Vault Guide Mckinsey Profile

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© 2004 Vault Inc.

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MCKINSEY& COMPANY

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INTRODUCTION 1

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1McKinsey & Company at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

THE SCOOP 3

ORGANIZATION 15

Managing Director: Ian Davis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15Practice Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16Locations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19Key Competitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

VAULT NEWSWIRE 21

OUR SURVEY SAYS 25

GETTING HIRED 31

Interviewing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31Questions to Expect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37Questions to Ask . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

Table of Contents

McKinsey & Company

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http://www.vault.com/Consulting

ON THE JOB 41

A Day in the Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41Job Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44Career Path . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46

FINAL ANALYSIS 49

RECOMMENDED READING 51

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OverviewIn the industry and among its employees, McKinsey & Company is knownsimply as "The Firm" – need we say more? With 82 offices and around 7,000consultants worldwide, McKinsey serves more than two thirds of the Fortune1000, or 85 of the world's top 100 companies.

McKinsey's founder, James O. McKinsey, pioneered the idea of managementconsulting when he launched the firm in 1926. But it's Marvin Bower, withMcKinsey since 1933, who is credited with shaping the firm's values,including a relentless drive for excellence, a mandate of putting the clients'needs before the firm's, and an insistence on discretion in financial matters.Indeed, the notoriously tight–lipped company rarely publishes the names ofits clients, which include huge global companies, innovative startups, wealthycommercial banks, leading venture capital firms and vast technologycompanies. McKinsey also provides pro bono assistance to educational,social, environmental and cultural organizations.

McKinsey emerged from the Internet gold rush days relatively unscathedcompared to competitors, though it suffered its own PR challenges as it foundits name linked with scandal–plagued companies like Enron and GlobalCrossing. In recent years, the firm has turned its attention toward the ITsector and outsourcing, in an attempt to respond to the shifting trend in theconsulting market toward more "tangible" services, such as systemsintegration. On the pure strategy side, McKinsey also has faced a competitivethreat from rivals like Bain and Boston Consulting Group.

McKinsey & Company

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Introduction


55 East 52nd StreetNew York, NY 10022Phone: (212) 446–7000Fax: (212) 446–8575www.mckinsey.com

THE STATSEmployer Type: Private Company Managing Director: Ian Davis2003 Employees: 11,0002002 Employees: 11,0002001 Employees: 13,000

PRACTICE AREAS• Automotive & Assembly• Banking & Securities• Business Technology Office• Chemicals• Consumer/Packaged Goods• Corporate Finance & Strategy• Electric Power/Natural Gas• High Tech• Insurance• Marketing• Media & Entertainment• Metals and Mining• Nonprofit• Organization and Leadership• Operations Strategy & • Effectiveness• Payor/Provider• Petroleum• Pharmaceuticals and Medical• Products• Private Equity• Pulp and Paper• Retail Strategy• Telecommunications• Travel and Logistics

UPPERS

• Extensive alumni network• Global reach• Research–driven projects

DOWNERS

• Strict "up or out" system• Ongoing, frequent review process• Limited mobility without advanced

degree

McKinsey & Company at a Glance

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http://www.mckinsey.com

Shaping management theory

In 1926, lawyer, CPA and University of Chicago management professorJames Oscar "Mac" McKinsey founded the firm that still bears his name. Inthose early days of consulting, McKinsey was fascinated by the emergingscience of management, and sought to give both management and financialadvice to high–ranking personnel at accounting and other corporations.McKinsey envisioned bringing "management engineers" to not only rescuefaltering companies, but also to help thriving companies do even better. Hisfive partners included A.T. Kearney and protege Marvin Bower, who wouldgo on to shape the McKinsey firm we know today.

A few years after setting up shop, McKinsey accepted a temporary offer torun and restructure the Chicago department store Marshall Field's. Bower ranthe consulting partnership until McKinsey's death in 1937. A quarrel overleadership between Bower and Kearney led to a split, and the two went theirseparate ways in 1939, with Kearney retaining the Chicago office and namingit after himself, and Bower naming the New York branch McKinsey &Company., in honor of his mentor. As for the other partner, Kearney, hisname is now associated with another strategy consulting firm, A.T. Kearney,still numbered among McKinsey's competitors.

Learning the rules

"The Firm" derives much of its mysterious prestige from its powerfulfive–part code of conduct, instituted by Bower and still followed today.Bower directed McKinsey employees to put client interests ahead of firminterests, serve the client in a superior manner, adhere to high ethicalstandards, preserve the confidence of clients, and be ready to differ with clientmanagers and tell them the truth, however painful. Over time, Bower alsobegan directing his recruiting efforts toward graduate students the firm couldmold into broad–based consultants, instead of experts who had built up yearsof experience in a single industry. McKinsey & Company thus became thefirst consulting firm to hire directly from business schools.

Another tradition set by Bower was a reticence to discuss financial mattersopenly, which persists to this day. Maintaining that the firm would makemore money if it didn't concern itself with profits, Bower never chargedclients performance–based or results–based fees. Ensuring that this decorumregarding all things financial would stick for the long haul, Bower declined

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to take the company public (at what would have been an enormous profit)when he retired in 1963, instead selling his shares back to the firm for bookvalue. Future partners have continued this practice.

Bower shaped McKinsey culture in other, more subtle ways. All executiveswere required to wear hats and long socks (to avoid displaying "raw flesh") –though there may be more bare heads and bare skin on display these days,many McKinseyites still prefer long socks.

Like many of its peers, McKinsey really took off during the postwar period,when companies turned their attention to expanding profits. The 1950s sawMcKinsey adding an expanding number of bluechip companies to itsclientele, as well as adding engagements with major government and militaryorganizations, defense contractors. In 1959, the firm went international withan office in London, and opened offices in Melbourne, Amsterdam,Düsseldorf, Paris, Zurich and Milan shortly thereafter.

The lure of the new

The firm started to face fiercer competition – and lose market share – in the1970s, a time of corporate buzzwords, such as the Boston Consulting Group's"growth–share matrix." Rejecting trendy marketing theories on principle,McKinsey lost business to BCG and other upstarts. These less–stodgy firmssoon began luring away top b–school grads, the engine driving much ofMcKinsey's success. But the firm created another tradition of its own when,in 1986, it began an MBA summer internship program in response to theextravagant signing bonuses competitors like Bain and BCG were using towoo top candidates like Harvard's Baker Scholars. The program was soon tobecome a norm across the industry, as well as among others like investmentbanks.

In 1989, the firm's acquisition of the Information Consulting Group provedsomewhat awkward when a culture clash between the companies causedmany former ICG employees to jump ship. The firm righted itself later in the1980s as the global economy began booming again, and the 1990s were asuccess story. To date, the revenue has more than doubled since 1993, andthe firm doubled its professional staff and opened a total of 20 offices in the1990s. In 1999 alone, the firm opened offices in Antwerp, Belgium; Athens;Dubai, United Arab Emirates; Manila, Philippines; and Rio de Janeiro.

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Consultants without borders

In fact, McKinsey has been described by managing partner Ian Davis, in aJune 2004 interview with the Financial Times of London, as "a truly globalfirm." Its consultants are citizens of 95 countries. McKinsey's governingshareholder committee is controlled by a non–American majority, and about60 percent of revenues come from overseas, with further growth expectedfrom new markets in Russia, Eastern Europe and China. The firm hassolidified its Asian presence in recent years, conducting more than 500engagements in China over the last decade. In October 2003, the firmestablished its Asia–Pacific regional headquarters in Shanghai, and the officehas worked with some of that nation's most prominent clients, includingSingapore Airlines and the chewing–gum–averse national government. InMarch 2000, McKinsey opened a new office in Tel Aviv, from which it hasoffered assistance to Israeli corporations, startups and government entitiessuch as the Ministry of Communications and the Postal Authority. Thenewest office on McKinsey's list is in Zagreb, Croatia, opened in early 2003.

It's in India

India is also big on the firm's radar, especially as the trend toward offshoring(a term Davis argues is misleading) continues. In February 2000, McKinseyenhanced its presence in India with the launch of India Venture 2000, whichwas created to help Indian entrepreneurs establish and grow new IT ore–commerce businesses. The firm's office in New Delhi is one of its fastestgrowing sites, and in India, the firm helped the State Bank of India reengineerits business processes in May 2003; advised liquor company Shaw Wallaceon opening new breweries in September 2003; consulted with engineeringand construction firm Larsen & Toubro on strategy matters; and advisedPrime Minister Atal Behari Vajpayee on foreign investment issues.McKinsey maintains one office in Delhi staffed 24/7 with 300 workers whoprovide the firm with support for visual presentations and graphics, andanother near Delhi employing 12 highly–educated staffers who performstatistical research for McKinsey consultants. But, as Davis argued to theFinancial Times, "From McKinsey's point of view, offshoring doesn't meananything for us. Offshore from were to where?" He added, "We have 40different nationalities working in the London office. So offshoring to Indiawouldn't mean anything because you could argue we are as much Indian asanything else."

And it isn't all about outsourcing, offshoring, or whatever else you might callit. In fact, McKinsey has approximately 130 consultants on the subcontinent



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as of 2004, and the firm's efforts in India have established it as one of thatnation's most prestigious employers. Many Indian consultants havegraduated McKinsey to lead major corporations and projects of their own(ex–director Ashok Alexander went on to head the Bill and Melinda GatesFoundation in India, and fellow alumnus Pulak Prasad is a leader at WarburgPincus, to name just a couple). "We are a breeding ground for leaders and westart working on people from Day One," Pramath Sinha, an India–basedMcKinsey principal, told The Economic Times of India.

