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The Firm: The Story of McKinsey and Its Secret Influence on American Business

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The story of McKinsey & Co., America’s most influential and controversial business consulting firm, “an up-to-date, full-blown history, told with wit and clarity” (The Wall Street Journal). If you want to be taken seriously, you hire McKinsey & Company. Founded in 1926, McKinsey can lay claim to the following partial list of accomplishments: its consultants have ushered in The story of McKinsey & Co., America’s most influential and controversial business consulting firm, “an up-to-date, full-blown history, told with wit and clarity” (The Wall Street Journal). If you want to be taken seriously, you hire McKinsey & Company. Founded in 1926, McKinsey can lay claim to the following partial list of accomplishments: its consultants have ushered in waves of structural, financial, and technological change to the nation’s best organizations; they remapped the power structure within the White House; they even revo­lutionized business schools. In The New York Times bestseller The Firm, star financial journalist Duff McDonald shows just how, in becoming an indispensable part of decision making at the highest levels, McKinsey has done nothing less than set the course of American capitalism. But he also answers the question that’s on the mind of anyone who has ever heard the word McKinsey: Are they worth it? After all, just as McKinsey can be shown to have helped invent most of the tools of modern management, the company was also involved with a number of striking failures. Its consultants were on the scene when General Motors drove itself into the ground, and they were K-Mart’s advisers when the retailer tumbled into disarray. They played a critical role in building the bomb known as Enron. McDonald is one of the few journalists to have not only parsed the record but also penetrated the culture of McKinsey itself. His access puts him in a unique position to demonstrate when it is worth hiring these gurus—and when they’re full of smoke.


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The story of McKinsey & Co., America’s most influential and controversial business consulting firm, “an up-to-date, full-blown history, told with wit and clarity” (The Wall Street Journal). If you want to be taken seriously, you hire McKinsey & Company. Founded in 1926, McKinsey can lay claim to the following partial list of accomplishments: its consultants have ushered in The story of McKinsey & Co., America’s most influential and controversial business consulting firm, “an up-to-date, full-blown history, told with wit and clarity” (The Wall Street Journal). If you want to be taken seriously, you hire McKinsey & Company. Founded in 1926, McKinsey can lay claim to the following partial list of accomplishments: its consultants have ushered in waves of structural, financial, and technological change to the nation’s best organizations; they remapped the power structure within the White House; they even revo­lutionized business schools. In The New York Times bestseller The Firm, star financial journalist Duff McDonald shows just how, in becoming an indispensable part of decision making at the highest levels, McKinsey has done nothing less than set the course of American capitalism. But he also answers the question that’s on the mind of anyone who has ever heard the word McKinsey: Are they worth it? After all, just as McKinsey can be shown to have helped invent most of the tools of modern management, the company was also involved with a number of striking failures. Its consultants were on the scene when General Motors drove itself into the ground, and they were K-Mart’s advisers when the retailer tumbled into disarray. They played a critical role in building the bomb known as Enron. McDonald is one of the few journalists to have not only parsed the record but also penetrated the culture of McKinsey itself. His access puts him in a unique position to demonstrate when it is worth hiring these gurus—and when they’re full of smoke.

30 review for The Firm: The Story of McKinsey and Its Secret Influence on American Business

