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Doesn't McKinsey frequently work for different clients in the same industry even? I never got the impression that consulting firms really limited themselves in

Doesn't McKinsey frequently work for different clients in the same industry even? I never got the impression that consulting firms really limited themselves in that way.

zubiaur 5y ago
They do. I would be surprised if they don't operate in compartmentalized teams. I work with a company that has clients in competing markets. We have "conflict houses", organizations within the organization that compartmentalize clients, sets firewalls and prevents information leak between employees. I would be surprised if McK doesn't do anything similar.
- dachryn 5y ago
  Indeed, the 'cool-off' time is even part of the statement of work, and negotiable. Its just part of the game. There are maybe 10 companies active in a given region/content that have the fame to pull off this high level of consulting (I am not claiming they are the only capable ones, or even that they are capable, just saying that the shortlist is rather ... short) Its known that they work for the competitors. You just want to handle the exposure and limit the risk of your super realistic super important strategy leaking 3 months before you make it public.
- shkkmo 5y ago
  And nothing in those practices excuses McKinsey from failing to disclose such possible conflicts.
kevingadd 5y ago
Lack of disclosure is a serious problem
tharne 5y ago
> Doesn't McKinsey frequently work for different clients in the same industry even? They do. It's a well-known way for companies to get inside info on their competitors. You can't legally/ethically hire an employee away from a competitor and then say, "tell us everything you know about company X". But, you can hire a McKinsey team that worked extensively for your competitor and say "give us a list of 'best practices' in our industry".
burkaman 5y ago
> Federal procurement rules require U.S. government agencies to determine whether a contractor has any conflicts of interest. If serious enough, a conflict can disqualify the contractor from working on a given project. McKinsey’s contracts with the FDA, which ProPublica obtained after filing a FOIA lawsuit, contained a standard provision obligating the firm to disclose to agency officials any possible organizational conflicts. One passage reads: “the Contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality because of the appearance or existence of bias.” > Over the past couple of years, for example, McKinsey’s bankruptcy-advisory practice has paid more than $30 million to the Justice Department and one client’s creditors to settle allegations that it failed to disclose potential conflicts, as required by the federal bankruptcy rules. I don't know how frequent it is, but when they do it to the government it's at least a breach of contract and possibly criminal: https://www.nytimes.com/2019/11/08/business/mckinsey-criminal-investigation-bankruptcy.html https://www.nytimes.com/2019/11/08/business/mckinsey-crimina...
Grustaf 5y ago
The problem here wasn't that they worked for both sides but that they didn't disclose it.
mrep 5y ago
Bain supposedly does not work with competitors: https://en.wikipedia.org/wiki/Bain_%26_Company#Reception https://en.wikipedia.org/wiki/Bain_%26_Company#Reception

Doesn't McKinsey frequently work for different clients in the same industry even? I never got the impression that consulting firms really limited themselves in that way.

zubiaur 5y ago

They do. I would be surprised if they don't operate in compartmentalized teams. I work with a company that has clients in competing markets. We have "conflict houses", organizations within the organization that compartmentalize clients, sets firewalls and prevents information leak between employees. I would be surprised if McK doesn't do anything similar.

dachryn 5y ago
Indeed, the 'cool-off' time is even part of the statement of work, and negotiable. Its just part of the game. There are maybe 10 companies active in a given region/content that have the fame to pull off this high level of consulting (I am not claiming they are the only capable ones, or even that they are capable, just saying that the shortlist is rather ... short) Its known that they work for the competitors. You just want to handle the exposure and limit the risk of your super realistic super important strategy leaking 3 months before you make it public.
shkkmo 5y ago
And nothing in those practices excuses McKinsey from failing to disclose such possible conflicts.

kevingadd 5y ago

Lack of disclosure is a serious problem

tharne 5y ago

> Doesn't McKinsey frequently work for different clients in the same industry even? They do. It's a well-known way for companies to get inside info on their competitors. You can't legally/ethically hire an employee away from a competitor and then say, "tell us everything you know about company X". But, you can hire a McKinsey team that worked extensively for your competitor and say "give us a list of 'best practices' in our industry".

burkaman 5y ago

> Federal procurement rules require U.S. government agencies to determine whether a contractor has any conflicts of interest. If serious enough, a conflict can disqualify the contractor from working on a given project. McKinsey’s contracts with the FDA, which ProPublica obtained after filing a FOIA lawsuit, contained a standard provision obligating the firm to disclose to agency officials any possible organizational conflicts. One passage reads: “the Contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality because of the appearance or existence of bias.” > Over the past couple of years, for example, McKinsey’s bankruptcy-advisory practice has paid more than $30 million to the Justice Department and one client’s creditors to settle allegations that it failed to disclose potential conflicts, as required by the federal bankruptcy rules. I don't know how frequent it is, but when they do it to the government it's at least a breach of contract and possibly criminal: https://www.nytimes.com/2019/11/08/business/mckinsey-criminal-investigation-bankruptcy.html https://www.nytimes.com/2019/11/08/business/mckinsey-crimina...

Grustaf 5y ago

The problem here wasn't that they worked for both sides but that they didn't disclose it.

mrep 5y ago

Bain supposedly does not work with competitors: https://en.wikipedia.org/wiki/Bain_%26_Company#Reception https://en.wikipedia.org/wiki/Bain_%26_Company#Reception