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Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do reall

Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do really anything really wrong or corrupt, there are other actors who are clearly to blame, but let's blame the Western Colonialists! This is a bad meme. First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. They're smart people who make slides. Sometimes they have specific knowledge. Second - it seems as though they were a little aggressive on pricing, who can blame them? It's not their fault - whoever was on the procurement and oversight side on the fence is definitely the guilty/stupid/corrupt party on that one. There doesn't seem to be any indication that McKinsey cheated on that, I mean, literally they are even admitting 'maybe we could have charged less' like a self-aware faux pas? Would we expect that of any business anywhere? It seemed they knew there was some risk and tried to investigate it legitimately, and then backed away ultimately when things were known. So that's not so bad. And yet - it looks like there were obvious corrupt actors in this - Gupta's - surprise (!) who where knowingly and specifically trying to screw over the system! --> So why isn't this article about the Guptas? Shouldn't the headline be: "Indian-South African Gupta family swindles South Africa yet again?" The evidence in the article doesn't really indict McKinsey of anything other than 'knowing maybe they shouldn't have been getting into something risky'. Sure. But they're clearly not the bad guys, and not even 'knowing enablers'. The problems in this area have little to do with McKinsey.

origen 8y ago
Sorry, McKinsey: - Partnered with a local provider (Trillian) after minimal/token due diligence (despite ample reason to be extraordinarily suspicious, and in contravention of internal policy), to win an unprecedentedly lucrative contract; - Even when the Gupta ownership connection to Trillian was revealed internally, refused to amend the terms of the engagement; - Only dropped Trillian when forced by public scrutiny; - And then tried to cover up the entire debacle, actively misleading investigators and journalists. What part of this has "very little to do" with McKinsey, exactly? It's quite clear that ethical and/or legal scrutiny was lessened, no doubt given the size of the potential prize on the other side.
- deleted 8y ago
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RachelF 8y ago
In my experience with consultants, McKinsey and their ilk do similar things in many other countries, too, and not just the poor African ones. It is not uncommon for government officials to retire to lucrative positions at these consultancies, in return for earlier favors. South Africa is different because their very liberal post-apartheid constitution gives journalists and whistleblowers a large amount of protection. They also have a good culture of investigative journalism, thanks to the anti-apartheid movement.
sgift 8y ago
> Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do really anything really wrong or corrupt, there are other actors who are clearly to blame, but let's blame the Western Colonialists! That's the long and short of it. I read that article twice now and all comes down to 'South African law forced them to get a local partner' - a partner which turned out to be not so great - and 'The contract which was in objective terms great for the client (you only pay if you get a benefit) didn't look great because people in SA didn't like that a foreign company got so much money' -- that's about 99% of what this is about: We do not like the outcome of what we brought upon ourselves, so lets blame someone else. And if that someone happens to be from the West - even better.
- deleted 8y ago
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- wernsey 8y ago
  The allegations are more that McKinsey specifically chose a partner that they knew was well connected with the political elite in order to have government business sent their way. Yes, it is true that the South African law forced them to get a local partner. During the apartheid years black people were limited in where they were allowed to work, and this law is an attempt to rectify the past. Unfortunately this law is also abused by well connected politicians to enrich themselves and their cronies. Where things went wrong for McKinsey here is that the local partner they chose, Trillian, had a shareholder that was a well known associate of the Gupta brothers, and the Gupta brothers had a relationship with the president, Zuma, and his son. It also later emerged that the CEO of Eskom and his CFO had a relationship with the Gupta brothers. [1] https://www.dailymaverick.co.za/article/2017-09-14-scorpio-amabhungane-how-mckinsey-and-trillian-ripped-r1-6bn-from-eskom-and-planned-to-take-r7-8bn-more/ https://www.dailymaverick.co.za/article/2017-09-14-scorpio-a...
  - sonnyblarney 8y ago
    "The allegations are more that McKinsey specifically chose a partner that they knew was well connected with the political elite in order to have government business sent their way." On it's face, that's extremely rational and normal behaviour. The less transparent a government is, the more this is a necessity. Basically outside the Western world, and many places within, it's a given. Try getting a snow clearing contract from the Montreal City Hall ... and then find out 'who knows who' ...
ti_ranger 8y ago
"--> So why isn't this article about the Guptas? Shouldn't the headline be: "Indian-South African Gupta family swindles South Africa yet again?"" 1)A corrupt transaction requires the cooperation of at least two parties. If the Guptas could not find any co-conspirators, their ability to extract money from the South African government would have been reduced. 2)There are enough articles about the Guptas; there hasn't been enough coverage of the companies that enabled their corrupt transactions. "But they're clearly not the bad guys, and not even 'knowing enablers'." They aren't good guys, and they most certainly were enablers, the fact that they didn't do enough due diligence to 'know' is on them, and they will need to account for this and/or suffer the consequences.
