The Firm: The Story of McKinsey and Its Secret Influence on American Business
Page 36
27. Ian Davis, interview by author, June 6, 2011.
28. Walter Kiechel III, The Lords of Strategy (Boston: Harvard Business Press, 2010), 11.
29. Andrew Hill, “Inside McKinsey,” FT Magazine, November 25, 2011.
30. Peter Grauer, interview by author, July 26, 2011.
EPILOGUE: THE FUTURE OF McKINSEY
1. Walter Kiechel III, The Lords of Strategy (Boston: Harvard Business Press, 2010), 2.
2. Nicholas Lemann, “The Kids in the Conference Room,” New Yorker, October 18, 1999.
3. Bill MacCormack, interview by author, May 7, 2010.
4. Stefan Stern, “Strategy Consultants Need Some New Ideas,” Financial Times, April 5, 2010.
5. Clay Deutsch, interview by author, March 5, 2011.
6. Gary Hamel, The Future of Management (Cambridge: Harvard Business School Press, 2007), 6.
7. George David Smith, John T. Seaman Jr., and Morgan Witzel, A History of The Firm (New York: McKinsey & Company, 2010), 444.
INDEX
Abernathy, William J., 124
Accenture, 199, 328
accountability, 124, 186, 244
accounting/accountants, 12, 13–14, 15, 21–22, 23, 38–39, 199, 202–3, 246–47. See also auditing/auditors; specific firm
Achieving Excellence in Retail Banking (McKinsey), 156
activity value analysis (AVA), 207
A.D. Little, 205
advice-on-retainer system, 31
Advised and Sold: McKinsey & Co—The Big Bluff of the Management Consultant (Leif), 214
AIG, 258, 293–94, 307, 317
Air Canada, 117
Air Force, U.S., 93
Air France, 79
Air Liberté, 256
Air Littoral, 256
airline industry, 255–57
Alitalia, 102–3
AlixPartners, 294
Allen, Mike, 76, 115
Allen, Robert, 177
Allstate, 257–59, 293
alumni, McKinsey: board memberships of, 305
as CEOs, 192, 231–32, 281–82
as clients, 84, 303–7
cronyism and, 307
and culture of greed at McKinsey, 208–9
as double-edged diaspora, 303–7
in England, 285–86
financial services industry and, 231–32, 286
Gupta insider-trading case and, 319
as Harvard alumni, 192
influence of, 231–32, 305
institutionalization of, 84
Kumar inside-trading case and, 308
as McKinsey competitors, 205–6
and McKinsey in the future, 327, 329, 332
McKinsey reputation and, 238
and McKinsey as success, 190–92
number of, 84, 192, 222, 303
questionable behavior by, 296
as Rotten Corps, 84
scrutiny of, 307
specialness of, 7–8
who were forced to leave, 304–5. See also specific person
Amazon.com, 11, 182, 264
Ambani, Mukesh, 314
AMD, 309, 310
America West Airlines, 233
American Airlines, 53, 311
American Association of University Instructors in Accounting, 14
American Automotive, 52
American Business, 1920–2000: How It Worked (McCraw), 17
American Business magazine, 35
American Century, 15–18
The American Challenge (Servan-Schreiber), 78
American Cotton, 17
American Express (Amex), 7, 182, 207, 233, 303, 304, 327
American Management Association, 29
American management technique: McKinsey contribution to, 3
American Red Cross, 64
American Tobacco, 17
Ames, Chuck, 232
Amgen, 220
analysis, 15, 113, 143–44, 226–27, 232. See also knowledge-building
“Anchorage perspective,” 163
Andersen Consulting, 199, 200, 203, 227, 249
Antonini, Joseph, 254
AOL, 253
AOM, 256
Aoshima, Yukio, 164
Apax Partners, 232, 305
Apple Computer, 111, 168, 182, 327, 328
Applied Digital Solutions, 265
Armour & Company, 18, 24
Arrow Electric, 303
Arthur Andersen, 100, 138, 199–200, 239, 250, 309, 327
Arthur, Brian, 217
Arthur D. Little, 26, 74, 88, 138, 201
Ashland Oil, 303
Ashley, Richard, 225
