As the 2018 finish line nears, will McKinsey continue its breakaway or slip back into the peloton?

Every six months, we review McKinsey’s performance, analyze its strategy and consider likely scenarios for the firm in the near term

Back in June, we said, “If McKinsey truly gains market permission to take digital transformation from design through execution, its peers will be pressured to emulate the firm.” In advance of the November profile, we’ve considered how the firm performed through the first part of 2018 and put together a couple quick thoughts as the end of the year nears, specifically around some McKinsey moves in France and a potentially pressing market trend.

As part of a burst in recruiting at McKinsey France, three partners with specializations in robotics and automation relocated to the firm’s Paris office, filling in portfolio gaps. McKinsey also launched a high-profile and seemingly civic-minded skills-development program to combat stubbornly high unemployment across France. Along with Bain & Co., Oliver Wyman and others, McKinsey seems to be sensing new growth in the France consulting market, likely driven by Brexit and digital transformation. Brexit’s pending implementation constrains consultants working between the U.K. and members of the European Union, making the French consulting market more congested as well as more lucrative for well-positioned and staffed consultancies. French companies have also accelerated efforts around digitization and digital transformation, driving consultancies such as McKinsey to place more emerging technology resources on the ground in Paris.

Not all will be wine and roses — or champagne and irises — as McKinsey faces a market trending toward transparency even as the firm manages the fallout from several high-profile mistakes (e.g., South Africa, Eskom)

Competitors have always complained about McKinsey’s business practices, and clients have always complained about the firm’s pricing and failure to follow through on implementations. Customers and/or markets emphasizing transparency may be far less forgiving of McKinsey’s methods, and larger consultancies with positive brand strategies and market presence — such as EY, PwC and Deloitte — may be well equipped to displace McKinsey, given the opportunities. Even as McKinsey adopts risk-sharing and outcomes-based pricing for some engagements, tech trends such as cloud, Global Data Protection Regulation compliance, analytics and SaaS, point to increased transparency and visibility into actual results, with clients potentially assessing whether McKinsey’s high consulting fees are justified.

We will be marking all these moves in our upcoming Management Consulting Benchmark, comparing McKinsey against 12 other consultancies across four service lines and countless metrics. In June we quoted a longtime partner at a Big Four firm, who said, “I don’t know what McKinsey will do next. I do know they’ve consistently been a couple steps ahead of us.” Maybe the timing is right for those competitors to catch up.