
McKinsey’s corrupted culture - jawngee
http://blogs.reuters.com/felix-salmon/2011/03/09/mckinseys-corrupted-culture/
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samirmm
McK alum here. Article is drawing conclusions on 6,000 ppl based on
allegations of actions of a few. Client confidentiality reigns supreme within
the culture, though no cultural is monolithic. Stuff always slips through.

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.

~~~
sudhirc
"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.

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lukeschlather
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.

~~~
notaddicted
I believe it is common in Law firms as well.

<http://en.wikipedia.org/wiki/Chinese_wall#Law>

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vtail
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.

~~~
ig1
(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.

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geofflewis
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-
Steal/dp/0446576565)

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ig1
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.

~~~
VladRussian
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.

~~~
ig1
Sure and the second is clearly illegal in either case.

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ggeorgovassilis
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

~~~
laurenceputra
even if they are bound by NDA's they can still use what they know to make
decisions for the new client.

~~~
ggeorgovassilis
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...

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takinola
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

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yuhong
Here is a better article about what is actually happening:
[http://www.businessinsider.com/raj-trial-prosecution-
opening...](http://www.businessinsider.com/raj-trial-prosecution-opening-
argument-2011-3)

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gojomo
McKinsey is the wisdom-laundering Bing Toolbar of corporate strategery!

