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Bob Sternfels has failed to win the support of a majority of McKinsey’s senior partners for another term at the helm of the consulting firm in the second round of its leadership ballot, forcing him into a run-off against the head of its digital strategy business, Rodney Zemmel.
People familiar with the result said that Zemmel emerged as Sternfels’ strongest challenger from a field of 10 that was put to the firm’s 750 senior partners around the world on Wednesday.
Sternfels’ tougher than expected battle for a second three-year term as McKinsey’s global managing partner has exposed rifts within the firm over his leadership style and his handling of a round of back-office cost cuts last year, the Financial Times has reported.
Zemmel, a 29-year veteran of the firm based in New York, is the global leader of McKinsey Digital, which advises companies on digital transformation and data analytics. He was previously head of the firm’s northeastern US office.
While Sternfels has been seen as the favourite from the outset, he will need to win over colleagues who failed to back him as their first choice in the opening two rounds of the race. Otherwise, he would become the second global managing partner in a row to be pushed out after a single term.
His predecessor, Kevin Sneader, failed to make the run-off in the last leadership race in 2021, which took place shortly after McKinsey agreed to pay almost $600mn to settle lawsuits over its work for opioid manufacturers.
Its advice to Purdue Pharma on how to boost sales of OxyContin led to claims it contributed to an epidemic of opioid addiction.
Sternfels has doubled down on Sneader’s investments in risk and compliance functions as well as new processes to vet clients, which many partners accept are vital for safeguarding its reputation, even if they have chafed at times under the strictures and complained that Sternfels has concentrated power in too few executives.
McKinsey has also suffered from a slowdown in the growth of the 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. It laid off 1,400 back-office staff in March, in what it called Project Magnolia, to protect profits.
Under McKinsey’s idiosyncratic election process, senior partners were able to vote for any one of their number in the first round, provided they can serve a three-year term before turning 60. The 10 strongest candidates went forward to a second round, where Zemmel beat out other challengers including Carter Wood, chief risk officer, and Liz Hilton Segel, chief client officer.
McKinsey declined to comment, except to say it would announce the result after the election process concludes.