How McKinsey has helped raise the stature of authoritarian governments | Hacker News Reader

How McKinsey has helped raise the stature of authoritarian governments

nytimes.com

169 pointsValentineC39 comments

Between their enormous scandal in South Africa, the rather reprehensible work in Saudi Arabia that likely got some dissidents killed and all of this, it does feel like many shoes are yet to drop. The article details some pretty obvious conflicts of interest that are simply not viewed as such:

"McKinsey says it has no knowledge of any collusion between China and Mr. Najib. It said that of course it would discuss China’s sweeping Belt and Road plans but rejected the notion that, by representing both sides involved in the project, the company had a conflict of interest in any way."

As with Silicon Valley, their model requires recruiting reasonably talented and intelligent people on a regular basis. I suspect that, if anything, may be the most at risk from the behavior these articles are highlighting.

McKinsey ultimately can get away with far more mediocre people than Google. Google has to keep the website up at the end of the day — McKinsey just needs to make a slick PowerPoint.

i've heard from a friend who works in MC that they outsource their slides so they can come in the next day with a completed slide deck

You’re probably thinking of design. Consultants will assemble the deck contents then ship to an offshore contractor to pretty them up overnight.

They have teams in India who generate the slides. They’re really good, but I’m pretty sure most of the are generated through some tool.

Usually uniformly excellent slides are outsourced to somebody. I have a few friends who have a patreon person do almost all of the PowerPoint slinging.

It's usually an internal research team, specialised in a vertical, say Energy or transportation that prepares the material for the consultant. Still, most good management consultants are good at creating docs, excels and ppts. And they are good reading/sifting through the data quickly; just like a senior software engineer can navigate and grasp code more quickly.

The larger issue that I find with management consulting approach though is that they use the same set of tools to create solutions for ALL problems. They will throw in some charts, finance numbers, pas research etc. to sell a 'story'. They usually don't work on implementation but to present the first part of the solution. That's not how every problem should be solved IMHO. McKinsey et al. can make things easy for bureaucrats or government people to grasp, but to be honest their suggestions seems pretty ridiculous at times. Just look at some of the articles they have written about software industry and how out of touch it seems. Most of their solutions on social issues and such fields are rather ridiculous too. So I would hire an ex-consultant as an employee, no problem. But I wonder if I would ever want to outsource work to a Management Consulting company.

The cynic in me reads the headline and thinks at least half of the commissions they take from authoritarian dictatorships and dubious corporations will have a neutral or negative impact on those dodgy clients anyway, since the bulk of their work is providing quasi-independent justification for a solution management already favours, for internal use only and at expensive rates.

Take the extreme case from the article: Yanukovych's attempts to portray himself as a moderniser looking for greater ties with the West ended with him being overthrown after mass public protests at his decision to suspend planned agreements with the EU under economic pressure from Russia (with the West largely approving of his overthrow and Russia treating him as largely irrelevant to their own subsequent intervention in Ukraine). If McKinsey contributed significantly to his reform strategy at all, it's very hard to say they actually helped him in the long run.

As it was explained to me the purpose of the management consultant is not to solve the problem, but to take the blame for solving the problem.

The Internal politics of most reasonable sized corporates are Byzantine to say the least. Senior management might not have the political capital to drive change through an organization, don’t want to take the blame if the change does not work, or just want to signal that they are doing something, without taking responsibility for said something.

Hence...management consultants... and the pricier and the more prestigious he better.

Not quite. There’s an outsourced team to make the slides look good, but the content typically comes from the consultants themselves.

The Saudi Arabia item was overblown. Someone made an example of finding clusters around social networks that happened to identify people opposed to some government idea. It was not prepared as client work.

