McKinsey’s corrupted culture(blogs.reuters.com)
blogs.reuters.com
McKinsey’s corrupted culture
http://blogs.reuters.com/felix-salmon/2011/03/09/mckinseys-corrupted-culture/
9 comments
I'm not too familiar with your former business, but didn't you do case studies, ask experienced colleagues for advice, and give industry-specific training? There are lots of ways to share some information without handing over a competitor's balance sheet...
"Consultants at McK are labeled as 'conflicted' if they have served a competitor of a client in a given industry."
and in couple of years consultant runs out of industries.
Only if they've been burned so many bridges that they can't do further work for the firms they've worked with in the past.
I believe it is common in Law firms as well.
http://en.wikipedia.org/wiki/Chinese_wall#Law
http://en.wikipedia.org/wiki/Chinese_wall#Law
Once McK consultants reach a certain level, they tend to work with the same clients over and over again.
gotta crank those page views, my man.
Disclosure: I'm a management consultant with one of the big firms.
Management consulting business is built around providing knowledge to clients. There are several ways to get it:
1. Face a new client problem and think long and hard how to solve it.
2. Ask colleagues who have experienced similar problems before for general guidelines - "frameworks" or "best practices" in consultant-speak.
3. Share some proprietary knowledge in a disguised form, e.g. percent ranges instead of absolute numbers, or get client's data and tell them where they are versus the industry[1].
4. Directly share proprietary knowledge.
(Have I missed anything?)
In my experience: (1) is usually ~80% of work, (2) is ~19%, (3) is ~1% - happens very rarely and only with explicit client's consent, and (4) is strictly prohibited - people may violate it, as people my violate any law, but any management consulting firm is very strict about such violations.
To me, (1) has no moral problem whatsoever, and (2) is probably not very different from how any professional is getting experience - in McKinsey/other consultant's cases the speed of sharing the new codified knowledge is obviously much higher than in other industries, but that's part of their business.
My personal opinion - grey area in consulting industry is certainly not darker than in many other professions. Author of the article probably underestimates percentages for (1) and (2) above.
[1] Example: there are databases that management consulting companies keep on e.g. operational performance indicators. You can get access to some aggregate statistics from that databases in exchange for providing your own data. The individual data points are never shared.
Management consulting business is built around providing knowledge to clients. There are several ways to get it:
1. Face a new client problem and think long and hard how to solve it.
2. Ask colleagues who have experienced similar problems before for general guidelines - "frameworks" or "best practices" in consultant-speak.
3. Share some proprietary knowledge in a disguised form, e.g. percent ranges instead of absolute numbers, or get client's data and tell them where they are versus the industry[1].
4. Directly share proprietary knowledge.
(Have I missed anything?)
In my experience: (1) is usually ~80% of work, (2) is ~19%, (3) is ~1% - happens very rarely and only with explicit client's consent, and (4) is strictly prohibited - people may violate it, as people my violate any law, but any management consulting firm is very strict about such violations.
To me, (1) has no moral problem whatsoever, and (2) is probably not very different from how any professional is getting experience - in McKinsey/other consultant's cases the speed of sharing the new codified knowledge is obviously much higher than in other industries, but that's part of their business.
My personal opinion - grey area in consulting industry is certainly not darker than in many other professions. Author of the article probably underestimates percentages for (1) and (2) above.
[1] Example: there are databases that management consulting companies keep on e.g. operational performance indicators. You can get access to some aggregate statistics from that databases in exchange for providing your own data. The individual data points are never shared.
(3) happens surprisingly often outside of MC, just between consenting firms. When I've worked in the financial industry it's quite common for a third party firm to benchmark everyone and provide positioning, etc. data. It often works in everyone interest.
Must read book on this topic: "House of Lies: How Management Consultants Steal Your Watch and Then Tell You the Time"
http://www.amazon.com/House-Lies-Management-Consultants-Stea...
http://www.amazon.com/House-Lies-Management-Consultants-Stea...
What happens at McK is far less than what happens when competitors steal employees from each other (which happens all the time), the reason you hire employees from your competitors is not to steal insider information (although this does go on), but to steal someone who's done it before and knows what mistakes to avoid.
there is an enormous difference between the knowledge about structural advantages and disadvantages of steel T-beam in the suspension bridge and the knowledge that Company A is planning to bid a 100M on the contract for the bridge across that river in that town.
Sure and the second is clearly illegal in either case.
And to a large extent such 'stealing employees' is good for society, and thus public policy as reflected in things like competition law, employee's rights, the recent DOJ investigation/settlement with major valley employers, etc.
My 2c as an ACN alumni... the author's conclusion could as such be extended to the entire consulting industry. There are three reasons this does not hold though:
- consultants are bound by strict NDAs
- the client hires me because of my experience in the field (which includes competitors) and needs to live with the fact that I'll carry that experience with me
- if the client didn't want me to carry my experience with me from their project, he'd need to pay me for the rest of my days for just doing nothing
- consultants are bound by strict NDAs
- the client hires me because of my experience in the field (which includes competitors) and needs to live with the fact that I'll carry that experience with me
- if the client didn't want me to carry my experience with me from their project, he'd need to pay me for the rest of my days for just doing nothing
even if they are bound by NDA's they can still use what they know to make decisions for the new client.
Hello Laurenceputra,
If that particular knowledge contributes to a clearer image about how the industry works, then yes, you (as a consultant) can use that knowledge.
If however that particular knowledge is classified, then you won't. If you were to divulge such classified information the client might ask himself what you would do with what is in your head once you leave the project...
If that particular knowledge contributes to a clearer image about how the industry works, then yes, you (as a consultant) can use that knowledge.
If however that particular knowledge is classified, then you won't. If you were to divulge such classified information the client might ask himself what you would do with what is in your head once you leave the project...
As a McKinsey alum, I must say I did not feel any resonance with the position of the author. In fact, I was very surprised at how strictly the firm prohibits sharing of confidential information between clients. Quite often, consultants had to choose studies (the McKinsey term for a client engagement) very carefully because it may preclude you from ever working with certain clients again. McKinsey certainly has a number of faults, this issue is not one of them
Here is a better article about what is actually happening:
http://www.businessinsider.com/raj-trial-prosecution-opening...
McKinsey is the wisdom-laundering Bing Toolbar of corporate strategery!
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For example, consultants at McK are labeled as 'conflicted' if they have served a competitor of a client in a given industry. Therefore, no consultant at the firm can serve competing firms. And the firm's institutional knowledge which gets carried over is stuff you can read in HBR/McK Quarterly.
Can't excuse blatant securities fraud, but to paint the entire industry with such a brush is slightly sensationalist.