cm2187 8y ago
Yeah I really fail to see how a service provider should be held responsible for the misdeeds of its clients. Unless anything in those slides they sold suggested anything illegal, which I haven’t heard to be the case, I don’t see why McKinsey would be more guilty to providing them advice than Lenovo would be guilty of supplying them with laptops and the local water company with water. It’s not like an auditor who is signing off on the behaviour of its clients. Even banks have been deputised into quasi law enforcement. But not consultants.
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mad_tortoise 8y ago
You are totally wrong as another commentator pointed out. Mckinsey knowingly incited and spread racial hatred for their personal gain, and pushed the idea of "white monopoly capital" so that the ANC could leverage that as a political point. The result being highly inflamed racial tensions on their part, not only this but they were paid by Gupta linked companies and organisations. The Gupta's, an Indian billionaire family, have been responsible for corruption of the previous president Zuma, and even had a term 'state-capture' defined to explain what they have done. Through corruption they have literally come to own large state entities, however this was stopped and they and former president are being charged with corruption. Mckinsey was pivotal in enciting racial tensions, among many other things, to try to obfuscate what the president and Gupta's were responsible for in terms of corrupting the state, by blaming other parties namely "White captial".
- jessaustin 8y ago
  You're going to have to link to something if we're to have any idea what you're talking about. The only thing in TFA that seems remotely related to this racial stuff is this: They were part of a notably diverse group. Given South Africa’s historic battle against apartheid, it was a point of pride at McKinsey that more than 60 percent of the office’s 250 employees were black South Africans. This doesn't seem like a bad thing? Should they not have hired so many non-whites? It seems unlikely that ANC would have needed to hire management consultants to identify racial inequality as a political issue.
  - xkcd-sucks 8y ago
    >It seems unlikely that ANC would have needed to hire management consultants to identify racial inequality as a political issue But a great way to convince white people that it's an issue
- wernsey 8y ago
  The "white monopoly capital" was not incited by McKinsey, though. What happened was that the Gupta brothers and the president received a lot of negative media attention for a series of very serious corruption allegations, so they hired UK-based PR firm Bell Pottinger. Bell Pottinger spun a story that they were victims of rich white people who spread these stories because their wealth was being threatened. They also hired mobs for protests and ran twitter campaigns. This did agitate some racial tensions, but fortunately they weren't successful thanks to the dedication of investigative journalists and some heroic whistle blowers. Here are two relevant links: * https://www.dailymaverick.co.za/article/2017-06-06-scorpio-and-amabhungane-guptaleaks-how-bell-pottinger-sought-to-package-sa-economic-message/ https://www.dailymaverick.co.za/article/2017-06-06-scorpio-a... * https://www.dailymaverick.co.za/article/2017-07-10-analysis-bell-pottinger-has-thought-us-what-to-treasure-in-the-long-painful-haul-back-to-freedom/ https://www.dailymaverick.co.za/article/2017-07-10-analysis-...
jiminy_john 8y ago
Those arguing that the client does not need to share their share of the blame, are implying basically that the client is not capable of assuming the contracts that they signed. It is quite a patronizing position but often very common.
apexalpha 8y ago
>First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. They're smart people who make slides. Sometimes they have specific knowledge. This! These 'management consultancy' firms are essentially programming libraries in real life: they recycle and reuse proven methods from other companies (that they worked for) and use it at yours so you don't have to reinvent the wheel. Don't hire consultants for something your organisation can (and should!) do itself and don't ask them for advise on something that can't be realistically quantified in excel. And watch out for managers using consultancy firms to outsource decision making.
- sonnyblarney 8y ago
  They actually do novel stuff, that's not 'off the shelf' - they have smart people who can make smart assertions ... but implementation is hard in any context.
richardw 8y ago
"Ah well we charged a bit more than we should have and we were a bit weirded out by working with the mafia, but we didn't actually kill anyone so really we were basically angels." The Gupta's are known crooks. That's where the ultimate blame lies. That doesn't stop this from being a great cautionary tale for consulting companies who work in countries where this type of thing is more likely.
tim333 8y ago
Maybe "Indian-South African Gupta family in association with Indian McKinsey partner swindle South Africa yet again?" >The #GuptaLeaks includes emails between Essa and Sagar dating back to August 2014 https://www.dailymaverick.co.za/article/2017-09-14-scorpio-amabhungane-how-mckinsey-and-trillian-ripped-r1-6bn-from-eskom-and-planned-to-take-r7-8bn-more/ https://www.dailymaverick.co.za/article/2017-09-14-scorpio-a... That was a couple of years before "McKinsey hired a private investigative firm to dig into Trillian’s background" and found to their shock Essa ran it. Some more on Sagar https://www.biznews.com/sa-investing/2017/07/14/vikas-sagar-mckinsey/ https://www.biznews.com/sa-investing/2017/07/14/vikas-sagar-...