  1. 4 out of 5

    ☘Misericordia☘ ⚡ϟ⚡⛈⚡☁ ❇️❤❣

    Q: Any chief executive who hires a consultant to give them strategy should be fired. (c) Q: You can forecast anything. Delivering actual results is a different story. (c) Q: “And McKinsey never really left the building. A decade later, when John Birt, then director-general of the BBC, stepped down from his job, McKinsey brought him on as a part-time consultant. In 2005 Birt severed all ties with the firm after critics suggested that working for 10 Downing Street in London and McKinsey posed a conflic Q: Any chief executive who hires a consultant to give them strategy should be fired. (c) Q: You can forecast anything. Delivering actual results is a different story. (c) Q: “And McKinsey never really left the building. A decade later, when John Birt, then director-general of the BBC, stepped down from his job, McKinsey brought him on as a part-time consultant. In 2005 Birt severed all ties with the firm after critics suggested that working for 10 Downing Street in London and McKinsey posed a conflict of interest—as if hiring him shortly after extracting millions of pounds out of the BBC hadn’t been. Birt’s replacement at the BBC’s helm—Greg Dyke—immediately slashed spending on outside consultants by 75 percent.” (c) Q: “What you get from Harvard Business School is a wonderful network of people who were there with you and a set of tools that you can then bamboozle people with for the rest of your life,” Radio 4 business reporter Peter Day told London’s Sunday Times in 2009.” (c) Q: “Smart clients say that the best way to use McKinsey is not to let them insinuate themselves—to prohibit walking the halls of the client’s offices looking for new business. Jamie Dimon of JPMorgan Chase, for example, will hire McKinsey, but for one-off projects in which the entire body of knowledge generated is transferred to JPMorgan Chase at the end of the project. The firm’s operating committee has to approve any consulting engagement, and the JPMorgan Chase executives don’t take just any consultants; they pick and choose the specific people they want on the project.” (c) Q: It’s the only job I can think of where you start in general management, and then, if you’re successful, you end up in sales ... (c) Q: major private equity firm. “We don’t need them for strategy. But they will do anything you want them to do, including filling out spreadsheets. I use them at twenty cents on the dollar so I don’t have to hire more associates. They generally cost me about a hundred thousand dollars a week. (c) Q: How the fuck can you coach a football team if you’ve never played football in your life?” he continued. “And I’m not talking pro. I’m talking at any level. They don’t have a clue. I don’t care how many hours they spent firing people at Time Inc. or Meredith Corporation. They had this stupid red/yellow/green system, which they explained to me like I was a five-year-old. (c) Q: It says much that Matassoni, who went on to spend five years at BCG after leaving McKinsey, still considers himself a McKinsey man above all else. “BCG asked me how come their alumni aren’t as happy as McKinsey’s,” he said. “I told them it was simple, that when a guy left BCG they shat all over him and considered him a failure. When people leave McKinsey, they are counseled out and are proud of their time there.” There is no McKinsey boneyard, in other words; you’re still McKinsey, even after you’ve left. (c) Q: E. N. B. Mitton, a mining engineer who joined the British office of Bedaux in the 1930s, joked at the time that he would rather tell his mother that he was working “as a pianist in the local brothel” than admit that he had joined a consulting firm. (c) Q: Consultants will carry information in and information out. The client has to decide which of those flows is worth more. (c) Q: McKinsey can also be hired when one executive needs “disinterested” support for an idea that might just also result in the removal of an internal rival. Lee Iacocca wrote in his autobiography that when Henry Ford wanted Iacocca out of the firm, he hired McKinsey to recommend a new organizational structure. Iacocca went to Chrysler, where he used Bain & Company instead of McKinsey. (c) Q: (c) Но кто же такие консультанты McKinsey на самом деле? Специалисты по вопросам управления и сокращения расходов, козлы отпущения и катализаторы корпоративных перемен. Бизнесмены в квадрате. Элитное подразделение властелинов бизнеса, локальная армия, скрытно выполняющая закулисную работу для самых могущественных людей мира. Как они это делают? Скажу так: и посторонние люди, и они сами сравнивают методы своей работы с теми, к которым прибега ют иезуиты, американские морские пехотинцы и католическая церковь. Работники McKinsey настолько нежно относятся к себе, что и в тех случаях, когда надо сохранить анонимность, настаивают на персонализации: для посторонних они – сотрудники некой консалтинговой компании, а «для своих» – Фирмы. (c) Дуг Айер, работавший консультантом McKinsey с 1962 по 1968 год, вспоминал, как поделился с Бауэром своими планами относительно предстоящего катания на лыжах. «Он сказал, что считает катание на лыжах непрофессиональным занятием, – рассказывал Айер. – Я рассмеялся. А он был серьезен. Он сказал: “Ты рискуешь сломать ногу, что помешает твоей работе с клиентами”. Я ответил, что все равно поеду, но ценю его мнение».

  2. 4 out of 5

    Jay Connor

    I'll be the first to admit that the audience for this book is pretty narrow. In addition to McKinsey alums looking for a shout out, the folks like me who are intrigued by the art of management and those folks interested in the (I'd argue contradictory) impulse to contract management's accountability out to MBA gunslingers, are pretty rare birds. If you are in one of those categories, you will greatly enjoy Duff McDonald's "no-agenda" relaying of the history of McKinsey and consulting. First, the I'll be the first to admit that the audience for this book is pretty narrow. In addition to McKinsey alums looking for a shout out, the folks like me who are intrigued by the art of management and those folks interested in the (I'd argue contradictory) impulse to contract management's accountability out to MBA gunslingers, are pretty rare birds. If you are in one of those categories, you will greatly enjoy Duff McDonald's "no-agenda" relaying of the history of McKinsey and consulting. First, the short-falls: General Motors in the 90's; AT&T wireless and Enron were all multi-million dollar clients; and McKinsey totally missed the internet and tech revolution. Too often, to keep a client -- McKinsey "plays the role the (client) company has scripted" -- and this stands in the way of it's ability to eventually deliver quality in many engagements. Maintaining the multiple millions of dollars GM spent in the 1990's on its way to bankruptcy, for example, can blind McKinsey to seeing what the "numbers" are really suggesting. However, in a world full of talkers and blowhards, McKinsey is supremely capable of bringing the focus back to the data and research, and usually to efficient effect. Modeling this rigor is a great gift to leaders - no matter what sector they find themselves in. Management guru, Gary Hamel referred to the machinery of management as one of humanity's greatest inventions in his 2007 book, "The Future of Management." If McKinsey hasn't in fact invented many of the bold ideas of management, since it's founding in the 1920's by James O. McKinsey, it has certainly helped clients understand them and carry them out. And for that, alone, they have made a mighty contribution.