Asia, 300, 301, 335. See also specific nation
associates, McKinsey, 121, 208, 235, 269–70, 273, 275
Association of Consulting Management Engineers, 71
AT&T, 6, 17, 174, 177, 178–79, 182, 183, 191, 197, 198, 327
Atari, 154
Athos, Anthony, 149
Atomic Energy Commission, U.S., 68, 78
auditing/auditors, 31, 202–3. See also accounting/accountants
Auguste, Byron, 169
Austrian Airlines, 255–56
automobile industry: in Japan, 104, 163. See also specific person or corporation
Axelrod, Beth, 248
Ayer, Doug, 51–52, 62, 77
Bacon & Davis, 26
Bain & Company: BCG relationship to, 110
best place to work surveys and, 295, 324
conflict of interest concerns and, 90
founding of, 90
Iacocca/Chrysler hiring of, 190
knowledge-building at, 217
as McKinsey competitor, 111, 115, 138, 140, 142, 167, 197, 226, 264, 295
Time Inc. as client of, 281
Bain, Bill, 111, 199
Bain Capital, 111–12
Baker, James, 241
Bales, Carter, 70–72, 73, 200–201, 276, 305
Balloun, Jim, 205
Bank of America, 177, 189
Bank of England, 76, 78
Bank of Ireland, 78
Bank One, 185–86, 287
banking industry: consolidation in, 166, 253
credit demands on, 289
as early clients of McKinsey, 28–29
“global profit pools” of, 302–3
influence of McKinsey on, 166, 232, 286, 288–94, 332
in Korea, 301
McKinsey failures/missteps with, 292–94
McKinsey fees for, 204, 286, 292, 293
signs of impending failures of, 231
and specialization-generalization debate, 121, 145
Swedish, 252. See also investment banking; specific person or bank
Bantam Books, 153
bar codes, 115
Barnard, Chester, 55
Barrington Associates, 42
Barron’s magazine, 281
Barton, Dominic: Asian interests of, 300, 301, 335
capitalism views of, 301–2
clients of, 301
Davis and, 299, 300
earlier managing directors compared to, 299–300, 301
elections as managing director of, 297, 299–300, 301, 324
Gupta case and, 317
Gupta compared with, 301
knowledge building and, 302, 303
and Kumar as inside-trader, 307–8
Mer meeting with, 323–24
and partnership morale, 321
personal and professional background of, 300, 301
writings of, 297, 301–2
BASF, 79
Basic Training Guide (McKinsey & Co.), 49–51
BBC, 180–81
Beame, Abe, 71
Bear Stearns, 287
Bechtel Group, 220
Bedaux Company, 26–27
Bell Labs, 170, 193–94, 195, 197, 215–16
Ben & Jerry’s, 106
Benmosche, Robert, 258, 294
Bennett, David, 286
Bennett, Jim, 117, 146, 147, 153
Berardinelli, David, 258, 259
&
nbsp; Bergen, Harold, 53
Bertelsmann, 161
Bessemer Securities, 134
best place to work surveys, 295, 324
“best practices,” 5, 283
Bezos, Jeff, 11
Bharara, Preet, 318
Bhatia, Sabeer, 314
Biglari, Hamid, 232
Birt, John, 181
Black & Decker, 110
Blackwell, Lord, 285
Blankfein, Lloyd, 312, 315
Bleeke, Joel, 225
Bloomberg LP, 323
Bloomberg, Michael, 283
Bok, Derek, 82–83
Bolshoi Theater, 228
Bookkeeping and Accounting (McKinsey), 21
books: McKinsey-published, 156. See also specific book or author
Booz & Company, 171
Booz Allen Hamilton: in China, 230
European expansion of, 74
founding of, 26
government consulting of, 72
as McKinsey competitor, 55, 171, 182, 203, 204, 205
as private company, 118
as public company, 118
revenue/fees for, 138, 203
top clients of, 182
Booz, Edwin, 26
Borch, Fred, 113, 114
Borden Chemical, 305
The Borderless World (Ohmae), 162
Bose, Partha, 123, 137, 143, 157, 163, 216, 217, 218, 223, 229
Boston Consulting Group (BCG): best companies to work for survey and, 328
clients of, 110
founding of, 88–89
four-box matrix of, 88, 109, 113, 140, 143, 144
Harvard recruiting by, 110