Along with its consulting peers, McKinsey took a hit from the dot–combubble and the effects of September 11. The dot–com boom was good to thefirm for a while, and it took on more than 1,000 web–related engagementsduring 1999 and 2000, reaping record revenues of $3.4 billion in 2000. Thefirm was somewhat shielded when the bubble burst as it had limited thepractice of accepting equity stakes from clients in lieu of start–up fees, acommon practice among competitors. But McKinsey still suffered when itwas stuck with some of these worthless shares, and income from manypreviously high–flying e–commerce clients quickly dried up.

Jumping ship

The firm's Internet troubles actually started before the bubble burst, as manyof McKinsey's best consultants jumped ship to latch on to alluringweb–related ventures. In 1999, the firm's San Francisco office saw a third(150 members) of its staff walk out the door. One year later, though,McKinsey had more employees than it knew what to do with. Out of the3,100 MBAs who were extended offers in 2000, McKinsey expected 2,000acceptances, but the firm received more than 2,700. "We honored every offerand didn't push people out," then–managing partner Rajat Gupta toldBusinessWeek in July 2002, "and we had no professional layoffs other thanour traditional up–or–out stuff." This "stuff" was reportedly on the rise as of2001, when 9 percent of all analysts and associates were shown the way out,compared with just 3 percent a year earlier, the New York Times reported. Thepost–September 11 recession led to some belt tightening amongnon–consulting McKinseyites; in November 2001, the firm announced that itwould cut 5 to 7 percent of its 3,000 support staff in the United States andCanada. Other cost–trimming measures, the Times reported, include cutbackson travel, training retreats, and "even the Reese's Peanut Butter Cups at thefirm's New York reception desk."

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Bankruptcy blues

McKinsey rarely publicizes the names of its clients, but its association withsome troubled companies has put the firm in the headlines. In recent years,McKinsey's association with bankrupt entities including Enron, Swissair,Global Crossing and Kmart occasioned some grumbling among outsideobservers about the value of the high–priced advice it provides.

In May 2003, McKinsey's services were called into question duringbankruptcy hearings for client United Airlines. Bankruptcy lawyers chargedthat the firm's restructuring–advice fees, which included a $1million–a–month flat fee for McKinsey, were unwarranted for a company thatcouldn't manage to pay its debts. UAL dismissed the concerns and retainedMcKinsey. McKinsey was also caught up in a client's bad luck when it madeheadlines for failing to predict an $800 million takeover bid of client OceanSpray by rival Northland Cranberries Inc. in early 2003. McKinsey hadadvised Ocean Spray since late 2002 and, against the wishes of the company'sstruggling growers, had advised the cooperative's management to avoidselling any of its businesses. The collective rejected Northland's overture inFebruary 2003, but the pro–sale growers won a vote to replace Ocean Spray'sboard of governors with a new, smaller panel, and the company cut 58 of itsexecutives the following month.

The sinking "E"

But Enron provided the firm's biggest PR headache in recent years, especiallysince disgraced CEO Jeff Skilling joined the doomed enterprise fromMcKinsey, where he'd worked with the fledgling company to develop atransaction– and services–based, minimal asset approach to corporateoperations. To make matters worse, the firm touted the Enron model as asuccess story after Skilling left to head the corporation. As it transpired, thetransactions and services on which Enron grew its numbers were largelyillusory, the result of exchanges between Enron subsidiaries. When the modelcould no longer sustain itself and the word got out, Enron collapsed, takingmuch of the stock market with it. McKinsey consultants working out ofEnron's Houston offices had racked up millions in fees – topping out at morethan $10 million during one year – for dispensing strategy advice. None ofits work for Enron, however, had anything to do with the shady dealings thatled to the Tilting E's ruin. Looking back, Ian Davis told the Financial Times,"I think our reputation was dented" by the Enron affair, though "People knowwe had nothing to do with any wrongdoing."



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Growing pains

Aside from its association with troubled clients in a turbulent economy,McKinsey's struggles in recent years have come from internal growing pains,as well. The firm's obsession with excellence reflects the company mantra,"100 percent to the third power," meaning that the firm seeks to bring 100percent of firm capabilities to bear on 100 percent of McKinsey clients, 100percent of the time. However, an internal report from 2001, quoted in a May2002 Wall Street Journal article, shows this thorough approach to be apossible weakness. The article, "Growth at McKinsey Hindered Use of Data,"cites an internal study, referred to as Project Coolkat, which concluded thatrapid expansion had hindered the firm's ability to keep track of its owninformation, leading to poor client performance. "It takes much too long tofind the right knowledge," the report states, "and in many cases, the bestexisting knowledge is not identified and brought to the client." Furthermore,the report calls the work satisfaction and professional development ofMcKinsey research staff "unsatisfactory ... Moving forward, this is notacceptable." The firm notes that "most of our most important knowledge isin the heads of our most senior people, exchanged primarily throughconversations – not through knowledge workers or electronically. At no pointover the last decade has McKinsey ever been anything but the best consultingfirm in delivering business knowledge to clients." Shortly thereafter, the firmlaunched a new initiative to improve researcher training and a major budgetincrease for McKinsey's "knowledge–management" processes and systems,$35.8 million in 2002 versus just $8.3 million in 1999. But a senior partnerquoted in the WSJ article was quick to point out that there was "nodemonstrable link – in fact there's no link whatsoever – between our decisionto invest in upgrading our knowledge–management systems and any specificclient."

Where the elite meet

There's no doubt that McKinsey's obsession with excellence and clientprivacy have given the firm a sheen of prestige and even elitism. McKinsey,which rarely reveals the names of clients and issues few press releasesdetailing its activities, is sometimes characterized as a "secret society." ButMcKinsey takes issue with this: "Only after many years have passed and ifour clients themselves publicly refer to our involvement, do we acknowledgethat we have served a company," the firm contends. "This policy is not theresult of some cultivated secrecy or mystique. It is what we believe isprofessional behavior and the appropriate posture given our conviction thatwe supplement our clients' leadership, but never replace it." Of course,

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McKinsey consultants often end up heading their clients' firms. Its staffroster of PhDs and Rhodes scholars is also closely guarded, though somepersonalities are too well–known to keep under wraps. In February 2003,news was leaked that former First Daughter Chelsea Clinton got a $100,000offer to join McKinsey as an analyst in the London office. But Clinton, agraduate of the Oxford international relations master’s program, held out foran assignment in New York in order to be closer to her parents. She got the$120,000–a–year job in March 2003, and has reportedly been pulling80–hour weeks as she works on projects dealing with health care.

McKinsey's intelligence arsenal is bolstered by a global network of more than900 knowledge professionals, most of whom are aligned to specific industry,functional or geographic knowledge domains. These professionals doresearch on topics related to specific client engagements, allowingconsultants to focus on the client proprietary dimensions of a study. Inaddition to business research, this group also plays a lead role in the creation,codification, organization and dissemination of McKinsey's vast knowledgebase and spearheads the design, development and deployment of allknowledge related technologies. Recent enhancements include new searchtechnology applied across its vast document collection and a unique expertiselocation approach that enables consultants to identify colleagues from aroundthe world who might be able to help them with a specific problem.

Indeed, this group may be tapped at any point during their careers, even afterleaving the firm. Like the Hotel California, McKinsey is a place from whichalumni can check out any time they like, but they can never leave. The firmpublishes a volume listing every living person who has ever worked for thefirm, where they live, and their current occupation. Its cover cautions: "Thisdirectory is to be used exclusively by alumni of the firm." There areapproximately 10,000 McKinsey alumni all over the world, and each yearthey're invited to a party where they can mingle with current consultants. Thisalumni network is likely to become ever more far reaching–the firm currentlyemploys 6,000 consultants from 90 countries. McKinsey alumni, aspreviously noted, have often left the firm to take on more visibly prestigiousroles – in addition to the infamous Jeff Skilling, more successful careers havebeen forged by alumni such as Bruce Henderson, a former McKinseyite whowas named CEO of Imation Corp. in May 2004, and J.D. Hickey, a33–year–old McKinsey alum who was appointed to lead Tennessee's healthcare program, TennCare, after having advised the program with the firm forthree years.

The complex web of current and former McKinseyites forms a uniquedecentralized structure for such a large corporation. Operating as a



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partnership, McKinsey is run through a network of offices that runs as aunified firm. In fact, the firm is reluctant to admit it has a global headquartersat all (though it runs much of its backbone administrative work from NewYork City). The ownership and management of the firm is vested entirely inabout 800 active directors and principals (which roughly correspond to seniorand junior partners). McKinsey's managing director is elected every threeyears by these directors, in a process some compare to the election of a newpope. In March 2003, Ian Davis, who headed the firm's British office foreight years, was tapped to replace Rajat Gupta, who served the company'smaximum of three three–year terms. Davis, a holder of undergraduatedegrees in policy, philosophy and economics from Oxford University, hasbeen with McKinsey since 1979.

The Davis era

Davis' election was seen as heralding changes for the firm. Gupta, whopresided over McKinsey during its – and the economy's – period ofdizzyingly rapid expansion, became associated with that aggressive growthstrategy. But observers say Davis, who publicly emphasizes McKinsey's"core mission and values," such as a client–centered, meritocratic approach,may usher in a calmer era at the consultancy. Consultants say that he isputting the recommitment to McKinsey's core values in action. In June 2004,the company held a special day of workshops to discuss the core values of thefirm and commitments to serving clients. In July 2004, Davis told theFinancial Times of London that the heady years of the dot–com boom "didput severe strain on our basic values. In the kerfuffle, I think some of themgot lost. We didn't knowingly move away from them, but my sense is thatafter this period we need to affirm our basic approach and values." (Anotherof those values – privacy and lack of personal status–seeking – is illustratedby the fact that Davis didn't give his first interview to the press until morethan a year after his election as managing partner.)

