James O. McKinsey

Further career

Having written textbooks about accounting and taxes, in 1922 he published his first major work, entitled Budgetary Control. It is regarded as "the first definitive work on budgeting"., and was written at a time when budgeting was limited to government, not private industry. In his book, McKinsey advocated that companies' performance should be judged by staying within a set budget.

McKinsey followed up Budgetary Control with two more books, Managerial Accounting and Business Administration, in 1924. In Managerial Accounting, McKinsey demonstrated ways that accounting data could reform businesses, for instance financial standards that could determine efficiency of business operations. Business Administration would serve as a precursor to the General Survey Outline, a 30-page system that McKinsey created in 1931 to evaluate a company's finances, organization, and competitiveness. These books were considered by reviewers to be "rigidly and boldly scientific as never before". McKinsey also became president of the American Association of University Instructors in Accounting in 1924 and helped establish its journal The Accounting Review.

In 1925, McKinsey founded his own consultancy firm James O. McKinsey & Company, in Chicago, where he served as senior partner until 1935. Although he was promoted by the University of Chicago to full professor in 1926, because of his business obligations, McKinsey taught only two courses at Chicago starting in 1928. In 1935, Chicago department store Marshall Field & Company retained McKinsey's services to resolve financial difficulties, specifically $12 million lost since 1930 and a loan repayment of $18 million. After sending 12 consultants to review 752 stores in 32 states, factories, and wholesalers, McKinsey recommended that Marshall Field should limit its business to retail, sell its factories, and end wholesaling. Marshall Field's board offered McKinsey the job of chair and chief executive, and McKinsey accepted the offer in October 1935. While leading Marshall Field, McKinsey also sat on the boards of Kroger, the Armour Institute of Technology, and other businesses and organizations.

For his eponymous company, McKinsey named Andrew Thomas Kearney managing partner of the Chicago office. In 1936, McKinsey was also elected chairman of the American Management Association.

The History of Accounting: An International Encyclopedia explained that McKinsey "soon turned Marshall Field's red ink into profit, but he may have done so at the cost of his health. He died of pneumonia on November 30, 1937."