influence on consulting business of, 112–13
knowledge-building at, 217
and knowledge focus in consulting, 139
McKinsey alumni at, 304
McKinsey compared with, 114
as McKinsey competitor, 88–89, 109–11, 112, 115, 116, 138, 140, 142, 156, 167, 197, 226, 264
offshoots of, 110–11
and Ohmae’s influence on McKinsey, 164
Peters and Waterman’s work and, 149
products of, 109–10
size of, 142
“strategy consulting” at, 88–89, 140
Boston, Massachusetts: McKinsey office in, 37, 52, 53, 165
Bower, Helen McLaughlin (wife), 33, 34, 42, 62, 73, 87, 270
Bower, Marvin: accomplishments of, 326
ambitions of, 33–34, 35, 39, 51, 62
Bales-NYC controversy and, 71–72
clients of, 39, 44–45, 108
colleague relationships with, 37–38
compensation/financial affairs of, 38, 42–43, 87
Crockett and, 56–57
culture/values at McKinsey and, 44, 61, 74, 116, 125, 208, 219, 265, 270, 271, 275, 319, 320, 321, 322, 325, 335
Daniel and, 126, 134–35
and “dark years” for McKinsey, 104
death of, 270–71
decline in relevance of, 130–31
early years with McKinsey of, 34–35
economy as advantageous to tenure of, 136
Eisenhower comment to, 68
and election of managing directors, 101
elitism of, 93–94
as embodiment of McKinsey & Company, 49
and equity stakes with clients, 234, 265
executive committee of, 66, 94, 100, 138, 277
frugality of, 87–88, 118, 128
gains control of McKinsey, 56–57
generalist model and, 120
goal of, 4
and growth/expansion of McKinsey, 73, 75–76, 95, 171
Gupta compared with, 225
and Harvard case study approach, 83
and incorporation of McKinsey, 86
influence on McKinsey of, 35, 61, 62, 116
and joint venture proposal, 117–18
legacy of, 101, 219, 270–71
McDonald relationship with, 128, 129, 130
McKinsey alumni and, 84
McKinsey bureaucracy and, 277
McKinsey compensation system and, 145, 165, 208
and McKinsey competition, 167, 203
and McKinsey dealings with management level, 63–64
and McKinsey exceptionalism, 94
McKinsey (James O.) and, 24–25, 32, 34, 35, 36, 95
as McKinsey (James O.) successor, 4, 56–57, 61–62
and McKinsey leadership structure, 138
McKinsey mission and, 169
McKinsey revenue/fees and, 266, 323
and nonfinancial rewards for professionals, 119
“one firm” philosophy of, 31–32
on Parker in London office, 75
as partner in McKinsey, Wellington, 31
partners’ views about leadership of, 129
and Patton work on executive compensation, 65–66
personal and early professional background of, 32–34
personality/style of, 4, 41, 49, 62, 63–64, 87, 134–35
Peters and Waterman’s work and, 149, 154–55
power of, 158
and products for clients, 109
professionalism focus of, 105, 124, 260
Reilly payments and, 130
as repeater, 41–42, 44
reputation of, 118
retirement of, 95, 100
role in McKinsey & Company of, 31, 36, 37, 39, 41
and secret of success, 191
as selling back shares in McKinsey, 42–43
successors to, 100–102
technology views of, 171
tenure of, 101, 135, 136
training and consistency focus of, 85
up-or-out approach and, 83
views about clients of, 39, 44–45, 58–59, 108, 109, 123, 225, 234, 266, 275
views about consultants/consulting, 15, 31, 41, 43–45, 46, 124, 208
as visionary, 32, 96, 97
Walton relationship with, 105
and Wellington-McKinsey merger, 31–32, 37
writings of, 36, 44, 48, 52, 69
and youth as prized over experience, 80. See also specific person, client, or topic
Bower, Richard “Dick” (son), 43, 62, 270
boxing ring cartoon, 167
Braxton Associates, 110
Brebach, Gresham, 200, 201
British Broadcasting Corporation (BBC), 77, 78, 180, 181
