McKinsey & Co. opened an Orange County office nearly five years back as a satellite of its larger Los Angeles operation. Since then, the consulting firm’s Costa Mesa office has catapulted into a Southern California hub of sorts.
In March, New York-based McKinsey plans to expand its OC operation by relocating to Irvine’s University Research Park. The firm is set to move into a 22,000-square-foot office at the park adjacent to the University of California, Irvine. McKinsey plans to add 30 consultants and partners by year’s end, up from around 10 employees in Costa Mesa.
“Our practice in Orange County has been growing quite dramatically,” said Dennis Sweeney, a McKinsey director. “The last five years have seen pretty explosive growth.”
The Irvine office will be the main office in North America for McKinsey’s Production System Design Center, as well as the Southern California headquarters for the firm’s Tech Coast Accelerator division. The accelerator is expected to be the lead component of the new office.
While the design center is set to offer consulting to clients in light and medium manufacturing, the accelerator will help businesses set up electronic commerce operations.
The accelerator consists of a team of people with a focus on e-business, according to Sweeney. The division plans to help companies start e-commerce from scratch.
In the past, the OC office focused on general consulting services in Orange and San Diego counties. It coordinated and sought help from Los Angeles and other offices when clients demanded services in areas such as electronic business or production efficiency.
The design center aims to serve production system needs of McKinsey’s entire clientele in North America, while the accelerator plans to focus on Southern California.
“We will start with a team of 15 people in the accelerator division, but the notion is to ramp up to around 25 to 30 by year-end,” Sweeney said.
Christiana Shi, a McKinsey director, will head the accelerator. Sweeney will be looking after the local business practice for McKinsey.
Design center consultants plan to focus on efficient production systems for clients in technology and other manufacturing segments. OC stands to house McKinsey’s first design center in North America. The firm has one in England.
“We have been looking at establishing one center in the U.S. for some time now,” Sweeney said. “Southern California has the largest concentration of light manufacturing in North America. So our global practice has chosen to locate it here.”
The design center consists of a team of managers and consultants who specialize in the lean production system similar to the one used by Toyota Motor Corp. and other Japanese automakers. Japanese manufacturers perfected the system in the 1950s. It is viewed as more flexible and cost effective and results in fewer production defects than traditional systems. The center is set to start with 10 consultants and three managers.
“We will add more consultants and managers over the next 12 to 18 months,” Sweeney said.
The Irvine office will have enough space for 100 people, he said.
“Our operations here will take a quantum jump in the coming months,” Sweeney said.
To staff up its operations, McKinsey plans to hire and move in consultants and managers from other regions. Many of the employees for the design center are set to come from Cleveland.
“We have people in Cleveland who have the skills for a lean production system,” Sweeney he said. “We will have a total of six partners and 30 other people to start, and we will be around 40 by the end of the year.
When McKinsey set up shop in Costa Mesa, the office here contributed around 10% of the firm’s revenue in Southern California. Now the OC and San Diego region have more than a 50% share in the firm’s Southern California business, Sweeney said. n
