McKinsey & Company grew substantially over 75 years through implementing a "one firm culture" and emphasizing knowledge management. To address challenges, Ron Daniel initiated changes like restructuring work groups and prioritizing client needs. Further, Rajat Gupta pursued a four-pronged knowledge development approach including practice competitions and research expansion. While initiatives helped growth, the firm had to balance knowledge sharing with client focus.

1. Running Head: MCKINSEY AND COMPANY
1
MCKINSEY AND COMPANY
7
MCKINSEY AND COMPANY: MANAGING KNOWLEDGE
AND LEARNING
Student’s Name
Institutional Affiliation
Introduction
McKinsey and company was founded by James O. McKinsey
in 1926 (Christopher and colleagues, 2013). Seventy-five years
later the firm had grown into a global partnership. The company
was made up management engineers. Their main job activities
were to rescue sick companies and they also helped the healthy
companies to flourish and grow. They have trusted advisors to
many of the influential businesses and institutions. The

2. company had branches all over the world and had staff that had
diverse experience and diverse expertise. The consultants
helped solve many businesses problems excellently.
1. McKinsey and Company Growth
There are many reasons that one can identify as the source of
the company’s growth. This includes their commitment to
consultant training, their development of professionalism, their
recognition in top-management consulting, their focus on
general management consulting, their strategies and
organization, their wise recruitment of minds and the power of
“one firm culture” (Srinivas, 2013). The most important source
of their growth can be attributed to the “one firm culture”.
It is very clear from the graph in the exhibit section that the
company was growing. This is because the firm’s active
engagements increased during that period as well as the
company’s office locations.
This culture was at the heart of their every day to day operating
practices. This concept was put in place by Bower. It was their
source of competitive advantage. McKinsey was able to build a
culture where the whole firm was integrated. This made the
company build a strong internal capability. This is very
different from other companies that build their firms in offices
and type of service that led to internal wrangles within the
company. All McKinsey’s managers participated in the
development of the strategic plan, goals and objectives of the
firm. This had a positive effect on management by objectives.
The company transferred knowledge and expertise to its new
consultants as a byproduct of its culture. The expertise was
mainly on the company’s approach to problem solving and
framing issues. The company also transferred their strongly held
values to all their consultants. In every task that the company
had, it treated it with commitment and helped solve problems
for their clientele.

3. 2. Ron Daniel Efforts in Responding to Challenges.
The system was however found flawed as the old client
relationship was in turmoil. Their generalist approach in
problem solving had become a problem. The change in the
company was initiated by Ron Daniel five years after the report
was tabled. Daniel made various changes in the company. He
appointed one of the senior directors who had been in the
company for a long time to head internal training. The internal
training had a strong impact on the company.
Daniel also made some structural changes that created industry
and functional based groups. The groups tried to develop their
knowledge according to the group they were in. Daniel also
redefined the company’s goals to not only provide client service
but also the building of a great firm (Christopher and
colleagues, 2013). The firm recruited, developed and retained
exceptional consultants and staff in accordance with their new
goal. The intellectual capacity of the company grew as a result.
Fred Gluck started a Knowledge Management Project. This
project helped in developing a series of information systems.
This includes the FPIS and PD net systems. FPIS system was a
database of the client’s engagements while PD Net was a system
whereby the consultant’s ideas and concepts would be stored.
The systems facilitated in capturing the knowledge within the
firm and facilitated the transfer and application of the
knowledge within the other parts of the firm.
Their computer-based system can be viewed as one of the firm’s
competitive advantage. Gluck also contributed by developing
the 15 centers of competence. This helped consultants and
ensured that there was a renewal of the intellectual resources
that the firm had to offer. He also created a client impact
committee that helped in focusing on clients’ needs.
3. Company effectiveness in the two decades Change Process.

4. Each of the three cases revealed the strengths and weaknesses
of the structures and systems that the company leaders had
created. The company had managed to get high-level knowledge
in various fields, experience and capabilities from all over the
world that enabled them to solve their clients problems
irrespective of which part of the world they came from. The
consultants also were highly educated (Srinivas, 2013) and had
a lot of experience and were, therefore, capable of solving their
clientele problems. The training of the new employees gave
them more opportunities to practice in daily operation.
The change process could be termed as successful taking into
consideration the figures in the exhibit below (Exhibit 1). The
firm opened up more firms all over the world during the 20
years change process. The firm had 24 office locations at the
beginning of change process and after the twenty years the firm
had 69 office locations. The firm’s active engagements had
increased tremendously from 661 to 3559 at the end of the
change process. The increase in active engagements and office
locations is a true indicator that the company had become more
effective over the twenty years.
A debate can, however, be raised on the effectiveness of their
knowledge based organization. Example include the Sydney
office project where the project was staffed with junior and
inexperienced consultants who were supervised by a manager
who did not arrive at the office until the junior consultants had
carried out most of the analysis. The team did not come up with
a breakthrough. The team can be viewed as if it was abandoned
and that was the reason it did not produce the expected results.
This idea of abandonment can, however, can be countered by
the fact the team had access to the PD Net that allowed them to
be educated on the firm expertise, the directors could also give
them advise on call and 60 associates were also ready to answer
any questions that they had. This then enabled the junior
consultants to deliver the firm’s knowledge and expertise to the
clients. John Stuckey was, however, concerned that the team