  3. 4 out of 5

    James

    Ah business books. You sit there with the allure of time spent not only being entertained but worthily garnering all sorts of useful life skills or at the very least a snippet or two that you can use to hint at far deeper knowledge. Very rarely they actually entertain, challenge or inform, in fact around one percent of the time. The other 99% goes a little bit like this 1. I had a decent newspaper article and i turned into a long book 2. I had an title which would be really exciting but could not Ah business books. You sit there with the allure of time spent not only being entertained but worthily garnering all sorts of useful life skills or at the very least a snippet or two that you can use to hint at far deeper knowledge. Very rarely they actually entertain, challenge or inform, in fact around one percent of the time. The other 99% goes a little bit like this 1. I had a decent newspaper article and i turned into a long book 2. I had an title which would be really exciting but could not find any evidence for it really. In this case that McKinsey has a secret influence on American business. Its not really that secret. 3. I am trying to bring a fresh angle so will hold multiple contradictory thoughts a) McKinsey sucks up really useful talent who would change the world but lack any individuality or the risk appetite to have a real impact b) McKinsey rips off its clients because it really does not deliver anything except inflated fees but yet is able to wreck companies. The fundamental issue is this. Business is not all that interesting - case in point I have sat in countless meetings and never, not once has someone suggested hiring an assasin to get rid of a particular problem. Someone once threw a water bottle at someone which was plastic so again not all that interesting. Whats even less interesting then business usually is consulting to business. Which in my time consisted of being asked to run endless analysis while pretending to be really chipper about it all so that the partner could come back and tell you that it was all tremendously useful and appreciated. Then after a certain stage you go to the meeting as well and realize that no-one in their right mind is ever ever going to read it and if they did they are not going to do anything about it, you then surpress that thought because it would do incalculable damage to your self esteem. Its all a bit duff like this book.

  4. 4 out of 5

    Marks54

    This is an updated company history of McKinsey, the strategic consulting firm that has been so successful that it has come to define the standard for providing management advice. The story follows the firm from its inception to the recent insider trading scandal involving former managing director Raj Gupta. The book presents a curious mix of popular acclaim, criticism of the dark sides of the consulting business (legitimating management decisions, justifying downsizing, providing inside informati This is an updated company history of McKinsey, the strategic consulting firm that has been so successful that it has come to define the standard for providing management advice. The story follows the firm from its inception to the recent insider trading scandal involving former managing director Raj Gupta. The book presents a curious mix of popular acclaim, criticism of the dark sides of the consulting business (legitimating management decisions, justifying downsizing, providing inside information from other clients, etc.), and some occasional insights into how this odd business works and how these firms make money. The basic narrative is well known to anyone who has followed McKinsey in the popular business press and the relatively few quality popular books on the area (The Witch Doctors, for example). Some of the additional insights into the industry is lifted (with attribution) from other sources such as Alfred Chandler or Kiechel's The Lords of Strategy. Overall, the story is well known, but the updating of the McKinsey firm into the 2000's is useful and worth reading to anyone interested in following the industry. The style is typical of the higher end business trade press and is not difficult to follow. This fills the niche for consultants that recent books about Goldman Sachs do for investment bankers.

  5. 5 out of 5

    Ravi Shrivastava

    This book is worth a read. That said, there are some clear pros & (minor) con worth considering: PROS: * Walks you through the entire history in sufficient detail * Provides good explanation behind why the firm changed the way it did at times * Highlights its strength & weaknesses in an objective fashion CONS: * This is a minor point but I feel that the author uses speculation to hint at his understanding of things that we don't really know for sure such as assumptions that "CEOs who hire consultants This book is worth a read. That said, there are some clear pros & (minor) con worth considering: PROS: * Walks you through the entire history in sufficient detail * Provides good explanation behind why the firm changed the way it did at times * Highlights its strength & weaknesses in an objective fashion CONS: * This is a minor point but I feel that the author uses speculation to hint at his understanding of things that we don't really know for sure such as assumptions that "CEOs who hire consultants routinely are not confident in their ability to lead and need someone to vet their decisions" - I could not find any good reason in the book to believe that to be true

  6. 5 out of 5

    Andrew

    Trash

  7. 5 out of 5

    Mitesh

    In my second year of management consulting, I'd worked on a project that involved detailing the history of Management Consulting as an industry. So, could connect very well with the details provided in the book from inception to evolution to current state of McKinsey. Plus, I have been a management consultant, though for a very short period of 13 months and could relate to the author's arguments about how McKinsey, a large organisation with no tangible product influences not just the corporate, In my second year of management consulting, I'd worked on a project that involved detailing the history of Management Consulting as an industry. So, could connect very well with the details provided in the book from inception to evolution to current state of McKinsey. Plus, I have been a management consultant, though for a very short period of 13 months and could relate to the author's arguments about how McKinsey, a large organisation with no tangible product influences not just the corporate, but also the public sector. A recommended read for past/ current/ aspiring management consultants.

  8. 5 out of 5

    Sana Vasli

    Well written and researched book, but highly misleading. The tagline of the book is click bait. It's not a tale of a controversial firm. It's a promotional book, massively in favour of them. All of the "gotcha" moments weren't compelling enough for me to be suspicious of McKinsey. In fact I finished the book respecting what they have achieved. They co-invented the barcode and the White House Chief of Staff! This book shares some interesting things about McKinsey and you should only read if you wo Well written and researched book, but highly misleading. The tagline of the book is click bait. It's not a tale of a controversial firm. It's a promotional book, massively in favour of them. All of the "gotcha" moments weren't compelling enough for me to be suspicious of McKinsey. In fact I finished the book respecting what they have achieved. They co-invented the barcode and the White House Chief of Staff! This book shares some interesting things about McKinsey and you should only read if you work there or interested in the company.