British Management Consultants Association, 78
British Petroleum, 305
British Rail, 78
British Steel, 175
Broken Markets (Mellyn), 263, 289
Bruggisser, Philippe, 255–57
Bryan, Lowell, 121, 232, 243, 248, 253, 277, 278, 289, 293, 305
BSHG, 201
Budgetary Control (McKinsey), 21, 24
budgeting, 2, 21–22, 114
Buffett, Warren, 313, 315, 334
Bulkin, Mike, 151
Bush, George W., 284
business: as machines, 150
social role of, 261–63. See also corporations; specific business
Business Administration (McKinsey), 22
The Business Healers (Higdon), 24, 46, 189–90
Business Objects, 309
Business Review Weekly: McKinsey cover story in, 168
business schools, 2, 20, 80–84, 89–90. See also specific school
Business Technology Office, McKinsey, 202, 203
BusinessWeek magazine, editorials/stories in: and arrogance at McKinsey, 165
and AT&T-Gluck-Monitor, 198
BCG-McKinsey competition and, 110
Byrne comments for, 242–43
Carlson comments for, 170
Chellgren comments for, 303
and client development at McKinsey, 268
criticism of McKinsey European expansion, 74
Daniel comments for, 135
election of non-Americans for managing director, 223
and Enron-McKinsey relationship, 242–44, 247, 249, 251
&n
bsp; “Excellence” research feature, 148, 154
expansion of consulting work, 93
Gluck cover story in, 198
and Gulf War publications, 218
Gupta comments for, 249, 259, 268, 269
and Gupta leadership of McKinsey, 238
McKinsey consultant profiles, 156
McKinsey expansion story, 64
and McKinsey generalist model of consulting, 120
and number of clients served by McKinsey, 136–37
and overstaffing at McKinsey, 269
Skilling comments for, 239, 242
Byrne, John, 223, 238, 242, 249, 251, 260–61
Cadbury Schweppes, 78
Cahouet, Frank, 174–75
Campbell Soup, 17
Cannon, Warren, 49, 54, 117–18, 158, 277
Cap Gemini, 199, 210–11
capitalism, 103–4, 215–20, 261, 301–2
Capote, Truman, 46–47
Cardwell, Jack, 126, 134
Carlson, Don, 170
Carlyle Group, 81, 303
Carnegie, Rod, 94–95, 108–9, 194–95
Carnegie Corporation, 90
Caro, Robert, 58
CarsDirect.com, 265
Carter, Graydon, 279
Carter, Jimmy, 136
Caspar, Christian, 162, 223
Casserley, Dominic, 280
Catholic Church: McKinsey compared with, 3, 41, 46, 165
CBS, 72
Cecil, John, 232
Celanese Corporation, 80
Celler-Kefauver Act (1950), 63
Center for Managing Uncertainty, 293
Central Intelligence Agency (CIA), 327
CEOs: as exercising internal control, 114
job of, 177
McKinsey alumni as, 192, 231–32, 281–82
McKinsey consultants as confidants of, 234, 330, 333
McKinsey impact on, 326, 333
McKinsey as producer of, 192, 233, 304. See also executive compensation; leadership, business; management; specific person
Champy, James, 210
Chandler, Alfred, 16, 18, 19, 77, 99
Chanos, Jim, 246
Chase Manhattan, 72, 91, 145, 176, 179, 253, 287
Chatterjee, Anjan, 314
Cheek, Logan, 79, 108–9, 158
Chellgren, Paul, 303
Chemical Bank, 287
Chenault, Ken, 207
Cheng, Josh, 228
Cherington, Paul, 53
Chicago, Illinois: Gupta as head of office in, 221, 224, 226
McKinsey office in, 25, 31, 35–36, 37, 38, 56, 117, 221. See also University of Chicago
Chicago Tribune: Gupta comments to, 225
McKinsey (James O.) obituary in, 35
China: Barton base in, 301
McKinsey activities in, 222, 227–30, 283, 296, 329
McKinsey fees for clients in, 283
and McKinsey in the future, 329, 335
China Leadership Institute, McKinsey (Beijing), 230
Chopra, Deepak, 314
Chrysler Corporation, 58, 64, 80, 190, 333
Chrysler Group LLC, 305
cigarette industry, 92–93