McKinsey & Company: Managing Knowledge and Learning - Essay Example

McKinsey & Company: Managing Knowledge and Learning Table of Contents Table of Contents 2 Introduction 3 Key Issues 4 General Environmental Analysis 5 SWOT Analysis 6 Strategic Alternatives 7 Recommended Course of Action 8 Conclusion 8 Bibliography 9 Introduction McKinsey & Company is a management consulting firm of repute. It advises leading companies of the world on various issues like strategy, technology, organization, and operations. McKinsey works as an advisor to world’s prominent businesses, institutions and also government organizations. They help in performance improvements of the organization. It is recognized as one of the leading company in consulting industry. McKinsey has around over 8500 consultants in nearly 100 consulting offices across around 50 countries. McKinsey & Company was set up in Chicago in the year 1926. The founding member of organization is James O. McKinsey. McKinsey provide services to Fortune 500 companies. McKinsey as a company invests prominently on their knowledge management system. They using this system and provide support to their field consultants. The knowledge management system includes researchers, industry as well as function related experts and also librarians. McKinsey has a sub-division named McKinsey Knowledge Centre to manage their pool of knowledge. The centre is operational in Poland, Waltham Massachusetts and in India. This system enables the employees to have the opportunity to readily access an organization’s documents and also facts and figures for gathering information. The system helps in retaining intellectual properties of an employee after they leave the organization also it helps in reducing the training time of new employees in an organization. Anil Kumar who is an eminent partner of McKinsey is regarded as the creator of knowledge management system. Key Issues McKinsey as an organization puts emphasis on knowledge management system. Knowledge is regarded as the lifeblood of the organization. The organization on their vision put a heavy emphasis on sticking to the high standards regarding ethics, integrity and also technical excellence. They wanted to develop and attract young people to their organization so that they will be able to continue the companies’ endeavor of serving their clients to the best of their ability. McKinsey had planned for leadership succession but the economic turmoil and competition from Boston Consulting Group (BCG), led to stalling of company growth. McKinsey’s quality of work done in earlier times was uneven. The knowledge management team was regarded as excellent problem solver but they lacked in-depth industry knowledge. They wanted a continuous development program for their members. They proposed a T-shaped organization in which generalist view would be supplemented by in-depth knowledge and specialty. They wanted to build on their existing knowledge management by developing several initiatives. The company created 15 centers of competence to develop consultants and to continue a renewal of firms existing knowledge employees. The developed a new knowledge infrastructure. They wanted to prepare I-Shaped consultants who would be specialists. They emphasized on building individual and team capability than developing knowledge. The company focused on client impact as a new idea. The company focused on McKinsey’s three consultants to understand the evolving process of knowledge management. In 1994, new MD Rajat Gupta wanted to continue emphasis on knowledge management by launching a four pronged attack. They had developed client service staffs and client service support and administration staffs to look after their clients. McKinsey focuses on serving the companies and clients who seek their help as well as building a successful institution for producing motivated and world class employees for serving the clients. General Environmental Analysis The inception of McKinsey was on successful note. They had successful management and succession planning in place. But an economic turmoil related to oil crisis forced the company to slow down their divisionalization process. The new found competition from Boston Consulting Group had forced McKinsey to think of measures to tackle the competition. On the social front the clients started to transform into more sophistications. So, the company also needed to evolve their client management system. A McKinsey global institute was prepared in the early 1990s to study the global economy. Cross functional development was given importance. Also, a state of the art formulation of key issue was initiated. The focus was given on creating and also managing strategic growth, creating shape and function for the future corporation and also in capturing the opportunities on global basis. The knowledge management centers were developed to leverage firm’s knowledge base effectively. The firm put their emphasis of developing specialized skilled people for serving the clients. They have a limited number of competing players in the consulting industry. Therefore, they have the prospect of being successful in their sector. SWOT Analysis McKinsey has an established structure of operation and business. They have, from the initial days of the company transformed from time to time. They have adopted a flexible approach in knowledge management. They have always put an emphasis on not only serving their clients to the best of its ability but also to develop the consultants. This is one of its strengths, as the manpower development enables a company to tackle any situation arising from ever changing environmental condition. They had always wanted to maintain a strong professional ethics, integrity, and technical excellence which have helped them to grow stronger. They have always wanted to not only serve their clients but also to develop people who can create value to the organization in future. The firm had enjoyed an extraordinary domestic level growth in earlier days that had enabled them to think of international expansion. McKinsey had devised a strategy of considering problems of each client as unique. Their highly intelligent consulting persons were able to devise a solution to the clients’ problem. Their self-confidence gave them opportunities to expand globally. But when they faced threat from competition of Boston Consulting Group, their self confidence was lacking and gave away to self doubt. Their advantage lies in the fact that they had a local presence which enabled them to have a strong connection with business community and also helped them in working at the clients’ work site. Use of technology in connecting with the clients and solving their problems could be the opportunity that helps them to achieve the extra edge over their competitors. The threats arising from similar management consulting firms like Boston Consulting Group could enable them to develop themselves further to overcome the challenge. Strategic Alternatives McKinsey has been able to succeed in this competitive business environment through proper management by its hierarchy and its focus on not only serving the clients well but also by integrating knowledge management system. In future, they can use the development in technology to progress. They can connect with their client base faster by the use of technology. They can have a global growth in the regions like Asia and Africa by using their consultants. The McKinsey global institute can be utilized in developing more skilled employees. The can use cost effective methods in their client service. They will be able to generate success in the business front by developing self governance and also commitment towards their clients. They can recruit manpower from different fields for their consultant position and can train them to successfully tackle any client related problem. The databases required for serving a client properly could be utilized as a future reference. Recommended Course of Action The use of technology could be recommended here as a future course of action. In the coming days, the technology is going to change the entire face of the business operation. In every field, the improvement in technology gives an opportunity for growth. As a management consulting company, McKinsey can use the developing technology to create a client network. They can use the technological progression in establishing their consultant base on global basis. The use of technologies like e-mail will help them to overcome the distance related problem. They will be able to connect with a global client base by using the technology. Also, they will have faster and more complete access to databases that they require in advising their clients to manage and sustain growth and maximize their revenue. Thus, technology will be able to bridge some of the existing gap that the company still has in reaching to the top of the competing companies. Conclusion McKinsey has been able to successfully tackle any client related problem for number of years now. They have given maximum priority on building a relationship with their clients and also providing them with new insight in solving their problem. The relationship with the clients is built on trust. The company puts emphasis on earning clients’ trust not only by their commitment and responsibility but also by their quality of work. In their venture of being the best, they have given equal priority to their knowledge workers i.e. their consultants. They have always looked after developing them further so that they are able to serve the clients with required skills. The use of technology by the company will not only help the company but also their consultants to solve the problem of the clients in effective as well as efficient way. Bibliography Harvard Business School, (2000). McKinsey & Company: Managing Knowledge and Learning. Case Study. Read More