Mckinsey Principal

Partners Viewpoint McKinsey Principal

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I recently had a coaching session with a client who could become a McKinsey Principal in about 12 to 24 months. He is currently a McKinsey Associate Principal and has been a long-time client of FIRMSconsulting.

He joined our coaching program when he was at Harvard completing an MBA and we helped him join McKinsey as an associate. This is my 7th year of coaching him and he is a wonderful young man.

I feel confident we can get him to the equity partnership, a McKinsey Director and ultimately to become a senior partner. I see all three steps happening within about 8 years. That is below the average time.

I am going to summarize some critical advice I offered him, and other McKinsey Principal-level coaching clients, about moving from associate principal to becoming a McKinsey Principal and, thereafter, McKinsey Director.

He found it incredibly useful so I am going to share it with the broader community. I did make a comment in the coaching call that all of the advice I am offering is already covered in a program we have. In this article, like the call with the client, I want to zoom in on just a small part of that program.

 

Mckinsey Principal

 

A McKinsey Principal within the Partnership

 

The first thing to understand is how a partnership is structured within McKinsey, and this would apply to any partnership at any elite firm. To know how a firm works you need to ignore the values, slogans, structure, and statements and look at the incentive/compensation structure.

The best way to think about a partnership is to think of the mafia or organized mob. I am using this analogy purely for the structure and incentives and not the unsavory and illegal parts. I am not making that implication at all.

The mafia is made up of families.

Different families control different parts of the trade or different regions of the same trade.

They all agree to work together and pool resources since it is better to fight in numbers as a unit versus the cost of fighting each other.

They transfer best-practices, use the same brand, ask for help etc.

Yet, they remain distinctive and different families who work together.

They may look and act similar but they are different.

Here is a very important point. You never join the mafia.

You first need to join a family that is a part of that mafia. That family trains you and mentors you until you reach a certain level of status and then they nominate you to represent them in the overall organization among many families. Around that table, controlling that Mafia, are the heads of each family. The heads of each family come together to agree on profit sharing percentages and make collective management decisions.

The head of a family is like a senior partner within McKinsey or any other elite firm.

This is how a McKinsey or any other partnership is structured. I will make this more clear shortly, but not understanding this is the main reason so many McKinsey associates don’t make a transition to the partnership.

 

A McKinsey Principal within the ‘Mafia’

 

When you join McKinsey as an associate or business analyst you are joining McKinsey the overall firm, and not just one part of McKinsey.

McKinsey is essentially a group of senior partners who have revenue-generating relationships with clients and decide it is better to work together under one brand, share resources, pool ideas and lower the risk of operating independently. McKinsey is effectively a collection of smaller consulting firms each headed by a senior partner. They share a common brand and agree to work in roughly the same way worldwide. But like all collectives, there are differences and disagreements.

Sometimes a senior partner can choose to leave McKinsey and take their entire book of business with them. They can go to Bain, BCG or even set up their own firm. This is actually very common in the legal profession.

When you join McKinsey the firm, you immediately begin auditioning to join one of the smaller consulting firms headed by a senior partner. That smaller consulting firm has not yet selected you.

However, to become a McKinsey Principal or McKinsey Director, a smaller consulting firm must select you to groom you. There is no other route to the partnership.

Kevin and I both explain these concepts in more detail but with different approaches in our programs on sales.

Let’s look at your very first engagement.

Let’s assume your first engagement as an associate is a pricing study for a tech company.

That engagement is overall headed by a senior partner who manages that relationship.

If you do well as an associate, the senior partners’ team is happy since you are helping them preserve the relationship and protect the revenue stream.

They want you to stay with them and develop you to the engagement manager level and so on.

Again, if you do that well and help them protect the revenue stream, they keep pushing you up their mini-organization.

 

Understanding your role on the path to becoming a McKinsey Principal

 

Now, you have to understand your role within McKinsey as you progress, from the perspective of what the senior partner wants relative to the revenue he is bringing in.

McKinsey partners and most partners of other firms do not talk about revenue but Kevin makes an exception as he builds his program around understanding the sales side. I also do the same since the partnership of any elite organization is about revenue.

As a senior partner in the London office once said.

We charge an awful lot of money all for the privilege of never having to discuss money, to the point that people forget we are an immensefully profitable business.

Let’s break down each level from a revenue perspective.

McKinsey Business Analyst: Do not rock the boat aka don’t do anything that upsets the client.

McKinsey Associate: Help the engagement manager protect the revenue stream

McKinsey Engagement Manager: Coordinate the team to deliver the work to protect the revenue stream

McKinsey Associate Principal: Begin managing parts of the client relationship to protect the revenue stream and free up the Principals’ time.

McKinsey Principal (non-equity partner): Find ways to grow the existing revenue stream at one or more existing clients within the senior partners’ consulting practice and/or find new revenue streams at one or more existing clients within the senior partners’ consulting practice

McKinsey Director (equity partner): Take on overall management of one or more clients to grow existing revenue streams or find new sources of revenue, such that the senior partner need only manage the relationship should a problem occur. Ideally, the senior partner simply has a relationship and all the work is led by the director.

