When McKinsey Comes to Town

1. McKinsey's global influence extends far beyond traditional consulting

"To those convinced that a secretive cabal controls the world, the usual suspects are Illuminati, Lizard People, or 'globalists.' They are wrong, naturally. There is no secret society shaping every major decision and determining the direction of human history. There is, however, McKinsey & Company."

McKinsey's reach is vast. The firm has consulted for a wide array of clients, including:

• 90% of the world's 100 largest corporations
• Governments and public institutions in over 130 countries
• Numerous state-owned enterprises in China and other nations

The firm's influence is multifaceted. McKinsey shapes policy, business practices, and even societal norms through:

• Advising top executives and government officials
• Publishing influential reports and articles
• Placing former consultants in leadership positions across industries and governments

This pervasive influence allows McKinsey to shape global trends and decision-making processes, often without public scrutiny or accountability.

2. The firm's pursuit of profits often conflicts with ethical considerations

"If you want to do ethical work, if that's a priority, then you have to be willing to turn down profitable opportunities. It was never clear to me that McKinsey was ever willing to do that."

Profit over principles. McKinsey has repeatedly chosen lucrative contracts over ethical considerations:

• Advising tobacco companies despite known health risks
• Helping pharmaceutical companies boost opioid sales amid an addiction crisis
• Working with authoritarian regimes known for human rights abuses

Ethical dilemmas are systemic. The firm's structure and culture contribute to ethical lapses:

• Decentralized decision-making allows partners to take on controversial clients
• The emphasis on revenue growth incentivizes accepting ethically questionable work
• The firm's culture of secrecy makes it difficult to hold consultants accountable

These factors combine to create an environment where ethical considerations are often secondary to financial gain, leading to decisions that can have far-reaching negative consequences.

3. McKinsey played a significant role in widening income inequality

"McKinsey was telling Allstate to essentially declare war on a sizable proportion of its policyholders. One slide proclaimed, 'Winning will be a zero sum game.' In other words, Allstate's gains come at the expense of its policyholders."

Promoting shareholder primacy. McKinsey has consistently advised clients to prioritize shareholder value over other stakeholders:

• Recommending cost-cutting measures that lead to mass layoffs
• Advising on executive compensation packages that widen the pay gap
• Promoting outsourcing and offshoring strategies that reduce domestic jobs

Systemic impact on inequality. The firm's influence extends beyond individual companies:

• Advising governments on policies that favor business interests over workers
• Promoting financial practices that concentrate wealth at the top
• Shaping business education to prioritize short-term profits over long-term stability

These actions have contributed to a widening wealth gap and the erosion of middle-class economic security in many countries where McKinsey operates.

4. The firm's work with authoritarian regimes raises serious ethical questions

"McKinsey was helping ensure the viability of a brutal, authoritarian regime."

Controversial clients. McKinsey has worked with numerous authoritarian governments and state-owned enterprises:

• Saudi Arabia's government and state-owned companies
• Russian state-owned enterprises under sanctions
• Chinese government agencies and state-owned firms

Enabling repression. The firm's work has sometimes directly supported oppressive practices:

• Advising on economic policies that strengthen authoritarian control
• Providing technological expertise that can be used for surveillance
• Helping regimes improve their international image despite human rights abuses

These engagements raise serious questions about McKinsey's role in legitimizing and empowering authoritarian governments, potentially at the expense of human rights and democratic values.

5. McKinsey's involvement in the opioid crisis reveals a disregard for public health

"Through a series of efforts, we secured the future of the crucial OxyContin franchise."

Fueling the epidemic. McKinsey played a significant role in exacerbating the opioid crisis:

• Advising Purdue Pharma on strategies to boost OxyContin sales
• Recommending tactics to circumvent regulations and public health concerns
• Proposing programs to "turbocharge" opioid sales even as addiction rates soared

Conflict of interest. The firm simultaneously advised opioid manufacturers and regulators:

• Consulting for the FDA while working for pharmaceutical companies
• Potentially influencing regulatory decisions in favor of clients

This dual role allowed McKinsey to profit from both sides of the opioid crisis, demonstrating a prioritization of financial gain over public health concerns.