Though the firm guards its staff rolls as closely as its client list, it's clear thatthe company has taken pains to retain its best and brightest during theweakened post–September 2001 economy. Now that the economy is on therebound, so are invitations to join McKinsey. In 2003, the firm significantlyexpanded its campus recruiting activities on MBA, law, MD, PhD andundergraduate campuses. In the 2003–2004 campus recruiting season, thefirm hired over 1,600 consultants, about a 60 percent increase over theprevious year. In addition, McKinsey has hired several hundred summerassociates – graduate students who are going into their last year of school.The North American offices have scheduled a conference for all of thier

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summer associates in ski paradise (though probably not during the summer)Vail, Colorado.

Natural selection

Despite its reputation as an "up or out" firm when it comes to advancement,McKinsey considers its promotion policies to be based on the naturalprogression of consultants at the firm, with advancement and compensationbased on a fair review system. On average, only one in four or fiveconsultants who starts at McKinsey finishes the vaunted journey to principal."It's a pretty competitive process," says an insider, "though lots of peopledon't want to make partner, so they leave." VOX (visibility, options,expression of preference), a system implemented in early 2000, givesconsultants greater influence over the engagements they work on. McKinseyis also eager to get even more out of the best and brightest that it hires. Forincoming associate hires without a financial or business background, the firmoffers the Mini MBA, a three–week program that provides an opportunity tolearn core business skills. In addition, all associates and business analystsattend Basic Consulting Readiness, a curriculum that prepares them for clientengagements. In addition, one– to two–week role–change courses areprovided at each career milestone. McKinsey also provides an array ofworkshops and learning opportunities in a range of topics, includingcommunications, functional skills, coaching and team leadership, andnegotiating skills.

Publish or perish

McKinsey has built a solid reputation as a publisher of management–relatedbooklets, documents, papers and magazines, including the well–regardedMcKinsey Quarterly. McKinsey partners also often write booksindependently of the firm. In addition to Tom Peters and Bob Waterman'sbest–selling In Search of Excellence, books penned by McKinsey alumsinclude 2000's Measuring and Managing the Value of Companies by TomCopeland, Tim Koller and Jack Murrin, and 2001's The War for Talent by EdMichaels, Helen Handfield–Jones and Beth Axelrod; 20/20 Foresight:Crafting Strategy in an Uncertain World, by Hugh Courtney; and CreativeDestruction, by Richard Foster and Sarah Kaplan (which unfortunatelyhighlights Enron as a shining corporate example in passages written beforethe company's collapse). The big book in 2002 was Dangerous Markets:Managing in Financial Crises, by Dominic Barton, Roberto Newell andGregory Wilson. 2003 saw the publication of Banking in Asia: Acquiring a



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Profit Mindset, by Tab Bowers, Greg Gibb and Jeffrey Wong. The McKinseyQuarterly, now available in an online version, has more than 300,000subscribers and runs articles on e–commerce, telecommunications, strategyand other fields. McKinsey also analyzes its own business approach, hopingto understand the difference between change that is fundamental and changethat is fundamentally faddish. For example, the firm acknowledged thatMcKinsey itself had put client service ahead of wealth creation for clientsduring the recent Internet euphoria, but now applies the principles of strategicthinking, industry and functional knowledge, and analytical rigor to today'senvironment.

Thanks in part to the vast amounts of research produced by the firm,McKinsey is known as a preeminent information source on globalization,governance, organizational performance and corporate strategy. TheMcKinsey Global Institute (MGI), established in 1990, operates as anindependent economics think tank within McKinsey, conducting research anddeveloping positions on issues affecting businesses and governmentsworldwide. The Institute's approach "combines the rigor of academia withthe real–world experience of business," according to the firm. Through itsresearch, MGI has amassed a fact base that covers more than 15 countries,four continents and more than 28 sectors. Located just steps from the WhiteHouse in Washington, D.C., the Institute been estimated to spend more than$100 million a year on its information gathering and internal research.Reports released in 2003 include a study of multinational companyinvestment in developing economies; an analysis of the benefits and impactof offshoring worldwide; and reports on improving productivity andcompetitiveness in Europe.

Going nonprofit

Another of McKinsey's specialty areas, the nonprofit world, got a jumpstartin 2001 when the firm launched the McKinsey Institute on the NonprofitSector, appointing Senator Bill Bradley as chairman of its advisory board.The practice coordinates the firm's community and pro bono activities. Eachoffice devotes 5 to 10 percent of its consultants' time to work for nonprofits,and more than half of its North American partners are on the boards of at leastone nonprofit organization. The firm served more than 200 nonprofit and/orpublic sector clients in 2003, representing an in–kind contribution of wellover $100 million. These clients include museums, theaters operas, festivals,multinational NGOs and development agencies, philanthropic organizations,schools, conservation organizations, land trusts, zoos and more. Followingthe events of September 11, the New York office devoted itself to nine


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separate pro bono projects. These included serving the Lower ManhattanDevelopment Corporation, overseeing the development of a victim databasefor New York State Attorney General Elliot Spitzer and studying how NewYork Police Department and Fire Department members reacted during theWorld Trade Center attacks. The Big Apple office has also done work for theUnited Way, the World Economic Forum and the New York City Opera.

On the tech track

In a hyper–competitive consulting arena, McKinsey's efforts at goinghigh–tech in response to more IT–centric rivals like Accenture has gotten offto a rocky start. The firm admits that previous attempts to build a major ITconsulting capability, through acquisition and then through the creation of anIT practice, "could not achieve sufficient scale to ensure long–term success."As a result, the firm formed the Business Technology Office (BTO), in 1997,the only McKinsey office not tied to one specific geographic location. Theoffice helps companies implement IT strategies, improve their operations,strengthen the value of their customer relationships and craft innovativeapproaches to IT architecture and IT management in areas such aspost–merger integration, prioritization of IT investments and strengthening ofthe IT organization. The strategy seemed to pay off – the number ofconsultants in the BTO grew by 30 percent in 2003. Still, word on the streetindicates that McKinsey, along with many of its high–powered peers, may befacing competition in the high–tech arena from newer consultancies withIT–centered backgrounds, especially those spun off from high–techcompanies themselves, such as IBM's Global Business Services unit.

Private equity is another new area for McKinsey, and it offers advice instrategy/organization, opportunities for growth, deal assessment and duediligence, and cross–portfolio support. The firm's recent projects have beenglobal in scale: In 2004, as in previous years, a group of McKinsey delegatesjoined the World Economic Forum in Davos, Switzerland, addressing topicssuch as the benefits and challenges of offshoring, business opportunities andtrends in China, and the balance between risk and control in managingcorporations. In May 2003, the firm took on the role of investment advisorfor the privatization of the oil group Unipetrol in the Czech Republic. In July2003, the firm issued a report on the use of the English language in SouthKorea. Also in 2003, McKinsey began conducting a comprehensive analysisof the global coffee industry on a pro bono basis, in addition to advising theColombian Coffee Federation on a new retail strategy. In May 2004, the firmwas tapped by the Confederation of Indian Industry to study and suggestchanges to the laws governing mining operations in India. At U.N.



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headquarters in June 2004, McKinsey issued a report on the Global Compactwith the business community, which U.N. Secretary–General Koffi Annanhad proposed five years earlier (the compact, aimed at summoning corporateresponsibility for issues such as human rights, labor, and the environment indeveloping nations, is working, the report concluded).

Closer to home, Tennessee's largest insurer, TennCare – now run by a formerMcKinseyite – has paid the firm more than $4 million as it works to reformthe troubled health care system, with a $1.8 million two–month contractrenewal signed in June 2004. McKinsey also has been under contract toproduce a report suggesting ways to improve the city government in Dallas.


Managing Director: Ian DavisAppointed managing director in March 2003, Davis, 52, had already spent 23years at the firm. Based in London, he is McKinsey's tenth managingdirector. He holds a degree in politics, philosophy and economics fromOxford, and joined McKinsey in 1979 after a seven–year stint at papermanufacturer Bowater. His work for the consultancy has been wide–ranging,but mostly has fallen within the consumer and retail industries. Davis gotgood practice in leadership heading the firm's U.K. operations, among thefirm's larger offices, for eight years. Before that, he ran the firm's consumerindustries practice in Europe.

Unlike many of McKinsey's directors, who are known as a little bit dull,Davis is said to be outgoing, charming and highly visible, especially in hisnative Britain. Oddly, too, for a McKinsey man, he doesn't have a graduatedegree. He's also veddy British – again, a departure for McKinsey, whereeach managing director before Davis' predecessor, Rajit Gupta, wasAmerican. Davis' grandfather was a professor at Oxford, his daughter is afifth–generation Oxford student and his three brothers are all "highlydistinguished," as a BusinessWeek article described them – one's the CEO ofpublisher Reed Elsevier, one's a judge and the other, a lawyer. And fittingly,Davis is a "keen sportsman," fond of cricket, rugby and tennis.

Though Davis had some big shoes to fill – Gupta presided over a period ofunprecedented growth at the firm – his first year at the firm was met withfavorable reviews. The Financial Times of London, in the first interview withDavis (published a year after his appointment, in July 2004), describes him as"fluent" and "approachable," "happier talking about the future than the past,"but not averse to analyzing the mistakes the firm made during the Internetboom. According to the article, Davis' spare, unlived–in London office is atestament to his hands–on management style, which involves traveling theglobe and visiting 25 countries during his first 12 months.

