Consulting’s cult of secrecy

Keeping things quiet seems central to Mckinsey’s MO

How appropriate that one of the most powerful organisations in the world seems to take guidance on leadership issues from the Vatican, another of the world’s most powerful organisations.

The primary difference is that the Vatican is far less secretive about selecting a pope than consulting company Mckinsey is about selecting a replacement for MD Dominic Barton.

The Financial Times recently carried a chilling account of Mckinsey’s “byzantine and secretive” MD selection process. It makes the papal process look like a hotbed of democracy. As for transparency, well there is none. And don’t expect to see white smoke once the decision is made. Presumably insiders face the Mckinsey equivalent of hellfire and damnation if they breathe a word to pagan outsiders.

For an organisation that makes a fortune advising powerful corporations and government entities on leadership, this approach is worrying.

Secrecy seems to be a crucial part of Mckinsey’s MO — as it is of other big consulting groups, such as Bain & Co, Boston Consulting and Accenture.

If your child or spouse works for one of the big consulting firms, chances are you have little idea where he or she heads off to each day. They are sworn to a cult-like level of secrecy, ostensibly to protect their clients.

It’s difficult to know who is best served by this approach, but it’s certainly not the public. Now that we know Barclays Africa and Standard Bank were clients of Mckinsey, will we be able to guess what sort of strategies these banks are pursuing?

Will shareholders of Standard and Barclays Africa, who didn’t know their bank was a client of Mckinsey until it wasn’t, now worry their investments are at risk without the handholding it provided? They have no idea of the extent of the firm’s involvement in their banks, and therefore how vulnerable they may be without it.

Companies and government entities should be obliged to disclose their use of consultants, revealing the engagement date, the expected duration of the consulting project and the fees.

There is a suspicion, borne out by our Eskom experience, that many government departments and state enterprises are run by consultants. This means taxpayers are not only funding the generous pay packages of public servants of dubious ability, but also the hefty charges incurred by the unrestrained use of consultants.

While the corporate sector may not be as critically dependent on consultants (we hope), the suspicion that shareholders are funding hefty consulting fees on top of obscene executive remuneration is truly galling.

Secrecy suits the consulting firms and their clients, which is why they are all happy to go along with it. The absence of disclosure means there is no pressure to restrain their use. It has the additional advantage of sparing executives from having to explain why they need so much additional help.

In a fast-changing world, consultants will always have an important, albeit temporary, role to play. But without the restraining influence of disclosure, this role has acquired a seedy dimension.