The firm has also overhauled its own operations in many respects. Mr Barton claims that half of what it does today falls within capabilities that did not exist five years ago. It is working to ensure that customers turn to McKinseyites for help with all things digital. It has had to make acquisitions in some areas: recent purchases include QuantumBlack, an advanced-analytics firm in London, and LUNAR, a Silicon-Valley design company. It is increasingly recruiting outside the usual business schools to bring in seasoned data scientists and software developers.
Staying relevant to big tech firms is not easy, however. McKinsey has kept plenty of older ones as clients, such as Hewlett Packard, but it has a lot more to do to crack new tech giants and unicorns (private startups worth more than $1bn). In general, management consultancies have made fewer inroads into firms such as Facebook and Google. That is partly because consultants typically help struggling firms cut costs; they have less appeal to firms already on the cutting edge. Cash-rich tech firms also tend to prefer keeping things in-house rather than bringing in consultants. They compete with McKinsey in some ways, too. Amazon has become the largest recruiter at some business schools, and the firm’s own consultants are lured away by tech firms’ generous pay packages.
McKinsey’s response is to try to gain a foothold earlier on in tech firms’ life-cycles. It is targeting medium-sized companies, which would not have been able to afford its fees, by offering shorter projects with smaller “startup-sized” teams. As it chases growth, the firm is also doing things it used to eschew as being insufficiently glamorous. In 2010 it moved into business restructuring and it has also set up a global strategy “implementation” practice. That is a far cry from the days when its consultants stuck mainly to blue-sky thoughts in their ivory towers. Mr Barton has also overseen a shift towards a results-based fee model, bringing the firm into line with its nearest competitors, the Boston Consulting Group and Bain & Company.
As McKinsey takes on more people and practices, cracks in its distinctive “One Firm” ethos, and its reputation for discretion, might start to show. It is under investigation in South Africa for working with Trillian, a local consulting firm owned by an associate of the controversial Gupta family, on a contract worth hundreds of millions of dollars for Eskom, a state-owned utility. The firm says it never worked for the Guptas, but admits to “errors of judgment”, particularly in starting work with Trillian before its internal due diligence was complete. The fallout so far has been limited to South Africa, with a few local clients, including Coca-Cola’s local unit and some banks, saying they will not give McKinsey any new work.
