The Shit Business
The dirty little secrets of McKinsey & Co.
I love doing crossword puzzles. For the duration of quarantine, I’ve done the New York Times puzzle every single day. (That’s a 263 day streak, for those keeping score at home.) I do the New Yorker puzzle when it’s published three times a week. And once a month, I do the McKinsey & Co. business-themed crossword. I like the McKinsey puzzle because it challenges me with its consulting-specific clues. October’s theme was “Easy pickings for a consultant.” I wrote in “CARPAL TUNNEL FROM POWERPOINT,” “BEST SUSHI IN DELAWARE,” and “NO-BID BANKRUPTCY DEAL RESULTING IN LAYOFFS” before I found the right answer.
I first heard of McKinsey in 2016, during my second semester of college. I was living in Hill House, then considered one of America’s worst college dorms. My roommate had been recently expelled for selling cocaine and doing illustrations on the bathroom mirror with his own feces. (The academy always misunderstands the avant-garde.) I can barely remember a single weekend from that semester, and weekends began on Wednesday. Life was good.
Suddenly, I started noticing other students walking around in suits all the time. What was happening? A Jewish holiday I forgot about? A Blues Brothers flash mob? Turns out, it was the beginning of on-campus recruiting for corporate jobs. I learned quickly. Turns out a “bulge bracket” is not something desperate men order from the back of Hustler. If investment banking turned you off with its nyotaimori lunches and having to polish your boss’s monk strap loafers with your tongue, you should be a consultant. The best people went into consulting and the best of the best worked at McKinsey. Instantly, a job offer from McKinsey replaced substance abuse disorder as the pinnacle of college achievement. Working at a white-shoe consulting firm was not only prestigious; it was cool. The social landscape had shifted beneath me, like that summer I came back from all-boys camp to find everyone had started French kissing.
McKinsey & Company was founded by accountant James McKinsey in 1926. The business model was simple: help companies with their accounting so they could make better budgets and strategies. In 1950, Marvin Bower (Chazzy’s Note: a “bower” is when you sit on your butt in the shower because you don’t have a bathtub) took control of McKinsey & Co. He had a vision of the McKinsey employee as a consummate professional, which in the 1950s, meant you only harassed your secretary verbally. The Firm (as it’s called internally) began plucking the most promising students from colleges and business schools. McKinsey men had to look the part. They were required to wear hats through the 1960s, even after JFK made fedoras unfashionable. For this, McKinsey is known as “The Ne-Yo of Management.”
Under Bower, McKinsey began to look like the behemoth it is today. The Firm expanded from accounting to general consulting, assisting businesses with anything and everything. Today, McKinsey consults for 90 of the 100 largest public companies. They advise 22 of the 100 largest state-owned businesses in China. McKinsey has contracts with many US federal agencies, state and local governments, as well as governments around the world. McKinsey is a giant, secretive business that sells a simple promise: if you have a problem, we can fix it.
The longer I’ve thought about McKinsey, the less I understand it. Consultants are hired to provide experience and expertise, yet McKinsey hires thousands of college students every year with neither experience nor expertise. McKinsey advises companies on how to cut costs, yet charges $67,500 a week for a single junior consultant. Those “junior consultants” are recent graduates, who could probably be hired for $67,500 a year. A smart, young person is somehow 52 times more valuable if they work for McKinsey.
At a time when the United States and China are on such bad terms that diplomats are expelled, embassies are closed, and companies are banned, McKinsey is readily hired to consult on every facet of government and commerce in both countries. While Trump blamed China for causing Covid, he hired this firm with close ties Chinese government to handle our pandemic response. While Andrew Cuomo lambasted Trump’s national Covid strategy, he also hired McKinsey to plan New York’s.
McKinsey advises companies on how to implement best practices, yet magically appears at the center of every instance of corruption, fraud, graft, and malfeasance you can think of. McKinsey is meant to embody professionalism, yet is literally facing RICO charges as if they were Junior Soprano or Bobby Shmurda. The longer you look, the more contradictions you find. It’s turtles all the way down.
For a long time, I was content to just make fun of McKinsey employees for being lame. For spending your youth drinking in airport bars and industrial park hotels. For having to carry around two phones so you can be made to work whenever, wherever. For insisting that getting hibachi with your V-necked, prematurely-balding boss who stopped listening to music to make more time for self-help audiobooks is fun.