McKinsey & Company


Organization


McKinsey & Company

Organization

Practice areas

Industry Practices

• Automotive & Assembly• Banking & Securities• Chemicals• Consumer/Packaged Goods• Corporate Finance & Strategy• Electric Power & Natural Gas• High Tech• Insurance• Marketing• Media & Entertainment• Metals & Mining• Nonprofit• Operations Strategy & Effectiveness• Organization & Leadership• Payor/Provider• Petroleum• Pharmaceuticals & Medical Products• Private Equity• Pulp & Paper• Retail• Telecommunications• Travel & Logistics

Locations

U.S. locations:

• Atlanta, GA• Boston, MA• Charlotte, NC• Chicago, IL• Cleveland, OH• Dallas, TX


McKinsey & Company

Organization

• Detroit, MI• Florham Park, NJ• Houston, TX• Los Angeles, CA• Miami, FL• Minneapolis, MN• New York, NY• Palo Alto, CA• Pittsburgh, PA• San Francisco, CA• Seattle, WA• Stamford, CT• Washington, DC

International locations:

• Amsterdam, The Netherlands• Antwerp, Belgium• Athens, Greece• Auckland, New Zealand• Bangkok, Thailand• Barcelona, Spain• Beijing, China• Berlin, Germany• Bogota, Colombia• Brussels, Belgium• Budapest, Hungary• Buenos Aires, Argentina• Caracas, Venezuela• Cologne, Germany• Copenhagen, Denmark• Delhi, India• Dubai, United Arab Emirates• Dublin, Ireland• Dusseldorf, Germany• Frankfurt, Germany• Geneva, Switzerland



McKinsey & Company

Organization

• Gothenburg, Sweden• Hamburg, Germany• Helsinki, Finland• Hong Kong, China• Istanbul, Turkey• Jakarta, Indonesia• Johannesburg, South Africa• Kuala Lumpur, Malaysia• Lisbon, Portugal• London, England• Madrid, Spain• Manila, Philippines• Melbourne, Australia• Mexico City, Mexico• Milan, Italy• Monterrey, Mexico• Montreal, Quebec• Moscow, Russia• Mumbai, India• Munich, Germany• Oslo, Norway• Paris, France• Prague, Czech Republic• Rio de Janeiro, Brazil• Rome, Italy• Santiago, Chile• São Paulo, Brazil• Seoul, Korea• Shanghai, China• Singapore• Stockholm, Sweden• Stuttgart, Germany• Sydney, Australia• Taipei, Taiwan• Tel Aviv, Israel• Tokyo, Japan


McKinsey & Company

Organization

• Toronto, Ontario• Verona, Italy• Vienna, Austria• Warsaw, Poland• Zagreb, Croatia• Zurich, Switzerland

StructureMcKinsey is privately held.

Managing Director: Ian Davis

Key CompetitorsBain & Co.: Among the world's leaders in international strategy consulting,Bain, which split off from the Boston Consulting Group in 1973, boasts aconsulting staff of more than 2,100. The firm's client base consists primarilyof diversified, international corporations in all sectors of business andindustry, such as financial services, e–commerce, retail, health care,consumer products and technology. According to the company, its clientshave historically outperformed the stock market by three to one.

Booz Allen Hamilton: Booz Allen racked up $2.7 billion in sales in 2004,and is a powerhouse in government–side consulting, landing major contractswith the Department of Health and Human Services, NASA and otheragencies. Booz Allen garners 80 percent of its revenue from previous clients.Not a pure strategy firm, it puts an emphasis on transforming businessesrather than merely prescribing change. The firm reports spending one–thirdto one–half of its time helping clients implement its recommendations. Booz'sindustry practices compete with McKinsey.

Boston Consulting Group: BCG insists it's McKinsey's main competition,and McKinsey reluctantly agrees. BCG, a global powerhouse employingmore than 2,600 consultants in 60 offices in 37 countries. Founded in 1963by Bruce D. Henderson as the management and consulting division of theBoston Safe Deposit and Trust Company, BCG has been the driving forcebehind a number of major management consulting innovations and conceptsin its 39 years, including "time–based competition," "deconstruction," and"capability–driven competitive strategies."



McKinsey & Company

Organization

Mercer Management Consulting: Formed in 1990 by the merger of Temple,Barker & Sloane and Strategic Planning Associates, and owned byprofessional services giant Marsh & McLennan, Mercer has grown rapidly,opening offices in Europe, the Pacific Rim and Latin America, and acquiringa number of boutique consultancies. Today, Mercer Management Consultinghas approximately 1,400 consultants and support personnel in 22 officesworldwide. Though it was initially considered a brazen startup in a fielddominated by giant, established firms such as McKinsey, Mercer hasexpanded its practice quickly by aggressively pursuing clients and rooting itswork in a series of well–publicized books. It has developed special industryexpertise in communications, energy, financial services and manufacturing.

Monitor Group: Though much smaller than McKinsey, this heavilystrategy–oriented consultancy sees itself as a strong competitor. Founded in1983 by a group of professors and consultants, including Michael Porter (aconsulting guru and creator of popular case interview framework Porter'sFive Forces), Monitor tries to bridge the gap between academic ideas andbusiness realities. The firm has developed a number of practices andexpanded its client list to include everything from Fortune 500 companies andinternational firms to government agencies and major nonprofitorganizations. Through its 28 offices in 23 countries, it offers advisoryservices in areas including private equity and venture capital, e–commerceincubation, and mergers and acquisition–related transactions.


July 2004

Managing director Ian Davis gives his first interview to the media, forLondon's Financial Times.

July 2004

McKinsey alumnus J.D. Hickey, who advised the TennCare program whilewith the firm, is appointed by Tennessee's governor to lead the state's healthcare system as director.

June 2004

Tennessee health insurer TennCare signs a contract extension with the firmfor an additional $1.8 million.

June 2004

McKinsey issues a report to the United Nations on Kofi Annan's GlobalCompact with the world's business community.

May 2004

The Confederation of Indian Industry hires McKinsey to review the nation'smining laws.

August 2003

The Czech government approves McKinsey's role in advising theprivatization sale of Unipetrol.

August 2003

The governor of Tennessee announces McKinsey will review the state'shealthcare program.

May 2003

A newspaper reports McKinsey is advising the State Bank of India onrestructuring.

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May 2003

In bankruptcy court, lawyers argue that the $1 million–per–month flat fee forconsulting services that bankrupt carrier United Airlines pays McKinsey isunwarranted for a company that couldn't pay its debts. Rejecting theargument, United continues to retain McKinsey during its restructuring.

April 2003

For the seventh year in a row, McKinsey tops the list of where MBA studentswould most like to work, according to a Universum study.

March 2003

It is announced Ian Davis will succeed Rajat Gupta as managing partner ofthe firm.

February 2003

The press reports that former First Daughter Chelsea Clinton will join thefirm.

October 2002

McKinsey begins to perform an assessment of the New York City schoolsystem for chancellor Joel Klein.

September 2002

It's revealed that McKinsey is helping the West Bengal government toencourage investment in local industries.

September 2002

McKinsey releases a controversial report detailing what New York's fire andpolice departments did right – and wrong – in response to the September 11,2001, attacks.

2001

McKinsey clients Enron, Swissair and Kmart file for bankruptcy.


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August 2001

Branding strategy has, historically, been a closely guarded facet of theadvertising business. Not anymore. In a move that may be the beginning ofa turf war between the advertising and consulting industries, McKinseypurchases Chicago–based branding consultancy Envision.

March 2001

In an interview with the Financial Times, McKinsey managing director Guptafrets that the attrition rate at McKinsey has fallen to 12 percent per year, 5percent below the "equilibrium level" of 17 percent. Gupta also notes thatduring the height of dot–com fever, turnover rose to 21 percent at the firm.

May 2000

McKinsey signs on as the strategic advisor to Apollis AG, a new companyfounded by General Atlantic Partners that will create and support wirelessapplications in Germany and soon, throughout Europe. This alliance signalsMcKinsey's increasing efforts to expand into the trendy wireless space.

March 2000

McKinsey says it will raise associates' pay. Crain's New York Business reportsthat the total compensation package for incoming MBAs will be in the$150,000 range.

February 2000

In a hotly contested battle, managing partner Rajat Gupta is reelected for histhird three–year term. A report the following month in The Economistmaintains that Gupta withstood internal challenges to the throne from IanDavis, manager of McKinsey's London office; Clay Deutsch, former head ofthe Cleveland/Pittsburgh office; and Michael Patsalos–Fox, the New Jerseyoffice manager, among others.



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January 2000

A McKinsey study of the Indian technology industry concludes that theindustry could grow to $87 billion by 2008 if the government can improve itstelecommunications infrastructure. In addition, McKinsey says that the ITindustry has the potential to provide India with 2.2 million new jobs, attractforeign investment totaling $5 billion and account for more than 7.5 percentof India's GDP by 2008.

November 1999

In an effort to recruit and retain the best b–school grads and ward off growingcompetition from dot–com companies, McKinsey decides to offer itsassociates the opportunity to invest in Internet startups. Junior consultantscan also, for the first time, buy stakes in investment funds that would notnormally be open to them.

September 1999

McKinsey puts Ogilvy & Mather, the venerable agency known for its workwith IBM, American Express and Ford, in charge of its first–ever advertisingcampaign.

August 1999

President Clinton announces his intention this month to name Dr. MartinBaily to chair the Council of Economic Advisers (CEA). Baily is a principalat McKinsey, based at the McKinsey Global Institute in Washington, D.C.


The chosen few

A life with The Firm is "crazy and exhilarating," sources say. "It is a placewhere you meet tons of people who are extremely smart, but unique in a verydiverse fashion," says an insider. Your colleagues might include a quantumphysicist, "top lawyers," people who hold "PhDs twice over in informationscience," even an "orchestra director." Indeed, "There is an overpoweringfeeling at McKinsey & Company that you are among the chosen few, that youare the best and the brightest. Having survived the grueling interviewprocess, you do indeed feel that you have reached some sort of careerpinnacle," a consultant relates. Others describe life at McKinsey more simplyas "a roller coaster." And as you might expect, "whenever you stickoverachievers together, it's competitive. But there's no backstabbing," says asource. Another insider says, "To outsiders, we must look extremelycompetitive. We're told we should never feel comfortable doing what we'redoing, that we should always be reaching to do more. But the people whocome here thrive on challenge, and you're only competing with yourself."

