McKinsey & Company unites design skills to launch McKinsey Design

12 November 2018 7 min. read

One of the world’s most influential consulting firms, McKinsey & Company, has formalised its entry into the world of design thinking with the launch of McKinsey Design. The firm’s new business unit builds on three acquisitions – Lunar, Carbon12 and Veryday – and now counts to the tune of 350 designers spread across ten cities globally.

The global strategic consulting firm first pushed into the design realm back in June 2015, when it stunned the world of management consulting with the acquisition of industrial design firm Lunar, in a move that added saw 80 professionals join its ranks. Lunar, founded in 1984, added offices / design studios in San Francisco, Chicago, Hong Kong and Munich to McKinsey’s footprint. Roughly one and a half year later Carbon12, a boutique design firm with studios in Austin and Mumbai, and one month later Veryday, a Swedish design agency with 90-plus designers, researchers, engineers and consultants based in Stockholm and New York, joined the McKinsey family. Since launching in 1969, Veryday has won more than 240 awards, and new products the firm co-designed have been granted more than 300 patents. 

“We were searching for a design firm with an unquestionable reputation and world-class designers,” said Volker Grüntges, a Munich-based senior partner at McKinsey who led the acquisition back then. “Veryday is ahead of the curve because its work combines physical product design, service design, and an engaging experience.” 

Enter: McKinsey Design

Now, McKinsey & Company has consolidated its design offering globally into the new McKinsey Design business unit, which formally launched in New York on October 25. The new creative arm sits alongside its core strategy consulting outfit, and other divisions such as McKinsey Implementation, McKinsey Digital and McKinsey Solutions. Commenting on the firm’s rationale behind the new brand, Benedict Sheppard, a partner in McKinsey’s London office, said “It's no secret that design is increasingly a source of competitive advantage and business value. In a world of fierce competition, products, and services that are well designed – working better as well as looking better – have a critical edge.” 

McKinsey Design - Growth by Design

Sheppard highlighted that the move is a response to an explosion of design-related requests from the firm’s clients, as they try to stand out from the crowd in an increasingly global marketplace. “There’s been such an increase in the questions we’re getting, and the number of projects and studies we’re working on, to help clients with their design, we felt it deserved elevation in some way and recognition that this is now core to what we do,” said Sheppard to Architectural Digest, a platform for architects and designers. 

“The convergence of physical and digital, of products and services, is a huge opportunity for a lot of our clients,” explained Derrick Kiker, a McKinsey partner in Tokyo. Kiker pointed out that by bringing together top design, engineering, and business thinking in one holistic approach, McKinsey can provide a “very powerful” approach to design related challenges, from strategy through to execution. In discussion with the Wall Street Journal, Sheppard said: “Things that used to be separate in the business world are converging, and the consumer's experience has to be seamless. Service plus digital plus physical. That is not easy to deliver….. If we bring design capabilities to pieces of strategy and operations, then we can do something quite extraordinary.”

With approximately 350 designers spread across ten global studios, “we’re the biggest design firm you’ve never heard of,” remarked Hugo Sarrazin, a senior partner at McKinsey in Silicon Valley. The firm’s offering revolves around three main propositions: product design (helping clients with designing, prototyping and launching new products), experience design (helping clients design experiences that delight customers and drive top-line growth) and service design (helping clients optimise their service touchpoints with consumers – online and offline).

McKinsey Design works for some of the most high profile clients in the market, including Apple, HP, Motorola, Philips and Prorsche. However, in true McKinsey fashion, the firm’s partner team remains secretive about who they are working with. “One of the things we guard most zealously, is who we work with,” commented Sheppard.

“The business world is converging, and the consumer's experience has to be seamless. If we bring design capabilities to pieces of strategy and operations, then we can do something quite extraordinary.”
– Benedict Sheppard, McKinsey Design

The business value of design

In parallel with the launch of McKinsey Design, the management consulting firm released an in-depth study on the business value of design thinking, based on a five-year study of 300 public companies. The researchers found that companies that are frontrunners in design reap the rewards. Leaders in design thinking – about one-quarter of the companies assessed – managed to book an average annual revenue growth of 10%, compared to between 3% to 6% for the other companies studied. Similarly, annual growth in total returns to shareholders was 12% to 16% at average companies, and 21% at the most design-focused companies. 

The synopsis that design doesn’t just offer marginal improvements but has the potential to roughly double a company’s revenue growth, comes at a time when many organisations are still questioning the business case behind their design thinking spending. According to the authors, “Creating beautiful, ingenious and charismatic products adds business and financial value.”

McKinsey isn't the only top consultancy spearheading a push into design thinking. Rival Boston Consulting Group acquired Maya in August last year, Accenture bought London-based design studio Fjord in 2013, while the Big Four have made several bolt-ons in the space over the past years, blending their design skills into their wider creative and digital platform.

Talking about the firm’s edge in the market – McKinsey will face the likes of among others IDEO, Designworks, Ammunition, RKS, Designaffairs and GK Design Group – Collin Cole, founder of Carbon12 Creative and a digital design veteran, said “I’ve worked in design studios for 30 years and would say they are great for cultivating creativity. The great thing about McKinsey is that it looks at opportunities from all angles and works at the highest levels of client organisations.”