Book review of The Firm: The Story of McKinsey and its Secret Influence on American Business

 

 

Employing his journalistic skills in packaging and presenting thoughts about consulting giant McKinsey, Duff McDonald brilliantly takes the reader into the world of McKinsey, its practices, and the cutting edge thinking undergirding the ruthless machinery that has prided itself in amassing a group of highly intelligent people to turn companies towards greater profitability and competitiveness.

 

Crystallising their strategy, McDonald comments that apart from slashing cost by slashing headcount (increasing employee churn in order to keep costs low), there have been many instances where the recommendations that have come from McKinsey seem to focus on cold blooded cost cutting at the expense of long term staff loyalty, creating a culture of fear and short-termism in the organisational culture. The deity-like reputation built about McKinsey is such that it would be unthinkable to not follow its recommendations. If one will not go wrong to hire a McKinsey consultant, then one must definitely be right to go with a McKinsey recommendation.

 

And the best part of all of this is the manner through which the credit or blame is accorded should the end-result go well or poorly: a CEO can take the credit for a job well done without having to credit McKinsey since he had the mind to hire them in the first place. If the recommendation was taken and the end-result was disastrous McKinsey was shielded from the blame too.

 

Enron

Enron (Photo credit: elycefeliz)

 

 

Perhaps one of the most striking examples embodying the culture perpetuating from the firm is the former fallen CEO of Enron, Spilling, who himself was from McKinsey and took over the reins of the now-defunct Enron. McLean and Elkin were quoted in the book to have commented on Skilling as a learned consultant who was skilled at applying his acquired frameworks to issues to create a persuasive argument and garner logical support for his cause. “He could process information and conceptualise new ideas with blazing speed. He could instantly simplify highly complex issues into a sparkling, compelling image. And he presented his ideas with a certainty that bordered on arrogance and brooked no dissent. He used his brainpower not just to persuade, but to intimidate… but he also had qualities that were disastrous for someone running a big company. For all his brilliance, Skilling had dangerous blind spots. His management skills were appalling, in large part because he didn’t really understand people. He expected people to behave according to the imperatives of pure intellectual logic, but of course nobody does that.. he was often too slow – even unwilling to recognise when the reality didn’t match the theory. Over time his arrogance hardened, and he became so sure that anyone who disagreed with him was summarily dismissed as just not bright enough to “get it”.”

 

This eventually led to his downfall. And he is not alone in the hall of scandals, which should somewhat erode the brand value of the firm over time. Will McKinsey persist in its pole position in the eyes if companies seeking advice? Find out more in this McDonald’s latest book of gripping truth of the firm that has defined American leadership culture for the longest time.

 

J.CJ

 

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