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McKinsey & Companys Success, Challenges, and Failures
Introduction
McKinsey & Company, Inc is a famous consulting company serving a huge client base worldwide and is widely known for its incomparable success. The firm holds offices in more than 50 countries all around the globe and serves more than a thousand companies from various sectors, such as commercial and non-profit organizations, public and private institutions. The history of the company, the business strategy, and the recruitment process are key factors of its success, from which many lessons can be learned to stimulate the prosperity of the business.
The history of McKinsey & Company
The companys history begins in 1926 when James O. McKinsey decides to found his own firm to become a trusted advisor to leading enterprises. Born in a small three-room house, McKinsey had ambitions and business knack since his teen years, which in adulthood helped him become a professor at the University of Chicago and an expert in the field of management accounting. He was one of the first to practice the principles of scientific management, studying in detail the specifics of the workflow and division of labor. At this stage, he set an enduring tone of independence and established a commitment to rigorous research and training (History of our firm, n.d., Invention of management consulting, para. 1). During its early years, the company expanded and prospered until the death of McKinsey in 1937, when the position of managing director passed to Marvin Bowyer.
Over the next few decades, the company was building values and learning to overcome the difficulties of the working market. Bauer has introduced a radically new approach to staff selection, recruiting recent graduates of the countrys leading business institutions. By the 1950s, the firm was helping the White House with staffing organization which, according to the company, would lead to the formation of the chief of staff role, and in 1970 McKinsey helped create the barcode (CNBC, 2019, 1:16). In the course of its work, the company was actively assisting clients to achieve long-term improvements and the most important goals. These opportunities have been retained by McKinsey & Company for more than a hundred years and are still helping it remain stable in the market.
Recruitment process
The companys management adheres to a consistent approach to the selection and development of personnel, regardless of the place they work in and their previous experience. This allows the company to provide services in a timely manner to the right team with the necessary knowledge and experience (About Us, n.d., Defined by our people, para. 2). According to the companys expertise, the management believes in the development of a quality culture since each employee maintains quality and is personally responsible for issues related to customer satisfaction. The consultant vacancies include people of various specialties, such as doctors, civil servants, and non-managers, who can fully reveal their talent and demonstrate an unusual approach to solving complex problems. The company supports the profitable growth of its customers by improving the new product development process and working with more valuable and attractive offers.
Reasons for success
One of the main reasons for the companys success is its customer orientation. McKinsey & Company works in accordance with a certain set of values, which reduce to the fact that the quality of a product or service reflects the quality of the business. To ensure complete quality management, the company uses a benchmarking system, which is a useful tool that helps customers in quantitative and qualitative diagnostics of quality indicators. It also leads to the fact that the company has been able to retain its excellent reputation for a long time. By now, McKinsey & Company is famous for having a decades-long relationship with any number of Fortune 500 companies and being on top of senior executives (CNBC, 2019, 4:12). Thus, the companys concern for customer satisfaction and periodic quality control of services contributes to the prosperity of the business.
Another reason for the success of McKinsey & Company lies in the constant expansion of knowledge, as well as the ability to adapt to new trends in the market. The companys activities cannot exist without a full and in-depth understanding of the macroeconomic environment or changes in economic dynamics. For this reason, the company invests more than $700 million of the firms resources annually in knowledge development, learning, and capability building (About Us, n.d., Powered by knowledge, para. 1). According to the companys leaders, investments in knowledge are always justified and make an invaluable contribution to the development of the industry.
Failures and challenges
Despite the fact that the companys priority from the very beginning remains customers, it cannot ignore the competitiveness in the labor market. McKinsey & Company is not the only firm offering consulting services and has serious competition like Bain & Company and The Boston Consulting Group. But even among the Big Three, as they are called, the firm is the leader when it comes to management consulting revenues (CNBC, 2019, 3:27). The companys activities themselves also often face criticism from the general public. There is still an opinion that the popularization of the companys activities cannot hide the structural deficiencies that are distracting the American middle class (Markovits, n.d.). These tendentious were especially acutely felt in the middle of the last century when McKinsey & Company snatched a leading position.
The beginning of the Great Depression shortly after the foundation of the company became one of the key failures in its history. Having overcome it, the company no longer faced a challenge that would put it on the verge of bankruptcy. Today, the companys reputation is often under pressure due to the perception that McKinsey adheres to a role as a key adviser to authoritarian governments. The most popular examples are the case of an internal report that tracked critics who were promoting negative views of the kingdom in Saudi Arabia or relation to former Ukrainian leader Viktor Yanukovych (Posner, 2018). However, despite all the difficulties and scandals, the company continues its development and only increases the customer base.
Lessons learned
The success of the firm is unambiguous and gives new consulting companies a lot of lessons that can be learned to achieve high results. According to the company, sincere interest in the quality of the product provided and the welfare of the people are closely linked. In modern conditions, a new era of growth is possible, which does not consider growth and positive social impact as opposing forces (About Us, n.d., Together, we will accelerate sustainable and inclusive growth, para. 1). Thus, the main lesson to be learned from the companys activities is not only its attentive attitude to highly qualified specialists but also its indifference to the results of work. Based on this policy, the company can build a successful line of business tactics and a plan for long-term prosperity.
Conclusion
From all of the above, it follows that the success and huge demand of McKinsey & Company are based on the firms indifference to the result and the focus on the clients pleasure. This is what helped it gain a foothold in the United States and subsequently expand its influence in other areas, for example, Europe and the Middle East. The company is constantly expanding, increasing its knowledge base, and adapting to new economic trends, which helps it to remain a leader among consulting firms.
References
About Us. (n.d.). McKinsey & Company. Web.
CNBC. (2019). How McKinsey Became One Of The Most Powerful Companies In The World [Video]. YouTube. Web.
History of our firm. (n.d.). McKinsey & Company. Web.
Markovits, D. (n.d). How McKinsey Destroyed the Middle Class. The Atlantic. Web.
Posner, M. (2018). How McKinsey & Co. Fails As A Global Leader. Forbes. Web.
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