The Firm: The Story of McKinsey and Its Secret Influence on American Business

The Firm: The Story of McKinsey and Its Secret Influence on American Business

The story of McKinsey & Co., America’s most influential and controversial business consulting firm, “an up-to-date, full-blown history, told with wit and clarity” (The Wall Street Journal).If you want to be taken seriously, you hire McKinsey & Company. Founded in 1926, McKinsey can lay claim to the following partial list of accomplishments: its consultants have ush...

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Title:The Firm: The Story of McKinsey and Its Secret Influence on American Business
Author:Duff McDonald
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The Firm: The Story of McKinsey and Its Secret Influence on American Business Reviews

  • ☘Misericordia☘ ~ The Serendipity Aegis ~  ⚡ϟ⚡ϟ⚡⛈ ✺❂❤❣

    Q:

    Any chief executive who hires a consultant to give them strategy should be fired. (c)

    Q:

    You can forecast anything. Delivering actual results is a different story. (c)

    Q:

    “And McKinsey never really left the building. A decade later, when John Birt, then director-general of the BBC, stepped down from his job, McKinsey brought him on as a part-time consultant. In 2005 Birt severed all ties with the firm after critics suggested that working for 10 Downing Street in London and McKinsey posed a conflic

    Q:

    Any chief executive who hires a consultant to give them strategy should be fired. (c)

    Q:

    You can forecast anything. Delivering actual results is a different story. (c)

    Q:

    “And McKinsey never really left the building. A decade later, when John Birt, then director-general of the BBC, stepped down from his job, McKinsey brought him on as a part-time consultant. In 2005 Birt severed all ties with the firm after critics suggested that working for 10 Downing Street in London and McKinsey posed a conflict of interest—as if hiring him shortly after extracting millions of pounds out of the BBC hadn’t been. Birt’s replacement at the BBC’s helm—Greg Dyke—immediately slashed spending on outside consultants by 75 percent.” (c)

    Q:

    “What you get from Harvard Business School is a wonderful network of people who were there with you and a set of tools that you can then bamboozle people with for the rest of your life,” Radio 4 business reporter Peter Day told London’s Sunday Times in 2009.” (c)

    Q:

    “Smart clients say that the best way to use McKinsey is not to let them insinuate themselves—to prohibit walking the halls of the client’s offices looking for new business. Jamie Dimon of JPMorgan Chase, for example, will hire McKinsey, but for one-off projects in which the entire body of knowledge generated is transferred to JPMorgan Chase at the end of the project. The firm’s operating committee has to approve any consulting engagement, and the JPMorgan Chase executives don’t take just any consultants; they pick and choose the specific people they want on the project.” (c)

    Q:

    It’s the only job I can think of where you start in general management, and then, if you’re successful, you end up in sales ... (c)

    Q:

    major private equity firm. “We don’t need them for strategy. But they will do anything you want them to do, including filling out spreadsheets. I use them at twenty cents on the dollar so I don’t have to hire more associates. They generally cost me about a hundred thousand dollars a week. (c)

    Q:

    How the fuck can you coach a football team if you’ve never played football in your life?” he continued. “And I’m not talking pro. I’m talking at any level. They don’t have a clue. I don’t care how many hours they spent firing people at Time Inc. or Meredith Corporation. They had this stupid red/yellow/green system, which they explained to me like I was a five-year-old. (c)

    Q:

    It says much that Matassoni, who went on to spend five years at BCG after leaving McKinsey, still considers himself a McKinsey man above all else. “BCG asked me how come their alumni aren’t as happy as McKinsey’s,” he said. “I told them it was simple, that when a guy left BCG they shat all over him and considered him a failure. When people leave McKinsey, they are counseled out and are proud of their time there.” There is no McKinsey boneyard, in other words; you’re still McKinsey, even after you’ve left. (c)

    Q:

    E. N. B. Mitton, a mining engineer who joined the British office of Bedaux in the 1930s, joked at the time that he would rather tell his mother that he was working “as a pianist in the local brothel” than admit that he had joined a consulting firm. (c)

    Q:

    Consultants will carry information in and information out. The client has to decide which of those flows is worth more. (c)