  9. 5 out of 5

    Ninaad

    A long Wikipedia article that is only relevant to consultants. Well researched. Average quality writing.

  10. 4 out of 5

    Utkarsh Modi

    Book # 22 The Firm: The Inside Story of McKinsey This book by McDonald is like a BBC documentary on McKinsey (except for the fact that it took much longer to complete than watching a documentary!) – and as goes with BBC Documentaries sometimes (closest example is their work on Putin) – it is opinionated at times with ambivalent statements and self-contradicting conclusions. The book traces the story of McKinsey – how James McKinsey founded the firm in the 1920s in effect giving birth to the consu Book # 22 The Firm: The Inside Story of McKinsey This book by McDonald is like a BBC documentary on McKinsey (except for the fact that it took much longer to complete than watching a documentary!) – and as goes with BBC Documentaries sometimes (closest example is their work on Putin) – it is opinionated at times with ambivalent statements and self-contradicting conclusions. The book traces the story of McKinsey – how James McKinsey founded the firm in the 1920s in effect giving birth to the consulting industry and how after his pre mature death, Martin Bower led McKinsey laying down its principles and ground rules to emerge as one of the most influential firms in America with its services being used by the most prestigious companies across sectors and even Governments. The first part of the book traces the story of how McKinsey came to be, its early clients, weathering the storm of new entrants like BCG (‘’McKinsey is Microsoft to BCG’s Apple – never ahead but still having resources to chase the leader’’), the intellectual cachet that McKinsey commands and how its partners (its biggest strength – its network and alumni) have shaped the world in more ways than you can imagine – almost all the major works in this domain have a McKinsey stamp on it. The second part of the book while lauding some of its achievements, takes a critical look at McKinsey’s failure with clients post the Bower era – most notable under Rajat Gupta when the firm recorded highest revenues but on the back of some questionable and botched assignments – as McDonald puts it McKinsey turned a profession into a money spinning machine. He talks about the Enron failure and how McKinsey played a part there, wrong advice and failure to read the market trends given to AT&T (they had mobile technology ready in 1980 only to be put down by McKinsey execs that the market would never grow the way it turned out to be!!) , HP Compaq M&A, diversification and investment strategy that went wrong for Swiss Air and the part they played in major M&As in the financial sector (Wachovia – Golden West Financial) leading up to the 2008 crisis. McDonald puts it this way – McKinsey follows the precept – we only advice and have nothing to do with the client’s final outcome – and still gets away with it. The last part of the book discusses the Rajat Gupta, Anil Kumar fiasco in detail where McDonald insinuates that the firm has lost its ethicality when a former Managing Director and Director are embroiled in Insider trading charges – case of bad apples or the firm values gone wrong – he takes an extreme and might I add – a one sided view. The book fundamentally asks the question – Has McKinsey made the world better? Has it helped businesses the way it intended to? And he answers in an ambivalent manner – Yes or maybe No – an answer occasionally pointing towards the former but majorly hinting towards the latter. Decent Read. Though would love to read more on this. #52BooksIn2018 #30ToGo

  11. 5 out of 5

    Surabhi Purwar

    As an incoming b-school candidate, it's rather typical of me to be reading this. I'd heard a great deal about McKinsey, BCG, and the likes but your average fan-stories by aspiring consultants seem to tell only one unhelpful fact about McKinsey, which is just how cool/invincible it is. Those who don't aspire to be one also seem to have taken the "god" status of Mckinsey as a given. This is not to say that I discredit the whole profession, but reading this book gave me a much more wholesome picture As an incoming b-school candidate, it's rather typical of me to be reading this. I'd heard a great deal about McKinsey, BCG, and the likes but your average fan-stories by aspiring consultants seem to tell only one unhelpful fact about McKinsey, which is just how cool/invincible it is. Those who don't aspire to be one also seem to have taken the "god" status of Mckinsey as a given. This is not to say that I discredit the whole profession, but reading this book gave me a much more wholesome picture of the consulting industry and its leader of nearly a century. Why I liked the book: 1. It doesn't seem to be mindlessly praising/fawning at everything McKinsey has done. The book is as unbiased as it can get. It gives Mckinsey credit where it's due, and points out the ironies where they are so obvious. That helps take Mckinsey down the made-up throne of the corporate-business world and renders it in the same light as you would any industry/company- with all its inconsistencies, hyperboles, ethical issues, and fallibilities. 2. The man Mckinsey had a brilliant idea and he set it up well in an economy that needed it (post-depression boom). There were leaders who came in and left and tried to do the best they could with the opportunities the economy offered them during their times. This painted a nice picture for me of how an organization grows, pivots, struggles to stay relevant in the context of its times. 3. Consulting as an industry is interesting because of what they sell, which essentially is, knowledge, research, and advice. Being able to do it so massively, profitably, and over a century tells us a lot about how money can be made and how value can be generated in an economy. 4. I was glad to read some of the questions the book has asked which somehow none of the consulting aspirants/fans ever seem to be talking about (maybe I need to talk to more) -What value has the company created for its client and for the world (maximizing profits vs causing mass layoffs) -What is behind all the hype and arrogance? - What role did the company have in some of the worst corporate decisions ever made (2008 recession for instance) So, overall, the book helped me with exactly what I needed to know- "a complete picture of Mckinsey". It repeats itself a lot and could have been shorter.

