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Accelerating with QuantumBlack

Problem-solving in progress at QuantumBlack's office in London

– We’re delighted to announce the acquisition of QuantumBlack, a London-based company with roots in Formula 1 motor racing that is pioneering the use of big data and advanced analytics to improve organizational performance.

The deal is our fourth acquisition of 2015, in areas ranging from product design to pricing optimization. We’ve also entered into a number of strategic partnerships, some involving equity investments. Behind these deals is a deliberate strategy to bring new tools, technologies, and capabilities to McKinsey clients, says Daniel Pacthod leader of our New Ventures unit: “Clients are asking us for more than just advice. We’re building some terrific new capabilities organically and we’re actively looking for partnerships or acquisitions where it makes sense.”

QuantumBlack’s roughly 45 employees will continue to operate from their existing premises in London’s Tech City under the company’s distinctive name. However, the acquisition opens the door to work jointly with McKinsey teams on client projects across a wide range of industries.

“Differences between teams [in Formula 1] are measured in milliseconds so they look for every available opportunity to make improvements,” says QuantumBlack co-founder Simon Williams. “Analyzing data at scale is a way to optimize the performance not only of cars but also of engineering teams and whole organizations.”

Nicolaus Henke, head of McKinsey Analytics, said “Data analytics is one of the most disruptive and potentially transformative developments in management. QuantumBlack, through its Nerve platform, combines data from disparate sources to produce meaningful data around human endeavor—something that previously has not been reliably measured.  This is why we’re so excited about the combination of our organizations—together we can provide our clients with a completely new means of making decisions and converting knowledge into action.”

“We’ve always been strong when it comes to working at the leadership level, and we bring fantastic analytical skill,” says Jeremy Palmer, QuantumBlack’s Chief Executive. “But what we haven’t yet had is the kind of broad domain expertise and implementation capabilities that McKinsey brings.”

Bill Wiseman, head of McKinsey Analytics in Asia, said “McKinsey and QuantumBlack worked together for more than a year in a number of industries. This approach to organizational performance requires not only a flair for statistics but also industry expertise, experience implementing change programs, and earned credibility with senior executives—all of which are McKinsey strengths.”

In a typical project, once objectives are agreed upon with the client, the first step is to bring together large amounts data from disparate sources—everything from engineering systems to performance-management systems to email servers. The consulting team then applies sophisticated analytical techniques (usually including machine learning) to find out what drives performance and uses data visualization to render the findings in a way that brings them alive for client executives. At this point, the rubber really meets the road: working with the client to decide on a course of action, align employees and other stakeholders, and make change happen over weeks and months.

Sven Smit, head of McKinsey Western Europe, notes that the McKinsey and QuantumBlack teams worked together successfully on a number of client projects before an acquisition was mooted. Even so, he concedes that making acquisitions work is never easy. The keys to success?

“We’re doing what we advise clients to do in these circumstances: get to know each other really well and develop a winning shared forward plan and put real resources into post-deal support. The deal doesn’t end when the ink is dry.”