McKinsey gets kudos for its professional culture as well. Consultants say thefirm's "values–driven culture rewards people for doing the right thing, not theprofitable thing." Another insider agrees, "You are always encouraged toimprove yourself. The work is stimulating, for you have the opportunity totackle complex issues for blue chips. The resources at our disposal can beimpressive." "You work with the best people and the projects provide youwith opportunities to learn, present to executives and build a strong network,"says a colleague. Still, despite all the prestige and glamour, "All that glittersis not gold," remarks one consultant. "You expect this place to be an Eden,but it's not. There are stains on the carpet. Sometimes you work on a projectand it winds up being fairly uninteresting. Sometimes a client changes hismind on a project plan and the result sucks."

McKinsey's rigorous selectivity is wellknown. Insiders say it's "not easy" toget an offer from McKinsey, partly because "the job market has changed,"and "the bar is set much higher now." "Relative to other consulting firms,"boasts one insider, "it is the most or among the most selective." This meansthat "when people get offers from us and from others, the vast majority endup coming here." But it isn't enough just to be an Ivy–league MBA with agleaming transcript, insiders note: "Given two people with the sameanalytical skills, we always want someone who is fun," says one McKinseyrecruiter.

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The Firm's formalities

The McKinsey mystique comes in part from its unique culture, reflected inthe ways in which staffers interact with each other and their company."McKinsey employees are taught to refer to McKinsey as the 'Firm,' never asmerely a company. We were always guided by firm policy and procedures,"says an insider. While the firm is described as "nonhierarchical from aproblem–solving standpoint (i.e., everyone participates fairly equally)," it'sstill "very hierarchical when it comes to tactical issues (e.g., attending clientmeetings, putting together presentations, controlling your hours)." But don'tget the impression McKinsey limits its consultants – in fact, says a source, "Ibelieve there are few places where you are more dared to take a challenge: itis the rule rather than the exception to be tasked with a chunk of work whichis bigger than you have previously handled."

As the pinnacle of consulting (to many, anyway), McKinsey also puts itsconsultants to the test with late nights and plenty of hotel time. "Workinghours are hard to control. My goal is to work between 55 hours and 60 hoursper week, and I think I manage that about 70 percent of the time," says asource. Another says that while there's a "pretty good balance in terms ofhours and keeping weekends free … being out of town is always tough." Buta colleague suggests this may depend on who's managing your projects:"Your time is almost entirely controlled by the EM, with late night conferencecalls with the partners, who frequently show up late. Get lucky enough tohave an EM who cares about lifestyle (they're rare), and you might get out at8 p.m. regularly. Get the more typical EM in a busy office that's overscopingand understaffing projects, and the late nights are the usual." Another seniorconsultant says that while increased work–life balance is now "part of theconversation" at McKinsey, a "sustainable life" is still a challenge.

Of course, as one associate puts it, "If balance is important to you, consultingis not the place you want to be, and definitely not McKinsey." But, the sourceadds, "we try to do 'sanity checks' on the workload, because all theseoverachievers will kill themselves with the pace." Another insider notes thatthose sanity checks "are a matter of common sense. When you work 70 to 75hours per week for a while, you realize it just isn't sustainable." As for travel,insiders report that there's "a lot," "which does not add to the happiness." Fortheir troubles, however, consultants can expect plenty of "creature comfortsduring travel" like nice hotels and first class seats on long flights.


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The royal treatment

Indeed, consultants at McKinsey get the "royal treatment" as a reward fortheir travails, sources suggest. Salaries at the firms are reportedly among thehighest in the industry. One McKinsey insider notes, "Future increases in payare based on the previous year's pay, so you basically have to push for a largefirst–year package to make the biggest bucks later on." One McKinseyitewarns: "You cannot negotiate with McKinsey. Your pay each year getsdecided." Pay at the firm is based on individual performance; McKinsey'ssenior partners receive salaries in excess of $1 million a year. In addition,"The firm tosses a substantial amount into your 401(k) every year, based onperformance of the firm and your own performance. There's also a regularperformance bonus that starts at $10,000 and goes up beyond $25,000 in yearone," an insider reports. Others report receiving signing bonuses, a low–ratehome loan, and an interest–free loan for "settling in."

The company provides a choice of health plans, two of which offer fully paidpremiums, along with "fully–paid dental, life, STD and LTD, flexiblespending plans and opportunities for group discounts with car insurance andmortgages." Adoption assistance and "generous " maternity leave are alsoprovided, and office perks include free beverages, free lunches and dinnerswhen work is pressing, and free cab rides to and from work during early andlate hours. The firm also offers "monthly social events (bowling nights,creative art gatherings) and lots of opportunities to pick up free tickets tovarious sporting events." After reaching the rank of engagement manager,McKinseyites receive a personal assistant. The company is also generous tothose who decide that McKinsey just isn't for them (estimates of turnoverrange from 20 to 25 percent annually). When the time has come to part, oneinsider says, "The firm will continue to pay your salary until you find a jobyou like. Not just until you find a job, but one you like."

No such thing as "good enough"

For those who remain, the firm has a reputation for being, in the words of oneconsultant, "up–or–out, baby!" – but it also helps ambitious consultants movevertically. "McKinsey is all about the performance review, constantly givingevery consultant the next, very specific list of things to work on and 'upping'the bar each time you succeed. If you love to constantly be challenged to thenext level, you'll love it here," says a source, who adds, "If incessantevaluation will make you crazy as a loon, try somewhere else." One source,with previous experience at other consulting firms, notes, "Among all mycolleagues at other firms, I think McKinsey has the most focus on constantly



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evaluating you. 'Meets expectations' is a failing grade around here – you'realways supposed to do more, to add value that you weren't asked for." Thatleads to a lot of performance pressure, which isn't always good. Hecontinues, "The expectations are so high, you never feel that your work isgood enough. You want to be recognized a little, take a short breather, maybesay, 'That's good enough.' Management is so used to overachievers that theydon't remember the 'I care about you' human factor, the praise you need for ajob well done."

A colleague adds, "Sometimes you'll wish they didn't advance you so fast.Just when you begin to get confident at one position, they'll fling you into thenext." Another describes the corporate ladder at McKinsey as "fairlyself–weeding," noting that "fewer than 10 percent starting at McKinsey atentry–level move up to partner. Some people thrive on the hard work andcompetitiveness; many others find greener pastures." A typical path forMcKinsey promotions is described as "about two years to manager, anothertwo years to junior partner (associate principal), and another two years topartner."

To help its consultants become ever more promotable, says a consultant, thefirm invests in intense mentoring and on–the–job learning. MBA–levelconsultants are able to take a training program called ILW after two years onthe job. "It is some of the best training in the world – you lean about problemsolving and communication. It's done all over the world in groups of about20. In my group, we had people from 13 different countries." McKinseyiteslearn from the masters, too, as interaction with firm and client higher–ups isthe norm: "You can easily meet the partners," says a source. Another says that"I've interacted with around a dozen CEOs in my five years with McKinsey."

Minority report

McKinsey insiders say that the firm's "diversity is pretty broad from theperspective of background, but not nearly enough from a gender or racialperspective." A consultant notes that "women are fairly numerous (30percent) in the associate class, but dwindle quickly as you move up the ranks– probably due to lifestyle issues as much as anything else." The companyreportedly has launched initiatives to encourage workplace diversity, thoughanother source observes that "newly–minted MBA consultants tend to bewhite and male." "African–Americans are the most under represented of allminorities at McKinsey," says a colleague. As for gays and lesbians, the firm"offered domestic partner benefits early on," a source reports. Anotherconsultant has "worked with gays at all levels in the firm (associate to


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director) who were very successful, open about their sexual orientation andopen to bringing their significant others to firm events."

The firm is known for performing "a lot of community work." This includes"pro bono consulting, voluntary support of United Way [and] variousinitiatives driven by individuals."



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Early birds only

Students wishing to join McKinsey's hallowed ranks should start gatheringresources for the highly competitive process early. Both MBA and undergradscholars should check with their school campus career centers as early in theyear as possible to find out whether McKinsey recruits on their campuses. Ifso, sign up quickly for an interview – the slots are likely to go fast! Thosewho aren't lucky enough to be graced by an on–campus visit shouldn't fret.McKinsey accepts applications online from students who don't attend thefirm's target schools, as well as from working professionals and non–MBAadvanced degree holders.

The career section of McKinsey's web site includes helpful information forjob candidates from undergraduate, MBA and advanced degree programs, aswell as experienced professionals. It also walks applicants through a samplecase study. Insiders tell us there is "no internship program for analysts,"though the firm, of course, offers MBA–level internships. Undergrads whojoin the firm as analysts are "retained for 18–24 months," according tosources; after that, the entire class is cut loose to go back to school or seekemployment at another firm. A return trip to the mother ship is quite possible."If they like you and want you back, they pay for grad school," says onesource. One insider thinks the company could improve by "adjusting thepromotion system to promote high–performing analysts without an MBA."In the past, there have been instances of analysts being promoted straight intothe associate ranks, but more than one insider describes these as "extremelyrare." We are told "there are no promotions when times are bad."

InterviewingDuring the interview process, the site says, McKinsey looks for people withstrengths in problem solving, influencing others, leading others and buildingrelationships, and achieving goals. Prospective candidates can findinterviewing tips and a practice case study online. McKinsey encouragescandidates to use its online application system.

After the boom period of the late 1990s, the interview process has changed,insiders note. "Now there's a much bigger structure – cases, group interviewsand presentations," a source reports. Another says it's "very rigorous." Athird calls the screening "fair and objective." He notes, "You'll take some

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tests that are like part of the GMAT – in fact, we used to use old GMAT examsas our tests."

Patience is a virtue

Those who have their hearts set on McKinsey should come equipped withpatience to burn. "The hiring process began one year prior – with my firstyear in business school," a source relates. "McKinsey held several formal andinformal information sessions on campus. They also helped with interviewpreparation, including one–on–one and one–on–six interview workshops."Another describes a full two years of bravely trying to get a foot in the doorIn the first year, "McKinsey took me out to dinner over the summer, while Iwas at another company. Second year included more information sessions,workshops and dinners. Again, I interviewed with the same office, this timeI was successful." This source continues, "The case interview process wasimportant, but it became clear to me that it wasn't the most important.Handling consulting cases isn't that hard, and it doesn't have to be doneperfectly. The key was getting to know the members of the office, andfinding a fit with their culture. By taking them up on nearly every offer fordinner or event, I got to know them well enough to get an offer."