  12. 5 out of 5

    Cassie

    Clearly the author has his opinions about The Firm. Fascinating info none the less.

  13. 5 out of 5

    Jeff

    Duff McDonald's business writing has always been underlined by his expertise (in addition to writing for the likes of Fortune, Vanity Fair, New York, Conde Nast Portfolio, and many other publications, he is the author of a biography of Jamie Dimon and has himself worked on Wall Street). His writing is clear, brimming with content, and infused with a story-teller's instinct for narrative. This detailed account of the entire history of McKinsey showcases all those positives, while nicely elucidati Duff McDonald's business writing has always been underlined by his expertise (in addition to writing for the likes of Fortune, Vanity Fair, New York, Conde Nast Portfolio, and many other publications, he is the author of a biography of Jamie Dimon and has himself worked on Wall Street). His writing is clear, brimming with content, and infused with a story-teller's instinct for narrative. This detailed account of the entire history of McKinsey showcases all those positives, while nicely elucidating the role this shadow company has played in shaping contemporary America. Bravo: not an easy assignment.

  14. 4 out of 5

    Emma

    This book confirms many or my prior opinions and insights, that McKinsey is the Microsoft of today, too large, too overblown, and run by people while smart are out of touch with the realities of how business operates. Worse, some of its leadership have been convicted of illegal practices, and even though that number is small, others involved with Enron, HP, the economic crisis, and others, McKinsey side stepped responsibility by telling the world that, while they provide strategic advice they do This book confirms many or my prior opinions and insights, that McKinsey is the Microsoft of today, too large, too overblown, and run by people while smart are out of touch with the realities of how business operates. Worse, some of its leadership have been convicted of illegal practices, and even though that number is small, others involved with Enron, HP, the economic crisis, and others, McKinsey side stepped responsibility by telling the world that, while they provide strategic advice they don't actually pull the trigger. So, I'm not sure if I like it out of confirmation bias or what little new information I learned from it. A remarkable story nonetheless.

  15. 5 out of 5

    Evan

    This was an interesting book, but it didn't seem well organized to me. McKinsey has such a long history that I think it would be difficult to write a detailed summary of the firm. There was much interesting information, but I feel like the author tried to cover too many small examples. Maybe this would be a better book for someone who is more familiar with events that occurred over the span of the book. There were lots of interesting facts, but it almost felt like too many. This was an interesting book, but it didn't seem well organized to me. McKinsey has such a long history that I think it would be difficult to write a detailed summary of the firm. There was much interesting information, but I feel like the author tried to cover too many small examples. Maybe this would be a better book for someone who is more familiar with events that occurred over the span of the book. There were lots of interesting facts, but it almost felt like too many.

  16. 5 out of 5

    LeikHong Leow

    I was attracted to the book by its title - McKinsey. I like to learn how McKinsey became the world-leading consulting firm. This book shared the whole history of the firm, how it was founded and the rise and fall for the last 80 years. To me, this book is more like a history book of the firm, not many ideas on how they did it. Most parts of the stories were elaborating their legendary leaders, I was hoping to find out about the strategies instead.

  17. 4 out of 5

    Christopher Anderson

    I used to be able to count on one hand the number of books I give up on - now it takes two. This is a dry and uninteresting pile of generalities. I forced myself to get 1/2 in, waiting for it to get interesting. 3/5 of the way through it never got there and I through in the towel. Life is too short to waste time reading this book.

  18. 5 out of 5

    Dave Mason

    Great read to get an understanding of macro biz trends during the past 100 years, and to learn (arguably) who (McKinsey) has influenced them, and how. I work in an agency, so it's interesting to read how a consulting firm can scale its business like McKinsey has. I took notes and learned something. Great read to get an understanding of macro biz trends during the past 100 years, and to learn (arguably) who (McKinsey) has influenced them, and how. I work in an agency, so it's interesting to read how a consulting firm can scale its business like McKinsey has. I took notes and learned something.