origen 8y ago

Sorry, McKinsey: - Partnered with a local provider (Trillian) after minimal/token due diligence (despite ample reason to be extraordinarily suspicious, and in contravention of internal policy), to win an unprecedentedly lucrative contract; - Even when the Gupta ownership connection to Trillian was revealed internally, refused to amend the terms of the engagement; - Only dropped Trillian when forced by public scrutiny; - And then tried to cover up the entire debacle, actively misleading investigators and journalists. What part of this has "very little to do" with McKinsey, exactly? It's quite clear that ethical and/or legal scrutiny was lessened, no doubt given the size of the potential prize on the other side.

deleted 8y ago
[deleted]

RachelF 8y ago

In my experience with consultants, McKinsey and their ilk do similar things in many other countries, too, and not just the poor African ones. It is not uncommon for government officials to retire to lucrative positions at these consultancies, in return for earlier favors. South Africa is different because their very liberal post-apartheid constitution gives journalists and whistleblowers a large amount of protection. They also have a good culture of investigative journalism, thanks to the anti-apartheid movement.

sgift 8y ago

> Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do really anything really wrong or corrupt, there are other actors who are clearly to blame, but let's blame the Western Colonialists! That's the long and short of it. I read that article twice now and all comes down to 'South African law forced them to get a local partner' - a partner which turned out to be not so great - and 'The contract which was in objective terms great for the client (you only pay if you get a benefit) didn't look great because people in SA didn't like that a foreign company got so much money' -- that's about 99% of what this is about: We do not like the outcome of what we brought upon ourselves, so lets blame someone else. And if that someone happens to be from the West - even better.

deleted 8y ago
[deleted]
wernsey 8y ago
The allegations are more that McKinsey specifically chose a partner that they knew was well connected with the political elite in order to have government business sent their way. Yes, it is true that the South African law forced them to get a local partner. During the apartheid years black people were limited in where they were allowed to work, and this law is an attempt to rectify the past. Unfortunately this law is also abused by well connected politicians to enrich themselves and their cronies. Where things went wrong for McKinsey here is that the local partner they chose, Trillian, had a shareholder that was a well known associate of the Gupta brothers, and the Gupta brothers had a relationship with the president, Zuma, and his son. It also later emerged that the CEO of Eskom and his CFO had a relationship with the Gupta brothers. [1] https://www.dailymaverick.co.za/article/2017-09-14-scorpio-amabhungane-how-mckinsey-and-trillian-ripped-r1-6bn-from-eskom-and-planned-to-take-r7-8bn-more/ https://www.dailymaverick.co.za/article/2017-09-14-scorpio-a...
- sonnyblarney 8y ago
  "The allegations are more that McKinsey specifically chose a partner that they knew was well connected with the political elite in order to have government business sent their way." On it's face, that's extremely rational and normal behaviour. The less transparent a government is, the more this is a necessity. Basically outside the Western world, and many places within, it's a given. Try getting a snow clearing contract from the Montreal City Hall ... and then find out 'who knows who' ...

ti_ranger 8y ago

"--> So why isn't this article about the Guptas? Shouldn't the headline be: "Indian-South African Gupta family swindles South Africa yet again?"" 1)A corrupt transaction requires the cooperation of at least two parties. If the Guptas could not find any co-conspirators, their ability to extract money from the South African government would have been reduced. 2)There are enough articles about the Guptas; there hasn't been enough coverage of the companies that enabled their corrupt transactions. "But they're clearly not the bad guys, and not even 'knowing enablers'." They aren't good guys, and they most certainly were enablers, the fact that they didn't do enough due diligence to 'know' is on them, and they will need to account for this and/or suffer the consequences.

cm2187 8y ago

Yeah I really fail to see how a service provider should be held responsible for the misdeeds of its clients. Unless anything in those slides they sold suggested anything illegal, which I haven’t heard to be the case, I don’t see why McKinsey would be more guilty to providing them advice than Lenovo would be guilty of supplying them with laptops and the local water company with water. It’s not like an auditor who is signing off on the behaviour of its clients. Even banks have been deputised into quasi law enforcement. But not consultants.

