Knowledge Management at McKinsey

contents

Knowledge Management at McKinsey

I abstract (Inhaltsangabe)

1 introduction

2 definitions
2.1 Knowledge Management
2.2 Explicit Knowledge
2.3 Tacit Knowledge

3 McKinsey & Company
3.1. The history
3.2. The performance

4 Knowledge management in the company
4.1. How knowledge management arised
4.2. The internal structure
4.3. The knowledge culture
4.4. How the company manage the knowledge
4.5. The specialists
4.6. The firm-wide network

5 conclusion

IV list of figures

V bibliography

I abstract

The main topic of this work is the knowledge management of McKinsey & Company. Therefore, in the beginning, knowledge management as well as explicit and tacit knowledge have to be defined. To get an understanding of the development of the company and how it is working, the company is introduced in a second.

After that it has to be explained how the knowledge management arised. The internal structure is important to know for understanding the culture and the management of McKinsey. The knowledge management system depends on the specialists, who are described after the knowledge management in the company. The firm-wide network is the most important thing in the company. Without this the knowledge management do not function and its hard to get to the information. Finally the ambitions of knowledge management listed and with a conclusion this work will be round off.

1 introduction

How does your company manage Kow-how? Does your company know what it knows? These are questions, which are not easily answered. Many companies do not know how to manage the knowledge in their company and they also do not know that knowledge decides. Today, besides land, work and capital knowledge is the fourth factor of production. In the following work it will be how McKinsey uses the fourth factor of production and how they combines the explicit an tacit knowledge, which is also explained in the following text. “Sharing knowledge is deeply embedded at McKinsey and Company... it is just totally expected, that is what you do.”^[1] That is what John Stucky, managing partner of McKinsey & Company in Australia, said. Also Rajat Gupta, former managing director of McKinsey & Company, said: "The three fundamental dimensions of our strategy are lines, people, and knowledge."^[2]

2 definitions

2.1 Knowledge Management

Knowledge management is the organisation of the knowledge in an enterprise.

To be competitive on the market it is necessary for an enterprise to know all information, data and skills. Managing all these factors correctly gives the enterprise the ability to disseminate the existing knowledge and to use it for new products and services. Due to the fact that the same knowledge is not shared by every employee of an enterprise, it is easier to solve an upcoming problem with the support of a system in which all employees put together their experience and solutions and make this system accessible to everybody. It is timesaving and at a lower price because the employees has a fast solution and has the ability to manage more work in time.

2.2 Explicit Knowledge

Explicit knowledge is easy to articulate into formal language. It is methodically and systematically. It can be processed by and disseminated with information and communication technology. Therefore explicit knowledge is a shared knowledge and can be readily transmitted by others.

2.3 Tacit Knowledge

Implicit knowledge is the personal knowledge of an individual with ideals, values and insights. It is knowledge that people carry in their minds and that is difficult to access. Tacit knowledge is hard to articulate with formal language (hard, but not impossible) and before it can be communicated, it must be converted into words, models, or numbers that can be understand.^[3]

3 McKinsey & Company

3.1. The history

McKinsey & Company was founded in Chicago in 1926 by James Oscar McKinsey, who was a professor at the University of Chicago.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1:James O. McKinsey

In 1964 McKinsey established the first german office in Dusseldorf. This was the first German office with four consultants with the first client Dynamit Nobel. Until 1985 John O. MacDonald was the leader of this office and the number of the consultants increased continuous. After MacDonald there was Herbert Henzler. From 1985 until 1998 there were 700 consultants. From this point of time Jurgen Kluge was the managing partner of McKinsey from 1998 until 2006 and the number rised forward. Today there are 1.900 employees. Under this 1.200 consultants are 123 partner. And from 2007 on the german managing partner is Frank Mattern.

Apart from Dusseldorf, McKinsey opened offices in six other German cities: in Hamburg, Berlin, Cologne, Frankfurt, Stuttgart and Munich.

3.2. The performance

After 75 years McKinsey & Company is the world’s leading topmanagement consulting and most successful strategic consulting firm with 8.300 consultants in ninety offices and more than fifty countries. They see themselve as generalist among the consultants and they describe themselves as the trusted adviser to the world’s leading business, governments, and institutions.^[4]

They help leaders make distinctive, lasting, and substantial improvements to the performance of their organizations. They tackle their most difficult issues and serious challenges. They provide their people an outstanding place to work, with opportunities for growth they can find nowhere else.^[5]

McKinsey treats complex tasks. They focus on issues that affect the performance of the company as a whole in order to improve company performance and develop and implement strategies for growth and change.

Other key areas of work are function-projects in marketing and sales, manufacturing and logistics, corporate finance and information technology.

The assigments must be constantly adjusted, as the economic environment continues. Continuous research in important areas of modern management theory and management practice will ensure this. Futhermore, the employees receive continuous education and training.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: Logo McKinsey

4 Knowledge management in the company

4.1. How knowledge management arised

At the beginning of 1970, the rapid development of the last 50 years of McKinsey was slowing down. The development of the professional and technical skills was disregarded additionally they had to cope with an increasing number of new competitors on the market the such as Boston Consulting Group.

In order to hold out against the competition McKinsey established working groups to develop knowledge in the key areas strategy and organisation.

They developed firm-wide industry-based client sectors, such as banking and consumer products, to cut across geographic boundaries.^[6]

[...]

^[1] http://www.curveconsulting.com/downloads/brw.htm(2008-07-22)

http://www.icmrindia.org/casestudies/catalogue/IT%20and%20Systems/Mckinseys%20Knowledge%2

0Management%20Practices-IT%20and%20Systems.htm(2008-07-30)

^[3] http://www.nwlink.com/~Donclark/knowledge/knowledge.html(2008-07-16)

^[4] http://www.mckinsey.com/aboutus/(2008-07-20)

^[5] http://www.mckinsey.com/aboutus/(2008-07-20)

^[6] http://www.curveconsulting.com/downloads/brw.htm(2008-07-22)