McKinsey & Company was founded in 1926 as the Accounting and Engineering Advisors and it grew rapidly. The case describes the steps taken by McKinsey & Company to transform the firm into "snowball makers" and "snowball throwers."
1. What was the organization design that was in place at McKinsey and what did they want to change? Did the change in design complement their strategy? What were the key barriers to implementing change?
The organization design in place at McKinsey was general in nature. The consultants were to be well trained, highly intelligent, disciplined analyst. Though the employees were good problem solvers, they often lacked knowledge concerning the industry, which was demanded by the clients. McKinsey operated under a One Firm policy. The policy requires all consultants to be recruited and advanced on a firm-wide basis, all clients be treated as McKinsey & Company responsibilities, and that profits be shared from a firm pool, not an office pool.
The vision of the firm stated they wanted to be "one focused on issues of importance to top level management, adhering to the highest standards of integrity, professional ethics, and technical excellence, able to attract and develop young men of outstanding qualifications, and committed to continually raising its stature and influence. Above all, it was to be a firm dedicated to the mission of serving its clients superbly well" Currently, within the company there is more emphasis placed upon expanding geographically and new practice possibilities, and less emphasis on technical development and professional skills.
The major design that they firm wanted to correct was the disproportionate emphasis placed upon expansion and new practice policies and technical development and professional skills. In order to make the necessary changes, the firm took many actions. First, focus was shifted to more formal development of the firm's...