    Q:

    McKinsey can also be hired when one executive needs “disinterested” support for an idea that might just also result in the removal of an internal rival. Lee Iacocca wrote in his autobiography that when Henry Ford wanted Iacocca out of the firm, he hired McKinsey to recommend a new organizational structure. Iacocca went to Chrysler, where he used Bain & Company instead of McKinsey. (c)

    Q:

    (c) Но кто же такие консультанты McKinsey на самом деле? Специалисты по вопросам управления и сокращения расходов, козлы отпущения и катализаторы корпоративных перемен. Бизнесмены в квадрате. Элитное подразделение властелинов бизнеса, локальная армия, скрытно выполняющая закулисную работу для самых могущественных людей мира. Как они это делают? Скажу так: и посторонние люди, и они сами сравнивают методы своей работы с теми, к которым прибега

    ют иезуиты, американские морские пехотинцы и католическая церковь. Работники McKinsey настолько нежно относятся к себе, что и в тех случаях, когда надо сохранить анонимность, настаивают на персонализации: для посторонних они – сотрудники некой консалтинговой компании, а «для своих» – Фирмы.

    (c) Дуг Айер, работавший консультантом McKinsey с 1962 по 1968 год, вспоминал, как поделился с Бауэром своими планами относительно предстоящего катания на лыжах. «Он сказал, что считает катание на лыжах непрофессиональным занятием, – рассказывал Айер. – Я рассмеялся. А он был серьезен. Он сказал: “Ты рискуешь сломать ногу, что помешает твоей работе с клиентами”. Я ответил, что все равно поеду, но ценю его мнение».

  • Jay Connor

    I'll be the first to admit that the audience for this book is pretty narrow. In addition to McKinsey alums looking for a shout out, the folks like me who are intrigued by the art of management and those folks interested in the (I'd argue contradictory) impulse to contract management's accountability out to MBA gunslingers, are pretty rare birds.

    If you are in one of those categories, you will greatly enjoy Duff McDonald's "no-agenda" relaying of the history of McKinsey and consulting.

    First, the

    I'll be the first to admit that the audience for this book is pretty narrow. In addition to McKinsey alums looking for a shout out, the folks like me who are intrigued by the art of management and those folks interested in the (I'd argue contradictory) impulse to contract management's accountability out to MBA gunslingers, are pretty rare birds.

    If you are in one of those categories, you will greatly enjoy Duff McDonald's "no-agenda" relaying of the history of McKinsey and consulting.

    First, the short-falls: General Motors in the 90's; AT&T wireless and Enron were all multi-million dollar clients; and McKinsey totally missed the internet and tech revolution. Too often, to keep a client -- McKinsey "plays the role the (client) company has scripted" -- and this stands in the way of it's ability to eventually deliver quality in many engagements. Maintaining the multiple millions of dollars GM spent in the 1990's on its way to bankruptcy, for example, can blind McKinsey to seeing what the "numbers" are really suggesting.

    However, in a world full of talkers and blowhards, McKinsey is supremely capable of bringing the focus back to the data and research, and usually to efficient effect. Modeling this rigor is a great gift to leaders - no matter what sector they find themselves in.

    Management guru, Gary Hamel referred to the machinery of management as one of humanity's greatest inventions in his 2007 book, "The Future of Management." If McKinsey hasn't in fact invented many of the bold ideas of management, since it's founding in the 1920's by James O. McKinsey, it has certainly helped clients understand them and carry them out. And for that, alone, they have made a mighty contribution.

