John Oliver on management consulting firms: ‘They shouldn’t get to be invisible’
John Oliver tore into management consulting firms on Sunday’s Last Week Tonight, and in particular the track record of McKinsey & Company, the “massive” and “ubiquitous” firm with offices in more than 65 countries and over $15bn in annual revenue.
McKinsey frames its work as a force for good in the world, though its reputation has taken a knock in recent years for taking on a number of questionable clients, including several oil companies, Purdue Pharma and the Saudi government.
The company, founded in 1926, keeps a purposefully low profile – no published client lists, no signs on its offices – and has a notoriously rigorous interview process for ambitious new hires. But much of the time, its bespoke advice is pretty straightforward; the firm reorganizes sales forces or designs by-the-numbers downsizing to reduce overhead costs. “Essentially, McKinsey is a firm that projects a huge amount of confidence to sell a frequently unremarkable product at skyhigh prices, making them truly the Salt Bae of companies,” said Oliver. “You’ve had salt before, but have you ever had it from a douche?”
McKinsey advice is associated with mass layoffs, disguised with euphemisms such as “finding efficiencies” or “organizational streamlining”, and with the expansion of executive pay. “Layoffs are sometimes necessary, but they’re always painful,” said Oliver. “And much more painful than some mid-20s Ivy Leaguer who fancies himself a business genius might realize.”
Oliver then started in on McKinsey’s shadowy client list with Purdue Pharma, the makers of OxyContin, which paid McKinsey about $84m in fees to “turbocharge” sales of opioids.
McKinsey also advises public entities, such as New York City, which paid the company $27.5m to help reduce violence at Rikers Island. Advice provided by the consultants included the expanded use of Tasers, shotguns and aggressive dogs. “It’s some really outside-the-box thinking for people who are literally trapped inside boxes,” Oliver deadpanned.
McKinsey claimed that it reduced violence by 50% in certain “Restart” facilities, though the company allegedly colluded with jail officials to stack the Restart units with inmates the company believed would not start fights or attack prison staff. McKinsey still denies rigging the experiment, but ProPublica found that violence rose 50% at Rikers overall after the company began its assignment. “You’ve got to hand it McKinsey there. Not many firms could get paid $27m of taxpayer money to leave Rikers somehow even worse,” Oliver joked.
McKinsey consultants also worked for Purdue and the Food and Drug Administration (FDA) at the same time, a conflict of interest the global managing partner Bob Sternfels dismissed to Congress as “the individuals involved had experience in both pharmaceuticals and opioids”.
“There’s a big difference between having experience working for both and actively working for both at the same time,” Oliver responded. “It’s the same difference between telling your wife about your ex-girlfriend and telling your wife about your current girlfriend. One is dramatically worse than the other.”
At one point, four consultants advising the FDA on drug safety were simultaneously working for Purdue on projects designed to persuade the FDA of the safety of Purdue’s products. McKinsey claims there was no conflict, “which is a little hard to take considering that they sold themselves to Purdue at the time with the notion that they had special insights into the FDA”, said Oliver. According to a House oversight committee report, in 2014, McKinsey boasted to Purdue of having an “unequaled capability based on who we know and what we know” including “the FDA, who we have supported for over five years”.
“Hold on McKinsey, which is it then?” Oliver exclaimed. “Was the work you did for the FDA totally different, or did it help you bring an unequaled capability to Purdue, because it can’t be both! This isn’t Shrödinger’s contract. You don’t get to claim it’s both relevant and unrelated depending to who the fuck you’re talking to.”
Oliver then pivoted to McKinsey’s “truly terrible clients” abroad, from Russian defense contractors to the government of Saudi Arabia. One internal McKinsey report highlighted three people who publicly criticized the regime on social media. The dissidents were then targeted by the Saudi government. McKinsey said that the document’s intended audience was internal and it was “horrified” by the possibility that it could have been “misused in any way”.
“Come on, it’s Saudi Arabia,” said Oliver. “Even if that report didn’t fall into their hands – and, please – what part of the way Saudi Arabia operates made you think that a McKinsey curated list of shit-talking dissidents would be a good thing to put together? You’re working in one of the rootinest, tootin-est, journalist shootin-est regimes in the Middle East, and you figured it was completely fine to draw up a list like this because the potential for misuse was remote? What are you talking about?!”
McKinsey “wants me to tell you that they do a lot of projects like helping clients deploy vaccines, or supporting refugees and rebuilding in Ukraine”, Oliver added. “Which is very nice, but think of it like this: how many uplifting McKinsey projects like More Snuggles at the Puppy Factory or Make Grandma Live Forever would you need to hear about to effectively counterbalance Turbocharge the Opioid Epidemic, Help Fuck Up Rikers Even More and Make a Saudi Arabian Snitch List?”
Oliver was not necessarily against the consulting industry, he concluded, “but if their work, as they claim, really does impact the lives of millions of people, they shouldn’t get to be invisible, and they should expect much more accountability for their mistakes”.