McKinsey and the

Globalization of
Consultancy
Fernando Vasconcelos 152108169
João Leite 152108167
Manuel Abreu 152109030
Pedro Palos 152109022
1 9 2 0 ’s
• 1926 - The accountant James
McKinsey, a former professor at the
university of Chicago founded
McKinsey & Co.
• 1926 - First office was opened in
Chicago
• Adoption of the M-form in the early
1920s
1920 1930
 “In the ‘30s and ‘40s a ‘management consultant’
was looked upon as something slightly nefarious.

1930’s People would say ‘Oh, an efficient expert,’ but

that made all the men in McKinsey draw up in
horror.” – Ruth Neukom, wife of John Neukom. LA Office
member, 1933-1975

• 1933 – Marvin Bower, graduated from Harvard Law

School and Harvard Business School, joined
McKinsey
• 1935 – Turning point for the company: contract from
the retailer Marshall Fields
• 1937 – Split between Chicago (managed by Tom
Kearney) and NY offices (managed by Bower)
• 1937 – Bower wrote a memo explaining his vision for
the firm: successful firm known for its quality work,
the prestige of its clients and the professionalism
and caliber of its staff
• One-firm approach as the key to McKinsey´s success
1920 1930 1940
 “After the war [WW II] we had to upgrade the

1 9 4 0 ’s
caliber of the people. And we did. That led to
being the first employer of a Harvard Business
School graduate.” – Everett Smith, NY Office member,
1944-1977

• 1946 – Bower purchased the exclusive

use of the McKinsey name from the
Chicago Office, which was renamed A.
T. Kearney and company
• 1949 – The firm had first begun
considering incorporating to help
build capital
• During the 1940´s U.S consultancy
firms struggled to make an impact in
1920 Europe
1930 1940 1950
 “Marvin wanted the firm to be distinctive, quite

1 9 5 0 ’s
unlike any other consulting firm. He wanted it to
exemplify the highest standards of professional
conduct.” – Warren Cannon, NY/Chicago Office member, 1949-
1988

• 1953 – Marvin Bower starts a debate

within the firm about the advantages
of international expansion

1920 1930 1940 1950 1960

1950’s – Debate on the
internationalization
 “Marvin wanted the firm to be distinctive, quite

1 9 5 0 ’s
unlike any other consulting firm. He wanted it to
exemplify the highest standards of professional
conduct.” – Warren Cannon, NY/Chicago Office member, 1949-
1988

• 1953 – Marvin Bower starts a debate

within the firm about the advantages
of international expansion
• 1954 – McKinsey establishes a formal
“up or out” policy for associates
and had its first multinational
client (IBM world trade)
• 1956 – McKinsey shifts from a legal
partnership to a corporation
• 1959 – First international office in
1920 London,
1930 UK
1940 1950 1960
 Obstacles faced by McKinsey Geowth – “Boer wanted to create a
large, successful firm known for its quality of work, the prestige of its
clients, and the profissionalism and caliber of its staff”

• Staff
• U.S
• Hired professionals with years of experice
• 1953 – Recruitment MBA directly from Business school (31 out
of 84 were from HBS)
• Bower wanted to focus on young, relativly malleable individuals
• Europe
• Hard to find local high quality staff
• No business schools
• Mckinsey was unknown and therefore it was not an obvious
employer for European elites
• Elites atended different types of school
• Mckinsey needed ro biuld contacts with local elites in foreign
companies in order to develop a domestic client base
• 1954 – first multinational client
• 1959 – Shell announced publicly that it had accepted
McKinsey´s recommendations
 “We began to see ourselves as architects of

1 9 6 0 ’s
change. We must not solve the problem the
clients bring us in to solve, but also bring about
changes within the client organization.” – Dick
Neuschel, NY Office member, 1945-1979

• First mover advantage in most

countries
• Expanded in Europe, by establishing
contacts with local elites
• 1964 – Launched “McKinsey Quarterly”
• Foreign offices developed much faster
than the U.S. offices
• By the end of the 1960´s McKinsey
had become a corporate savior in
Europe
1920 1930 1940 1950 1960 1970
• Will McKinsey be able to maintain its
identity?
 “We should begin to view our primary purpose as
building a great institution that becomes an

1 9 7 0 ’s empire for producing highly motivated, world

class people who, in turn, will serve our clients
extraordinarily well.” – Fred Gluck, NY Office member,
1967-1995

1920 1930 1940 1950 1960 1970 1980

C o m p e tito rs

Company Number of U.S Number of Foreign

A.T. Kearney 5Offices 6Offices
Arthur D. Little 6 6
Bain & Company 1 0
BCG 1 3
Booz Allen 12 5
McKinsey and 7 13
Company U.S Consulting Firms before 1973
 Questions
• Would the cynism that appeared to be on the upturn in the
United States spread elsewhere?
• The competition in Europe was not as fierce as in the United
States
• Low recognition of local european competitors
•

• Would international companies still pay for McKinsey services?

• McKinsey can support multinational companies to enter in
local markets
• Mckinsey had office all over the world which allow them to
integrate and take advantage of diverse knowledge
•

• Had Mckinsey grown too big?

• Prestige clients are multinational companies and
• Global clients require global companies
• There are emerging markets, thus McKinsey can grow even
more – example: Penetration in the Japanese market
•