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McKinsey welcomes Westney Consulting, a leading capital-projects consultancy

Every day around the world, companies are building new production capacity, governments are expanding roads and bridges, and major infrastructure is being repaired. These projects, which account for some 14 percent of global GDP, are critical to society, the global economy, and productivity—and they often run late and over budget.

“This creates huge inefficiencies,” says McKinsey senior partner Steffen Fuchs. “Imagine the economic opportunity if we could accomplish these projects on time and on budget.”

Our firm’s desire to help organizations seize that opportunity is what drew us into the capital projects and infrastructure space, where we have been ranked the top industry consulting firm by ALM Intelligence for the last five years running. Now, that vision takes a big step forward with McKinsey’s acquisition of leading capital-projects consultancy Westney Consulting.

Founded by Dick Westney in 1978, Westney is also ranked among the top five capital projects and infrastructure consultancies in the world by ALM and has supported $250 billion of global energy projects since 2012.

“Westney has been consistently recognized for having the world’s deepest benchmarks for analyzing and predicting future project performance,” says McKinsey senior partner Filipe Barbosa. “They provide project-cost and schedule-prediction transparency like no one else.” As projects become more complex and unpredictable, being able to derive such critical insights from data is crucial.

Much of Westney’s capabilities are derived from its robust projects database, amassed over 40-plus years of consulting, that helps validate project timelines and budgets, improve delivery, and ensure effective project organization. Rather than a traditional bottom-up cost-and-scheduling approach, Westney creates a top-down assessment using data-driven methods of identifying the most realistic ranges of project outcomes.

Video
Watch now as Steffen Fuchs, Dick Westney, and Keith Dodson discuss Westney joining McKinsey.

In many ways, this acquisition is an extension of a longstanding partnership between McKinsey and Westney. Over the past 10 years, we’ve worked closely together on over 80 projects that span oil-and-gas, power, mining, and other sectors. Among Westney’s leaders to join our Capital Projects and Infrastructure practice are Keith Dodson and former McKinsey consultant Justin Dahl.

“This is a natural and exciting progression to our long-term relationship with McKinsey,” says Dick Westney. “Combining McKinsey’s global reach, capabilities, and insights with Westney’s pattern-recognition power will significantly expand our clients’ abilities to benchmark large capital projects and locate specific drivers of cost overruns, delays, and quality issues to make better decisions.”

While sectors like retail or manufacturing have reaped productivity gains from digital technology, digitization in construction has evolved at a glacial pace. “An industry like construction is ripe for a productivity boost,” says McKinsey partner Kassia Yanosek. “What’s needed is exactly what Westney provides: an independent source of truth for clients at the onset of engagements, so project owners and contractors know exactly what they’re getting into and can plan accordingly.”

Westney’s rich data set builds on McKinsey’s existing Energy Insights capabilities and Major Project Delivery expertise that are already leading to an average 20 to 40 percent productivity increase on major projects. “With Westney, we’ll be able to provide insights faster and more effectively,” says Filipe.

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From left, Steffen Fuchs, McKinsey senior partner; Keith Dodson, Westney principal; Dick Westney, founding Westney principal.

For example, having greater foresight into projects’ costs, timelines, and skilled labor demands could help ensure every dollar is used as efficiently as possible. “We’ll be able to give owners and contractors better visibility into outcomes across every single stage of a project,” adds Steffen, “leading to more effective capital allocation across the private and public sector.”

McKinsey partner Jimmy Nowicke agrees. “On numerous occasions, we’ve collaborated with Westney on client projects to provide unbiased facts and targeted interventions early on,” he says. “We’re excited to now be working as one McKinsey team to help clients translate the data generated on major projects into actionable insights.”

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