5 ms·
Hopefully this is the beginning of the end for McKinsey. They’ve gone from scandal to scandal over the last 10 years or so and their once vaunted reputation is
by JCM9 2y ago
Hopefully this is the beginning of the end for McKinsey. They’ve gone from scandal to scandal over the last 10 years or so and their once vaunted reputation is now in shambles. They deserve whatever is coming to them here. There are certainly some decent folks that have passed through McKinsey but the firm is, ironically, in desperate need of some good advice on how to run a company.
- smt88 2y agoEnron didn't kill Arthur Anderson. Nothing is going to kill McKinsey. They're too intertwined with powerful people.
- jjeaff 2y agoWhat? Enron DID kill Arthur Anderson. They completely collapsed in mid 2002, right after Enron. They were also big players in the WorldCom collapse, so that contributed as well.
- smt88 2y agoThe corporate entity collapsed, but the consulting business continued at Accenture (and notably BearingPoint, among others), and substantial portions of the accounting business survives to this day as Andersen Tax and a few spinoff firms founded by ex-partners. The only reason we haven't "another Enron" is because of Sarbanes-Oxley, not because Arthur Andersen was sufficiently destroyed.
- stevesimmons 2y agoYour chronology is incorrect. - Arthur Andersen and Andersen Consulting split in 1989. It was an acrimonious divorce, with a long arbitration settlement finally concluding on 1 Jan 2000. - That settlement gave AA exclusive use of the Andersen name. So Andersen Consulting changed its name to Accenture on 1 Jan 2000. - Enron collapsed in 2001 and Arthur Andersen went out of business in 2002. So it's not accurate to say that AA's consulting business continued at Accenture; the split happened a decade earlier.
- bitcharmer 2y agoNah, they are now Accenture
- stevesimmons 2y agoNope, Accenture split from Arthur Andersen 13 years earlier, in 1989. See my other comment.
- smaug7 2y agoThis is fundamentally different. Arthur Anderson was an auditing firm and did accounting. Their selling point was to be the "source of truth" for their client's books. What's that confidence is lost, then no one would hire them for their work. McKinsey, as a management consultancy, doesn't have to be a "source of truth" and offers perspective, which can be neither right or wrong. Management makes decisions on if they want to take McKinsey's advice or not.
- sidcool 2y agoNop. That's not going to happen. They will continue to thrive. And such criminal investigations mean more businesses will avail their services. Recently, RedHat hired McKinsey to streamline Techies jobs: https://www.theregister.com/2024/03/27/red_hat_hires_mckinsey/ https://www.theregister.com/2024/03/27/red_hat_hires_mckinse...
- EdwardDiego 2y agoYeah, I wasn't at Red Hat for overly long, but you could feel Big Blue's MBAs slowly tightening their grip, bringing in McKinsey wasn't RH culture, but it is IBM culture.
- raffraffraff 2y agoPoor Hashicorp
- EdwardDiego 2y agoIndeed.
- unyttigfjelltol 2y agoThey're meta-managers; if the C-suite has a high-stakes business decision they can't afford to screw up, they call McKinsey. Or Bain. Or BCG. The big draw isn't McKinsey's perfection; it's the C-suite anxiety and absence of anything better. If you want to drive a stake through the heart of management consulting, knock the C-suite down a peg so they lose their god complex, or come up with a business model better than McKinsey's for enabling business outcomes. Neither has happened in 50 years, or will, so no, it's not the end for Mckinsey. Nor is it business as usual.
- hn_throwaway_99 2y agoIn my experience, this rationale is absolutely not why McKinsey is hired. One of the most important roles that McKinsey can take is a third party willing to provide cover. E.g. often times a CEO hires McKinsey to rubber stamp a decision he's already made. Let's say the CEO wants to have a big layoff to boost profits (at least in the short term). Hiring McKinsey basically provides a veneer of objectivity, and within the org, McKinsey can help deflect some of the blame ("Man this sucks, can you believe that McKinsey!")
- abofh 2y agoMostly this - McKinsey isn't hired to bring in a unique perspective, they're hired to paper up a decision that the person hiring McKinsey wants to make. They charge a pound of flesh and give you a pile of research saying this is how to accomplish your goal, not here are the goals you should have considered.
- unyttigfjelltol 2y agoYes, I've seen the silly caricature videos. The consultant strenuously begging the CEO for the preferred answer at the start of the engagement. But ask yourself-- how does seeking confidential advice, disclosed to no one outside the C-suite accomplish a supposed blame-avoidance function?No, a simpler explanation is that the executives spotted a key business decision coming up and to get the decision right they call their figurative B-school professors for advice. Their genuine advice, which you can of course criticize on the merits. In a world that earned your personal experience, where this instead was a cynical exercise in posturing, first, what an odd way to kick off a cost-cutting initiative, and second, where are all the news release announcing that McKinsey told businesses X, Y and Z to conduct layoffs to boost profits? I just googled it-- the only announcents are McKinsey's own layoffs. The engagements certainly don't appear designed to shift blame. That leaves the uncomfortable possibility that the recipients of this advice, for reasons you don't understand actually value it and want to know what the management consultants have to say.
- achow 2y agoCriminal case? Been there, done that. - McKinsey, probably. 2022 - McKinsey Charged in South African Corruption Case https://www.nytimes.com/2022/09/30/world/africa/mckinsey-corruption-case-south-africa.html https://www.nytimes.com/2022/09/30/world/africa/mckinsey-cor...
- pembrook 2y agoOn the contrary, this just affirms their value-add. As a decision maker, the reason you would outsource decision-making to 23-year old PowerPoint kids is so you aren’t responsible for the consequences of your actions. “Darn, that strategy ended up killing people?? Too bad evil McKinsey told me to do that! I’m just a lowly corporate officer. I wouldn’t have killed all those people if they didn’t show us those PowerPoint slides! I got duped like the rest of you!” [goes home and counts money]
- loceng 2y agoAnd it's even easier to displace or misplace blame when you control the state-funded media in Canada - like CBC getting $1.6 billion annually, and the other popular channels getting $600 million annually distributed amongst them.
- bitcharmer 2y agoAs much as I'd love you to be wrong, you're not. There's this common saying among executives: "no one ever got fired for hiring IBM". Here IBM can be replaced by any of the big five and it'll still work.
- mguerville 2y agoIn management consulting it's big 3 (Bain, BCG, McK) but same sentiment
- marban 2y agoReminds me of "What people really want from the automated adding machine is not more accurate sums, but a box into which they may place their responsibility."
- eastbound 2y agoSo McKinsey is the first company replaced by AI. Exchanging a few billion dollars of bad advice with a ChatGPT subscription.
- southerntofu 2y agoMcKinsey is also very involved in french scandals. There's many investigations in France about corruption with Macron and his close associates. More recently, the Atos scandal (going from 7B€ valuation to 230m€ in a few years) also has McKinsey involved: french newspaper Blast claims they received over 150M€ in consulting fees. I just read their "Controversies" section on Wikipedia and i still can't believe you can go to jail for selling weed and these people walk free (and rich): https://en.wikipedia.org/wiki/McKinsey#Controversies https://en.wikipedia.org/wiki/McKinsey#Controversies
- RachelF 2y agoTheir Alumni have infested many big corps now, including Sundar Pichai who rules Google.