  19. 4 out of 5

    Dawa Tundup

    Scintillating and exciting

  20. 5 out of 5

    Robert

    Good insight into the world of consulting and how a company ethical code can get lost on the way to making large amounts of money

  21. 4 out of 5

    Tom

    An institutional biography of the consulting firm, McKinsey. Interesting to learn more about how consultants operate, the arrogance, the massive fees, and the all-too-frequent questionable advice. The book contains many stories about McKinsey's bad advice that led to massive business failures, and yet McKinsey never took the blame for any of them. For example, why were no McKinsey directors subpoenaed after Enron's failure? They were basically running the company. On McKinsey's advice to General An institutional biography of the consulting firm, McKinsey. Interesting to learn more about how consultants operate, the arrogance, the massive fees, and the all-too-frequent questionable advice. The book contains many stories about McKinsey's bad advice that led to massive business failures, and yet McKinsey never took the blame for any of them. For example, why were no McKinsey directors subpoenaed after Enron's failure? They were basically running the company. On McKinsey's advice to General Motors that eventually led to GM's bankruptcy in 2009: "McKinsey just moved people around and this had the effect of destroying institutional knowledge and the informal networks of people who knew how to get things done inside the massive company. They were flying perpendicular to where they should have been. It was the thousand of little things Toyota did well that mattered, and not the organizational design of General Motors." "These [consultants] are not people who have ever run anything. These are people who have spent their lives talking to high level executives. And what do high-level executives know about making things? Not much, usually." "Corporate executives are not risk takers. They don't see trouble clearly until they are going down the drain." While McKinsey typically questions a company's organizational structure and suggests making "organizational changes" (i.e., layoffs), the following is an instance that led to long-term improvements at one particular company. On deciding which R&D projects to proceed with: "Instead of focusing on the here and now, the company was asking managers to estimate the return on investment for each initiative, and then basing the decision to proceed on that. Rosy projections abounded, so much so that in the few years since the change no project had been turned down. Think about that! To calculate the return of investment for a project that's still in R&D means you're projecting sales way out into the future. You can project anything you want, which makes it a totally useless way of selecting projects. The way you should select R&D projects is based on what it does to your competitive position or whether it opens up a new market to you."

  22. 5 out of 5

    Kyle Weil

    The Firm: The Story of McKinsey and Its Secret Influence on American Business is exactly what it sounds like, a book on the history of McKinsey and a primer on what the multinational company does. The book chronicles McKinsey from its inception as a small professional firm focusing on organization structure ti the massive behemoth specializing in strategy, knowledge collection, transformational change, and a range of other specialties. McDonald does not hold back on the myriad of scandals and cr The Firm: The Story of McKinsey and Its Secret Influence on American Business is exactly what it sounds like, a book on the history of McKinsey and a primer on what the multinational company does. The book chronicles McKinsey from its inception as a small professional firm focusing on organization structure ti the massive behemoth specializing in strategy, knowledge collection, transformational change, and a range of other specialties. McDonald does not hold back on the myriad of scandals and critiques leveled at McKinsey over the years. Critics describe the firm as full of pompous, arrogant, snake oil salesmen. According to these critics, McKinsey repackages the same catechisms and cliche ideas for generations. They latch on to companies and deliver what executives want to hear rather than what they need (or so critics say) On top of this, McKinsey has been full of huge controversies ranging from a managing director being convicted of insider trading to faulty advice that has led many a company to bankruptcy. With that said, McDonald does acknowledge McKinsey's spikes. The firm's analytical prowess and ability to generate industry knowledge are unrivaled in the industry. The firm's alumni network is among the strongest in the world and is the arguably the number one producer of CEOs. While the Firm's value can be hard to measure, the fact that companies continue to pay a premium to receive McKinsey's services speaks leagues to how respected their work has been. This book showed me how easily corruptible businesses are and the importance of a strong value system. Overall, I would not recommend this book to anyone except those who have a strong curiosity to learn about McKinsey or are interested in working there. The book could be extremely monotonous at times and the structuring of chapters made the beginning hard to follow (lots of quickly jumping back and forth in time). I enjoyed this read for the sole reason that I learned more about my future employer, the good and the bad.

  23. 5 out of 5

    Dakshesh Thacker

    As a college student in the last decade, the aura around McKinsey & Co. stood tall even though I studied at a college not known to be one of their talent hunting grounds in India. Over the years as I graduated and kickstarted my career, I could see the ubiquity of The Firm. Whether it was supply chain, education nonprofits or the government, I heard, saw or caught references to their work wherever I went. As a result the ever curious person in me always pushed to think- what did McKinsey do for As a college student in the last decade, the aura around McKinsey & Co. stood tall even though I studied at a college not known to be one of their talent hunting grounds in India. Over the years as I graduated and kickstarted my career, I could see the ubiquity of The Firm. Whether it was supply chain, education nonprofits or the government, I heard, saw or caught references to their work wherever I went. As a result the ever curious person in me always pushed to think- what did McKinsey do for the last century, earning them this stellar reputation and almost equal number of detractors. Duff McDonald has scripted a taut narrative blending inputs from both sides of the coin. The rigor of research to craft the work is clearly visible but definitely not in your face. Overall, the book does lean on the positives of McKinsey but also has chapters sharply critiquing some of its infamous engagements and decisions. McDonald does an excellent job in tracing the historical arc and thus proving how the firm reached where it has today. Apart from the Managing Directors, many of the firm's renowned consultants and thinkers are profiled with varies levels of detail. This book will definitely appeal to readers keen on understanding the firm. Moreover it will also interest those who are keen to understand how the nature of work, industry and the consulting services sector has evolved over the last century. At various points of the book, McDonald connects the progress of industry with McKinsey's and superficially theorizes possible impact it has on society. This book will definitely not appeal much to those outside consulting , the corporate arena (hardcore bankers may have some beef with the book too) and those who aren't in favor of capitalism and its projected excesses in the last half century. Would definitely recommend the book to all others.

