Review: ‘When McKinsey comes to town’: book tells dark side of global consulting giant

by

Some of McKinsey’s staunchest critics cited in a new book about the consulting firm are its own employees. In messy general meetings or in blinding company-wide goodbye emails, they denounce management for working with controversial clients.

McKinsey is an “amoral institution,” wrote an outgoing consultant to colleagues around the world, because it advised coal companies “directly responsible for putting us on the mind-boggling fast track to planetary omnicide.”

And, amid an internal revolt in the United States for having worked for the Trump administration’s immigration enforcement agency, a speaker at a general meeting asked: “If we helped southern states ‘improve agricultural asset yields’ in the years 1850, would we still support this? Our guidance so far would indicate that the answer is ‘maybe’.”

That this internal turmoil has come to a head is testament to the depth of information gained by journalists Walt Bogdanich and Michael Forsythe, who spent the better part of five years writing about McKinsey for The New York Times. The firm remains the elite of global management consulting, operating behind the scenes of thousands of companies and government agencies as a catalyst for the latest management theories and an enforcer of capitalist efficiency with claws and teeth. A dive into its inner workings, the authors point out, is “a way to help readers understand how power is exercised in our society.”

This was one of the most difficult periods for McKinsey’s reputation in the company’s 100-year history. Its South African partners are embroiled in a wide-ranging corruption scandal, in which the firm now faces charges related to the looting of the state rail freight monopoly. This prompted questions from politicians on both sides of the Atlantic about conflicts of interest in their healthcare practice.

She was sued by a Saudi dissident identified in a slideshow of social media influencers in the country, which the dissident says targeted his family. The case was eventually shelved.

And last year she paid nearly $600 million to settle work-related charges to Purdue Pharma, the seller of the opioid OxyContin, whose sales practices — advised by McKinsey — were considered a contributing factor. to the addiction epidemic in the United States. McKinsey denied the illegal activity but apologized.

The authors’ accounts of these and other controversies intensified questions about the company’s ethics. More recently, they revealed that McKinsey consultants to tobacco giant Altria proposed a smartphone app for Marlboro smokers to keep them loyal to the brand — “more than 50 years after the Ministry of Health confirmed the link between smoking and smoking.” cancer”.

The downside to putting these incidents together in a book is that it feels unbalanced and unfairly negative rather than a full account of the company. Sometimes it seems like there’s no corporate evil that can’t be placed on McKinsey’s doorstep. In successive chapters, she is involved in the “dehumanization” of banking in the 1950s, sets off a chain reaction that led to the 2008 financial crisis, and promotes the use of “dehumanizing” performance metrics in baseball, which the authors blame for sport cheating scandals. The next chapter is titled “Beating Seals,” and it’s a surprise that it’s not literal. (It’s a foolish phrase one consultant used to describe negotiating high fees with the South African government.)

With McKinsey’s deep reach in businesses and governments around the world, it is inevitably and rightly a focus for the discussion on what modern corporations are for and the impacts they have, for better or for worse. Public companies haven’t had the luxury of avoiding these debates the way a private partnership like McKinsey has until recently.

The debate with younger, goal-driven employees is intensely uncomfortable for McKinsey leadership, as well as corporate executives around the world. For years, McKinsey prided itself on allowing its consultants to reject working with a client they had ethical objections to. Many refused to work for the Pentagon during the Vietnam war, for example. Now, that policy is dismissed by one employee as “an excuse, freeing McKinsey as a whole to take a stand.”

The company’s response was to build a verification building under a “client selection policy” that now rejects more jobs, including for the defense and security branches of undemocratic governments.

But it also sounded like a defiant note. Bob Sternfels, the current managing partner, defended his work for fossil fuel companies, saying it’s best to stay engaged and help them reduce emissions, echoing the argument of asset managers against divesting shares in oil companies.

In an interview with the Financial Times in June, Sternfels said: “There are a lot of options in this world, so if that doesn’t suit you, you don’t have to stay with us or come to us.” It was a surprising thing to say to current and future employees, because it stood out from the branding around purpose and positive impact used by most modern companies and, in fact, McKinsey itself. Will Bogdanich and Forsythe find more exciting outgoing emails to cite in future issues?

Translated by Luiz Roberto M. Gonçalves

You May Also Like

Recommended for you