It’s important to understand that the most brilliant McKinsey consultant who cannot grow or find new revenue streams for a senior partners’ consulting practice will struggle to become an equity partner.

There may be exceptions, but largely speaking they will find it difficult make it to senior partner. They will be stuck at the principal level.

 

A McKinsey Principal is not nominated by McKinsey

 

There is a strong myth about the way the partnership works at most firms, including McKinsey. McKinsey is not the Borg. McKinsey does not do anything. It is a brand and incorporation. Only people within McKinsey can do things and there is never going to be 100% consensus.

McKinsey does nothing as a collective because some McKinsey partners choose to take an action even if many other McKinsey partners disagree. For example, when McKinsey bought a design firm, there were definitely some partners who disagreed. However, enough partners supported the purchase for it to happen.

Whenever you see McKinsey doing something, it is not a uniform decision.

McKinsey does not nominate anyone to the McKinsey partnership: be it McKinsey Principal or Director. Let’s break that down because it is important.

When we say, McKinsey, we mean the McKinsey Partnership Committee. They do not nominate anyone because their job is to select someone nominated to them, and then they review that nomination made to them and place it for a vote.

So how does this work?

Senior Partner Steven looks at his mini-consulting practice within McKinsey. He believes that moving Sheila from Associate Principal to Principal will help him, Steven, build his small consulting practice within McKinsey for several reasons.

Sheila has a good relationship with the client and by promoting her, Steven can spend less time at the client and have one of his partners spend less time at the client.

Steven and his other partner can spend that saved time finding new clients

Sheila is also developing great skills in organizational design and Steven believes most clients in the sector he serves will be undergoing some form of reorganization in the next 2 years.

So Steven sits down with his team and makes sure they like working with Sheila. Even if Steven likes Sheila, his team must like working with her since Steven will not be the person working with her directly.

If they all agree promoting Sheila to Principal helps their small consulting outfit generate more revenue and profits, they will put forward her nomination and vigorously promote her.

The McKinsey Partnership Committee reviews these nominations and does its own checks and then submits a final list.

McKinsey did not nominate a McKinsey Principal. McKinsey selected a McKinsey Principal nominated to them.

Even if you are on a first name basis and great friends with all the partnership committee members, unless some smaller consulting team head by a senior partner strongly nominates and supports you, you cannot become a McKinsey Principal.

To say otherwise is to say that a group of partnership committee members who have never/rarely worked with Sheila and do not have a role for Sheila within the organization, are going to make Sheila a partner when Sheila has no mechanism to generate revenue, and then force Sheila into a senior partners’ smaller consulting practice.

That cannot make sense.

 

From McKinsey Associate Principal to McKinsey Principal

 

So this is the plan my client, Kalan, wanted to follow to become a McKinsey Principal within about 18 to 24 months.

(1) The senior partner has a core team that he takes to every new client or new initiative within the client. Kalan wants to be part of that team so he gets into the inner circle.

(2) Spend as much time learning from the senior partner.

(3) Try to find new sales opportunities with the existing clients where Kalan works.

(4) Gain some broader exposure at other industries/clients to gain a diverse exposure that McKinsey seeks in principals

(5) Publish articles to gain credibility with clients.

All of this is a bad idea and I will explain why below, linking the explanation to each of the 5-points Kalan wants to follow.

My overall sentiment is Kalan must have been raised by so involved helicoptering parents that his hair must look like a Beatles haircut from the downward push of the air from the helicopter blades. This list is all about what he wants when he should be treating the senior partner as his client.

To be promoted Kalan must do what the senior partner wants and needs. I will treat each of Kalan’s priorities as myths. Which is what they are.

 

McKinsey Principal Myth #1

 

The senior partner does not want to travel to clients with you. He does not want an entourage.

He is not Jay Z.

To always be in the same room as the senior partner implies that Kalan cannot do what is needed and the senior partner needs to be there to do it for Kalan.

The senior partner wants his senior team to be able to operate independently. He wants to know that his principal, Kalan is managing his client so well that he/she, the senior partner, only needs to show up when he/she, the senior partner, chooses to show up.

Kalan’s strategy should be to avoid the entourage and go off and protect one of the senior partners’ clients and do such a great job, that the account grows and the senior partner can spend time on other things. Kalan is doing well when the senior partner does need to spend time with Kalan and can just trust him to get the job done.

That is essentially how I became a partner. I was sent by the senior partner to manage problems on his behalf. If he needed to travel with me, it meant I could not do the work. I only attended one CEO meeting with the senior partner who backed my nomination. Just one.

 

McKinsey Principal Myth #2

 

Again, this must be from helicopter parents who drove him around from piano to football to clarinet to playdates to learn.

Somehow in the last 20 years, the vernacular of wanting to learn became a strength. Sounds like weakness to me. Kalan has been at McKinsey for 5 years. It’s time to shift from learning to learning-by-doing.

