McKinsey is such a prestigious consulting company – arguably the most prestigious – that you might wonder: is it a member of the ‘Big 4’?
McKinsey & Company is not one of the Big 4 firms. However, it is a part of the Big 3 companies in strategic consulting, also referred to as “MBB”. The other two are Boston Consulting Group (BCG) and Bain & Company.
McKinsey mostly deals in management consulting services, while the primary focus of the Big 4 firms is always in the financial spectrum. I’ve also come to know that there are differences in:
- client base
- revenue generation
- the size of McKinsey versus the ‘Big 4’.
Today, I’ll explain “Is McKinsey a Big 4 firm” to help you clearly understand its status in the professional services industry.
Is McKinsey & Company a Part of the Big 4?
McKinsey & Company is not a part of the Big 4 firms, which comprises:
- PricewaterhouseCoopers (PwC)
- Ernst & Young (EY)
But McKinsey is grouped with Boston Consulting Group (BCG) and Bain & Company as the “Big 3” strategy consulting firms. These companies are collectively referred to as “MBB,” which stands for McKinsey, BCG, and Bain. (as you might have been able to guess!)
Let’s explore 5 key facts that explain why it is not a part of that illustrious group:
1. Service Offerings
McKinsey & Company has its roots dating back to 1926 when it was established by James O. McKinsey. (Source)
Right from its inception, James’s vision was to assist organizations in navigating complex challenges. He wanted to help firms to improve their operational efficiency and achieve long-term growth.
That’s why McKinsey’s core focus has always been on offering services to its clients in areas like:
- Developing strategies
- Performance gains
- Digital transformation
- M&A advisory
- Solving difficult business problems
With these services, McKinsey & Company is usually successful in developing long-term relationships.
The Big 4 firms have their origins in accounting and auditing practices. They are ancient! They date back to the late 19th and early 20th centuries.
As time progressed, these firms expanded their service portfolios. However, their foundational expertise is deeply rooted in accounting and financial practices, such as:
- Conducting Audits
- Advising on tax matters
- Managing risks
- Compliance with strict regulations
Although Big 4 firms and McKinsey have a strong foothold in their respective domains, their separate brands reflect their unique areas of expertise.
On the other hand, McKinsey is synonymous with top-tier strategic guidance and is often considered a gold standard in the consulting industry. (Source)
John David, a Senior Consultant at McKinsey & former Manager at KPMG, said on Glassdoor: I have had the privilege of gaining valuable experience in two prestigious organizations, McKinsey and KPMG. Working with clients from diverse industries and geographies has broadened my experience, and I can’t thank both of these firms for having me on board and giving me a global ride across various regions. Adaptability has been a key theme in my career. I’ve embraced this challenge with enthusiasm, showcasing my versatility as a professional.
The Big 4 firms have diversified into consulting, taxation, and advisory services, but they have yet to achieve the same level of dominance in the consulting sphere as McKinsey.
But, on the other hand, McKinsey has a lack of expertise in the Big 4 services, and that is what keeps it out of the running to join this elite group.
2. Client Base
McKinsey primarily serves a diverse range of clients. These include private-sector corporations, nonprofit organizations, governments, and public institutions.
Its clients are spread across various industries, such as:
- Consumer Goods
- Manufacturing, and more.
Big 4 firms have a broader client base. They mostly work with publicly traded companies, private enterprises, government agencies, and nonprofit organizations. (Source)
This difference in clientele might be another reason why McKinsey never made it to the Big 4 list.
3. Size and Global Presence
McKinsey & Company is relatively smaller in terms of its global reach compared to the Big 4 firms. The company operates in more than 135 offices across over 65 countries.
This moderate yet powerful global presence allows it to serve a diverse clientele hailing from various industries and sectors. (Source)
In contrast, each of the Big 4 firms operates in almost 150 countries, with numerous offices scattered across the globe.
This extensive network positions them as go-to firms for multinational corporations, governments, and organizations, which leaves McKinsey out of the Big 4 group.
4. Employee Count
McKinsey & Company is definitely a substantial consulting firm. However, it maintains a comparatively smaller workforce.
It comprises approximately 35,000 employees spread across its global offices. (Source)
Each of the Big 4 firms employs between 200,000 and 250,000 professionals globally. These firms provide more services than McKinsey, so you can understand why they require a larger workforce. (Source)
That is another fact that is keeping McKinsey to be a part of the big league!
Last year, McKinsey & Company reported annual revenues that typically exceeded $10 billion. Guess what?
Each of the Big 4 firms reported more than $30 billion, with Deloitte leading the pack, as always.
Here’s a chart that shows the exact revenue generated by McKinsey and the Big 4 companies in the last year:
This table clearly states that to be in the Big 4 firms, a company has to generate revenues to match its potential.
If you’re really interest in getting a job at either MBB or the Big 4, then the following Youtube video talks through the pros and cons of working at both: