Shrouded in shadows and secrecy, managed in mystery, New York based McKinsey & Company has been the planet’s most profitable and well-known management consulting firm since the early 1940s. Thoughts of classy boardrooms and shiny briefcases; images of jet-setting consultants and thousand dollar suits fill the minds of those who are on the outside looking in. Meanwhile, high-level connections, power, influence and money drape over those with a more intimate and in-the-loop relationship with the firm. McKinsey is widely thought to be the most respected and well-reputed name in the industry. Apart from the two other members of the aptly named “big three” (Bain Consulting, Boston Consulting Group), no other firm in the United States, or in the world, comes anywhere close to the reputation and breadth of service and the class of clientele that McKinsey can boast. What goes on behind closed doors? How has this firm become so massively successful?
From its inception in 1926, McKinsey has been focussed on numerical exacts and careful analysis. Its founder James McKinsey had previously served as an accounting professor at the University of Chicago and is considered the father of modern managerial accounting. Early on, McKinsey was paid to consult businesses on running a more efficient supply chain or on how to cut costs through tax loopholes. By the 1940s, the company was evolving into the global behemoth that it is today. They now boast a staff of over 9000 consultants, 100 global offices in over 50 countries, and a you-know-who list longer than anybody’s Facebook friend list. They offer services to private and public sector clients ranging from corporate financing to marketing to risk management. Throughout the decades of great growth and even greater profit, three things have ensured their dominant level of success: They only work with the best, they have a remarkable reputation and their corporate structure is unique and unmatched.
The McKinsey recipe for success starts with only the finest ingredients. At the entry level, recruits from only the most prolific business schools are offered interviews and only the best of the best are presented with an offer of employment. The most gifted minds of Harvard, Oxford and The London School of Economics are enticed by the promise of influence, travel and a starting salary in the six figures. Rhodes Scholars yearn for the opportunity to work for McKinsey. The best only get better. The firm has an “up or out” attitude. If an employee is not improving and moving up in the organization, he or she will be replaced with a more promising prospect. As well, the firm maintains a mandatory retirement age of 60. About a third of the company rotates out every three years.
The best clients are attracted too. McKinsey claims to have worked for up to 80 percent of the largest 100 companies in the Fortune 500. Governments all over the world- leaders of strong and emerging economies alike- also employ the firm. The best organizations hire the best, because they want to remain the best. This group is elitist by nature, and it works.
McKinsey can afford to be selective- the firm’s revenue has eclipsed $7 billion USD for the past five years. They attract superior business partners and leaders because of their status. McKinsey has a better reputation than Mother Theresa. The smartest and most sought after graduates will continue to swarm to the firm as long as their consultant positions remain the most sought after prize. This reputation isn’t just for success, but also secrecy and confidentiality. This attracts many high-paying clients. A consultant is bound to never reveal for whom they have worked and is never allowed to work for a competing company. This means that a corporation risks nothing by employing McKinsey- a fact made clear by the firm’s talented marketing team.
The most unique and attractive aspect of McKinsey to MBA grads is the structure of the firm. The firm has a small hierarchy and is seen as a global firm, working together with each branch- not in competition. A starting consultant is an associate, one higher up is called a principle associate. After that, the only position higher is partner. The key to their outlandish success is that every employee has a mentor and a mentee. They have dedicated time each week to counsel and be counselled. This formula has created an enormous amount of global leaders and visionaries. Fortune Magazine declared McKinsey as “the best CEO launch pad”. Over 70 CEOs of Fortune 500 companies are former employees of the firm. Notables range from the COO of Facebook to the Governor of Louisiana to the CEO of BMW.
Global domination may not be possible for political leaders, professional athletes or celebrities for more than a day, a month or a year. McKinsey has joined the ranks of institutions like The Roman Empire and The East India Trading Company on a short list of those who have held worldwide power and influence for a striking amount of time.