deleted 8y ago
[deleted]

mad_tortoise 8y ago

You are totally wrong as another commentator pointed out. Mckinsey knowingly incited and spread racial hatred for their personal gain, and pushed the idea of "white monopoly capital" so that the ANC could leverage that as a political point. The result being highly inflamed racial tensions on their part, not only this but they were paid by Gupta linked companies and organisations. The Gupta's, an Indian billionaire family, have been responsible for corruption of the previous president Zuma, and even had a term 'state-capture' defined to explain what they have done. Through corruption they have literally come to own large state entities, however this was stopped and they and former president are being charged with corruption. Mckinsey was pivotal in enciting racial tensions, among many other things, to try to obfuscate what the president and Gupta's were responsible for in terms of corrupting the state, by blaming other parties namely "White captial".

jessaustin 8y ago
You're going to have to link to something if we're to have any idea what you're talking about. The only thing in TFA that seems remotely related to this racial stuff is this: They were part of a notably diverse group. Given South Africa’s historic battle against apartheid, it was a point of pride at McKinsey that more than 60 percent of the office’s 250 employees were black South Africans. This doesn't seem like a bad thing? Should they not have hired so many non-whites? It seems unlikely that ANC would have needed to hire management consultants to identify racial inequality as a political issue.
- xkcd-sucks 8y ago
  >It seems unlikely that ANC would have needed to hire management consultants to identify racial inequality as a political issue But a great way to convince white people that it's an issue
wernsey 8y ago
The "white monopoly capital" was not incited by McKinsey, though. What happened was that the Gupta brothers and the president received a lot of negative media attention for a series of very serious corruption allegations, so they hired UK-based PR firm Bell Pottinger. Bell Pottinger spun a story that they were victims of rich white people who spread these stories because their wealth was being threatened. They also hired mobs for protests and ran twitter campaigns. This did agitate some racial tensions, but fortunately they weren't successful thanks to the dedication of investigative journalists and some heroic whistle blowers. Here are two relevant links: * https://www.dailymaverick.co.za/article/2017-06-06-scorpio-and-amabhungane-guptaleaks-how-bell-pottinger-sought-to-package-sa-economic-message/ https://www.dailymaverick.co.za/article/2017-06-06-scorpio-a... * https://www.dailymaverick.co.za/article/2017-07-10-analysis-bell-pottinger-has-thought-us-what-to-treasure-in-the-long-painful-haul-back-to-freedom/ https://www.dailymaverick.co.za/article/2017-07-10-analysis-...

jiminy_john 8y ago

Those arguing that the client does not need to share their share of the blame, are implying basically that the client is not capable of assuming the contracts that they signed. It is quite a patronizing position but often very common.

apexalpha 8y ago

>First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. They're smart people who make slides. Sometimes they have specific knowledge. This! These 'management consultancy' firms are essentially programming libraries in real life: they recycle and reuse proven methods from other companies (that they worked for) and use it at yours so you don't have to reinvent the wheel. Don't hire consultants for something your organisation can (and should!) do itself and don't ask them for advise on something that can't be realistically quantified in excel. And watch out for managers using consultancy firms to outsource decision making.

sonnyblarney 8y ago
They actually do novel stuff, that's not 'off the shelf' - they have smart people who can make smart assertions ... but implementation is hard in any context.

richardw 8y ago

"Ah well we charged a bit more than we should have and we were a bit weirded out by working with the mafia, but we didn't actually kill anyone so really we were basically angels." The Gupta's are known crooks. That's where the ultimate blame lies. That doesn't stop this from being a great cautionary tale for consulting companies who work in countries where this type of thing is more likely.

tim333 8y ago

Maybe "Indian-South African Gupta family in association with Indian McKinsey partner swindle South Africa yet again?" >The #GuptaLeaks includes emails between Essa and Sagar dating back to August 2014 https://www.dailymaverick.co.za/article/2017-09-14-scorpio-amabhungane-how-mckinsey-and-trillian-ripped-r1-6bn-from-eskom-and-planned-to-take-r7-8bn-more/ https://www.dailymaverick.co.za/article/2017-09-14-scorpio-a... That was a couple of years before "McKinsey hired a private investigative firm to dig into Trillian’s background" and found to their shock Essa ran it. Some more on Sagar https://www.biznews.com/sa-investing/2017/07/14/vikas-sagar-mckinsey/ https://www.biznews.com/sa-investing/2017/07/14/vikas-sagar-...