Saturday, October 08, 2022

Financial Times: When McKinsey Comes To Town — inside the global consulting giant

When Walt Bogdanich was investigating the Michelle O'Connell homicide coverup here in St. Johns County during 2013 and 2017, two putative lawmen, successive St. Johns County Sheriffs showed a negative Profile in Courage, by refusing to grant him an interview -- ROBERT HARDWICK and DAVID SHOAR

Now Sheriff of St. Johns County, ROBERT HARDWICK ducked Mr. Bogdanich's interview requests on the Michelle O'Connell case, which HARDWICK had investigated.  (HARDWICK wanted to prosecute Deputy JEREMY BANKS for the murder, and said so  as the Criminal Investigator for Seventh Circuit State's Attorney RALPH JOSEPH LARIZZA.)  

As shown by Mr. Bogdanich's reporting for The New York Times and PBS Frontline, St. Johns County's then-Sheriff, DAVID SHOAR likewise ducked an interview.  SHOAR was the mastermind of the coverup, which is continuing.  BANKS is still a Sheriff's Deputy, with a gun and a badge. 

In a 2017 deposition, HARDWICK candidly testified about local lawmen's handling of the O'Connell case, "We're all tainted." That's how Mr. Bogdanich ended his 2017 story, quoting the words that Mr. HARDWICK said in a deposition (in the retaliatory lawsuit that SHOAR procured against FDLE Special Agent Rusty Ray Rodgers, dismissed by U.S. District Court Judge Brian J. Davis.  Two judges -- Judge Davis and County Court Judge Chslres J. Tintin -- both found probable cause that BAKS killed Ms. O'Connnell.

Here's the Financial Times' review of a new book co-authored by the rather heroic New York Times investigative reporter Walt Bogdanich::

When McKinsey Comes To Town — inside the global consulting giant 

NYT journalists Walt Bogdanich and Michael Forsythe deliver an exposé of the controversies that have dogged the storied firm 

Demonstrators hold placards declaring ‘Come clean McKinsey’ and ‘We demand ethical business practices’

Demonstrators outside McKinsey’s offices in Johannesburg iin October 2017 © Getty Images 

By Stephen Foley OCTOBER 6 2022 

Some of the fiercest critics of McKinsey quoted in a new book about the consulting firm are its own employees. At riotous all-hands meetings or in coruscating exit emails fired off to the whole firm, they call out management for working with controversial clients. 

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

And amid an internal revolt in the US over work for the Trump administration’s immigration enforcement agency, one speaker at a town-hall meeting asked: “If we helped southern states ‘improve agricultural asset yield’ in the 1850s would we still stand behind that? Our guidance so far would indicate the answer is ‘maybe’.” 

That this internal turmoil has come to light is testament to the depth of sourcing of journalists Walt Bogdanich and Michael Forsythe, who have spent the best 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 at thousands of companies and government agencies as catalyser of the latest management theories and enforcer of red-in-tooth-and-claw capitalist efficiency. A dive into its inner workings, the authors point out, is “a way to help readers understand how power is wielded in our society”. 

At times in this book, it seems there is no corporate ill that cannot be laid at McKinsey’s door This has been one of the roughest periods for McKinsey’s reputation in the firm’s 100-year history. Its South African partners have been embroiled in a sprawling corruption scandal, where the firm now faces charges related to the looting of the state rail freight monopoly. It has attracted questions from politicians on both sides of the Atlantic over conflicts of interest at its healthcare practice. It was sued by a Saudi Arabia dissident it identified in a slide deck on social-media influencers in the country, which the dissident says led to his family being targeted. The suit was ultimately dismissed. 

And last year it paid nearly $600mn to settle charges related to work for Purdue Pharma, peddler of the opioid OxyContin, whose sales practices — advised by McKinsey — were deemed to have contributed to America’s epidemic of addiction. McKinsey denied illegal activity but apologised. The authors’ reporting of these and other controversies has intensified questions over the firm’s ethics. Most recently, they revealed how McKinsey consultants to the tobacco giant Altria proposed a smartphone app for Marlboro smokers, to keep them loyal to the brand — “more than 50 years after the surgeon-general confirmed the link between smoking and cancer”. 

The downside of stringing these incidents together into a book is that it feels lopsided and unfairly negative, rather than a fully rounded account of the firm. At times it seems there is no corporate ill that cannot be laid at McKinsey’s door. In successive chapters, it is implicated in “dehumanising” banking in the 1950s and setting off a chain reaction that led to the 2008 financial crisis, and promoting the use of “dehumanising” performance metrics in baseball that the authors blame for cheating scandals in that sport. The next chapter is titled “Clubbing seals”, and it is a surprise that this turns out not to be literal. (It is an ill-advised turn of phrase that one consultant used to describe negotiating high fees from the South African government.) 

With McKinsey’s deep reach into business and government around the world, it is inevitably and correctly a focus for discussion on what modern corporations are for, and the impacts they have for good and ill. Public companies have not had the luxury of dodging those debates in the way that a private partnership such as McKinsey has managed to until recently. 

The debate with younger, purpose-driven staff is intensely uncomfortable for McKinsey’s leadership, as it is for executives at corporations across the world. For years, McKinsey was proud of allowing its consultants to reject working on a client to whom they had ethical objections. Many refused to work for the Pentagon during the Vietnam war, for example. Now that policy is dismissed by one employee here as “a cop-out, freeing McKinsey as a whole from taking a stand”. 

The firm’s response has been to build an edifice of checks under a “client selection policy” that now rejects more assignments, including work for the defence and security arms of undemocratic governments. 

Recommended InterviewHow to Lead McKinsey’s Bob Sternfels: ‘We’re OK if you don’t agree with us’ 

But it has also sounded a note of defiance. Bob Sternfels, current managing partner, has defended its work for fossil fuel companies, saying it is better to stay engaged and help them cut emissions, echoing the argument of asset managers opposed to divesting shares in oil companies. 

In an interview with the Financial Times in June, Sternfels said: “There’s a lot of choice in this world, so if that doesn’t appeal to you, you don’t have to stay with us or come to us.” It was a startling thing to say to current and future employees because it stood out from the slick branding around purpose and positive impact used by most modern businesses, and indeed by McKinsey itself. 

Will Bogdanich and Forsythe find more blistering exit emails to quote in future editions? When McKinsey Comes to Town: The Hidden Influence of the World’s Most Powerful Consulting Firm, by Walt Bogdanich & Michael Forsythe, Doubleday $32.50 / Bodley Head £20, 368 pages Stephen Foley is the FT’s US accounting editor *This article has been updated to clarify the status of a slide-deck on social-media influencers in Saudi Arabia Copyright The Financial Times Limited 2022. All rights reserved. 

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