The Firm: The Story of McKinsey and Its Secret Influence on American Business Hardcover – September 10, 2013

This book documents well the beginnings and evolution of McKinsey as a consultaing firm: from providing generalist advise to clients on implementing the multi-divisional and conglomerate structures, from the 1940s to the 1970s, and later, changing its focus to knowledge-based and highly specialized consulting to business, government and other organizations from the 1980s onwards. The author points out the changing strategies but the relatively constant cultural values which drove them: an unrelenting and self-effacing devotion to client needs,selectivity in human resources and clientele, adaptability to changing demands, prizing teamwork over individual achievement, continuous culling of the workforce, and a capacity to bring rigorous analytic thinking to customer's decision-making processes. Side-effects of the company's success have been a large dose of hubris, uber self-confidence and a penchant for seeing themselves as Masters of the Universe.He also points out that McKinsey managed to deftly balance the two opposing facets of a professional service organization, which are to maintain the professional values of providing sound and objective advise to clients, and at the same time, ensure the economics of the business itself are optimized. This balance was seriously compromised during the 1990s and early noughties, when under the leadership of Rajat Gupta the firm shifted its focus in favor of more commercial goals, and growth at any cost. Quaity was compromised and discontent flowed within its ranks. According to McDonald, these aberrations have since been corrected, although management is still struggling to hone its vision of itself and its future.Although any consulting firm with over 2,000 assignments/year is bound to have a few failures, the author stresses that in the case of McKinsey these have been egregious: tending to the needs of the iconic GM just before its demise, allowing itself to be caught up in the dot-com bubble, failing to foresee early on the importance of the internet, and indirectly contributing to the systemic real-estate and banking collapse, among others. These are big-picture events which one would expect such a large bevy of world-class thinkers should have foreseen or shied away from. Then there is the continuous nagging critique, especially from the European press, that a large portion of McKinsey's bread-and-butter has come from helping CEOs justify downsizing, i.e. fire lots of people. But, the author concludes, this has not stopped McKinsey's huge client base from continuing to hire its services, nor from it gaining new customers.Even though he dedicates each chapter ot an individual theme, the author's style is somewhat desultory: switching continuously from criticism to praise, from favorable quotes of journalists to unfavorable ones, from positive to negative anecdotes,etc. Yet, as th author suggests, this is a company hard to pin down, and this style makes the story juicy and more colorful.In recent years McKinsey has had far more comptetition both for clients and for talent and in some surveys it does not always come out on top vs Arthur Andersen or BCG. ( But in this business, is being the biggest synonymous with being the best? does size matter? and if so, how ? to the benefit or the detriment of the client ? ). The author also observes that the company may not be so succesful in the "modern" world of the Internet, young entrepreneurs, technology firms and others not so inclined to hire the services of consultants. Yet,this whole book reveals that McKinsey has never had a serious problem with strategy or growth, and the author concludes that if it manages to retain its original strong culture as its own internal complexity grows, it will continue to succeed.The reason why I gave four stars instead of five is because I feel the author needed to include a couple of examples of McKinsey's work, showing their thought-process, procedure, their conclusions and recommendations. Perhaps this may not be possible, but if it is, it would definitely enhance a second edition.

I’ve always been a bit baffled by McKinsey and it’s competitors. Companies that seem to just make money by doling out advice but not actually doing any of the actual work. I guess running my own consulting firm that also does the work I was a bit jealous of it. But in this book the author goes to point out that a consulting company made up of young people making decisions, who have no skin in the game have actually created the negative, zero-sum business world that we currently live in. This includes the excess of the Enron, the financial crisis, GM, and many more have all been linked to McKinsey in some way.Overall a good and detailed read, but it could have used a bit of cutting maybe 50Pages or so.

The author gives a penetrating account of McKinsey and Co. with special attention to the evolution of its values. J.O. McKinsey emphasized quantitative analysis of business. Marvin Bower, who grew the firm (and management consulting) from a fringe to a fabulously successful and influential institution, focused on addressing generalist issues that supersede the concerns of functional managers. Most importantly, Marvin insisted that the Firm live by the fiduciary standards of the best of professionals (acting in the best interest of the client, even if that detracts from outcome for the professional). Bower meant it, as is most evident when he sold his large share in the firm at book value. Bower's values were "desecrated" while Bower the centenarian still lived, illustrated not least in McKinsey's role in devising the financial strategy of Enron. The climax of the book is on page 320, where Marvin Bower is quoted in his later years as describing the Firm as "greedy f***s at the end."This book brilliantly exposes the path and the endpoint that McKinsey reached: a proponent of rationality and competence, within the limits of its new value system. This story is about evolution of the signature conflict of American values that now divides the nation.As a consultant at McKinsey's NY and London offices in 1980-81, I saw the value conflicts first-hand. I had lunch with Marvin Bower, who met all the new recruits. At the end of that year, I resigned, despite being told by a very senior partner "You are the best analyst in the Firm.", and despite a multi-party attempt to persuade me to stay. I saw that the culture was heading in a direction that I could not live with. The author frames those value conflicts with a rich background of information.

As an employee of no less than three large UK-located businesses in the period 1960 to 1990 which were clients of "The Firm" I was both entertained and educated by this book. It explained a great deal about their methodology and faithfully traced the changes made over the period I experienced. I consider it required reading for any management consultant.

As a consultant myself (at a McKinsey competitor of sorts), I was intrigued to understand what makes the firm tick. I have long wondered how they justify the colossal fees earned and the ability to consult with firms time and time again, even after seemingly adding no value with some of their 'studies'. This book goes some way to revealing the rationale and the mind set of clients and the culture within McKinsey that helps support this. At times the book is a little hard work as it is heavy on sequences of internal events, but at its best it is truly insightful! On balance, the book is an enjoyable read. I would recommend it to anyone who works in consulting or anyone who hires consultants. However, this book may not be for you if you do not have a real interest in the mind set of the world's most influential CEOs or an interest in the internal politics of a firm that is made up entirely of intellectual over-achievers!

Working for one of the competitors mentioned in the book, the book has come as an interesting read. Not only does it provide a gentle insight into the company, it provides a foundation for the context of consulting as a whole; outlining the principles of the occupation and the challenges continually placed on the employee in order to please the corporate leadership.

Excellent book that gave me a greater insight into the working of McKinsey. This book provides a fairly balanced perspective.

Good book, very thorough and dense and we learn a lot about this mythic company.