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McKinsey's new client: McKinsey

McKinsey's new client: McKinsey

Consulting Humor
June 17, 2024

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Gossip roundup

Top story: McKinsey’s newest client is McKinsey

Source: WSJ

Leadership Overhaul: Bob Sternfels is driving a transformative agenda at McKinsey, focusing on modernizing governance and enhancing internal collaboration, amidst legal challenges and a demanding market environment.

Adapting to AI: McKinsey is shifting its strategy to incorporate AI tools and performance-based fees, aiming to provide higher-value services and ensure long-term client success.

Meritocracy and Growth: Despite recent layoffs and internal challenges, McKinsey remains committed to its meritocratic culture, planning significant new hires and fostering an environment of unrivaled development for its consultants.

In a recent WSJ interview, Bob Sternfels, McKinsey’s global managing partner, talked about the future of McKinsey. He has embarked on a mission to overhaul the consulting giant amid a period of turmoil, marked by a downturn in demand, layoffs, and legal issues. Sternfels, known for his rigorous approach, initiated an around-the-world tour, opting for walking meetings to gather candid feedback from junior managers.

McKinsey, facing scrutiny over its past work with opioid manufacturers and its dealings with Saudi Arabia and China, agreed to pay $641 million in settlements and is under a criminal probe by the Justice Department. Despite a contentious election, Sternfels was re-elected, underscoring the firm’s unique governance structure where 750 senior partners choose their leader every three years.

As his new term begins, McKinsey is adjusting its fee structures, deferring payments until clients achieve results, and exploring internal "communities" to foster collaboration. The firm is also launching a "partnership modernization" task force to review governance, including the length of the leader’s term and election frequency.

Internally, McKinsey’s "up-or-out" culture persists, with some 3,000 employees receiving unsatisfactory ratings. However, Sternfels insists the firm remains a meritocracy. No additional layoffs are anticipated, and the firm plans to hire 6,000 people this year.

AI is a significant focus, with consultants encouraged to use AI tools to enhance their work. Despite legal challenges, Sternfels remains optimistic about resolutions. His leadership style combines internal focus with client engagement, seeking ways McKinsey can evolve and offer distinctive, innovative solutions.

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