  24. 4 out of 5

    Louis Chatelet

    This review has been hidden because it contains spoilers. To view it, click here. The story of McKinsey & Co., America’s most influential and controversial business consulting firm, “an up-to-date, full-blown history, told with wit and clarity” (The Wall Street Journal). If you want to be taken seriously, you hire McKinsey & Company. Founded in 1926, McKinsey can lay claim to the following partial list of accomplishments: its consultants have ushered in waves of structural, financial, and technological change to the nation’s best organizations; they remapped the power structur The story of McKinsey & Co., America’s most influential and controversial business consulting firm, “an up-to-date, full-blown history, told with wit and clarity” (The Wall Street Journal). If you want to be taken seriously, you hire McKinsey & Company. Founded in 1926, McKinsey can lay claim to the following partial list of accomplishments: its consultants have ushered in waves of structural, financial, and technological change to the nation’s best organizations; they remapped the power structure within the White House; they even revo­lutionized business schools. In The New York Times bestseller The Firm, star financial journalist Duff McDonald shows just how, in becoming an indispensable part of decision making at the highest levels, McKinsey has done nothing less than set the course of American capitalism. But he also answers the question that’s on the mind of anyone who has ever heard the word McKinsey: Are they worth it? After all, just as McKinsey can be shown to have helped invent most of the tools of modern management, the company was also involved with a number of striking failures. Its consultants were on the scene when General Motors drove itself into the ground, and they were K-Mart’s advisers when the retailer tumbled into disarray. They played a critical role in building the bomb known as Enron. McDonald is one of the few journalists to have not only parsed the record but also penetrated the culture of McKinsey itself. His access puts him in a unique position to demonstrate when it is worth hiring these gurus—and when they’re full of smoke.

  25. 5 out of 5

    Scott Wozniak

    This is a book about the most successful consulting firm in history--by an author who doesn't like consulting or consultants. He peppers snide comments and insults all throughout the book, like: "Despite the fact that only bad leaders need consultants, they were hired by..." and "We all know that consultants don't produce any value, but they tell their clients that change is what they offer..." Lost a star for that petty writing. The other star lost is because he very vague about certain aspects This is a book about the most successful consulting firm in history--by an author who doesn't like consulting or consultants. He peppers snide comments and insults all throughout the book, like: "Despite the fact that only bad leaders need consultants, they were hired by..." and "We all know that consultants don't produce any value, but they tell their clients that change is what they offer..." Lost a star for that petty writing. The other star lost is because he very vague about certain aspects of the firm. He mentions a famous manual for staff from the first 40 years of their start up--but then doesn't tell us what was in it beyond vague comments. If it was that important, I'd love to hear at least a table of contents list. He mentions how the key to their perpetuation is a hiring partnership with Harvard for many decades--but doesn't talk about how they hired (criteria, methods, etc.) He says one of their unique features is a decentralized leadership method--but only explains how the main leader is selected and not how any other decisions are made (except one time where he derides them for letting people select their own projects in the 90's). So as a consultant, I was able to wade through his personal angst and learn some interesting things about a truly controversial company. But I did have to filter through his frustrations. If you're a consultant and/or student of business history then it might be a good read for you. If not, probably not.

  26. 5 out of 5

    Virein

    A very comprehensive book about one of the most elite consultancies of the world; McKinsey & Company. It talks through McKinsey’s birth and ageing in an efficient and chronological order, using the managing directors as the central basis to define the different eras the company went through during its 80 odd years of existence. McKinsey in its initial years played an important role in validating the profession of consulting based on strict professionalism under the leadership of Marvin Bower (3r A very comprehensive book about one of the most elite consultancies of the world; McKinsey & Company. It talks through McKinsey’s birth and ageing in an efficient and chronological order, using the managing directors as the central basis to define the different eras the company went through during its 80 odd years of existence. McKinsey in its initial years played an important role in validating the profession of consulting based on strict professionalism under the leadership of Marvin Bower (3rd Managing Director) who played the most important role in establishing the McKinsey culture. Along the way, McKinsey rode every wave of change in company management, corporate governance and technological advancement and to grow into a very powerful establishment. Known for its alumni network, over the years McKinsey has managed to churn out numerous CEOs and business leaders primarily due to the wide industrial exposure made available to its employees. As the company has grown to become a large MNC, it has faced multiple challenges but somehow always managed to escape with minimal damage to its reputation in front of the clients, however it would be interesting to see the company’s performance in the forthcoming years. With the change in the culture of management and the emergence of new age industry leaders such as Apple and Facebook, McKinsey would need to offer MUCH more than it's tried and tested solutions.