Applicants can expect at least two rounds of interviews, with five to sixinterviews in the final round. Consensus among all participating parties–which may include senior associates, engagement managers and partners –is required to seal the deal. Not to add any pressure, but if your heart is seton working at McKinsey, you should ace the interview and know where youwant to be stationed. An insider let us know about an informal hiring policy:"If you apply to one region, you can't apply to another for one year."

One BTOer says that candidates specifically interested in working for thetechnology practice should have techie backgrounds, as one might intuit.BTO is considered an "office," just like a geographic location." Continues theBTO consultant, "After you get past the first round, you interview with anoffice. If there are people who would be a good match for us, we try tointerview them. In technology, there are some things that you just can't learnon the fly."

One applicant's case study

An applicant for a business analyst position in the U.K. reports his interviewexperience: "In the U.K., McKinsey screens resumes/CVs and invites peoplewho make that cut to take a 70–minute test. [Out of hundreds of applicants


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from each, only 90 applicants from Oxford and 90 from Cambridge wereinvited to take the test.] The test counts as the first–round interview. Peoplewho pass are invited to a second–round, real–life interview at McKinsey'sfantastically cool London offices. The test supposedly measures basic skillsthat McKinsey deems necessary for success in consulting. It had no questionsharder than anything on the GRE, and it was all multiplechoice. Somequestions were just reading comprehension, some involved making ajudgment based on almost enough information and some were basically mathproblems."

A week later, he continues, "I had two one–on–one, 45–minute interviews,back–to–back, with a 10–minute break in between with two differentassociates. Both interviews started with about five minutes of chat about mybackground and my current academic interests. The only personal questionin the first one was to describe something I'd worked on in the past six to 12months that had turned out well. In the second interview, the only personalquestion was to describe something that had turned out well in the past six to12 months on which I had worked with more than one other person. In eachinterview, the interviewer stopped me after every couple of sentences to askhow I had settled on the action I had just mentioned, or why I had decided tospeak to someone whom I had said I had contacted, or something else todiscern what I had thought I was doing at the time. Though it was unnervingto be interrupted so frequently, the 'hows' and 'whys' were surely relevant.Plus, I had the chance to show off my ability to finish a thought whensomeone has cut me off in the middle."

"In each interview the 15–minute–ish 'walk me through what you did andhow' question was followed by a challenging case study of about 25 minutes.There were no brainteasers, but each case study had a market–sizing problem,a couple of simple math problems (i.e., 50,000 times 500) and a tiny dose ofalgebra (i.e., solving for x or figuring a percentage). I did not make it to thethird (final) round, which would have been a day of group and individualexercises. My overall experience with McKinsey was great, though. Therecruitment staff was unfailingly kind and extremely helpful. My travelexpenses to London were reimbursed, which was certainly to be expected, butstill appreciated. When I got the call to say I had not made it to the last round,the super–nice recruitment lady gave me the interviewers' feedback. Hearingso quickly what was really good, what was marginal and where things hadgone wrong was a real comfort. When I asked if it might be worth my whileto work on a couple of not–hot things and reapply next year, the lady repliedwith an enthusiastic yes. Then she told me what had been compelling aboutmy cover letter so that I would know what not to change. Though I was



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disappointed not to make it all the way, I got the distinct impression that thatI did well to get as far as I did and that I was being taken seriously. I alsogained a better understanding of McKinsey's recruiting philosophy andprocesses, which should serve me well if I decide to try again."

Round and round

This applicant's process sounds more or less typical, though McKinsey isreportedly tinkering with its interview format. The first round of reviews atMcKinsey typically consists of two on–campus sessions, each lasting abouthalf an hour, although the format varies from campus to campus. The firsthalf–hour interview is intended to "get to know you." You and yourinterviewer will discuss your experience, personality, whether you would bea good fit with the firm and what you want out of a career. (Incidentally, theconsultants that interview on–campus come from McKinsey offices all overthe country and the world; interviewees in New York, for example, canencounter consultants from Los Angeles and Caracas.)

The second interview of round one is typically a case interview andimmediately follows the first interview. "My No.1 one piece of advice forinterviewees is, it's all about problem solving – practice, practice, practiceyour cases!" exhorts a BTO insider. The case interview is with oneconsultant, and lasts half an hour to 45 minutes. The consultant starts off byexplaining the ground rules: she'll give you a case interview that presents abusiness scenario for you to discuss. At McKinsey, the interview will almostalways involve an industry the interviewer has worked in recently. Youshould feel free (and are expected) to ask any questions if you need additionalinformation. As you go along, the interviewer will throw out newinformation and inquire how this additional data affects your conclusions. Anotepad and pen in this round, to take notes and make basic calculations, is amust! It is also vital is to ask the right sort of questions – questions that willgive you the information you need to make a recommendation – and not torush into your answer. Failing to ask the most obvious questions beforejumping to conclusions won't get you to the second round.

Moving on

In the second and third rounds, expect more case studies and personalinterviews. Insiders say interview rules aren't static, but recent case studieshave focused on theoretical client situations. A candidate might be asked todetermine the profitability of a computer manufacturer or the revenueopportunities of a pen manufacturer in Cleveland. How you present yourself


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Getting Hired

during these case interviews is significant, too – it's "not only how brilliantlyyou formulate a solution, but how well you can communicate that solution,"an insider says. As in the first round, candidates are encouraged to askquestions in order to ascertain specific information on the cases. While thefirst two rounds of interviewing are usually held on campus or at anestablished recruiting site, the third round is most always at the McKinseyoffice where the candidate is hoping to work. Traveling expenses are, ofcourse, on the company's tab.

These days, two people may interview you simultaneously in the first round;you may go through three or four interviews that day. In successiveinterviews, you may be interviewed by up to five McKinseyites at the sametime. At all hiring levels, McKinsey has reportedly increased its use of caseinterviews and decreased its reliance on guesstimates. This emphasis on caseinterviews reflects McKinsey's newfound understanding that an answer to anabsurd and farfetched guesstimate isn't necessarily reflective of a candidate'sfull analytical capacity. McKinsey reportedly is also experimenting withgroup exercises. In these group cases, approximately six candidates solve acase jointly over a period of an hour. Use the group exercise to demonstrate"how you work with others, how you behave in a group"; it is an opportunityto "be open, be forthright and show your personality," but "don't becompetitive against each other," insiders advise. These cases are now heldon–campus at some universities.

After the final round of interviews, the candidate typically goes home and isnotified by phone the following day. To make the hiring decision, a campusteam meets at the end of the final round. "It's like a town hall meeting,"declares one insider. "We talk very openly." For those who worry thatMcKinsey analyzes their every word and gesture, this report will do little toquell raw nerves. McKinsey recruitment teams do look at the smallest detailsof each applicant, even employing "high–tech screens" to examine "resume,""intelligence" and "which events" the person attended. "Candidates reallywill get a fair hearing," proclaims one zealous McKinseyite, "[At the finalround] we presume that candidates are innocent until proven guilty."

Inside info

If McKinsey can't decide upon an applicant, even after the third interview, ittakes other avenues of opportunity: "[We] find out more about this personfrom the people we have on campus [former business analysts]." Thoseenrolled in business school classes with McKinsey alums should take note.Fortunately, those lucky enough to pass McKinsey's mafia–like initiation



McKinsey & Company

Getting Hired

processes will find themselves welcomed with open arms. "We considerthem part of the McKinsey family," reveals another insider. About 75 to 80percent of McKinsey job offers are accepted. Disbelief, curiosity or afondness for radar surveillance prompts McKinsey to keep track of anycandidate who turns down a job offer. The firm is under the impression thatanyone who turns down an offer does so because of an "entrepreneurialsituation, like starting a business. Other people join large and smallconsulting firms or investment banking companies."

Solving the cases

Throughout the interview process, candidates will encounter a mixture ofcase questions and resume with "no brainteasers or market sizings." Sourcesrecommend that candidates "prepare for and be comfortable with the caseprocess." This is because "everyone has to be a great problem solver, so beready to demonstrate that through the case interview process." Also, "bepersonally comfortable." During the case sections, insiders advise candidatesto have "an open dialogue where we can see how people think." Don't searchonly for "a right answer or right framework." The worst method is "forcefitting something that doesn't make any sense because they think we'relooking for it." McKinsey is looking for four key qualities during theinterview process: "problem–solving ability, leadership, personalimpact/presence, and drive and aspiration." This apparently means asking,"Is this person going to make a difference in the world?"

General or particular

McKinsey newbies generally take one of two paths: People who wish toincorporate their knowledge of a range of industries (or no industries at all)can join as "generalist consultants!" while those who have expertise in aspecific area come onboard as 'specialized consultants." Although the firm isveering more and more toward industry–specific expertise, it emphasizes thatboth career paths offer "continuous learning and a high degree of intellectualstimulation, as well as rapid advancement for successful performers." A BTOinsider describes the firm's "hourglass model" of specialization: "You start outas a broad generalist, then start to pull in and specialize, and then after you'vemade partner you're expected to broaden out again. Everyone, even the mosthighly specialized expert, is expected to excel in basic consulting skills."

Although many analysts stay the industry standard of two years, a handfulstay for three. McKinsey says that an employee must "earn the right to staya third year" and is "encouraged to be in another office, usually another


McKinsey & Company

Getting Hired

country if possible. Of course, you must speak the language. "Some officesare experimenting with having a third–year [employee] work at a company.Some do pro bono work. Some will do a non–consulting job – like inMcKinsey corporate communications."

