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McKinsey Changes Strategy

After a string of missteps, McKinsey's elite have voted to end Managing Partner Kevin Sneader's reign on the first after three years leading the consultancy.

After a string of missteps, McKinsey’s elite have voted to end Managing Partner Kevin Sneader’s reign on the first after three years leading the consultancy.

Every three years McKinsey undergoes leadership elections to decide the next Managing Partner. Today the 650 senior partner’s at the firm, decided to change the course on the secretive firm. In the three years since Sneader took the helm, McKinsey has faced – from the outside looking in – one of the most challenging time periods in its recent history. First with the firm’s liability in the opioid crisis. Secondly in its firms success rate during the pandemic – where results and not strategy PowerPoints matter. And thirdly with it’s stance on employees right to protest in Russia which recently came to light.

In a true consultancy fashion, the way McKinsey vote in a new MP is a structured and comprehensive process which sees all senior partners first nominate seven individual prospective leaders each, this comprehensive list is then whittled down to the top seven who received most nominations among their peers, and then a final round of voting takes place to elect the leader. It is all overseen by a independent election committee, of which none of the committee are eligible to run for the position theirselves.

As reported by the Wall Street Journal, his ousting can be explained by the internal workings of McKinsey in recent months:

“Some partners didn’t like the changes that Mr. Sneader oversaw for approval of new clients and his settlement with U.S. state attorneys general for the firm’s work for opioid makers, people familiar with the matter said. While the changes were approved by partners, some were frustrated by a loss of independence they had and by Mr. Sneader’s apology over the firm’s work. In the past, there was relatively little oversight over partners and the work they did. Under Mr. Sneader, the firm’s top partners had to approve controversial new clients. This made it harder for non-U.S. partners to take on some clients and was seen as a centralization of power away from partners. As part of the firm’s new standards for clients, McKinsey said it would not serve defense, intelligence, justice or policing institutions in nondemocratic countries. That has put its partners in countries like Saudi Arabia in difficult positions because even if they work in areas such as economic development, all government entities ultimately report to the country’s top leaders.”

Reporting today has announced either Bob Sternfels or Sven Smit, senior partners in McKinsey’s San Francisco and Amsterdam offices respectively will lead the firm for the next three years.

Bob Sternfels has been with McKinsey & Company for 25 years and is currently the head of its San Francisco office. The American also is the global head of McKinsey’s client capabilities, which includes its industry practices and functional areas. Earlier in his career at the firm, Sternfels led the operations practice in the Americas and the private equity & principal investors practice globally. (Consultancy.us)

Sven Smit has been with McKinsey since 1992, and rose through the ranks to become Managing Partner of the Netherlands practice, leader of the firm’s Western Europe division, and global head of the strategy & corporate finance practice. The Dutchman is currently co-chairman of the McKinsey Global Institute, McKinsey’s business and economics research arm – and the globe’s top private sector think tank. (Consultancy.us)

If there ever was a time a consultancy needed a consultancy to help strategize their way to stable few years, it may be now.

Sources:

Business Insider: https://www.businessinsider.com/mckinsey-votes-out-global-managing-partner-kevin-sneader-ft-report-2021-2?r=US&IR=T

The Wall Street Journal: https://www.wsj.com/articles/mckinsey-partners-vote-out-leader-after-opioid-settlement-other-crises-11614187437

Consulting.us: https://www.consulting.us/news/5590/bob-sternfels-or-sven-smit-to-become-mckinseys-next-leader

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