  27. 4 out of 5

    A. Sacit

    The Firm gives a historical account of the consulting company McKinsey, referred to as The Firm, and a good overview of the management consulting business in general. Management consultants, in most cases, were a boon for incompetent corporate managers who did not know how to manage effectively and needed a rubber stamp for their decisions. If the outcome was good, management took the credit; if it was a failure, they had the consultants to point a finger at. We learn that some of the most notor The Firm gives a historical account of the consulting company McKinsey, referred to as The Firm, and a good overview of the management consulting business in general. Management consultants, in most cases, were a boon for incompetent corporate managers who did not know how to manage effectively and needed a rubber stamp for their decisions. If the outcome was good, management took the credit; if it was a failure, they had the consultants to point a finger at. We learn that some of the most notorious financial debacles and corporate failures, like Enron, took place under the watchful eyes of McKinsey, as the advice they dished out were of no guarantee for success. In general, management consultants who got hired under fat contracts were responsible for conducting “studies” on corporate manager’s compensations and justify their increases of pay to absurd highs (You scratch my back, and I’ll scratch yours). Management consultants became privy to the most intimate details of the corporations which they worked for due to their close association with the management and essentially became an insider themselves. This resulted in some notorious insider trading crime by the McKinsey management in the past (Gupta, Kumar), and I wonder how much of the fabulous wealth accumulated by the senior managers were a result of insider trading activity which went undetected.

  28. 5 out of 5

    Yijia Chen

    Many college student in the country's best schools tend to see many of their peers, often the smart and sociable type, put up a suit and join the consulting industry (McKinsey being the most prestigious). People know so little about consulting that lots of laughable misunderstandings arise. Is McKinsey helping the best businesses excel, or sucking on ailing companies' problems driven by greed? Are the McKinseyites the world's smartest people, or are they PPT monkeys? What is the definition of exc Many college student in the country's best schools tend to see many of their peers, often the smart and sociable type, put up a suit and join the consulting industry (McKinsey being the most prestigious). People know so little about consulting that lots of laughable misunderstandings arise. Is McKinsey helping the best businesses excel, or sucking on ailing companies' problems driven by greed? Are the McKinseyites the world's smartest people, or are they PPT monkeys? What is the definition of excellence so much embraced by consultants? Is consulting, and particularly McKinsey, creating value, or is it a hoax exploiting the organizational weakness? McDonald thoroughly narrated the phases of McKinsey and how consulting has transformed modern business history. On one hand, McKinsey has been quietly influencing our leaders and has played a huge role in shaping our world today. On the other, McKinsey has been much more influential and prestigious in the past than today. So if you'd never heard of McKinsey, no need to panic as you probably know more about business than the McKinsey consultant in the 80s. I like the book because it's a comprehensive curiosity satiator. I knew nothing about consulting, and now I probably know more than the entry McKinsey consultant. Moreover, it got me thinking: What do the phases of McKinsey, epitomized by its Managing Directors and changing clients, tell us about human pursuit, change of age, and our future?

  29. 4 out of 5

    Nathanael

    This was a masterpiece of a hatchet job. Not only are management consultants criminally useless, but managers and executives have never had a meaningful function in our society! All are bourgeoisie and de facto only steal from workers, hence they shouldn't exist in a fair society. Is that a valid starting point for a history of a management consultancy? If you don't believe it should exist, can you be honest about a thing? Perhaps you can, but this author cannot. Every sentence that hints McKinse This was a masterpiece of a hatchet job. Not only are management consultants criminally useless, but managers and executives have never had a meaningful function in our society! All are bourgeoisie and de facto only steal from workers, hence they shouldn't exist in a fair society. Is that a valid starting point for a history of a management consultancy? If you don't believe it should exist, can you be honest about a thing? Perhaps you can, but this author cannot. Every sentence that hints McKinsey did good or helped a client is immediately followed with a sputtered 'but they advised Enron; so, BAD!' The author lacks self-awareness. When McKinsey has the temerity to tell Conde Nast to cut the thousands spent on weekly lunch tabs for its upper echelon of editors, such as Anna Wintour, the author brusquely dismisses the advice, "they don't know publishing!" That may be true, but you can't be for your own fat cats and against everyone else's. The author appears so angry and his attack is so slipshod that there is one obvious, if unstated, explanation. He has been laid off, perhaps thrice, on a McKinsey recommendation. They and the executives they advise are thus uniformly, malevolently bad. Don't read this book if you seek to learn why this company exists, what they do, or how it works. Screed needs no such facts.

  30. 4 out of 5

    Monita Mehra

    Well documented history of McKinsey but it kept going back to the years for referencing time and again. There were times when the context was lost but it came back a few pages later, could be avoided. Initial years of The Firm were good with good people helming the same but over the years, the complete character of the company changed along with people at the helm changing at regular intervals. The book clearly says that the character of a company is defined by the management and not the founder Well documented history of McKinsey but it kept going back to the years for referencing time and again. There were times when the context was lost but it came back a few pages later, could be avoided. Initial years of The Firm were good with good people helming the same but over the years, the complete character of the company changed along with people at the helm changing at regular intervals. The book clearly says that the character of a company is defined by the management and not the founders as when they leave, new leaders take it forward and don't bother about the foundation. Also it mentions time and again that politics plays a very important role in selecting leaders and not necessarily merits even in consulting firms of this size. I wonder how they can aid companies in identifying leaders on merit when they haven't been able to do that in their own company so far. Good to read to understand how management companies work to ensure their relevance for large corporates and governments.

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