But I’m done with that. McKinsey is fucking evil. It’s fucking evil. This is McKinsey:
In Ukraine, McKinsey was hired by Russia’s richest oligarch to launder the reputation of his preferred presidential candidate, Viktor Yanukovych. Yanukovych won, built a house with a private zoo and a restaurant shaped like a pirate ship, helped Russia annex his own country, then fled. Ukraine was plunged into an ongoing civil war. McKinsey collected its performance fee.
In South Africa, McKinsey was hired by a state-owned energy firm. They helped cede control to the Guptas, an Indian family connected to President Joseph Zuma. The Guptas ended up with so much of South Africa’s state-owned businesses that there were nationwide protests against “the stateless coup.” McKinsey collected a $700 million performance fee from a country with 50% youth unemployment.
McKinsey currently faces multiple lawsuits for failing to disclose conflicts of interests related to MIO Partners, The Firm’s own $25 billion hedge fund. Among other things, McKinsey told Puerto Rico how to restructure its bonds while owning Puerto Rican bonds. McKinsey continues to advise clients on how to properly disclose conflicts of interest.
Under Marvin Bower, McKinsey embraced Milton Friedman’s argument that corporations are beholden only to their shareholders to the fullest. Through its work on M&A, hostile takeovers, and bankruptcy, McKinsey became “the single greatest legitimizer of mass layoffs of anyone, anywhere, at any time in modern history.”
New York City hired McKinsey to make Rikers Island less violent. McKinsey recommended that guards start using Tasers, dogs, and shotguns. McKinsey software surveilled inmates’ phone calls and visits. The consultants reported fabricated numbers to the City, which suggested the jail had become safer than it actually was. Rikers remained so dangerous that it is slated to be closed. McKinsey collected a $27.5 million performance fee.
McKinsey advised Purdue Pharma on how to “turbocharge” its opioid business. Recommendations included increasing sales visits to doctors and using mail orders to bypass pharmacies which might report over-prescription. They also advised Johnson & Johnson on how to get patients who were “stuck” on a low-dose opiate to use fentanyl patches. McKinsey collected a performance fee. 130 Americans die from opioid overdose every day.
In the United States, McKinsey was hired by ICE. The Firm recommended that ICE cut spending on food, lodging, and healthcare for migrants. They also recommended speeding up the deportation process. ICE agents, famous for their empathy, feared these proposals violated the migrants’ human and legal rights. McKinsey ghostwrote its own recommendation for a $2.2 million contract extension.
Now we arrive at the greatest mystery of all: how does McKinsey maintain its reputation in the obvious absence of results? And not just a lack of results, but outcomes that are often catastrophically worse than before McKinsey got involved?
One explanation is data. As McKinsey traverses the globe, working with heads of state and multinational C-suites, they accumulate an immense amount of data. When they finish a project, they don’t just delete it. As a result, there may be no corporation on Earth with as much information about how the world works. Facebook and Google know an awful lot about individual users. But McKinsey has knowledge of the inner workings of government and industry that the Big Data firms could only dream of.
I have another explanation: McKinsey is in The Shit Business. They are the septic tank pumpers or haz-mat disposers of the white collar world. McKinsey is the company you call when you have a mess on your hands that you can’t or won’t clean up yourself. There are other companies in The Shit Business. Blackwater is one, fighting wars that are too dirty for the military to handle. The law firm Sullivan and Cromwell was, too, helping the United Fruit Company execute a coup in Guatemala. You call them when you need someone to put on rubber boots and wade into the shit. But the masterstroke of McKinsey is they wear white shoes, not rubber boots. They are too prestigious to handle crap. It’s not The Shit Business -- it’s waste management.
You hire McKinsey when you have a problem you can’t fix, or maybe nobody can fix. The City of New York did not want to admit that Rikers Island is an irreparably violent hellhole. ICE did not want to be seen nickel and diming the care of detained migrants. Rinat Akhmetov did not want to be seen arranging the annexation of Ukraine. So they all called McKinsey to wade into the shit.
Every company wants to avoid looking you in the eye and telling you you’re laid off. No more paycheck, no more health insurance, not because you did something wrong, but for the benefit of the shareholders. So, they hire McKinsey. Now it wasn’t their decision. Some 22-year-old dipshit put you into Excel, ran you against the data, and said you had to go.
“Why me?”
“The McKinsey people said so. And, hey. They’re the best at what they do.”
Love it— good world, getting better at what they do