6. The firm's culture of secrecy shields it from accountability

"McKinsey & Company operates with a level of secrecy that would impress the CIA."

Opacity by design. McKinsey's culture of secrecy is deeply ingrained:

• Strict confidentiality agreements for employees and clients
• Reluctance to disclose client lists or details of engagements
• Internal policies discouraging public discussion of work

Consequences of secrecy. This lack of transparency has significant implications:

• Difficulty in holding the firm accountable for negative outcomes
• Limited public scrutiny of potentially controversial work
• Ability to work for competing clients without disclosure

The firm's secretive nature allows it to avoid public scrutiny and potential backlash, even when its work has far-reaching societal impacts.

7. McKinsey's advice has contributed to environmental degradation

"Think about it. Is there a worse client to serve than those directly responsible for putting us on the incomprehensible fast-track to planetary omnicide?"

Conflicting interests. McKinsey's work often contradicts its stated environmental commitments:

• Advising major fossil fuel companies on expansion strategies
• Helping coal mining companies increase production
• Promoting economic policies that prioritize growth over sustainability

Greenwashing concerns. The firm's environmental initiatives are often at odds with its client work:

• Publicly advocating for climate action while privately advising polluters
• Promoting sustainability to attract young talent while continuing work with major emitters
• Developing "green" strategies for clients that amount to superficial changes

These actions reveal a disconnect between McKinsey's public stance on environmental issues and its actual client work, potentially slowing progress on addressing climate change.

8. The firm's role in government contracts creates potential conflicts of interest

"McKinsey was being asked to help sort out roughly the same problem the NHS faced when it first brought in the firm nearly half a century earlier and to reverse many of the provisions of the 2012 law that it had helped to craft."

Revolving door. McKinsey benefits from a close relationship with government:

• Former consultants often take high-level government positions
• Government officials join McKinsey after leaving public service
• The firm gains insider knowledge and influence through these connections

Dual roles. McKinsey frequently advises both regulators and the regulated:

• Consulting for government agencies while working for companies they oversee
• Potentially influencing policies that benefit private sector clients
• Profiting from both creating and solving problems in public sector management

This intertwining of public and private interests raises questions about the firm's objectivity and the potential for conflicts of interest in shaping public policy.

9. McKinsey's impact on healthcare systems has been controversial

"McKinsey was telling Allstate to essentially declare war on a sizable proportion of its policyholders."

Profit-driven healthcare. McKinsey has promoted strategies that prioritize financial outcomes over patient care:

• Advising insurance companies on tactics to minimize payouts
• Recommending cost-cutting measures in hospitals that can affect quality of care
• Promoting privatization of public health services

Systemic changes. The firm's influence extends to entire healthcare systems:

• Advising governments on healthcare reforms that increase private sector involvement
• Promoting efficiency measures that can lead to reduced access to care
• Shaping pharmaceutical strategies that prioritize profitability over affordability

These actions have contributed to the commercialization of healthcare in many countries, often at the expense of equitable access and patient outcomes.

10. The firm's influence on Wall Street contributed to financial instability

"Securitization was based on the premise that a fool was born every minute. Globalization meant that there was a global landscape on which they could search for those fools—and they found them everywhere."

Promoting risky practices. McKinsey advocated for financial innovations that increased systemic risk:

• Championing the widespread adoption of securitization
• Advising on the creation of complex financial instruments
• Promoting deregulation of financial markets

Consequences of advice. The firm's recommendations contributed to financial instability:

• Securitization played a central role in the 2008 financial crisis
• Complex financial products obscured risks and contributed to market volatility
• Deregulation removed safeguards that could have mitigated financial crises

McKinsey's influence on Wall Street helped shape a financial system prioritizing short-term profits over long-term stability, contributing to economic vulnerabilities that affected millions of people globally.

Last updated: July 23, 2024