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Let's not forget, these are the same consultants that did work for Enron, work leading up to the 2008 financial crisis.[0] McKinsey is also advising various gov

Let's not forget, these are the same consultants that did work for Enron, work leading up to the 2008 financial crisis.[0] McKinsey is also advising various government agencies on optimizing their Covid-19 response[1], generating revenue of $100m and counting. [0] https://en.wikipedia.org/wiki/McKinsey_%26_Company#Controversies https://en.wikipedia.org/wiki/McKinsey_%26_Company#Controver... [1] https://www.propublica.org/article/how-mckinsey-is-making-100-million-and-counting-advising-on-the-governments-bumbling-coronavirus-response https://www.propublica.org/article/how-mckinsey-is-making-10...

haltingproblem 6y ago
Worse. Most of Enron management was directly sourced from McKinsey and McKinsey was intricately involved in its strategy and accounting. One day the story will be told of how they got away with it but Andersen took the whole blame. https://www.independent.co.uk/news/business/analysis-and-features/mckinsey-how-does-it-always-get-away-it-9113484.html https://www.independent.co.uk/news/business/analysis-and-fea...
- nickff 6y ago
  "The Smartest Guys in the Room" told that story, and the short version is that Andersen was the auditor which was supposed to be ferreting out accounting issues (and has certain legal responsibilities). McKinsey was a recruiting ground and consultant.
  - haltingproblem 6y ago
    That is not what this article says: https://www.theguardian.com/business/2002/mar/24/enron.theobserver https://www.theguardian.com/business/2002/mar/24/enron.theob... McKinsey was integral to designing Enron's asset light strategy and also creating the stock borrow structure, their internal talent marketplace, etc. etc. Seems like where Enron stopped and McKinsey started is hard to place.
    - nickff 6y ago
      Consultants are often deeply entwined in their companies, particularly when people like Skilling were from the consultancy. The auditor on the other hand has a duty to the shareholders. The whole point of independent financial audits is to guarantee the completeness and veracity of financial statements.
majani 6y ago
This type of scenario is probably the primary reason for the existence of management consulting firms: to have someone to point the finger to when risky decisions go tits up.
- cycomanic 6y ago
  That and to push through unpopular decisions: "look we don't want to fire 30% of our workforce, but the consultants told us we need to to maintain our profit margin"
cocoflunchy 6y ago
You make it sound like it's bad thing to help governments optimize their Codiv-19 response?

haltingproblem 6y ago

Worse. Most of Enron management was directly sourced from McKinsey and McKinsey was intricately involved in its strategy and accounting. One day the story will be told of how they got away with it but Andersen took the whole blame. https://www.independent.co.uk/news/business/analysis-and-features/mckinsey-how-does-it-always-get-away-it-9113484.html https://www.independent.co.uk/news/business/analysis-and-fea...

nickff 6y ago
"The Smartest Guys in the Room" told that story, and the short version is that Andersen was the auditor which was supposed to be ferreting out accounting issues (and has certain legal responsibilities). McKinsey was a recruiting ground and consultant.
- haltingproblem 6y ago
  That is not what this article says: https://www.theguardian.com/business/2002/mar/24/enron.theobserver https://www.theguardian.com/business/2002/mar/24/enron.theob... McKinsey was integral to designing Enron's asset light strategy and also creating the stock borrow structure, their internal talent marketplace, etc. etc. Seems like where Enron stopped and McKinsey started is hard to place.
  - nickff 6y ago
    Consultants are often deeply entwined in their companies, particularly when people like Skilling were from the consultancy. The auditor on the other hand has a duty to the shareholders. The whole point of independent financial audits is to guarantee the completeness and veracity of financial statements.

majani 6y ago

This type of scenario is probably the primary reason for the existence of management consulting firms: to have someone to point the finger to when risky decisions go tits up.

cycomanic 6y ago
That and to push through unpopular decisions: "look we don't want to fire 30% of our workforce, but the consultants told us we need to to maintain our profit margin"

cocoflunchy 6y ago

You make it sound like it's bad thing to help governments optimize their Codiv-19 response?