Unravelling the Structure of McKinsey & Company

McKinsey & Company was established as a partnership in 1926 and was legally restructured as a private corporation with shares owned by its partners in 1956. It follows the structure of an association and the employees are referred to as partners. The company has a flat hierarchy and each member is assigned a mentor. The company has a decentralized organizational structure, with offices, committees and employees that are mostly self-managed. There are also functional groups and geographical divisions with specific names.

The clear division of people's leadership roles at the center of the helix is an important feature of most agile business structures. For example, ING and Spotify have adopted models where value creation work (such as product development) is mainly carried out by self-directed, customer-oriented teams, led by the product owner who sets priorities. Several squads are consolidated into larger units called “tribes” and de facto capacity leaders are divided into “chapters” and coordinate the activities of team members in various disciplines (such as data analysis), in addition to doing their own work. McKinsey has a very global character; a characteristic that the company is very proud of and, without a doubt, it is a source of operational value. It has more than 100 offices in more than 60 countries around the world.

However, the regional nature in which teams are clustered can sometimes be a source of operational inefficiency. When a customer comes to McKinsey with a business, that customer is assigned to a particular partner in the relevant regional office. According to my interviews with some former McKinsey employees, part of the idea behind this regionally driven structure is to allow maximum in-person interaction. It's much easier for a member of the New York office to travel to Pittsburgh four days a week for three months than for a member of the Dubai team. This agreement allows McKinsey to maintain its valuable value of in-person consulting.

I agree that in-person interaction is certainly beneficial. However, I believe that this structure creates enormous operational inefficiency. The seven elements (structure, strategy, shared values, skill, system, shared values, style, and staff) are highly interconnected. If change leaders fail to create a complete plan of action to restore balance, the company can lose a lot of business. At the same time, a well-implemented change effort can be rewarding. In conclusion, McKinsey & Company is an international leader in consulting services since it has continuously provided business solutions to customers.

Founded almost 100 years ago, McKinsey & Company is the oldest and largest of the so-called “three great management consulting firms”.

Ernest Oesterling
Ernest Oesterling

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