{"id":8406,"date":"2018-04-30T11:41:36","date_gmt":"2018-04-30T15:41:36","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/mckinsey-company-will-the-firm-win-digital\/"},"modified":"2018-04-30T11:45:35","modified_gmt":"2018-04-30T15:45:35","slug":"mckinsey-company-will-the-firm-win-digital","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/mckinsey-company-will-the-firm-win-digital\/","title":{"rendered":"McKinsey & Company \u2013 will \u201cThe Firm\u201d win DIGITAL?"},"content":{"rendered":"

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MCKINSEY & COMPANY<\/b><\/h1>\n

McKinsey & Company is an international management consulting firm, arguably the biggest one in its space, spans over 60 countries and 120 cities. Within the +200 Billion management consulting industry, the company commands the largest market share with an estimated 4%. The firm is a privately owned partnership and has been estimated by Gartner and Vault to generate approximately $8-9 Billion, with about 23K employees worldwide.\u00a0<\/span><\/p>\n

Challenges:<\/b><\/h2>\n

A<\/b> Changing Competitive Landscape<\/b><\/p>\n

McKinsey & Co.\u2019s biggest traditional competitors in the management consulting market have traditionally included: Deloitte, Accenture, BCG and Bain & Company, but in today\u2019s world, McKinsey & Co., the company dubbed by many – \u2018The Firm,’ would be over simplifying if it were to ignore the wave of new competitors. Today, there are many other services with competing offerings that McKinsey & Co.\u2019s clients, e.g., Fortune 500s, can seek help from with their business and management problems. Some of these new players include: market place platforms like UpWork or Catalant, local or niche consulting firms such as CBRE, which specializes in real estate advisory services and even design thinking firms such as IDEO.<\/p>\n

The Digital Revolution & Changing client needs<\/b><\/p>\n

While these add to the competitive intensity traditional management consulting firms such as McKinsey & Co. face, arguably one of the biggest shifts in the space, has been the digital revolution and the emergence of information technology at its foundation. These days, historically satisfied McKinsey & Co. clients, are looking for more. For example, they\u2019re looking for more precise analysis of \u2018big data\u2019, advanced analytics and machine learning capabilities, rapid prototyping skills, digital user experience expertise and lots more. Clients are looking for partners who can help their businesses make the \u2018digital leap\u2019 to serve new generations of customers: Gen X, Gen Y, millennials, and even Gen Z. This tectonic shift in how busiensses seek out help with their biggest problems means that companies like IBM, Microsoft, GE and also smaller upcoming analtics and digital tools companies are now competing for share of wallet of Fortune 500s and Fortune 1000s.<\/p>\n

Internal Challenges<\/b><\/p>\n

But does the firm have what it takes to take on this challenge? Leaders at the firm have recognized that the resources, investments & talent it had in the past will not suffice to lead them into the future. In this new reality, McKinsey & Co. is faced with decisions on how to incentivize and hire software and hardware engineers, product managers, digital transformation experts and many more. They compete not only with their management consulting peer firms but with some of the world\u2019s most attractive companies, e.g., Google, Amazon and Microsoft, not to mention fast growing exciting startups with compelling equity upside propositions.<\/p>\n

Opportunities:\u00a0<\/span><\/b><\/h2>\n

Seizing the opportunity<\/b><\/p>\n

To be clear, over its 92 year history McKinsey & Co. has been well accustomed to ever-changing competitive landscape and adjusting client needs, but the question remains \u2014 how well and how fast can the firm react to this digital revolution?\u00a0<\/span><\/p>\n

\u201cMo Business Mo Problems\u201d<\/b><\/p>\n

Considering the core business model through which the firm generates revenue, the digital revolution clients and markets are facing is not in and of itself a bad business reality for McKinsey & Co. At its core, it is an opportunity. The current revenue model attempts to answer clients\u2019 problems and questions with projects, named \u201cstudies,\u201d ranging in duration from 1 to 18 months, which usually assemble a dedicated team on the ground backed by the firm-wide resources and knowledge to deliver an impactful response, strategy and implementation plan. Different studies fit under the 12 different functional groups, e.g., Risk, Marketing & Sales or Implementation and the recently added function – \u201cDigital McKinsey\u201d. If you assume clients are still facing traditional business questions with an added a digital complexity, then this means McKinsey & Co. benefits from more possible scenarios in which its services are needed. Layered on top of that is the fact that this functional need has permeated into almost all industries, e.g., Banking, Oil & Gas , etc. This means the McKinsey & Co. offering matrix, (i.e., industries across functions), can grow in both axes.<\/p>\n

Act one – The firm goes \u201cdigital?\u201d<\/b>\u00a0<\/span><\/p>\n

So far, McKinsey has tried to make numerous moves to stay ahead of the problem and turn it into an opportunity. To name a few:\u00a0<\/span><\/p>\n