  • Ravi Shrivastava

    This book is worth a read. That said, there are some clear pros & (minor) con worth considering:

    PROS:

    * Walks you through the entire history in sufficient detail

    * Provides good explanation behind why the firm changed the way it did at times

    * Highlights its strength & weaknesses in an objective fashion

    CONS:

    * This is a minor point but I feel that the author uses speculation to hint at his understanding of things that we don't really know for sure such as assumptions that "CEOs who hire cons

    This book is worth a read. That said, there are some clear pros & (minor) con worth considering:

    PROS:

    * Walks you through the entire history in sufficient detail

    * Provides good explanation behind why the firm changed the way it did at times

    * Highlights its strength & weaknesses in an objective fashion

    CONS:

    * This is a minor point but I feel that the author uses speculation to hint at his understanding of things that we don't really know for sure such as assumptions that "CEOs who hire consultants routinely are not confident in their ability to lead and need someone to vet their decisions" - I could not find any good reason in the book to believe that to be true

  • Mitesh

    In my second year of management consulting, I'd worked on a project that involved detailing the history of Management Consulting as an industry. So, could connect very well with the details provided in the book from inception to evolution to current state of McKinsey. Plus, I have been a management consultant, though for a very short period of 13 months and could relate to the author's arguments about how McKinsey, a large organisation with no tangible product influences not just the corporate,

    In my second year of management consulting, I'd worked on a project that involved detailing the history of Management Consulting as an industry. So, could connect very well with the details provided in the book from inception to evolution to current state of McKinsey. Plus, I have been a management consultant, though for a very short period of 13 months and could relate to the author's arguments about how McKinsey, a large organisation with no tangible product influences not just the corporate, but also the public sector.

    A recommended read for past/ current/ aspiring management consultants.

  • Utkarsh Modi

    Book # 22 The Firm: The Inside Story of McKinsey

    This book by McDonald is like a BBC documentary on McKinsey (except for the fact that it took much longer to complete than watching a documentary!) – and as goes with BBC Documentaries sometimes (closest example is their work on Putin) – it is opinionated at times with ambivalent statements and self-contradicting conclusions.

    The book traces the story of McKinsey – how James McKinsey founded the firm in the 1920s in effect giving birth to the consu

    Book # 22 The Firm: The Inside Story of McKinsey

    This book by McDonald is like a BBC documentary on McKinsey (except for the fact that it took much longer to complete than watching a documentary!) – and as goes with BBC Documentaries sometimes (closest example is their work on Putin) – it is opinionated at times with ambivalent statements and self-contradicting conclusions.

    The book traces the story of McKinsey – how James McKinsey founded the firm in the 1920s in effect giving birth to the consulting industry and how after his pre mature death, Martin Bower led McKinsey laying down its principles and ground rules to emerge as one of the most influential firms in America with its services being used by the most prestigious companies across sectors and even Governments. The first part of the book traces the story of how McKinsey came to be, its early clients, weathering the storm of new entrants like BCG (‘’McKinsey is Microsoft to BCG’s Apple – never ahead but still having resources to chase the leader’’), the intellectual cachet that McKinsey commands and how its partners (its biggest strength – its network and alumni) have shaped the world in more ways than you can imagine – almost all the major works in this domain have a McKinsey stamp on it.

    The second part of the book while lauding some of its achievements, takes a critical look at McKinsey’s failure with clients post the Bower era – most notable under Rajat Gupta when the firm recorded highest revenues but on the back of some questionable and botched assignments – as McDonald puts it McKinsey turned a profession into a money spinning machine. He talks about the Enron failure and how McKinsey played a part there, wrong advice and failure to read the market trends given to AT&T (they had mobile technology ready in 1980 only to be put down by McKinsey execs that the market would never grow the way it turned out to be!!) , HP Compaq M&A, diversification and investment strategy that went wrong for Swiss Air and the part they played in major M&As in the financial sector (Wachovia – Golden West Financial) leading up to the 2008 crisis. McDonald puts it this way – McKinsey follows the precept – we only advice and have nothing to do with the client’s final outcome – and still gets away with it. The last part of the book discusses the Rajat Gupta, Anil Kumar fiasco in detail where McDonald insinuates that the firm has lost its ethicality when a former Managing Director and Director are embroiled in Insider trading charges – case of bad apples or the firm values gone wrong – he takes an extreme and might I add – a one sided view.

    The book fundamentally asks the question – Has McKinsey made the world better? Has it helped businesses the way it intended to? And he answers in an ambivalent manner – Yes or maybe No – an answer occasionally pointing towards the former but majorly hinting towards the latter.

    Decent Read. Though would love to read more on this.

