Rumors are leaking out that once again McKinsey is bilking IBM for some serious cash and IBM seems to be going down the path of this McKinsey Three Horizons of Growth nonsense to grow sales and cut costs I guess. Inquiring minds would like to know how many tens of millions IBM has paid McKinsey going back to Gerstner where he was a director there for 13 years 1965-1978. Lets guess since Gerstner came in 1993 IBM has shelled out $3M/year to McKinsey. 32 years x $3M (likely more) is a cool $96,000,000. For what?
1 of a thousand failed examples here...IBM's Personal Computer division reached $4 billion in revenue by 1984, which was more than twice that of Apple at the time. The company continued to be a major player in the global PC market in the following years.
But by 2004, when IBM sold its PC business to Lenovo for $1.75B, annual sales for the division were approximately $10 billion. The company faced increasing competition from "clone" manufacturers throughout the late 1980s and 1990s, which eroded its market dominance and profit margins.
IBM completely F'd up it's wonderful PC business by not properly protecting the HW IP from Intel and the SW IP from MSFT. Combine that with IBM F'ing up MCA micro channel architecture, Token Ring, SNA and OS/2 and that is tens of billions of dollars lost to ineptness.
TODAY: Lenovo turned a $1.75B investment into $57,000,000,000 and IBM approx $62,000,000,000. An unknown Chinese firm in 2005 now rivals IBM for annual sales?! Could IBM use $60B of revenue for the next forever?!
IBM's latest Hail Mary here with McKinsey => https://flevy.com/topic/mckinsey-three-horizons-of-growth/case-growth-strategy-redesign-professional-services-competitive-market?srsltid=AfmBOoqmaY7ObrlfwqN8tDc9rAtBsbhQri_INrMLx8-zVOaRvYhjsN-9