600. Jeff Sinclair, The History of the Operations Practice at McKinsey

Jeff Sinclair, a senior global leader at McKinsey, discusses the history of operations at the firm. The firm was initially known as a strategy firm and did some organization and marketing work. However, in the 1980s, clients began to draw more attention to operations, particularly in the automotive industry in Europe and North America. Operations became a strategic function for automotive OEMs and part suppliers, as they needed to serve their customers with high quality, cost-effective, and operationally effective services.

Operations Practice at McKinsey

When Jeff joined the firm in 1981, there were about 500 people in the firm. Today, it is estimated that there are 40,000 people worldwide. The firm started building its operations capability in the 80s by recruiting people with specific functional expertise, particularly in manufacturing. They started hiring people from Toyota Supplier Support Center, and creating a well-defined career path within the firm, which is the specialist path or expert path. The operations practice was at the leading edge of other functional practices, such as marketing, market research, and organization. However, the firm had to create new career paths, which led to many iterations of the expert path. The firm had to continuously improve how it recognized and understood their contributions beyond the traditional generalist path.

Bureaucratic Maneuvering in Creating a Career Path

Jeff discusses the transition from a strong culture to multiple career paths within McKinsey. He explains that this change took about 18 years and was driven by the firm's strong culture and the willingness of senior partners in positions of power to help navigate the new path. As employees advanced in the firm, they had to develop relationships with senior executives, which led to ongoing opportunities to serve them. This made it difficult for experts to fit in and develop new service lines and ways of thinking about problem-solving. The firm struggled to recognize the contribution of subject matter expertise to their ability to serve clients and give them credit for developing new service lines and ways of helping clients execute more effectively. Experts were used on projects in a mixture of subject matter expertise, consulting  director roles, and full-time execution people. 

The Evolution of Consultants at McKinsey 

The firm gave some of the personnel role responsibility to the functional practices themselves, hiring lean manufacturing or supply chain experts into the practice. They would take over the personnel development role, evaluation of performance, counseling, and coaching on how to evolve these new career paths. Over time, the firm recognized the high value added contribution of functional practices and expanded its service to clients. While there is still a tension between generalist and specialist paths within McKinsey today, it has improved significantly. Bob Sternfels, the managing director of the firm, was a functional practice leader who recognized the level of contribution of functional practices and grew the career path within the firm.

McKinsey’s Expansion into other Industries

The firm's operations practice evolved from a dominant career path of the generalist partner to a more diverse range of ways of delivering value for clients. The firm initially faced resistance from some office leaders who believed that the new appr