You Want To Break Up Google And Facebook? Fine... And McKinsey Is MUCH Worse

I listened to NPR yesterday on my way home from City of Hope— where I got an Evusheld booster. Fresh Air was on and Dave Davies interviewed investigative journalists Michael Forsythe and Walt Bogdanich about their new book, When McKinsey Comes to Town: The Hidden Influence of the World's Most Powerful Consulting Firm (out today). I immediately thought about 3 things:

  • How corrupt, dangerous and worthless McKinsey is

  • My own experience with them at Warner Bros

  • How Mayo Pete should never be elected president

I’m in the middle of writing a memoir, which has put me back in touch with a lot of old experiences that I haven’t thought about— sometimes for many decades. Over the weekend, as I wrote about getting a pop record to #1, I was laughing about how sleazy and corrupt the music business is. But I’ll tell you something… the music business is like a home for angels compared to McKinsey. How do I know? Not just from what I read. When I was president of Reprise Records, someone at our parent company AOL-TimeWarner, wanted to justify his multimillion dollar salary so he decided to inflict McKinsey on all of the affiliates. Here in L.A. we took them seriously at first and tried to work with them in good faith but quickly realized it was a complete scam and that our mailroom interns knew more about the realities of our business than McKinsey ever would... with their idiotic suggestions about how many inches apart desks should be and what percentage of employees we should fire. Eventually we just laughed them out of the building and told our corporate masters to not send them back.

The Fresh Air report that I listened to yesterday made clear that “The McKinsey & Company consulting firm, which operates in more than 60 countries and employs more than 30,000 people, presents itself as a values-driven organization that cares not just about profits, but also about communities around the world. It's a reputation the firm draws on when hiring new consultants, often from the nation's top universities.” But you couldn't listen to the authors without concluding that McKinsey is basically just a collection of slick predators who are full of shit and doing more harm to the world than any other company on the planet. Their employees are criminals— and that includes famous alumni like Mayo Pete. Dave Davies introduced the segment by pointing out that McKinsey “has a history of engaging in ethically questionable work— from helping companies boost tobacco and opioid sales to working with repressive authoritarian regimes, including Saudi Arabia and Russia”-- and not doing anything to help those companies and regimes become better global citizens either.

Take the criminal work McKinsey did for Purdue Pharma. None of the principals went to prison and the company wasn’t closed down but McKinsey was fined over $600 million dollars, not a pittance, but not a game-changer for them either. “McKinsey,” explained Forsythe, “started working for them about 20 years ago... Obviously, Purdue Pharma developed the drug OxyContin, which took off like wildfire. And it began to be abused in large quantities and many people say helped set off the opioid crisis in the United States, which has killed hundreds and hundreds of thousands of people. And McKinsey came into Purdue Pharma and in one instance was trying to boost sales at the company, boost sales of OxyContin, and used the word ‘turbocharge.’ They developed sales programs to work with Purdue's sales force, to work with doctors and get information about doctors and which doctors were most likely to prescribe opioids that OxyContin in great quantities and to target those doctors. So McKinsey used its smarts, its ability to take large reams of data and distill that and to find a way to target people like doctors in order to boost sales of an addictive drug. That's one thing McKinsey did. McKinsey also did some work with Purdue Pharma to help develop a tamper resistant formulation for OxyContin as well. So they do the sales work and they also do some of the R&D work as well. Those magic words, ‘turbocharge,’ were used in materials McKinsey put together for Purdue Pharma in 2013. This is well after the dangers of OxyContin and the addictive power of OxyContin were widely known. And in fact, after there was already a legal action against Purdue Pharma for that very problem and for Purdue Pharma's marketing of OxyContin. So it was well known at that point— and yet McKinsey drove right in.”

Bogdanich added that “When you look at tobacco, the most lethal consumer product in American history, McKinsey worked for them for over a half century and long, long, long after it was well known that people were dying from it and that the tobacco companies were lying about the risks that people faced in smoking. But McKinsey continued— despite all of the warnings, despite the surgeon general in 1964, despite two federal judges that labeled them racketeers or liars— they continued to work for [the tobacco companies]. And I thought it was important to ask them: Why? Why did they continue, after this was well known? And they wouldn't answer it.” Forsythe added that “McKinsey only stopped working with the tobacco companies in 2021, last year. And as recently as 2016, McKinsey was putting together some pitches for work with Altria on loyalty programs for Marlboro cigarettes, and in one slide, which we obtained, it shows a mockup of an app, an iPhone app from Marlboro cigarettes, and the idea being the ... more Marlboros you buy, that will earn you points. And this particular one showed a picture of a bottle opener— buy some cigarettes and then you can earn a bottle opener. This is the kind of material that McKinsey was putting together at a point when cigarette smoking had been banished from offices, banished from restaurants. It was widely known that this was a killer product. And yet McKinsey continued to work with Altria and other tobacco makers until last year.”

In her review of the book last week Sheelah Kolhatkar noted that in the last few years the firm has undergone “reputational reversal” and that one might wonder what— if anything— would make them turn down a new client. Among the scores of well-known zombie-like scumbags who have rolled off the McKinsey assembly line are Tom Cotton (R-AK), Mayo Pete and Sheryl Sandberg— each of whom noticeably has no soul and is intent on becoming president (of the United States)-- and none of whom have anything to offer but down-sizing and off-shoring.

With chapter titles like “Guarding the Gates of Hades: Tobacco and Vaping,” “Toxic Debt: McKinsey on Wall Street” and “‘Clubbing Seals’: The South Africa Debacle,” the authors of When McKinsey Comes to Town are not subtle about their views. The portrait this book creates is one of a company chasing profits, spreading the gospel of downsizing and offshoring, its leaders virtually unmoored from any guiding principles or moral code. If there is a pro-McKinsey case to be made— one imagines it would be based on arguments about promoting “efficiency” in the economy— it won’t be found here.
Yet laying out McKinsey’s most morally compromised assignments, like a series of damning Harvard Business School case studies, creates a clear and devastating picture of the management philosophy that helped drive the decline of a stable American middle class over the last 50 years. In 1950, when the average CEO made about 20 times the income of an average production worker, McKinsey helped set off exploding executive compensation by arguing that workers’ wages were rising more quickly than their bosses’. (In 2020, the average CEO made at least 350 times as much as an average worker.)
In the 1990s, then firm promoted layoffs and the shipping of jobs to cheaper, foreign countries, such as India, where McKinsey advised major outsourcing firms like Infosys, as well as American companies that were sending jobs their way. In 2005, McKinsey advised Walmart, which paid such low salaries to its retail employees that a significant proportion of them and their children were on public assistance. A task force led by McKinsey consultants recommended that in order to raise profitability Walmart should increase its number of part-time employees, keep salaries and health-plan costs low, and reduce contributions to workers’ 401(k)s. Duff McDonald, in his 2013 book about McKinsey, The Firm: The Story of McKinsey and Its Secret Influence on American Business, wrote that McKinsey may be “the single greatest legitimizer of mass layoffs than anyone, anywhere, at any time in modern history.”