Q1.

What are the Key issues (General and Knowledge Management related)
facing Marvin Bower, Ron Daniel, and Fred Gluck as MD. Analyse the efficacy
of the remedial steps taken by them. (250 words)
Sol: McKinsey has achieved the enviable position it has: their early commitment to consultant
training, their development of a sense of professionalism, their recognition of a niche in topmanagement consulting, their focus on general management problems, particularly strategy and
organization, their recruitment of first-class minds, the power of one off culture.
Among
the
most
important
issues
that
may
be
raised
are
the
following:
- By treating all clients as a firm-wide responsibility, it ensured that there was both a consistent
consulting philosophy and a uniformly high standard of work, since there was a consciousness that
one weak office could lose a worldwide client.
-By recruiting and developing consultants into the firm, not an office, it ensured uniformly high quality
people who were readily transferable, a characteristic that was vital to knowledge transfer.
- By making people and profits firm-wide resources, it could ensure the most efficient utilization of its
financial and human resources, two assets in short supply in the rapid expansion phase.
At an individual level, most firm members including, and perhaps especially the partners and directors
had succeeded in the system by developing their generalist consulting skills and building client
relationships. To many, it must have seemed threatening to be asked to develop specialist skills and
become
"T-Shaped."
- At the organizational level, the power structure had always been built around local offices that were
responsible for hiring and developing consultants and building their local client base. Any changes
that would threaten either of these sources of power were likely to be resisted.
-At the level of basic beliefs, many including Marvin Bower were concerned that the changes would
damage the firm's deeply embedded value of client service by promoting "one-size-fits-all" tools
based consulting driven by visiting experts without long term client knowledge or commitment.
-Fundamentally, the proposed change to "thought leadership" consulting implied a major shift in the
whole business model and organizational capabilities on which McKinsey had been built.
However, under Daniel's leadership, the change process clearly took root as he initiated many of the
changes. One of the most important initiatives he undertook was to appoint one of the firm's most
productive and respected directors to head internal training. The symbolism of this allocation of a
highly productive "snowball thrower" to consultant development role must have been very powerful;
the impact of the programs he initiated even more so. The structural changes creating industry based
and functional based groups were also powerful signals, but it is worthwhile probing what Daniel was
trying to achieve with these changes. Finally, Daniel oversaw the institutionalization of these changes
in a formal redefinition of McKinsey's mission. While Bower was focused only on client service, the
new mission now puts equal weight on building a great firm. This recognition that attracting,
developing, exciting, and retaining exceptional people is at the heart of the McKinsey's mission
represents a major step in the development of its intellectual capital. Many of you may also
immediately focus on Gluck's initiative in starting a Knowledge Management Project in 1987 through
which a series of information systems were developed. FPIS provided a computerized database of
client engagements and PD Net was structured to capture consultant generated ideas and concepts.
These Systems were designed to support the task of capturing knowledge that existed within the firm,
and facilitating its transfer and application in other parts of the organization.