McKinsey & Company: State Farm Insurance Assessment

Introduction

State farm insurance refers to an association of companies that render financial and insurance services. It is a dominant industry player and holds a large chunk of the market compared to its competitors. It ensures cars and homes in America and Canada. State farm initially dealt with insurance of cars only but later incorporated farmers later in their business. The success of this company was in tandem with its support by farmers who were thrilled by the low premiums. State Farm later went into banking and financial services. The firm also ensures homes and assures life.

The chairman of the board is Edward B. Rust, Jr who also is the chief executive officer. There have been five chief executive officers since its inception in 1922. State Farm has 67,000 who are employed permanently and 17,000 agents. This large pool of employees caters for the 77 million policies and the 1.9 million banking clients that State farm covers. The firm also ensures more than 40 million vehicles going by the estimates of the year 2005.

In this paper, Mckinsey & company is to be discussed as a management consulting firm that deals in consultancy especially in senior management levels (Raisel, 2008). The paper will focus on the issues the company tries to handle in various entities including governments, institutions, and businesses. This is a well-established company that has been able to stay in the limelight as one of the leading consulting firms. Moreover, it is one of the top graduate employers in this industry (Haas,2004).

The paper will discuss the company’s organization starting from the key man who is the managing director to its employees who keep the company running. It is important to note that Mckinsey as a company encourages employees to further their careers in consultancy otherwise they are obligated to quit. The key employees to be considered in this paper are Dominic Barton the managing director, Jerome vascallero, Chandra G, Joseph Daniels, and Christopher Bartlett.

Discussion

Changes to the company

This company has a small organization of consultants which is called a knowledge management system. This organization has a variety of professionals who include; industrial experts, librarians, and general researchers. In this system, there is access to journals databases and research materials (Huey, 2003). This system has improved in the way the company tackles the competitors. This system is very unique since it is not employed by the other competitors. This system also helps the company management engage professionally with its clients. The company has used this system to acquire earlier client studies for different tasks.

The company has discovered that with the recent economic meltdown, the consumers have learned to do away with expensive products and switch to cheaper ones. With this approach of the consumers, the company has intended to revert to this rebound of consumer behavior (Fisher, 2007).

The company also intends to have online consultancy to curb the upcoming challenges and be relevant in the market. Online consultancy is more cost-effective and easy to reach the customers who may be far away from the agents. Take, for example, in the United States the general sales of products have reduced in the recent recession period but online sales have increased drastically (Fisher, 2007). The survey also indicates that more and more consumers are using the internet to purchase their products.

Mckinsey and company are contemplating a conglomeration with another company to increase its market base. Mergers are challenging but there are risks that are worth taking, since, in order to prosper in business one must take a risk no matter how much it is. Mergers ensure the integration of market forces and also ensure a central revenue collection point (Fisher, 2007).

This company is thinking of investing in the Asian markets since these markets are becoming a major force in business and investing thus this is a noble idea. Asian markets have a large area full of diverse cultures and tribes, the tastes and preferences of these people change periodically. It will be prudent for managers in multinational companies to invest in this market since it might prove worthwhile and profitable (Haas, 2004).

Kind of workers needed

The company will require freshly graduated employees from the universities who will bring fresh ideas to the company and who will also push the change agenda of the company forward. It will also be required to hire graduates with other advanced displines for example law, engineering and medicine. Fresh graduates are good for the company because they will want to build their careers and to do that they must show passion for the company or else risk fading away without much gains unlike the experienced employees who are already established. Fresh minds have good analytical skills and they will want to implement what they have been taught in universities thus uplifting the company (Haas, 2004).

The company will require graduates with degrees in business studies; this will boost their knowledge in this field of work and also to add up in their earlier degrees if any. It is prudent for the company to employ workers who are talented. Business management involves passion and without talent this cannot be done to perfection. It is important for the company to employ people with proper and good communication skills as this enables employee’s to convey the correct information from the firm to the clients. Employees should have proper analytical and research skills; this ensures the employees gather credible information for the company (Haas, 2004, 70).

For smooth working of the company; the employees should be flexible, this means that they can fit anywhere at any time with ease.Organisation is another most important skill that should be possessed by efficient employees. Increase in knowledge in a company encourages sustainable competition. When a company invests in the knowledge of its employees; it is a sure way of keeping itself afloat in the market.

Compensation system

Mckinsey and company have had problems with other insurance companies in paying claims for example; it was quoted by CNN in February 2008 for developing absurd car insurance policies. Tony Blair was in trouble for hiring Mckinsey firm in restructuring the cabinet office; this directly signifies that Mckinsey is offering low compensation which does not reflect the current market. This firm has been undervaluing claims by use of the deny, delay and defend strategy (Fisher, 2007).

Conclusion

This paper has discussed into details various changes Mckinsey as a company will go through. The paper has also highlighted the employees to be hired in the transitional period, their qualification for hire and the skills they should have as employees.

References

Fisher, A. (2007). “For new MBAs, a California lifestyle beats big bucks”. California: Fortune.

Haas, E. (2004). McKinsey’s Marvin Bower: Vision, Leadership and the Creation of Management Consulting. New York: John Wiley & Sons.

Huey, J. (2003). ”How McKinsey Does It” Chicago: Chicago University Press.

Raisel, E. M. (2008). The McKinsey Way. New York: McGraw-Hill.

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