Consulting Giant McKinsey Buys Itself a Top Design Firm

In the latest instance of the design and business worlds intersecting, McKinsey is buying the design consultancy Lunar.
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McKinsey & Company, the management consulting giant, is buying Lunar, the design consulting giant. The deal illustrates just how central design is to business today---and how design's influence is growing beyond the tech industry into the corporate world at large.

On the surface, the acquisition announced today might seem unlikely. Lunar is a top design firm, known for its work with clients like Apple, HP, and SanDisk. McKinsey is, well, McKinsey---"the most well-known, most secretive, most high-priced, most prestigious, most consistently successful, most envied, most trusted, most disliked management consulting firm on earth," as a Fortune profile once put it. But to those who've been paying attention, the deal is another example of a well-established trend: big companies paying big bucks for design expertise.

Lunar will keep its name and continue operating out of its offices in San Francisco, Chicago, Munich and Hong Kong. It will continue taking on new business. But it will also draw on its three decades of design experience to help McKinsey solve problems for its clients. According to Lunar President John Edson, this help could take many forms. It might be figuring out how to best execute a particular product---or how an incumbent player can integrate design into its long-term strategy.

McKinsey basically sells expertise to the world's most important companies. Its clients, to name a very few, include Johnson & Johnson, Shell, and the governments of the United Kingdom, Mexico, and Taiwan. Its interest in Lunar is proof that the business world is increasingly seeing design as a necessary competency.

Apple's rise from floundering underdog to the most successful company in history set a powerful example. Now corporations are scrambling to bring designers into the fold. GE is building a massive team dedicated to user experience. IBM is hiring an army of designers, by some accounts the world's largest. Others are expediting the process by absorbing entire design firms. Last year, CapitalOne bought UX pioneer AdaptivePath. Google picked up mechanical design firm Gecko. Facebook has swallowed up Hot Studio, Bolt Peters, and, most recently, Teehan+Lax.

These examples are easy to understand. Facebook, GE, and even CapitalOne all make products, and products need designers. Design's place in the world of management consulting is less obvious, but it makes sense. Design may have once been limited to wrapping products in pretty packaging, but today it's an incredibly broad discipline, encompassing everything from products, branding, and business models to corporate strategy and structure.

McKinsey is all about delivering impact, Edson says, and today impact can involve anyone from "a man or a woman on a CAD machine" to a supply whiz in China who knows "the cost of every last rivet." Design consultancies like Lunar have been cultivating these diverse skill-sets for decades. Naturally, as design and business commingle, clients will expect big-name consultancies like McKinsey to provide this expertise too. It's already happening. Accenture, another huge consultancy, bought service design firm Fjord in 2013. Plus, Edson says, McKinsey already employs more CAD wizards than you'd expect.

From all of this, you'd think it was a very good time to be in the design business. But some see a different trend: independent design firms having a hard time staying independent---or even staying alive. The brilliant London-based firm Berg closed its doors last year. Smart Design shut down its San Francisco office shortly thereafter. Even Fuseproject, one of the best known firms, recently sold a controlling stake to a Chinese marketing company.

All this activity has generated considerable chatter in the design world. A million Medium posts later, there's little clarity about what it all means. Are all these design firms genuinely jazzed about the "scale" and "scope" their new corporate parents can provide, as they often say in their farewell blog posts? Or are they relieved to find a life raft, feeling crunched as design dollars are increasingly spent in-house?

In Lunar's case, Edson maintains, it really is the scale and the scope. "This is not a move of desperation, by any means," he says. Either way, the acquisition is indicative of just how thoroughly design and business are melding. There's more and more overlap between management consulting and design consulting. Design is business and business is design. As Edson said of the deal, "It's a very natural kind of partnership."