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What is dry powder?
The term "dry powder" comes from the days when battles were fought using cannons and muskets and it was important to keep a plentiful supply of gunpowder on hand - and for it to be useful, it had to be nice and dry. In finance, investors might refer to cash reserves or other liquid assets that can be put to use to do battle in the marketplace as dry powder. The consulting team's equivalent is information, data, analyses, and insights that are already or nearly client-ready.
During the course of a consulting engagement, teams will generate a lot of material including PowerPoint pages and decks and Excel models. On most days, the goal is to push and improve this material until it is ready to move the project closer to the answer and be presented to clients and/or team leadership. Occasionally, it makes sense to set aside some complete or nearly-completed work and save it for another day - that is what McKinsey teams refer to as "dry powder".
Why keep dry powder in reserve?
There are a few good reasons - besides a desire to save themselves from extra work down the road - for a consulting team to stockpile dry powder. The more proactively you can recognize, leverage, and/or point out these situations to McKinsey leadership, the more dry powder you and your team can stockpile, freeing up time down the road. Some reasons for setting aside dry powder are....