The One Sentence Summary
The hidden influence of the world’s most powerful consulting firm has made the world more unequal, more corrupt and more dangerous.
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- The authors are investigative reporters for the New York Times and have obtained a substantial amount of inside information to complete the picture.
- McKinsey & Company have earned billions consulting for almost every major corporation in the world, and countless governments. Shielded by Non-Disclosure Agreements, their practices have remained vague, until now.
- Their work includes ruthless cuts to the NHS, troubleshooting for Big Oil, incentivizing the prescription of opioids, executing Trump’s immigrations policies that put children in cages, and advising some of the world’s most unsavoury despots.
- McKinsey talk a lot about values, which helps them appeal to a younger generation of idealistic recruits concerned about issues like global warming, inequality and racial justice. But by dissipating power to senior partners all round the world, each of whom operate independently and don’t divulge what they are up to, these so-called values are used in pretty much any direction they like, and essentially equate to a philosophy of wealth without guilt.
- Although named after its founder, its spiritual leader was Martin Bower, who joined in 1933. He insisted they call it a firm not a company, that it run a practice not a business, and that client work should be an engagement not a job. By the 1960s, their philosophy was to wedge yourself into a client company and spread like an amoeba.
- Their 1950 study into pay levels in the USA helped spawn one of the most corrosive issues today: income and wealth inequality. In 1950, the CEO of a typical large company made 20 times more than a production worker. By 2020, CEOs made 350 times as much.
- One of the most common approaches they use is to play both sides of the same issue. As recently as 2017, they have been found to be advising both state councils and their healthcare providers, receiving hefty fees from both parties without the other knowing, all under the guise of client confidentiality. Often this is only revealed after court cases demanding information that reveals all.
- For a company that presents itself as a voice for healthcare reform, McKinsey has remained silent in the fight against cigarettes, vaping and opioid abuse. That’s because it has clients in all three sectors.
- Another low was their involvement with the USA’s Immigration and Customs Enforcement, better known as ICE. Footage circulated online of children screaming in cages when separated from their parents as a result of Trump’s policy against Mexicans in particular.
- Another was helping the Chinese government, via one of its companies, to build military installations on islands in the South China Sea, creating direct conflict with the US government’s overseas security policy.
- Its involvement with Big Tobacco is equally shocking, cynically marketing Camel cigarettes as “doing what’s right” and embracing a “Lust for living.” They failed to notice the irony when recommending that the client “dip into their robust toolkit” and look at a “killer idea approach.” Killer indeed.
- In 2006, the US Justice Department found tobacco companies guilty of racketeering, and 4 of them were McKinsey clients. The finding stated that the defendants had known many of these facts – that cigarettes are addictive and deadly – and they have consistently and repeatedly denied them and used enormous skill and sophistication to mislead the public, the Government and the public health community.
- The cases keep coming. The company was closely involved in the Enron scandal and had no qualms about advising the Allstate Insurance company to “win by exploiting the economics of the practice of law.” To you and me, that means stalling and delaying claims, or making very fast, time-limited, and very low compensation offers to customers with a take-it-or-lose-it ultimatum. Employees who refused to implement this policy were then classified as JIJ – job in jeopardy.
WHAT’S GOOD ABOUT IT
- None of this is good of course. The prevailing theme of McKinsey is one of obfuscation: their so-called solutions involve little or no sacrifice from the world’s billionaires or big corporations. Instead, they focus on “doing well by doing good” – with small measures to address pressing problems that often call for collective action. It’s good PR.
- One former consultant questions the entire premise of the organization, saying that it makes the rich and powerful feel virtuous about the incremental good deeds that their companies do under the banner of ‘corporate social responsibility’ while their core businesses continue to inflict harm. The message to these companies from McKinsey is to challenge them to do more good, but never tell them to do less harm. The underlying system of capitalism must never be questioned.
- Another pulled no punches in a resignation email, describing it as an amoral institution which in many cases causes detriment to society, McKinsey’s reputation, and the planet.
WHAT YOU HAVE TO WATCH
- Some reviews suggest that the authors have it in for McKinsey and are biased against it, but as a neutral it’s hard not to be shocked by the hypocrisy and greed of it all. Decide for yourself.