Mckinsey

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But there was another thought that kept coming back to the 47 year old leader of this highly successful $1.8 billion consulting firm (See Exhibit 1 for a twenty year growth history). If this represented the tip of McKinsey’s knowledge and expertise iceberg, how well was the firm doing in developing, capturing, and leveraging this asset in service of its clients worldwide? Although the Practice Olympics was only one of several initiatives he had championed, Gupta wondered if it was enough, particularly in light of his often stated belief that “knowledge is the lifeblood of McKinsey.”

Founded in 1926 by University of Chicago professor, James (“Mac”) McKinsey, the firm of “accounting and engineering advisors” that bore his name grew rapidly. Soon Mac began recruiting experienced executives, and training them in the integrated approach he called his General Survey outline. In Saturday morning sessions 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.

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In 1932, Mac recruited Marvin Bower, a bright young lawyer with a Harvard MBA, and within two years asked him to become manager of the recently opened New York office. Convinced that he had to upgrade the firm’s image in an industry typically regarded as “efficiency experts” or ”business doctors,” Bower undertook to imbue in his associates the sense of professionalism he had experienced in his time in a law partnership. In a 1937 memo, he outlined his vision for the firm as one focused on issues of importance to top-level management, adhering to the highest standards of

1The Founders’ Legacy section draws on Amar V. Bhide, “Building the Professional Firm: McKinsey & Co., 1939-

1968,” HBS Working Paper 95-010.

Professor Christopher A. Bartlett prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
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McKinsey & Company: Managing Knowledge and Learning

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integrity, professional ethics, and technical excellence, able to attract and develop young men of outstanding qualifications, and committed to continually raising its stature and influence. Above all, it was to be a firm dedicated to the mission of serving its clients superbly well.

Over the next decade, Bower worked tirelessly to influence his partners and associates to share his vision. As new offices opened, he 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. And through dinner seminars, he began upgrading the size and quality of McKinsey’s clients. In the 1945 New Engagement Guide, he articulated a policy that every assignment should bring the firm something more than revenue—experience or prestige, for example.

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Elected Managing Partner in 1950, Bower led his ten partners and 74 associates to initiate a series of major changes that turned McKinsey into an elite consulting firm unable to meet the demand for its services. Each client’s problems were seen as unique, but Bower and his colleagues firmly believed...
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