McKinsey & Company is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an advisor to the world's leading businesses, governments, and institutions. It is widely recognized as a leader and one of the most prestigious firms in the management consulting industry. It has been ranked No.1 for 6 consecutive years in the Vault.com list of top consulting firms, and has been the first or second most desired employer for recent MBA graduates since at least 1996.

Organization

McKinsey & Co., while formally organized as a corporation, functions as a partnership in all important respects. Its managing director is elected for a three year term by the firm's senior shareholders (referred to as "directors", even if they are not company directors). Each managing director can serve a maximum of three terms. At a strategic level, a number of committees are charged with the development of policies and the making of critical decisions. McKinsey operates under a practice of "up or out," in which consultants must either advance in their consulting careers within a pre-defined time-frame, or else be fired.

McKinsey has over 8,000 consultants in 90 offices across 51 countries. Clients include three of the world's five largest companies, two-thirds of the Fortune 1000, governments and other non-profit institutions. McKinsey's clients represent more than 70 percent of Fortune magazine's most-admired list, more than 90 of the 100 leading global corporations, and governments in more than 35 countries. Forbes estimated the firm's 2007 revenues at $5.33 billion. 1

A controversial aspect of McKinsey's practice is that it is non-exclusive, and thus a conflict of interest could arise as different teams of consultants might work for direct competitors in an industry. This works to the company's advantage, as it does not require it to rule out working for potential clients; furthermore, knowing that a competitor has hired McKinsey has historically been a strong impetus for companies to seek McKinsey's assistance themselves. The policy also means McKinsey can keep its list of clients confidential. However, because of this there is great emphasis placed on client confidentiality within the firm, and consultants are forbidden to discuss details of their work with members of other teams. Consultants are also prohibited from serving direct competitors unless they wait 3 or more years between the date they cease serving one competitor and begin serving the next. In some cases, consultants are forbidden from ever serving a competitor.

The firm competes for clients primarily with Boston Consulting Group, Bain & Company, Booz & Company, Monitor Group and other top-tier consulting firms.

History

James O. McKinsey & Company was founded in Chicago in 1926 by James O. ("Mac") McKinsey, a professor at the University of Chicago who pioneered budgeting as a management tool. Marshall Field's became a client in 1935, and soon convinced McKinsey to leave the firm and become its CEO; however, he died unexpectedly in 1937.