McKinsey chief Bob Sternfels has signalled he plans to run for a second term as managing partner as he rebuilds the consultancy after years of reputational crises and as the firm battles mounting economic and geopolitical challenges.
Mr Sternfels, who is 53, was elected in July 2021 after a turbulent few years when the firm was embroiled in a corruption scandal in South Africa, criticised for its role in turbocharging opioid sales and attacked for working for clients including Saudi Arabia.
His predecessor, Kevin Sneader, was the first managing partner since the 1970s not to win a second three-year term after the turmoil called into question the company’s future and the idea of the “McKinsey mystique” that had backstopped the consultancy’s ability to charge a premium.
To ensure the longevity of the firm, which was founded in 1926, Mr Sternfels has sought to overhaul client relationships so they view McKinsey as a partner rather than just a service provider, pledged to hire from a more diverse talent pool and committed to being “one global firm”, bringing expertise from across the world to help clients wherever they operate.
“I think it’ll take us three years to land that and those aren’t things that you land, you know, in the next, in the next six months,” Mr Sternfels said in an interview when asked about the prospect of a second term. The McKinsey chief, who seeks to take the consultancy into its 100th year, said “it’s up to the senior partners” to dictate his future, of which there are about 770, up from 650 in July 2021.
In February, McKinsey said it could cut as many as 2,000 back-office staff this year as part of one of the largest rounds of cuts in its history amid continuing economic uncertainty. Mr Sternfels said it still seeks to hire “hard to attract” talent, such as women technology consultants, in a more competitive environment.
Mr Sternfels said he wanted to be “more humble” about past mistakes, such as its work in promoting opioids in the United States. “We’ve put in place new policies and protocols to make sure those kinds of things don’t happen again.”
But he remained committed to working in areas where McKinsey has been criticised – such as with oil companies as well as certain government clients. France’s financial prosecutor is investigating the consultant’s role in the 2017 and 2022 French elections, when Emmanuel Macron was elected and then won a second term.
“The world is a scrutinous place. I don’t think that’s going to change anytime soon,” said Mr Sternfels, who emphasised the firm would continue to do work it believed was important, despite detractors. “If you want to change society, you’ve got to help the public sector.”
The McKinsey boss noted that business leaders were facing an unprecedented level of uncertainty – from new technological advances such as generative AI to climate change, demographic shifts and current geopolitical upheavals such as the war in Ukraine.
“What CEOs tell me is, any single one of those would be a generation-defining issue. We have all four of those going on at the same time,” Mr Sternfels said.
Big US consultancies carrying out corporate advisory work have come under huge pressure in China with the government raiding offices and making it difficult for foreign investors to glean information on potential acquisitions, Chinese partners or suppliers.
Mr Sternfels said he remained committed to operating in China given the huge interdependencies that existed across every sector. “This is de-risk, not decoupling,” he said, highlighting that the firm was segmenting its IT systems to operate in the country.
“Many of the world’s biggest challenges aren’t confined by borders – they too are global – and we’re going to continue to try and stand for that idea, and relentlessly pursue sustainable and inclusive growth,” he added. – Copyright The Financial Times Limited 2023
