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McKinsey undergoes leadership transition amidst industry slowdown and political scrutiny

McKinsey's leadership reshuffle amid industry challenges; Woetzel retires, new North America and Latin America chiefs appointed.

By Mackenzie Crow

5/16, 03:55 EDT
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Key Takeaway

  • Lola Woetzel, McKinsey's China rainmaker, retires amid leadership reshuffle and firm's strategic response to consulting industry slowdown.
  • New appointments in North America and Latin America aim to rejuvenate McKinsey with fresh ideas during a demand downturn.
  • McKinsey faces US political scrutiny over its work with Chinese clients, despite clarifications on not working for China’s communist party.

Leadership Transition at McKinsey

McKinsey & Co., a global consulting firm, is experiencing a significant transition in its leadership, with Lola Woetzel, a senior partner based in Shanghai, retiring after more than three decades. Woetzel, who also served as a director of the McKinsey Global Institute, played a pivotal role in establishing the firm's Shanghai office in 1995. This move is part of a broader reshuffling within McKinsey, as it adapts to the changing business and political landscapes. The firm has seen a few dozen of its approximately 700 senior partners leave over the past year as new candidates are elected to these positions.

Strategic Appointments Amidst Industry Slowdown

In response to a slowdown in demand for consulting services, McKinsey's global managing partner, Bob Sternfels, announced significant appointments last week. Eric Kutcher, a long-serving member with over two decades at McKinsey, has been appointed as head of North America, while Tracy Francis, who joined the firm in 1997 and was recently its chief marketing officer, has been named Latin America chief. These appointments reflect McKinsey's tradition of rotational leadership, aimed at injecting fresh ideas and driving the firm forward. This strategy comes at a time when McKinsey has warned about 3,000 of its consultants of unsatisfactory performance and initiated job cuts across its technology and other divisions.

McKinsey's Engagement with China and Political Backlash

McKinsey's engagement in China, where it has worked with a wide range of clients including state-owned enterprises and multinational companies, has drawn political backlash in the US. Lola Woetzel, in her role, has been instrumental in leading McKinsey’s research on China, Asia, and global economic and business trends. Her work, including authoring five books on China's economy and advising Asian governments on economic development strategies, has been significant. However, McKinsey's involvement with Chinese clients has attracted criticism, including from Republican Senator Josh Hawley, who accused the firm of aiding the Chinese government's industrial ambitions. In response, Sternfels clarified to a Congressional committee that while McKinsey has advised some Chinese state-owned enterprises, it has never worked for China’s communist party or the central government.

Management Quotes

  • Bob Sternfels, Global Managing Partner at McKinsey & Co.:

    "Rotational leadership is a tradition at McKinsey. Typically, our leaders will rotate approximately every 3 years, to provide fresh ideas and continue driving us forward."