McKinsey and LUNAR: Case Study
Magic Day
At 5:30 pm on February 4, 2014, the one-day workshop organized by design firm LUNAR for McKinsey & Company was drawing to a close. As Derrick Kiker and Chris Musso, leaders of McKinsey’s Operations Practice, left LUNAR’s main room where the workshop had taken place, they reflected on what they had observed. They had been more than impressed with LUNAR’s design capabilities. The two companies shared the same professional values to deliver high-quality projects for their clients, and LUNAR could help McKinsey develop expertise in consulting for new product development. Derrick and Chris would investigate further the possibility of deepening the relationship between the two firms. LUNAR was founded in 1984 as a product and
development consultancy, headquartered in San Francisco (Figure 1a) with offices in Europe and
Asia. Its core capabilities included industrial design, communication design, video storytelling, mechanical and electrical engineering, manufacturing support, interaction design, user validation, design and research. LUNAR’s
current and past clients included Apple Inc., Abbott Labs, Cisco Systems, Hewlett-Packard, Johnson & Johnson, Microsoft, Motorola, Philips, Oral-B, Palm, Pepsi and Sony. (Excerpt)Case Study Questions
Will McKinsey & Company and LUNAR succeed in creating value post- acquisition?
- Why did McKinsey & Company want to bring a design capability “in-house”?
- Why would LUNAR want to be part of a large established management consultant firm such as McKinsey & Company? Alternatively, how could LUNAR extend its consulting product line and what would it gain from partnership (rather than being acquired)?
- What options did McKinsey & Company have to develop its own design capability? What are the pros and cons of each?
- What are the organizational, tactical and cultural issues that McKinsey and LUNAR need to consider to ensure the acquisition succeeds? How could LUNAR be integrated into McKinsey’s organizational structure? Or, should it remain a separate entity?
- If a partnership or acquisition is finalized, how can LUNAR management’s career path be incorporated into McKinsey’s strict career structure, where the ultimate goal is to make partner’?