The senior partner does not want Kalan to learn from him. He does not want Kalan to shadow him like the paparazzi. Again, he is not Jay-Z.

The senior partner needs Kalan to help the partners who work in the senior partners’ consulting practice do their jobs well. Kalan’s goal should be to help them succeed at whatever they need to protect and grow the revenue stream, and Kalan will learn as he is doing that.

 

McKinsey Principal Myth #3

 

Kalan should not pursue sales unless the opportunity comes to him. Doing so means working independently of Kalan’s team for his sole benefit. What Kalan does must be for their benefit. If they can sell and have been selling, is it not better for that mafia family if Kalan helps them sell rather than stumbling and inefficiently trying to sell by himself? Which is better for the family?

Kalan needs to do what is good for the family. No one is going to reward Kalan for a sale that could have been done faster, better and delivered in a superior way. Kalan eats when the family eats. Kalan should not go out hunting by himself when the family hunts better together.

This is not about Kalan’s needs.

A senior partner and his senior team are not your work mummies and work nannies. They are not there to drive you to a play date with a potential client and help you close the deal.

 

McKinsey Principal Myth #4

 

The first rule of the family is you do not leave the family. Ever. They have spent years grooming and training Kalan and now Kalan wants to take all those skills to another family just so that he, Kalan, is better off. Where is the loyalty?

In the Mob this is what they do to betrayal.

In McKinsey, the senior partner effectively kneecaps your career by withdrawing his nomination for you.

If Kalan did this he would have lost the trust of the senior partner and his team and that would end his career. Period. And there is virtually no hope of resuscitating his career.

It does not help the senior partner and his consulting practice for Kalan to do this.

In fact, most senior partners are worried about their relationships and clients being hijacked by partners within the firm, or by defecting colleagues to other firms. It is easy to say the senior partner must do what is best for the client and McKinsey. Yet, who decides this? If the client wants to change the relationship that is fine, but how can another partner at McKinsey decide they are better at managing an existing relationship that works just fine.

Kalan can gain a diversity of experiences within the same client and the same sector. That is what a broad range of experiences means. It does not mean new clients and sectors.

What possible value would Kalan bring to both a new senior partners’ team and new sector?

Why would those clients of the senior partner just accept him?

Why would the senior team of the new senior partner allow an ‘outsider’ to swoop in to be next in line for a partnership nomination?

Why would a senior partner trust and let Kalan into his team when Kalan left the team that groomed him?

If Kalan was “raised” in the auto sector would he bring much value in the tech sector?

McKinsey is not a uniform drone organization. How would Kalan seamlessly fit into the new teams’ work style and approach?

 

McKinsey Principal Myth #5

 

Kalan does not need to write articles. Unless his team needs this. Again, he needs to put his team first.

The most powerful partners at McKinsey are not the partners who write books and articles. The most powerful partners are the partners who manage important client relationships.

To sell, Kalan can use articles, or Kalan can simply discuss issues with clients. Some partners have powerful client relationships and write, and they are rare. Yet, Kalan does not need articles to sell and Kalan should not be writing articles if the sole purpose is to sell since that may not be what his team wants of him.

 

The McKinsey Principal

 

If you look at this advice, it is different because most people are wired to think that becoming a McKinsey Principal or McKinsey Director is about their success as an individual trying to prove their worth at sales and insights with clients. It is also different because partners rarely discuss the inner workings of the elite firms. We are different and believe our clients should know these things.

Insights do not lead to sales but that is for another piece.

To become a McKinsey Principal or McKinsey Director is about finding a home within a senior partner’s family and helping that senior partner grow his business. It is about the family and not about you.

We speak about sales a lot here even though I do not like the word. Yet, it is word everyone understands and even though we do not focus on this in this article, the work should be exceptional, the client should be better off after you finish the work and you should never sell a client what they do not need.

Finally, this advice applies to any partnership. Whether it is Bain, BCG, Deloitte S&O, PwC Audit, law firms etc.

You are welcome to post any comments and questions below. As you can imagine we receive many requests for help and as much as we would like to respond to them all, we just do not have the time. To ensure our responses reach as many readers as possible, questions will only be answered in our iTunes podcasts. This allows us to offer both thoughtful and meaningful answers that help improve your career. If you ask a question please offer as many details as possible. It is difficult to offer customized and valuable feedback if the details are vague or missing. It helps to provide more facts and leave out your interpretation of what happened. It is better to write “Duke MBA, graduated 2 years ago and working in Wells Fargo Technology Support,” than “a Top-10 MBA, recent graduate working for a large bank’s internal technology team.” The advice we offer would be very different for each and we would select the first type of question to answer.

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2 responses to McKinsey Principal

  1. Thank you, that was truly insightful!

  2. How would this advice change for people that work with AWS or Google’s Professional Services Organizations?

    Both of these are companies that hire ex consultants to help integrate their products into their client’s organizations, yet neither is a traditional consulting firm or a partnership.

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