Bob Sternfels faces run-off to remain McKinsey's global boss

30 January 2024 Consultancy.uk 3 min. read

Traditionally, McKinsey & Company has favoured stability when selecting its leaders. But Bob Sternfels could be about to become the firm’s second single-term global managing partner in a row, after the company’s partners forced him into a run-off ballot with contender Rodney Zemmel.

Bob Sternfels’ appointment was unusual in its own right. Only the 13th Partner to lead McKinsey & Company since its founding in 1926, he succeeded Kevin Sneader, who failed to secure re-election when the company’s partners voted him out of the first round of balloting. Sneader had defeated Sternfels to succeed Dominic Barton three years earlier, but in his only three-year term at the helm, McKinsey saw a number of high-profile reputational crises come home to roost – including the much-written about opioid settlement, which related to work McKinsey delivered over a decade ago.

The eventual appointment of Sternfels saw a new global leader appointed at McKinsey after just one term for the first time since 1976 – and only the third time in the company’s near-100-year history. The change was also the first time a global partner failed to win a re-election vote they contested.

Bob Sternfels faces run-off to remain McKinsey's global boss

However, while the firm’s partners hoped it would provide it with a fresh start, the firm’s reputational knocks have continued – from controversy surrounding its dealings with Saudi Arabia, to its alleged role in a state capture scandal in South Africa – and even been highlighted in internationally released book, ‘When McKinsey Comes to Town’. At the same time, McKinsey has suffered from a slowdown in the growth – felt by the wider consulting industry – prompting the firm to reduce the number of new promotions to partnership and to defer some partner compensation to smooth cash flows last year.

While this would usually not sit well with senior partners anyway, it does not seem to have helped matters that it has happened after Sternfels has doubled down on his predecessor’s investments in risk and compliance functions, as well as new processes to vet clients. Many partners accept this is vital for safeguarding McKinsey’s reputation, but it has also reduced the pool of clients the firm could reach at a time when its figures aren’t where they ought to be.

Run-off

Amid this, it seems that McKinsey’s senior members have got cold feet once again, and have sent the company’s latest leadership vote to a final run-off stage. As reported by the Financial Times, Sternfels will now face off with the company’s digital strategy business leader, Rodney Zemmel, after failing to secure a winning margin from its 750 senior partners.

Zemmel, who is a 29-year veteran of the firm based in New York, was one of the top two performers in an initial vote of 10 different candidates, beating other candidates including Carter Wood, chief risk officer, and Liz Hilton Segel, chief client officer. As well as being the global leader of McKinsey Digital, which advises companies on digital transformation and data analytics, Zemmel was previously head of the firm’s northeastern US office.

McKinsey declined to comment when asked by the Financial Times, except to say it would announce the result after the election process concludes. However, a source said to be an insider with the firm did speak to German business newspaper Handelsblatt, and alleged that there was great tension in the partnership as to who will win in the decisive round of voting.

The individual, who said they were a former senior partner in Germany, added, “This is a duel between two McKinsey greats and therefore not an easy decision”. Zemmel has a large following in the company, and is also very popular with younger senior partners because of his “chummy nature”, according to the source.

At this point, McKinsey’s long-term history might still peg Sternfels as favourite. But those who have followed the firm’s more recent trajectory might also be gripped with a sense of déjà vu for the coming duel. As such, what once would have been taken for an easy re-election for the incumbent Sternfels suddenly seems anything but straight-forward.