5. that was in Sydney only looked for knowledge and expertise
within the firm.
Another example is the European telecom project (Consulting
Parlour, 2005). The company transferred and leveraging
specialist knowledge of Bray from the headquarters to Europe.
The firm also transferred their documented learning in the PD
Net, it also transferred the company’s network and implanted
knowledge in their new staff in Europe. The Europe group can
also be criticized in that they only looked for knowledge and
expertise within the telecom practice. This can be seen as a way
in which the firm telecom intranet was not opening up in
information technology (Consulting Parlour, 2005).
Dull’s business to business project that he joined in order to
get himself the credentials needed for people to vote for him
was a redirection of the firm’s resources. The business to
business documents that he listed on the PD Net was a way in
which he generated valuable knowledge. The business to
business documents gave Dull a chance to generate a network of
people who were interested in his work and thus doing his work
was developed in solving the clientele problems.
The high need that Dull had for promotion could be seen as a
way that McKinsey and Company failed in solving the problem
of a specialist. Dull’s initiative to write a book on Business to
business was a way to develop his brand image.
4. Rajat Gupta’s four-pronged approach to knowledge
development.
Rajat Gupta was the Managing director of McKinsey and
Company after Fred Gluck stepped down. There was a
continuing debate within the firm on which knowledge
development approach was most effective. Gupta saw that the
debates were consuming energy that should have been used on

6. the project and concluded that the firm would pursue all the
options. He came up with the four-pronged approach
(Christopher and colleagues, 2013).
His first approach was to capitalize on the firm’s long-term
investment in practice development. He wanted to create some
new channels, forums, and mechanisms, in addition to the old
ones, that would help in knowledge development and
organizational learning. The next approach was to the building
of an experiment which was begun in the German office. He
embraced an approach called the Practice Olympics. Teams of
two to six persons were formed and they were encouraged to
develop new ideas that grew out of recent client engagements.
The teams then competed at regional levels where the senior
partners and clients acted as judges. The twenty best regional
teams then competed at firm-wide level (Christopher and
colleagues, 2013).
In his third approach, he initiated the six special multilayer
internal assignments. It focused on the issues that were of
importance to the C.E.Os. The initiative help in tapping all the
expertise within and out of the firm in the formulating state of
the art solutions to the issues. The initiative helped in allowing
the firm in doing bigger long-term commitments and
developments. The last initiative involved the expansion of the
firm’s research center. Most of the initiatives he took had left
no impact on the firm yet he was convinced the firm was headed
in the right direction (Christopher and colleagues, 2013).
Gupta's initiatives helped in the growth of the firm. They,
however, did not link the knowledge and expertise of the
organization. The initiative was costly to the firm. Care must be
taken to ensure that the company did not lose its focus by
overlooking the clients and market. The firm should, however,
using the traditional methods in to communicate to the
employees and in the process motivate them and develop a
personal relationship with them.

7. EXHIBITS
McKinsey & Co.: 20 Year Growth Indicators
Year
Office Locations
Active Engagements
Number of CCS
Number of MGM
1975
24
661
529
0
1980
31
771
744
0
1985
36
1823
1248
0
1990
47
2789
2465
348
1991
51
2875
2653
395
1992
55
2917

8. 2875
399
1993
60
3142
3122
422
1994
64
3398
3334
440
1995
69
3559
3817
472
CSR – Client Serving Staff (All Professional Consulting Staff)
MGM - Management Group Members (Partners and Directors)
References
Srinivas, K., (2013). Mckinsey Case. Retrieved from
http://www.scribd.com/doc/119613942/Mckinsey-Case on
March 5, 2016.
Consulting Parlour, (2005). Mckinsey & Co.-Managing
Knowledge & Learning. Retrieved from
http://consultingparlour.blogspot.co.ke/2005_04_01_archive.ht
ml on March 5, 2016.

9. Christopher A. Bartlett and Paul Beamish, Transnational
Management: Text, Cases, and Readings in Cross Border
Management, McGraw Hill-Irwin, Seventh Edition, 2013.
_1518873932.xls
Chart1YearYearYearYear1975197519751975198019801980198
01985198519851985199019901990199019911991199119911992
19921992199219931993199319931994199419941994
Office Locations
Active Engagements
Number of CCS
Number of MGM
Year
McKinsey & Co.: 20 Year Growth Indicators
24
661
529
0
31
771
744
0
36
1823
1248
0
47
2789
2465
348
51
2875
2653
395
55
2917
2875

10. 399
60
3142
3122
422
64
3398
3334
440
69
3559
3817
472
Sheet1McKinsey & Co.: 20 Year Growth IndicatorsYearOffice
LocationsActive EngagementsNumber of CCSNumber of
MGM197524661529019803177174401985361823124801990472
78924653481991512875265339519925529172875399199360314
231224221994643398333444019956935593817472
Sheet1
Office Locations
Active Engagements
Number of CCS
Number of MGM
Year
McKinsey & Co.: 20 Year Growth Indicators