13 Comments

I have never had any dealings with McKinsey, but I have dealt with Consultants.

This is a whole industry that gets paid big bucks for advice but is never held accountable for that advice. They get to write a White Paper, get paid for the white paper, and then move on. They do not have to deal the results in 5 years, 10 years or 25 years as no one even remembers the white paper in 25 years.

However the people who's lives have been impacted by decisions made by those white papers do have to deal with the results.

Fundamentally this is about separating "actions" from "consequences". Decision makers have to be tied to the decisions they make both positive and negative. When decision makers only have to live with the Upsides of Decisions, and are able externalize the negatives, this is the result.

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Friends of friends of mine work for McKinsey and I have had to sit through week-long sessions with their client-facing consultants who usually not MBA or PhD types. The ground floor level are just highly ambitious and self-oriented, prepared to work like crazy (eg: they don’t expect to spend more than 3nights/month in their own bed) for 2-4 years before implementing their ‘exit plan’ which invariably consists of using the connections they’ve made at the executive level to leverage their way into a leadership/ fast track position at either the client company or through reference to another company.

To me McKinsey (and that industry by extension) facilitate moral hazard by allowing management to take self-serving, myopic decisions and using the scientific/ professional veneer to justify them. McKinsey have plausible deniability on the other side of the moral hazard by saying it’s execution only. It’s just unbridled greed. Most people at McKinsey don’t have an interest in the content of the work, it’s about impressing, networking, and accelerated self-promotion as far as I can tell.

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Consultants should never "be held responsible for their advice". That remains the responsibility of the employer/customer/client. If I do not recomment Nortel as an investment in its late days and you don't sell, your inaction is your responsibility.

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Exactly, that is why Governments should not be hiring consultants.

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But, John, how can "government" contain/employ all the information required to run our country? Government CAN demand of itself and bureaucracy the ability to evaluate such advice.

I sense we agree: Consultant usage should NOT be accepted as a "responsibility dump".

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I will speak to my own experience with an NGO. If I go to my board and get funds to hire a consultant, and then a year later come back and report to the board that the consultant was an idiot, how does that make me look? In essence this is a form of the "sunk costs fallacy". Rince & repeat many times.

There is no easy way out of this, but from my perspective the following is true:

- we need more democracy, not less

- we need more transparency, not less

- we need to decentralize our government, and economy so that we have smaller more understandable, more easily influenced decision making groups in society. (smaller units mean better feedback loops)

This is best done by localizing governments, economic units (business), regulatory bodies, etc. This would have the added benefit of making corruption harder, as the more people that have to be bribed / influenced the more likely that some will refuse.

Because the issues we face are extremely complex we need to have many different jurisdictions trying different solutions, as no one has the knowledge required to get it right. It will only be by allowing many different approaches to the problems be implemented that an optimum solution will emerge. (Think Chaos Theory and Self Organizing Systems)

Going back to my original comment about consultants. We should not pay them for their work, but expect them to appear in public forums (on the public record) where alternate views can also be presented and evaluated. Public Servants should not make policy, but rather implement and evaluate policy.

I know that I am presenting a simplistic approach, but that is my point. These issues are so big that they cannot be understood which is why we need to look to alternative models for solutions.

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I've used consultants (in my own business) but have always demanded that my staff (who define the consultant's work product) "wear" the responsibility for it's quality, applicability and results.

If the consultants report is poor, we made a poor selection decision. If the implementation and results are poor, we're poor managers.

In no case (except for poor consultative work) do we hold the consultants responsible.

But I agree, government hides behind consultants.

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Look forward to listening Tara. Not sure if you discussed the recent closely related book by Mariana Mazzucato, she gave a talk on it a few weeks back, moderated by Forsythe:

https://event.newschool.edu/thebigconaconversationwithmari

I was at the talk (Mariana and I overlapped for a couple of years in grad school). She is a force of nature, might be an interesting guest for you at some point.

Glad you posted the McKinsey response, it's very much in keeping with the tenor of your podcast.

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Once again proving that journalists provide incredibly valuable information when given free reign

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That last breath of the podcast was interesting to me. Your question to your guest, Tara, is one you end with in the interviews of most guests that you have. It is an important question.

To re-establish trust in media, the guest said journalists must "write good stories and hold people in power accountable." We must bear in mind that the error, seen from the street and leading to much of the journalistic mess we are in presently, is the forgetfulness of the upper crust of the Media, that they also are powerful. We all know that "power tends to corrupt..." so where power is granted, there is a requirement for equally strong and completely visible accountability. The Mogul faces of the Media forgot they also are subject to the corruption, acting as if they are immune. You go write your good stories; the people will believe them when they see accountability spread a little further up the chain.

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The decline in trust in media is undeserved? Come on, give me a break!

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The characterization of McKinsey as an accelerant of trends is alarming esp in light of current trends, some of which they mention in their statement. They claim not to make policy - maybe so - but they are good at what they do and will continue to sparkle government and big corp eyes and drive trends set by ... who knows.

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Thin gruel, Tara. Forsythe shoots fast and loose with accusations...many of which are wrong. For example, he references Canadian public sector workers leaving due to the "pay gap" between the public and private sectors. In fact, working for the government has an 8.5% premium over the private sector and is viewed by many as the utopian, high pay Canadian risk-free job.

Linking McKinsey with politics is a cheap shot. Are we to castigate Canadian farmers for selling grain to the "wrong"people? Canadian manufacturers for selling "the wrong things to the wrong people? Who decides on the OKness of customers? The authors clearly had their minds made up before putting fingers to keyboards.

The social adversions implied here (Tech/energy, Opiods, wages etc) are a "shoot the messenger" wish list of attempts to create responsibility where none exists. Irrespective of left wing claims, no business has the responsibility to assess the political stance of its customers.

Whether it sits well with readers or not, the objective of business is to produce profits and dividends for its owners...and, regardless of wild wishes, that's it.

I repeat: you are a valued journalist for me. Even this denigration of a valuable company tells its own story. It further supports the push-back to the "let's expand business's social responsibilities" climate of the past few years.

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