 "New book reveals: Is McKinsey & Co a huge con?")
Is the world’s most influential management consulting firm, McKinsey & Co, getting too many calls wrong? Well, that’s whatDuff McDonald is saying in his new book The Firm:The Story of McKinsey and Its Secret Influence on American Business.
McDonald is his book has claimed that theMcKinsey executives are “de facto industrial spies.”
He writes, “The firm would surely take umbrage at the suggestion, but the whole notion of ‘competitive benchmarking’ is just a fancy way of telling one client what the other clients are up to, with the implicit - and somewhat dubious - promise that their most sensitive secrets will not be revealed.”
[caption id=“attachment_1084183” align=“alignleft” width=“380”] Book Cover via Amazon.com[/caption]
McKinsey is undeniably made up of heavy hitters-it produces more Fortune 500 CEOs than any other company.
The New York Times notes that thefirm has been the go-to strategy consigliere for the globe’s top companies - fromProcter & GambletoAmerican Express- as well as governments for more than a half century.
However, McKinsey has offered some of the worst advice in the annals of business.
Experts say McKinsey’s advice led to the first bank failure in the 1980s. It also led General Motors to pursue a strategy that made it harder to compete with Japanese imports.And it worked withGE Capitaljust before the financial crisis, helping the unit become even more exposed to problems that ultimately nearly collapsed the financial system.
“It toldAT&Tin 1980 that it expected the market for cellphones in the United States in 2000 would amount to only 900,000 subscribers. It turned out to be 109 million. The list goes on,” writesAndrew Ross Sorkin in the DealBook,while reviewing the book onthe consulting juggernaut.
Impact Shorts
More ShortsThe firm’s track record clearly begs the question, are they worth the hundreds of billions struggling companies pay out annually for their advice?
McDonald’sbook explores the remarkable and intriguing disconnect between the advice McKinsey offers and the ultimate results.
“Is it a con? Maybe. The young M.B.A.’s the firm fields on its engagement teams learn on the job on the client’s dime, and it’s hard to argue that a McKinsey associate has anything to offer the clientele but long nights,” writesMcDonald in his book.
The aura of the highly secretive firm has been dented just recently by the guilty verdict in the trial of Rajat Gupta, who once led the mighty firm, on insider trading charges. This new book looks to remind the many failures of the firm and is sure to generate a lot of heat.
The book is set to be released next Tuesday.
Read the NYT review of the book here.
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