Generally in consulting you do have people working for both sides of an issue (commonly a supplier and a buyer, for example). There are heavy handed rules about preventing people working on or who have worked on projects for either side from discussing the issue to avoid this. Assuming normal controls work as intended, the conflict of interest is generally handled sufficiently.

the only way to deal with these entities is not with leaflet campaigns, buttons and strongly worded letters. That ship has sailed decades ago. they operate under the law (read McMafia⁰)

IMVHO (and I understand why I might be alone in these views): people who sabotage these companies by any means possible are true heroes. We must take active measures in stopping these crooks from committing their hideous acts against the environment and against our future generations. Not everyone might have the stomach to take lives a la RAF but at least don't be a coward by being complicit. If you see something say something (leaking & exposing can be the next best thing). Learn about monkeywrenching¹. Don't say "let's enjoy it while it lasts".

We got one chance, one opportunity and not much time left - and we can't rely on our incompetent governments to do it for us. In the end Ted Kaczynski is right. The alternative will be total destruction of the biosphere, nature and ourselves (tech will not save us because tech isn't neutral).

I remember diving The Great Barrier Reef in the 90ies - I was back there last year and it's all dead now. We have no right to do this - fuck national laws that say otherwise. Any means are OK even if that means taking out the whole godforsaken race. There are many ways to do this. We just got to wake up and realize that tomorrow won't be better than today. It's impossible on an individual level and impossible on a collective level.

⁰ https://www.theguardian.com/books/2008/apr/06/society

¹ http://theanarchistlibrary.org/library/Various_Authors__Ecod...

You are absolutely not alone in your views. Keep fighting the good fight.

thanks! that means a lot

They really fucked up a key part of South Africa too. It'll probably take a decade to undo the damage to the tax collection infrastructure.

Literally broke a country

Queue land grabs

Wrong company

Nope. You're thinking of KPMG I'm guessing?

McKinsey provided consulting services to SARS revenue service during a 'restructuring' that damaged the organisation so effectively its hard to see it being an accident.

Actually scratch that. Youre right wring company.

Mckinsey had a scandal at Eskom (state power Co) while Bain was the SARS one.

McKinsey used to be much smaller and fairly selective with its client choices, but as the firm got bigger it would appear they’ve let their ethical standards slip a lot.

There’s been a growing number of questionable activities over recent years from the insider trading scandal, recent bankruptcy deal scandals, this. They’ve always traded on their name but increasingly that name is being equated with scandal and ethics issues so not sure what they’re thinking.

As a development economist by education I recently listened to the McKinsey podcast on growth and development [1]. It was akwardly non-political. I was wondering why they would package the insight of growth economics in that kind of sauce. This makes sense and I feel naive for not thinking of their commercial goals.

[1] https://www.mckinsey.com/featured-insights/innovation-and-gr...

It seems to me that the article’s thesis isn’t well formed. It basically boils down to whether western companies should be allowed to do business in basically-hostile states. But that feels like it should apply to major mgmt consulting firms the least. These firms are privately owned. The contracts with Chinese state owned businesses were probably landed by Chinese partners in the company. The majority of work done in China is probably done by Chinese consultants. Probably the same for Russia. Probably not for some of the smaller ones mentioned.

I doubt we would raise a fuss if American companies supplied, say, the materials for chinas artificial land so it feels like the complaint here is that they view consulting as too valuable to provide?

Started reading Stand on Zanzibar recently. Alphabet/Google could be an obvious mirror to General Technics, but perhaps a management consulting firm would be a better fit of a globetrotting corporation meddling in the policies of developing world countries to build them up.

Illustrative of the downsides of uncontsrained globalization: during the cold war, McKinsey would not be doing work for the Kremlin, and could you imagine ATT (Google) building an automated surveillance system for the Stasi (Chinese State Intelligence)?

Their work is just like any other firm perhaps they cause unfortunate things to happen but that is the nature of business.

Has anyone else come across TypeA McK consultants and thought they have come across as not genuine?

I think this is an example that shows many corporations have their own interests at heart. They care about making money. They do not care about the national interests of their home country.

