The story of McKinsey could make for a ruthless and biting book; the ingredients are all there. The oldest, largest, and smuggest of the “Big Three” management consulting firms siphons 20-something graduates from elite colleges with the promise of astronomical pay, future job prospects with even higher pay, and values-driven impact that mostly translates into legitimizing mass layoffs for multimillion-dollar fees. The company’s century-long insistence on secrecy has allowed it to maintain both a conflict-ridden client list and a veneer of professional decency, yielding alumni both famous (Pete Buttigieg, Sheryl Sandberg, Bobby Jindal, Tom Cotton) and infamous (the ones who went to prison). And its historical trajectory, kicked off by an accounting professor on the eve of the Great Depression, has directly accelerated the metastasis of corporate power in nearly every industry subjected to its exorbitantly priced PowerPoints. That book was written by Duff McDonald in 2013. It’s called The Firm.
A new release, from New York Times reporters Walt Bogdanich and Michael Forsythe, attempts to pick up where McDonald left off. When McKinsey Comes to Town, which came out Oct. 4 from Doubleday, is a deeply reported dive into the consulting firm’s expansive industrial reach, which draws from the accounts of nearly 100 current and former McKinsey employees, few of whom have much love for their old or current bosses. Most notably, the authors got a hold of McKinsey’s tightly guarded client list, which they use to highlight the firm’s fingerprints on everything from the opioid epidemic and the vaping crisis, to bloated CEO pay and the 2008 financial collapse, to ICE’s detention regime and the murder of journalist Jamal Khashoggi. The reporting pair has been responsible for much of the Times’s McKinsey coverage, and anyone who has been following along will find the book somewhat familiar. Sure enough, the text reads more like an article compilation than a cohesive account of how McKinsey’s emphasis on efficiency perverted the global economy.
Bogdanich and Forsythe’s portrait of McKinsey’s influence conjures a useful, if inexact, comparison to another shadowy institution with an outsized impact on American corporate culture — the Federalist Society, the conservative legal organization whose members populate every rung of the elite judicial ladder. Like the Federalist Society, McKinsey aggressively recruits Ivy League graduates, whose often short-lived employment belies a longer-term affiliation (“Leaving McKinsey is not a dishonor,” the authors note. “McKinsey knows that by seeding the business world with former employees, it stands to get new clients in return.”) Like the Federalist Society, McKinsey purports to adhere to a set of innocent-sounding values that collapse upon closer scrutiny. As FedSoc’s soliloquies on “judicial restraint” mask a revanchist mode of Constitutional interpretation, McKinsey’s promise to create “positive, enduring change in the world” thinly veils a straightforward devotion to the bottom line.
There are notable distinctions. The Federalist Society, as legal scholar Amanda Hollis-Brusky notes in her history of its influence, Ideas with Consequences, does not directly work to advance its interests through lobbying, litigation, or policy proposals, like McKinsey sometimes does. But its members do so on its behalf, and they have been most successful at disseminating what Hollis-Brusky calls “intellectual capital” — scholarship that slips reactionary ideas into the legal mainstream, lending cover to conservatives or, say, Supreme Court justices to justify enacting them as law. McKinsey does a version of this in the business world, to devastating effect. Consider the 1950 study they published in the Harvard Business Review on executive compensation at large corporations. Until then, “the pay of the individual executive was one of a company’s most closely guarded secrets,” wrote the study’s director, McKinsey consultant Arch Patton. But the paper, which revealed top salaries at 37 large companies, triggered a CEO race to the top. In the 70 years after its publication, executive pay skyrocketed from 20 times the average worker’s income to “at least 351 times as much.” McKinsey often diagnoses problems for which its services are the solution, especially through its nominally independent think tank, the McKinsey Global Institute. “The group wants to portray itself as “neutral public intellectuals,’” Bogdanich and Forsythe write, quoting economist Josh Bivens, while in reality “trying to ‘provide an intellectual gloss’ on a profit-making endeavor.”
One of the book’s most convincing claims is that McKinsey tends to play both sides of any given field. That can be through contracting with multiple companies competing in the same market, or, more dangerously, both private corporations and the public agencies tasked with their oversight. This pattern repeats itself in almost every industry McKinsey has its hands in, be it health care (where it both supports major providers and counsels state lawmakers working on coverage), banking (where it helped sell securitization as a way to bundle risky credit before advising Sen. Chuck Schumer in 2007 that the economy was “threatened by too much regulation, not too little”), or pharmaceuticals (where it advised the FDA while consulting for 19 pharma clients subject to the agency’s regulation).
McKinsey has defended its apparent conflicts on the grounds that “sufficient safeguards exist to ensure confidential information is not inappropriately shared.” But that math is hard to check, because the firm keeps its client list secret. As one health care consumer group put it: “We cannot know if McKinsey has any conflicts of interest because we don’t know who all their current clients are.” Bogdanich and Forsythe number among the select group with a clear picture of what that client list looks like. As they note several times in the book, they have their own copy. Publishing that list would be in the public interest — it would also make the book an invaluable, and more interesting, investigative document. But for all the authors’ allegedly exclusive insights, they share very few. The pair had the opportunity to name names; more often, they name only numbers. Consider this passage, about an Illinois investigation into how McKinsey secretly won $75 million in no-bid contracts to help expand the state’s Medicaid program:
This firm’s client list, a closely guarded secret, would not have been available to state officials. But the authors of this book gained exclusive access to that list, and it showed McKinsey’s deep ties to the managed care industry. In recent years, McKinsey billed companies that provide managed care more than $200 million, making it one of the firm’s most lucrative sectors. Moreover, four of the seven companies that won parts of the $63 billion Medicaid contract were later acquired by McKinsey clients.
Which companies? Bogdanich and Forsythe don’t specify. Presumably some clients have bad actors or pompous executives or cartoonish public scandals that could color the alarming yet contextless recitations of corporate contracts in the book. But the text cites the specifics of only a few such cases, mostly in asides. The authors’ reliance on abstracted summary instead weakens their work on both an informational level and a narrative one.
One of McKinsey’s strengths is its ability to mask its sinister projects with dreary paperwork and bland business jargon. Take the innocuous title of a report McKinsey sent the Saudi government in 2018, which identified an associate of Jamal Khashoggi’s as a state critic, shortly before the latter’s murder: “Austerity Measures in Saudi Arabia.” The task of the writer then is to translate that code into something of substance, to decipher what this assemblage of opaque deals and deceptions actually means. The authors do occasionally decode corporate buzzwords and “insights” on a case-by-case basis, as with the Saudi report, but all too often they sidestep the trickier work of injecting McKinsey’s glorified paper-pushing with the actual drama it has wrought on people’s lives. The result is about as inviting as McKinsey’s own memos.
The New York Times style of inquiry is palpable throughout When McKinsey Comes to Town. It’s there in minor ways, like when the authors reflexively dismiss Pete Buttigieg’s work at McKinsey, which allegedly included fixing bread prices in Canada and bringing American private enterprise to post-war Iraq, as “fairly mundane.” But it likewise infects entire sections. A chapter on China details some revolting incidents — a McKinsey party held mere miles from the camps in Xinjiang, for one — but also describes with sanctimonious outrage deals that, anywhere else, would seem standard, as if mere proximity to the CCP is a scandal on its own. The most Timesian element of all, however, is the book’s ending, a confusingly slapped on two-page epilogue. “There is no questioning McKinsey’s desire to do good, to give back,” the writers conclude. “But, as one former consultant said, McKinsey should also find a way to do less harm.” If Bogdanich and Forsythe sincerely believe that, I know a guy with a great bridge to sell them. For a modest consulting fee, of course.