were initatives like Firm Practice Information System (FPS), Practice Development
Network (PDNet) and Knowledge Resource Directory (KRD).
REFINING KNOWLEDGE MANAGEMENT
TIME- 1988, GLUCK BECAME MD
• The company was growing again. In 1988, the same year Fred Gluck was elected managing
director, new offices were opened in Rome, Helsinki, Sao Paulo, and Minneapolis bringing
the total to 41.

• After being elected MD, Gluck delegated the practice development role he had played since
1980 to a newly constituted Clientele and Professional Development Committee
(CPDC). Ted Hall, the leader of this committee noticed a problem. By the early 1990s, he
realized that practice development should focus on building individual and team capability
rather than just creating experts and documents for reputation building.
• Gluck's philosophy led to the proliferation of numerous sectors, centers, and working groups
• To address this, the CPDC integrated these groups into seven sectors and seven functional
capability groups, led by teams of younger partners, aiming to shift from leader-driven
knowledge creation to a self-governing stewardship model focused on competence
building.
CLIENT IMPACT

• Gluck established a Client Impact Committee to investigate how the firm could ensure that
its developing expertise generated positive measurable results in client engagements.

• The Client Impact Committee advocated for redefining the firm's key consulting unit from
the engagement team (ET) to the client service team (CST).
• The traditional ET focused on short-term tasks rather than long-term client needs, while
the CST aimed to enhance long-term value by uniting partners across multiple engagements
and committing them to work with the client over an extended period.

Career Paths
•Despite changes, the specialist consultant model struggled as evaluation criteria converged
with mainstream promotion standards, shifting focus from expertise to client impact and
engagement director capabilities.
•In late 1992, the Professional Personnel Committee established two career paths for client
service support and administrative staff: one for practice-dedicated specialists focused on
consulting to teams and another for practice management, emphasizing knowledge
transfer and complex network management.
 15

KNOWLEDGE
MANAGEMENT ON
THE FRONT
 16
JEFF PETERS AND THE SYDNEY
OFFICE ASSIGNMENT:
• John Stuckey, a director in McKinsey's Sydney office, faced challenges in finding
the right consultant for a financial services growth strategy study.
• Stuckey tapped into McKinsey's worldwide resources and identified Jeff Peters, a
Boston-based senior engagement manager.
• Due to Peters' prior commitments, Stuckey assembled a team of internal specialists
and experts, including John Peacocke, Patty Akopiantz, and Jonathan Liew.
• With the help of internal networks and resources like the Knowledge Resource
Directory, the team gathered relevant information and insights.
• The team held an internal workshop to refine their findings and presented
conclusions to the board, which were accepted for implementation.
 17

WARWICK BRAY AND EUROPEAN

TELECOMS:
• Warwick Bray, based in McKinsey's Melbourne office, transferred to London and became
involved in European telecom projects.
• Under the leadership of Michael Patsalos-Fox, the telecom practice grew rapidly,
necessitating the development of a stronger knowledge-sharing network.
• Sulu Soderstrom played a crucial role in creating administrative support for the European
telecom practice.
• Practice-sponsored studies and individual initiatives, like Bray's PD documents, contributed to
knowledge creation.
• Bray and his colleagues faced challenges in balancing exciting work opportunities and
developing informal links within the practice.
 18

STEPHEN DULL AND THE BUSINESS

MARKETING COMPETENCE CENTER:
• Stephen Dull transitioned from consumer to industrial marketing issues, eventually joining Rob Rosiello's business-to-
business marketing initiative.
• Dull's proposal to become the firm's first business marketing specialist was supported by the firm's emphasis on building
functional expertise.
• He faced initial hesitation due to concerns about being perceived as a specialist rather than a consultant serving clients.
• Dull and Rosiello presented their proposal to McKinsey's marketing practice leaders, who agreed to a mutual trial of the
concept.
• Dull and Rosiello initiated a Business Marketing Competence Center within McKinsey to focus on B-to-B marketing.
• They collected concepts, frameworks, and case studies to develop core beliefs and a new framework for business marketing.
• The initiative attracted interest from specialists like Mark Leiter from the Marketing Science Center of Competence.
• In November, the B-to-B initiative was declared a Center of Competence, gaining credibility and interest.
• Through PD documents, conferences, and word-of-mouth, the initiative gained traction, leading to more client calls.
• Dull considered writing a book on business-to-business marketing to enhance internal and external credibility.
 19

A NEW MD, A NEW FOCUS

(RAJAT GUPTA):
• In 1994, Fred Gluck stepped down as McKinsey's Managing Director, and
Rajat Gupta took over, bringing a renewed emphasis on knowledge
development. Gupta aimed to pursue all options for knowledge development
rather than making a single choice.
• He launched several initiatives, including capitalizing on existing practice
development structures, introducing grassroots knowledge development
through Practice Olympics, initiating special multi-year internal assignments
led by senior partners, and expanding the McKinsey Global Institute model.
• These initiatives aimed to enhance knowledge development and
organizational learning within the firm. Gupta emphasized the firm's
commitment to investing in the future and leaving it stronger for the next
generation.
 20

FUTURE DIRECTIONS:
• The McKinsey partnership engaged in debates about the firm's future
directions and priorities. Opinions varied, with some emphasizing the need to
balance growth with maintaining the firm's culture and integrating
knowledge across different areas.

• Others advocated for faster growth, leveraging technology for knowledge

transfer and mentorship, although concerns were raised about the potential
negative impact of technology on personal networks and creative problem-
solving.

• Overall, Gupta's task as Managing Director was to navigate these varied

opinions and set a direction that would strengthen the firm for the future.
THANK
YOU