To be honest, it's difficult for multinational corporations to satisfy all sides. If they want to chase profits and growth (which their shareholders demand as a foundational requirement to agree to not vote to change the Board of Directors and CEO), they need to seek growth where it exists. If they don't, their share price will suffer. The incentives point them in this direction. I'm not justifying it, I'm saying the system sucks.

So culture matters at a company. A strong culture can help keep a company's values to be true to itself. Employees matter. That's why stories like employee pushback at Google against Project Maven and Project Dragonfly are interesting. But those examples are probably few and far between. Ultimately, the incentives for profits and growth trump all else. These examples are probably more common.

https://www.eff.org/deeplinks/2016/04/ciscos-latest-attempt-...

https://en.wikipedia.org/wiki/IBM_and_the_Holocaust

It's easy to complain when corporations do things you don't morally agree with. But where there's an opportunity for money to be made, that problem will not disappear. Western nations need to decide whether they care more about their values (and put their money where their mouth is for which stocks their people buy, as well as enact laws that prevent economic activity that they believe should be prevented) or economic growth (these corporations do employ a lot of people and do in fact create a lot of economic value).

Can't have your cake and eat it too. Google employees are lucky in that they serve a market where they can afford to stand up for what they believe is right. McKinsey, I honestly don't know how much they have to grow without completely changing themselves. They may not have the freedom that Google has to stand for what they believe is right, besides facing the temptation of money.

edit: Actually, I think Chinese companies do care about their home country (especially given government involvement and partial ownership in some of them). If I think about it, they look like they have a patriotic feeling similar to how American companies probably had a patriotic feeling back in the 1950s. But in the 1950s, American companies were not yet multinational enough to face a lot of conflicting incentives. It would be interesting to see if Chinese companies also lose their patriotic feeling as they grow more multinational over the next 70 years.

> Western nations need to decide whether they care more about their values ... or economic growth

Isn’t the answer staring us in the face? We’d rather have a plush Western way of life than a planet capable of supporting life. Fortunately most of us will be long dead before the bill comes due.

Growth at any cost was not the capitalistic model of Adam Smith. Modern capitalism is the Anti thesis of what Adam Smith dreamed. Any unchecked growth is just cancer.

But West alone cannot be blamed, It is not that people in the East are any different despite having all the ancient wisdom of . Two big torch bearer of Eastern values India and China are aping the west. I come from India so have experienced this change in values personally.

On the other-hand when I arrived in West a decade ago, I was in awe of luxuries. Slowly I realized how wasteful and inefficient this model is.

All we can do now is enjoy it while it lasts!

That makes me sad for my kids and future generations.

Too late now but more kids is a big part of the problem. Environmentally it’s probably the worst thing the average person can do.

> Western nations need to decide whether they care more about their values or economic growth.

The decision is obvious. Western nations care more about values if someone else has to sacrifice economic growth.

Consulting firms are generally partnerships. There’s no stockholders so it’s a different issue. You might be a partner focused on something nice, like healthcare effectiveness. How do react or effect change regarding the existence of a Russian partner halfway around the globe focused on state owned oil enterprises? Odds are your worlds don’t overlap. Asking to pull out of a region or sector isn’t the same as devs asking to not work on a project. Devs are largely fungible. Asking to pull out is effectively asking for owners of the firm you have never met to be fired because their work disagrees with your values. Good luck with that political game.

McKinsey/MBB, Zerodium, Palantir, KPMG/Big4, offshore magic circle, etc. are enablers of inverted totalitarian plutocrats to attack their enemies and defend their power. Does this really come as a shock or a surprise?

And on the other side, you have these damaging western capitalist companies that ultimately seek to ensure (mostly) US subservience.

Also, McKinsey’s former hesd Rajat Gupta was sent to jail for insider trading.

Making sensational news out of nothing. NYT just lost all my remaining respect for them.

Setting up a luxury company retreat miles from a literal concentration camp isn’t “nothing”

Previously: https://news.ycombinator.com/item?id=17404287

Reply on news.ycombinator.com