Although the majority of new consultants come to McKinsey directly fromcampuses or post–doctoral research programs, some come from successfulcareers in such specialized areas as brand management, corporate finance,information technology, law and medicine. MBA candidates currentlyattending business school should follow the recruiting procedures of theirplacement office. All other candidates can submit applications viaMcKinsey's web site.

Questions to expectTake advantage of McKinsey's thorough online case study, a self–testingprogram which walks you through a real case interview and its componentquestions, on the careers section of the web site. Here are some others youcan use for practice:

1. Case: You are the head of a large corporation. Your company mustbuild a new paper plant. You must decide which country to build theplant in. What factors would you consider?

The point of the case interview is to evaluate your analytic capabilities andyour eloquence. You are expected to ask the interviewer questions to obtainadditional information before answering the case (as any good consultantwould do). Some questions to ask for this case would be: "What does thecorporation I head do? What does the company plan to do with the paperproduced by the plant? Use the paper in its own manufacturing process? Sellit to other companies? Do we even need to build the plant? Can we satisfythis need in another way?" Factors to consider in answering this case: eachcountry's labor costs, political stability, government treatment of foreigninvestments, price of raw materials, proximity to raw materials for the plant,relevant shipping costs, tax laws, skill and availability of local labor force,access to local capital markets, etc. As the interview goes on, the interviewerwill typically add information or constraints to the case (for example, hecould tell you that you must decide only between Brazil and China as a paperplant location).



McKinsey & Company

Getting Hired

2. Case: It's 1982. You're a consultant sitting on a plane next to yourclient, who is the CEO of American Airlines. The client tells you thatAmerican can't seem to keep many repeat customers and wants toinstitute something called a "frequent flyer" program to reward loyalpassengers with "points" they can redeem for free flights. He turns toyou and asks you to analyze the merits and faults of the program.

3. What is it about consulting that interests you?

Be honest, but try not to let the dollar signs in your eyes shine too brightly.

4. Why would you be a good fit at McKinsey?

Talk about your thirst for knowledge, addiction to problem solving and desireto be among the best of the best in your chosen field.

5. Case: You are a manufacturer of laundry detergent and thinking aboutshifting into the dry cleaning business. Decide if this is a feasible and/orlucrative option.

McKinsey wants to know if you fathom the many factors that go into makingsuch a momentous business decision. Here are a few crucial questions youneed to ask your interviewer: Can the assets be transferred from business tobusiness? What is the determined location – both geographical and on anoperational level – of this new dry cleaners? Will it be accessible tosubstantial number of customers? Is building a new brand in dry cleaninggoing to be important or can we depend on an existing clientele? Obviously,there are dozens, if not hundreds, of other factors to take into consideration.McKinsey doesn't necessarily expect you to acknowledge all of them.

6. Case: You are a gumball manufacturer in Cleveland. Business hasdeclined for the last five years. What are some things you can do toimprove growth?

You need to assess what has halted growth during the past five years. Thetwo vital elements of profit, revenue and costs, also need to be evaluated.

7. Case: You are an automobile manufacturer and you want to move intothe luxury sector. Do you build your own brand or buy an existing one?


McKinsey & Company

Getting Hired

Questions to ask1. For prospective analysts: What sort of assistance does McKinseyprovide in preparing analysts for acceptance into business school? Howsolid is McKinsey's acceptance rate?

Given McKinsey's four–star reputation, an interviewer won't have any troubleexpounding the firm's impressive business school stats. However, by askingthese questions, a candidate opens up the floor for the interviewer to discussrelated perks: exceptional prestige within the field, an incredibly powerfulalumni list and tremendous connections.

2. For prospective associates: Please describe how McKinsey evaluatespromotion at the firm.

McKinsey's "up–or–out" policy is a point of contention among many,including McKinsey staff. Any question concerning promotion implies thatyou are interested in learning more about the firm's supposed "cutthroatculture."

3. What most distinguishes McKinsey from its competitors?

Your interviewer will welcome the chance to brag a bit, and you can learnmore about The Firm's philosophies.

4. How much responsibility will I be given in my first year?

Both analysts and associates are given a considerable amount of independentwork their first year at McKinsey. Your interviewer will likely reiterate thisfact and cite the tasks typically completed by incoming McKinseyites.Remember that McKinsey is looking for employees who are motivated,ambitious and ripe for work–related conquest. There is no such thing as "toomuch responsibility."

5. How does McKinsey apply some of the advice it gives clients to its ownpractice?

Keep your interviewer on her toes. Not every consulting company actuallypractices what it preaches.

6. Please tell me more about the training McKinsey provides.

Flaunt the fact that you require constant mental stimulation and a highlearning curve.



McKinsey & Company

Getting Hired

7. How would you describe McKinsey's culture?

Employees of McKinsey swear that their corporate culture is unlike any otherin the industry. Find out what makes it so, and use the opportunity to see howyou might fit in.

8. What effect is McKinsey's increasing industry and IT emphasis havingon its commitment to strategy?

CompensationThe salary information reprinted below was supplied by some of theMcKinsey & Company employees who participated in Vault's 2004Management Consulting Survey.

Engagement manager, four to five years’ experience: $125,000

$40-$60,000 signing bonus

Associate principal,four to five years’ experience: $150,000

$75,000 signing bonus


McKinsey & Company


On the Job

For a (corporate–sanctioned) peek into several McKinseyites' workdays, visitthe firm's web site, which features "Day in the Life" profiles from around theworld.

A day in the life

Associate, BTO (a client site day)

8:00 a.m.: A bit jet–lagged from travel yesterday (Monday), sleepwalk toyour desk and start tackling voice mails and e–mails.

9:00 a.m.: All caught up, check in with colleague about how his recenttraining session went.

9:30 a.m.: You and your colleague head to your "team room" at the client site,where you hold a meeting with the five members of your team plus a fewrepresentatives from the client's office.

10:30 a.m.: After the client reps leave, continue the meeting in private withyour colleagues, talking about how you'll apply the McKinseyproblem–solving model to this engagement.

11:30 a.m.: Adjourn the meeting and begin tackling the development of a"hypothesis tree," which you'll apply to this client's project. To begin, youneed to gather knowledge from McKinsey's online resource, Knowledge Net,as well as from firm partners and experts. (This is never any problem – infact, "I'm impressed with access to partners here – they'll always call youback and make time for you.")

1:00 p.m.: Yikes! Was that your stomach growling? Time flies when you'redeep in thought! Run up to the client's cafeteria and grab a quick bite.

2:00 p.m.: Call a junior member of the team to ask about some fact–gatheringhe's doing for you.

3:00 p.m.: In another meeting with your team, start to compare notes on yourhypothesis–building process. You'll want to come to some consensus aboutthis before involving senior partners.


McKinsey & Company

On the Job

5:00 p.m.: Meet with senior–level staffers at the client site to discussprogress. "We're always running things by the client so there are nosurprises."

6:00 p.m.: Back at your computer, look up a little more background infoonline and respond to e–mails.

7:30 p.m.: Pack up the laptop (you'll need to keep working on this afterdinner) and go to meet colleagues at a nice restaurant downtown, courtesy ofThe Firm.

9:30 p.m.: At the hotel, fire up the laptop and prep for tomorrow's meetingwith clients.

11:30 p.m. Doze off in front of Letterman.

Analyst (an office day)

6:30 a.m.: Climb out of bed, pull on sweatpants and head to the gym.

9:00 a.m.: Get into the office and eat breakfast (sesame bagels and "darngood" cream cheese provided by McKinsey).

9:15 a.m.: Read The New York Times online; check voice mail and e–mail.

9:45 a.m.: Spend remainder of morning working independently onclient–related spreadsheets and phone interviews.

1:00 p.m.: Eat lunch with a co–worker at a local restaurant.

2:00 p.m.: Attend meetings with team members (one senior partner, oneregular partner, one engagement manager [EM] and one associate) to discussa current client.

6:00 p.m.: Eat on the run.

7:00 p.m.: Get call about a volunteer activity you do through McKinsey("There's usually one conversation unrelated to firm work per day").

8:00 p.m.: Finish spreadsheets left over from the morning.

8:45 p.m.: Leave to grab dinner and drinks with a friend.

Analyst (a client site day)

7:00 a.m.: Haul your tired body out of bed, shower and down two cups ofcoffee.


McKinsey & Company

On the Job

8:00 a.m.: Arrive in the "team room" of the client site, greet other McKinseyteam members and client affiliates.

8:30 a.m.: Discuss the agenda for the day

9:45 a.m.: Get to work on collecting data and creating a graph for a futurepresentation

Noon: Eat lunch with the team.

1:15 p.m.: Engage in impromptu group problem solving complete withbrainstorming, flipchart scrawling and Q&A sessions.

3:00 p.m.: Conference call with several partners from a small financialservices company.

4:00 p.m.: Meet with team for a brief project update.

7:45 p.m.: Leave with team for a swanky dinner at a swanky restaurant ("OnMcKinsey, thanks. McKinsey encourages camaraderie between itsconsultants, and will pay for it").

9:30 p.m.: Open door to hotel room door and crash into bed. Flip channelsand check out the paucity of late night TV options. Settle on a pay–per–viewmovie and fall asleep before the end.

Associate

7:30 a.m.: Alarm goes off.

9:15 a.m.: Arrive at the office .

9:30 a.m.: Sit down with research professionals to figure out what data isneeded for the day.

10:00 a.m.: Call president of a division of a large media company to arrangea tour of his facility in order to perform industry research for a client.

11:00 a.m.: Prep for team presentation.

11:30 a.m.: Meet with team to go over presentation for the board of directorstomorrow.

2:00 p.m.: Eat lunch in McKinsey cafeteria.

3:30 p.m.: Attend meeting with mid–level manager at client site to discussissues related to study.



McKinsey & Company

On the Job

5:30 p.m.: Meet with research professional to review data she compiled.Become disappointed after hearing that critical international data wasdifficult to obtain. Decide on alternative approach.