    #52BooksIn2018 #30ToGo

  • Marks54

    This is an updated company history of McKinsey, the strategic consulting firm that has been so successful that it has come to define the standard for providing management advice. The story follows the firm from its inception to the recent insider trading scandal involving former managing director Raj Gupta.

    The book presents a curious mix of popular acclaim, criticism of the dark sides of the consulting business (legitimating management decisions, justifying downsizing, providing inside informati

    This is an updated company history of McKinsey, the strategic consulting firm that has been so successful that it has come to define the standard for providing management advice. The story follows the firm from its inception to the recent insider trading scandal involving former managing director Raj Gupta.

    The book presents a curious mix of popular acclaim, criticism of the dark sides of the consulting business (legitimating management decisions, justifying downsizing, providing inside information from other clients, etc.), and some occasional insights into how this odd business works and how these firms make money. The basic narrative is well known to anyone who has followed McKinsey in the popular business press and the relatively few quality popular books on the area (The Witch Doctors, for example). Some of the additional insights into the industry is lifted (with attribution) from other sources such as Alfred Chandler or Kiechel's The Lords of Strategy. Overall, the story is well known, but the updating of the McKinsey firm into the 2000's is useful and worth reading to anyone interested in following the industry. The style is typical of the higher end business trade press and is not difficult to follow. This fills the niche for consultants that recent books about Goldman Sachs do for investment bankers.

  • Ninaad

    A long Wikipedia article that is only relevant to consultants. Well researched. Average quality writing.

  • James

    Ah business books. You sit there with the allure of time spent not only being entertained but worthily garnering all sorts of useful life skills or at the very least a snippet or two that you can use to hint at far deeper knowledge. Very rarely they actually entertain, challenge or inform, in fact around one percent of the time. The other 99% goes a little bit like this

    1. I had a decent newspaper article and i turned into a long book

    2. I had an title which would be really exciting but could not

    Ah business books. You sit there with the allure of time spent not only being entertained but worthily garnering all sorts of useful life skills or at the very least a snippet or two that you can use to hint at far deeper knowledge. Very rarely they actually entertain, challenge or inform, in fact around one percent of the time. The other 99% goes a little bit like this

    1. I had a decent newspaper article and i turned into a long book

    2. I had an title which would be really exciting but could not find any evidence for it really. In this case that McKinsey has a secret influence on American business. Its not really that secret.

    3. I am trying to bring a fresh angle so will hold multiple contradictory thoughts

    a) McKinsey sucks up really useful talent who would change the world but lack any individuality or the risk appetite to have a real impact

    b) McKinsey rips off its clients because it really does not deliver anything except inflated fees but yet is able to wreck companies.

    The fundamental issue is this. Business is not all that interesting - case in point I have sat in countless meetings and never, not once has someone suggested hiring an assasin to get rid of a particular problem. Someone once threw a water bottle at someone which was plastic so again not all that interesting. Whats even less interesting then business usually is consulting to business. Which in my time consisted of being asked to run endless analysis while pretending to be really chipper about it all so that the partner could come back and tell you that it was all tremendously useful and appreciated. Then after a certain stage you go to the meeting as well and realize that no-one in their right mind is ever ever going to read it and if they did they are not going to do anything about it, you then surpress that thought because it would do incalculable damage to your self esteem.

    Its all a bit duff like this book.

  • Sana Vasli

    Well written and researched book, but highly misleading. The tagline of the book is click bait. It's not a tale of a controversial firm. It's a promotional book, massively in favour of them.

    All of the "gotcha" moments weren't compelling enough for me to be suspicious of McKinsey. In fact I finished the book respecting what they have achieved. They co-invented the barcode and the White House Chief of Staff!

    This book shares some interesting things about McKinsey and you should only read if you wo

    Well written and researched book, but highly misleading. The tagline of the book is click bait. It's not a tale of a controversial firm. It's a promotional book, massively in favour of them.

    All of the "gotcha" moments weren't compelling enough for me to be suspicious of McKinsey. In fact I finished the book respecting what they have achieved. They co-invented the barcode and the White House Chief of Staff!

    This book shares some interesting things about McKinsey and you should only read if you work there or interested in the company.

  • Andrew

    Trash

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