McKinsey: consultant, heal thyself
“This year we aim to welcome more colleagues than ever before,” stated a McKinsey newsletter last week. Yet the most senior of all is out on his ear. Partners at the elite consulting firm have “voted out” their global leader, Kevin Sneader, in response to continued “blowback” over the firm’s role in the US opioid crisis, said DealBook in The New York Times. It’s the first time since 1976 that a McKinsey managing partner has been denied a second three-year term. The move follows years of “tough headlines”. McKinsey stands accused of aiding bribery, corruption and fraud across multiple territories, jeopardising “its status as a trusted adviser to companies and governments”, and as a “magnet for top talent”.
Long a “lightning rod for criticism of – and conspiracy theories about – global elites”, McKinsey has become “the kind of case study its recruits read about at grad school”, said Giles Whittell on Tortoise. It recently paid $573m to settle allegations that it advised Purdue Pharma “on how to sell more opioids in the midst of an addiction crisis that has cost nearly 50,000 lives”. Among other embarrassments, it has also been slammed for a lucrative relationship with Saudi’s ruling Crown Prince and with state-owned Russian banks. In 2014, former chief Rajat Gupta was jailed for insider trading.
Can the consulting giant’s once-burnished reputation recover? McKinsey still has plenty going for it: notably, “a vast alumni network”, rivalled only by Goldman Sachs, straddling some of the world’s most powerful organisations, said Patrick Jenkins in the FT. As at Goldman – itself a survivor of scandal – pride turned to “arrogance” at McKinsey. To retain its dominance, and its $10bn-plus annual revenues, perhaps Sneader’s successor should give Goldman’s reforming boss, David Solomon, a call.