6:30 p.m.: Work on slides to prepare for board of directors meeting

8:00 p.m.: Meet with production staff to make graphs and slides fortomorrow's meeting

8:30 p.m.: Meet with the team to go over presentation materials for tomorrow

10:30 p.m.: Leave for dinner with friend and then head home

Job descriptions

Business Analyst (or Fellow)

Coming out of undergrad, newbies enter McKinsey as business analysts or"fellows." Holders of advanced degrees other than MBAs also may beassigned this position. Analysts typically stay at McKinsey for two or threeyears before entering graduate school or pursuing other job opportunities.Placed on engagement teams of four to five consultants including a partner,Business analyst stay on an engagement fulltime. Duties may include"identifying issues, forming hypotheses, designing and conducting analyses,synthesizing conclusions, and helping to implement change," according toMcKinsey. They may also frequently make presentations to, and discussissues with, senior management of the client company.

Daily activities include:

Interviewing with industry experts, government officials and client'scustomers and competitors.

Meeting with research staff and gathering data to complete study.

Creating financial models using Excel.

Gathering analysis needed to prepare graphs, charts and slides needed forclient report.

Traveling to client to tour facilities and collect documents.

Presenting information to clients.


McKinsey & Company

On the Job

Associate

Associates, who typically have earned an MBA or another advanced degree,are staffed on teams that normally include a partner, a senior associate andone to four other associates. Associates are problem solvers that takeresponsibility for designing and carrying out the analyses needed to resolveissues that the team has identified. Associates often meet with clientexecutives and contacts, make presentations, and write work plans andreports.

As they gain experience, associates may earn the title of engagementmanager, taking responsibility for the day–to–day management andperformance of the team and coach other team members. Associates withlittle or no business experience may take a "mini–MBA" course that coverskey finance concepts and consulting frameworks.

BTO associates are expected to have "work experience with a technologycompany, an IT consulting firm or high–performing corporate IT department,and in IT design or architecture or in managing large IT projects," along with"a broad understanding of current IT trends, their impact on businessstrategies, and their implications for senior management in creating andsustaining competitive advantage and transforming business processes."

Daily activities include:

Meeting with key industry experts, government officials and client'scustomers and competitors.

Meeting with research staff and determining data needed to perform study.

Creating financial models using Excel.

Assigning graphs, charts and slides needed for client report to analysts.

Traveling to client to meet with client team, plan strategy for study and assignneeded tasks among McKinsey and client teams.

Attending presentation of study results to client; leading select sections ofpresentation.

Specialists/experts

Candidates with deep knowledge of an industry or topic may enter the firmas specialists or experts. These professionals, with an advanced degree andtwo to four years of industry experience, work with client teams as well as



McKinsey & Company

On the Job

spending part of their time building on their expertise in the field. Insiderssay specialists receive training in basic consulting skills – it's not enough tobe a know–it–all, you also have to "know how to bring ideas to the clients,"a source says.

Summer associate

McKinsey's summer associate program is designed for students pursuing anMBA or another advanced degree. Typically, summer associates will work onan engagement team for 10 to 12 weeks.

Summer associates at McKinsey are reportedly treated "just like regularassociates." The summer begins with a day and a half of orientation, whichmay include some computer software training. Summer associates maycontribute to reports, interview members of client companies and makepresentations. Contact with senior management is generally above average,depending on the office; such contact is apparently more difficult at overseasoffices than in the United States. However, most summer associates reportthat "the attitudes of the consultants toward us are very receptive."

Some summer associates spend as much as 60 percent of their time in teammeetings and the balance in data gathering; others may work moreindependently on quantitative projects. The firm says that summer associatesmay be extended an offer to join the firm upon successful completion of theirduties; insiders put the percentage of successful summer associates at up to90 percent. Summer associates recommend that interns "take initiativeimmediately" and "get into it from day one. The summer is very short."Other former McKinsey summer associates advise: "To increase your chancesof a full–time job offer, socialize outside of work with office matesfrequently."

Career path

For undergraduates

McKinsey says that over the past two years, successful analysts have joinedthe firm from nearly 300 schools worldwide. As you might expect,McKinsey recruits at top colleges across the country, but hires most of its newanalysts from Ivy League, Stanford and MIT, as well as from top Europeanschools. The typical analyst stays at McKinsey for two years, which is thedesignated length of the business analyst program. A few analysts may be


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On the Job

invited to remain for a third year, which is spent at a different office of theanalyst's choice, often overseas, though this has become more competitive inthe recent economic downturn. In general, analysts are not promoted directlyto associate positions without further schooling, usually business school,though McKinsey does promote some top–performing analysts directly.

For MBAs and others with graduate degrees

MBAs and other advanced degree holders are interviewed for associatepositions. The firm reportedly has recently modified its career path for MBAholders; previously, an associate moved up to engagement manager in hersecond or third year at the firm (if she survived that long), then became asenior engagement manager by the fourth or fifth year. However, the firmrecently instituted an accelerated path to partnership based on "personalreadiness." With the change, high performers can become a partner as earlyas their fourth year with the firm, though they have the option of waiting untilyear 10 or 11.

McKinsey still retains its "up–or–out" policy, however, requiring consultantsto leave the firm if they languish at any one level for too long.

New McKinsey associates enter as either generalists or specialists. Mosteveryone now develops a specialty by approximately her fourth year. Afterthat, a source reports, even the most specialized experts are expected to"broaden out" again, in what's known as an "hourglass model." Be advisedthat promotion at McKinsey is contingent upon an unusually intense anddetailed feedback process. To move up in the ranks, McKinsey demands"superior quality work and commitment to client service." Prospectivepartners must also be willing to care for people and develop their skills,inspire others, be pleasant, dedicate themselves to clients, exhibit"partnership behavior" and have personal integrity and maturity. To ensurethese standards are met, McKinsey employees are subjected to frequentcontribution to the partnership through teamwork, and collaboration andassumption of the responsibility of self–assessments by other McKinseyites.They receive reviews at the midpoint and end of each study in addition to aformal review process at the end of each year. Senior partners may spend "upto a third of their time" serving on committees that examine the work of theirco–workers and subordinates.



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Even in an era of shrinking corporate budgets, McKinsey is regarded as thegold standard in management and strategy consulting. Under the leadershipof new managing director Ian Davis, the firm is expected to continue pursuingits traditional values, adhering to a strict, insiders–only approach to itspractice. A successful stint at McKinsey places consultants in a privilegedgroup – alumni are welcomed at the highest ranks of corporations,government agencies, educational organizations, and just about anywhereelse you can think of. And while at the firm, consultants get the royaltreatment – we rarely (if ever) hear grumbling about pay or perks from theseinsiders.

Recruiting has remained strong at McKinsey even as the economy hasslowed. Internally, the firm is working on ways to address market needs,adding more IT capacity in the BTO segment and working to gain a strongposition in global outsourcing. In pursuing these goals, the firm has expandedits reach beyond the usual ranks of newly–minted MBAs, seeking specialistsand holders of advanced degrees from other areas.

For all of its secret society rep, insiders consistently describe McKinsey as apleasant place to work – one source notes with obvious relief that the firm is"much more down–to–earth and action–oriented than I'd expected." So pullup your socks, aspiring consultants: You couldn't do much better than a careerwith McKinsey.

McKinsey & Company


Final Analysis


Articles:

Skapinker, Michael. "Seasoned Survivor at the Head of the Firm." FinancialTimes (London), June 7, 2004.

"The Aspen Seven" Fortune, August 23, 2004.

London, Simon. "Buried Treasure." Financial Times, December 10, 2003.

Warner, Melanie. "The Incredible Shrinking Consultant." Fortune (Europe),May 26, 2003.

Byrne, John A. "At McKinsey, the Winner Is..." BusinessWeek Online, March7, 2003.

"McKinsey & Company Misplayed in Unicom's CDMA Strategy?" SinoCastChina Business Daily News, Oct. 25, 2002.

Articles by McKinsey consultants:

Farrell, Dana. "Can Germany Benefit From Offshoring?" The Wall StreetJournal, August 23, 2004.

Daruvala, Toos. "When, Where, How, and Other Questions on GoingOffshore." American Banker, July 3, 2003.

Hunt, David, and Mark Williams. "Analysts Are No Longer Going to BeStars." Financial Times, April 30, 2003.

Nevens, Mike. "Time for a High–Tech Shakeout." Financial Times, January6, 2003.

Gupta, Rajat and Paul Coombes. "Accentuating the Positive." Global Agenda(magazine of the World Economic Forum Annual Meeting) 2003.

Selected books by McKinsey consultants:

Bower, Marvin. The Will to Lead. McKinsey's paterfamilias on management.

Peters, Thomas J. and Robert H. Waterman, Jr. In Search of Excellence. Themanagement bible.

Copeland, Tom, Tim Koller and Jack Murrin. Valuation: Measuring andManaging the Value of Companies. The handbook for valuation.

Michaels, Ed, Helen Handfield–Jones and Beth Axelrod. The War for Talent.

McKinsey & Company


Recommended Reading


McKinsey & Company

Recommended Reading

Courtney, Hugh. 20/20 Foresight: Crafting Strategy in an Uncertain World.

Baghai, Mehrdad, Stephen Coley, and David White. The Alchemy of Growth:Practical Insights for Building the Enduring Enterprise.

Woetzel, Jonathan. Capitalist China: Strategies for a RevolutionizedEconomy.

Foster, Richard, and Sarah Kaplan. Creative Destruction: Why CompaniesThat Are Built to Last Underperform the Market – and How to SuccessfullyTransform Them.

Barton, Dominic, Roberto Newell and Gregory Wilson. Dangerous Markets:Managing in Financial Crises.

Bryan, Lowell, et. al. Race for the World.

Katzenbach, Jon R. et. al. Real Change Leaders.


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