Is McKinsey running the world?

Is McKinsey running the world? Of course it is, but the question of greater importance is: is this a good thing or a bad thing? I'll leave that up to you to decide, but for now let's take a closer look at McKinsey.

Founded ninety years ago, McKinsey & Company--known to insiders as The Firm--boasts over 17,000 employees worldwide and revenues totalling over $8.3 billion. It advises most of the world's top companies, as well as governments, local and national.

When he was asked how he would fix government if he were elected, Mitt Romney responded, "I would probably bring in McKinsey." Proving that McKinsey has no political affiliation, the Obama administration draws heavily on its expertise, even soliciting retirement advice. 

The vision committee, which solicits ideas from supporters around the country about how Mr. Obama should approach his postpresidency, is run by Lynn Taliento, a McKinsey & Company consultant. ~ The New York Times

The Scottish Development Agency loves McKinsey too.

We literally saved Glasgow. ~Peter Foy, McKinsey

McKinsey helped Carlos Salinas privatize Mexico, Margaret Thatcher do what she did to England, and the FBI build a domestic intelligence capability post 9/11. New York City hired McKinsey for $2 million to run a four-month congestion study to explore the effects of Uber.

Nothing happens in Germany without McKinsey being consulted first. ~ Duff McDonald, The Firm

Before he became Global Managing Director, Dominic Barton worked for McKinsey in Korea where he was instrumental in saving the Korean banking system. There has even been talk of McKinsey taking over the World Economic Forum once Klaus Schwab steps down or falls down. After all, McKinsey is the elite advisor to the elite and throws the best parties in town.

McKinsey alumni number 30,000+ and populate the upper echelons of the most powerful companies in the world. McKinsey produces more CEOs of public companies than any other single firm, with odds of 1 in 690 that any given McKinseyite will become CEO (the next closest CEO factory was Deloitte with odds of 1 in 2150). Not surprisingly, McKinsey alumni in high places often give plum consulting assignments to McKinsey. They speak the same language, they drink the same powdered drink.

Speaking of language, let's have a listen, shall we? Just listen to this video for a few minutes (try to hang in until the 19 minute mark). You'll get a good sense for the McKinseyan dialect...

Holy gum-smacking gibberish wrapped in a routinized conventional strategy framework of wisdom, Batman! Where are the limits of strategy theory? I don't know, but I hope McKinseyites don't talk like that at home. Or maybe I hope they do...

"Let's press forward baby, and create a new set of frameworks tonight that exist beyond the limits of the existing frameworks."

I don't know about you, but I'm getting more than a bit turned on. It's very Fifty Shades of Framework.

Aside from the sexy language, you may have noticed that Mr Coyne is well dressed. His subtle pinstripes evoke the wisdom of Churchill, his tie, a

reassuring nursery blue, his cufflinks geometrically perfect tables straight out of PowerPoint. His pocket square is an area line chart that foretells a precipitous drop in share price if McKinsey's words aren't heeded. 

They say it's lonely at the top, but not with McKinsey to keep you company, a battalion of strategic philosopher kings with frameworks to create the illusion of certainty amid chaos. You hire McKinsey for three reasons: 1. Their analytical toolbox that is wielded by some of the most intelligent and hard-working members of our species; 2) Their accumulated knowledge, including knowledge of your competitors disguised as benchmarks; 3) The sense of comfort that comes from knowing that when the free cheese sticks have been taken off the expense line, the organization has been totally flattened and the layoffs are announced you can always blame McKinsey.

McKinsey may be the single greatest legitimizer of mass layoffs than anyone, anywhere, at any time in modern history. Duff McDonald, The Firm

McKinsey is the grim reaper of downsizing whose appearance is as much symbolic as real, heralding the beginning of the end of the party and foreshadowing the falling of headcounts. McKinsey is currently poised, sickle in hand, over 1,700 heads at Yahoo. McKinsey's fingerprints are all over Marissa Mayer's Kill/Maintain/Invest list (at Condé Nast, McKinsey called it Red/Yellow/Green).

McKinsey was at the scene of two of the biggest business crimes of this century--Enron and the 2008 meltdown--advising clients of the joys of securitization and off-balance sheet transactions. Arthur Anderson took the hit for Enron, and there were so many other people to blame for the subprime meltdown that McKinsey escaped with its reputation intact. Like a consultative Keyser S?ze, McKinsey's greatest trick is to convince everyone that it doesn't exist, walking away from the bubble's wreckage with nary a limp.

It may surprise you to know that McKinsey himself left McKinsey to become chairman and chief executive at one of his clients, the midwest department store Marshall Field & Company. He was so stressed out by the work of leading a company through layoffs and other struggles that he caught pneumonia and died at age 47.

Since McKinsey left McKinsey, its leaders have been elected in a process resembling a papal enclave. Partners gather once every three years to vote in a leader. Dominic Barton is currently serving his third and final (there is a three-term limit) term. I have a global managing director crush on Dominic Barton. He seems like a nice man who thinks deeply, cares about the state of the world, and has a long-term perspective.

But Dominic Barton is only one Kinsey global managing director removed from Rajat Gupta, a man convicted of insider trader who keeps company with Jeffrey Skilling as the two most infamous McKinsey alumni, their Zegna suits replaced by jumpsuits. 

Sheryl Sandberg of Facebook fame learned to lean in at McKinsey and Chelsea Clinton learned how to add up to $19 trillion to try to bury Bernie Sanders at McKinsey. But don't let Sheryl and Chelsea fool you. Only 11% of McKinsey's top leaders are women, an abysmal number, no matter what framework you put around it.

McKinsey says Women Matter, but there seems to be something at the heart of its culture that is unappealing to women. What could it possibly be?

McKinsey is known for many things, but celebrating diversity is not one of them.  Its decentralized structure is held together with ropes of conformity that strain under conditions of diversity. Founded in 1926, it didn't hire its first black associate until 1968 and didn't name a black director until 2005. When they discovered he was gay, McKinsey put consultant Henry Golightly on permanent medical leave. To honour his friend, Truman Capote turned him into Holly Golightly, and had him eat Breakfast at Tiffanys.

So McKinsey isn't perfect. What company is? The question becomes, is McKinsey rule a good thing or a bad thing? If McKinsey is evil, it is usually by accident. Its intellectual processes have soullessness built into them. There is a focus on efficiency that travels like an asymptote through McKinsey's history holding the company together as it approaches perfection. There is no room in their models for hand wringing about people's lives.

Bottom line is that McKinsey is a hugely influential company, arguably the most influential company in the world. It has a free market philosophy that values rational decision making, strategic frameworks and efficiency over softer immeasurable human concerns, and it is a company that, although it preaches gender equality, at its highest levels is 89% male.

Is this the kind of company that should be running the world? You decide.

About the Author. Who cares about the author when the subject is as endlessly fascinating as McKinsey? Take a look at this McKinsey recruiting video that tells you everything you need to know about the firm's appeal to smart people who have many options to choose from, but deep down want to change the world through bar hopping.

(I'd choose the door with the comfy chair and the belching fish.)