McKinsey: Last Week Tonight with John Oliver (HBO)

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tonight

is about business, a word that somehow describes the front of a mullet, the second nicest seat on a plane and the saddest room in any hotel, specifically we're going to talk about the business they do let other businesses be your business management. Consultants, there are three big firms and

tonight

we will focus on the largest and oldest, McKenzie and Company. It has been around for almost a century advising both large companies and government agencies on how to solve their most complex and pressing problems. Mckenzie was founded. in 1926 by James o McKenzie was a professor at the University of Chicago and an expert in management accounting in the 1950s The company was helping the White House with personnel organization that the company believed would lead to the creation of the position of chief of personal. in 1970 McKenzie helped create the barcode yes that barcode that's really true McKenzie helped invent the barcode I know it's a little disappointing maybe I thought it was invented by a grocer in the 60's who dreamed of a way for computers to taste fruit maybe you thought The beeps were just like the program says yum, but I'm afraid you're imagining a better world than the one we actually live in, but it's not just a barcode.

Innovation companies like McKenzie sell themselves, as do the experts who can come in and provide an outside. perspective and solve any problem plaguing a company, whether it's redesigning an org chart, working on digital strategies or deciding whether to sell part of your business, whatever it is, they'll advise you what to do and Mackenzie has worked with everyone from companies like Coca -Best Buy and AT&T queue for government agencies like the Department of Defense and Ice McKenzie is huge and everywhere: he has offices in at least 65 countries and an estimated annual revenue of $15 billion, but McKenzie doesn't see himself same as just a group. of PowerPoint in a power suit using microphone managers, as you can see in their recruiting videos, they see themselves operating as a Force for good in the world.

Our purpose is to create positive and

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ing change in the world. The work you do with McKenzie will matter what we do. What we do on a daily basis truly impacts the lives of thousands of people, sometimes more. The really nice thing about McKenzie is that it gives you the opportunity to work on really difficult problems that are also really interesting and that really matter. Mackenzie consultants are encouraged to see themselves as world changers, as a humble Mackenzie associate once said: There are only three great institutions left in the world: the Marines, the Catholic church, and McKenzie, which is a great group. that you can look at, there are only three.

There Are Now Cool Kids in the World Henry Kissinger Kevin Spacy and I, and the truth is, McKenzie's reputation has taken a bit of a hit in recent years and he's come under scrutiny for everything from exacerbating income inequality to helping market dangerous products and enabling authoritarian regimes and Former employees have pointed out that for all their talk about making the world a better place, it has worked for some of the biggest polluters on the planet while raking in hundreds of millions of dollars. dollars in exchange. In fact, one of those disillusioned employees paints a pretty damning portrait of what the company does.

In essence, they serve many clients with really harmful effects. They know exactly what the repercussions are going to be and then they say we're going to do it anyway and that tells you everything you need to know about the company. Something inherently alarming to hear about a company, isn't it that what you generally want is for companies to mitigate harm and not actively seek it? influential, so omnipresent and behind so much damage, tonight let's take a look at McKenzie and if this is the first time you're hearing the name MacKenzie, don't be embarrassed because for a company with so much reach they've gone out of their way to try. and he keeps a low profile, does not publish his client list and even his offices can be difficult to detect.

We passed MacKenzie's headquarters in three World Trade Centers in lower Manhattan. Well, they are such a powerful company and yet you would never know they are. There isn't a single Mackenzie sign anywhere here, why don't they want anyone to know anything about them? They want everything to be done secretly and if that includes where they work, so be it, that's nothing innately suspicious, right? They've locked themselves inside an expensive, glass-fronted, nameless Lair that's completely invisible to anyone, unless they just type McKenzie into Google Maps or listen to that journalist say three World Trade Center while she literally shows them her address.

It was an idiotic move and I really appreciate it, but discretion is just part of the MacKenzie brand. They have also cultivated a reputation for hiring the best and brightest straight out of elite universities and MBA programs, and high-achieving young people often use a stint at Mackenzie as a springboard to bigger things. Former employees include Pete , Senator Tom Cotton, Facebook's Cheryl Samberg, and Google CEO Sundar Pitchai, and McKenzie chooses its consultants through a notoriously rigorous interview process that asks candidates challenging and slightly unconventional questions. One of the interview questions they asked me in my final. rounds was how many pigs are there in China, which sounds like a very stupid question, but it is a very good question to test how you think because it is not only the answer that matters, but how a problem can be structured.

Can you take a very nebulous answer? situation and structure it in a way that makes sense and then logically deduce things to come up with an answer that is meaningful. I mean, I'm sure that's one way to describe it. Another way could be to say that they are just trying to see. how good are you at coming up with a plausible sounding answer, because if a company really needs to know how many pigs there are in China, there are ways to find out, like the so-called Chinese pig tycoon, Chin Ying Lin, or just googling how many pigs there are in China. or if you're on your phone just Google how to Kenny or and China because that's still enough to go on.

That I have to do? Throw away the map. I'm in a hurry, my thumbs are fat and I have places to be, but. Once hired, Mackenzie consultants work incredibly long hours while learning the McKenzie way of doing things, something the company itself can be quite unbearable with a partner, it once said that we don't learn from clients, their standards are not up to par. high enough. learn from other McKenzie associates a phrase so smug that even if you just read it, you'll automatically have heard my accent in your head because that's not just smugness, it's British Empire smugness and the thing is, that level of arrogance might have some Mackin's device was consistently novel and brilliant, but it had some major flaws, as was the case in the early 1980s.

McKenzie was asked by his client AT&T to estimate how many mobile phones would be in use in the world by the end of the 1980s. century and Mackenzie concluded that the total market would only be around 900,000 phones in total, persuading AT&T to withdraw from the market for a while and, to be fair, McKinzie only lagged behind at around 739 million or 82,000 per phone. . But even when they're solving existing problems, their custom solutions can be blindingly obvious. Just watch how a mckin brags in a promotional video about the company's ability to find unique solutions we were servicing an energy client and their problem was they had offshore services. drilling rigs and they had stacks and stacks of paper invoices that they would fly to these rigs in the middle of the Gulf Coast in hurricane weather to have to get someone to approve and then helicopter back to headquarters.

We brought in a team that had We had partners who were experts in the energy sector and who were experts in procurement as a function and they were able to meet with our digital team and say we don't actually know if signatures are really required. D for this, yes, no. I'm not sure it speaks so highly of you that you needed the digital team and the energy and procurement experts as a function, whatever that means, to come to the conclusion of why not send a email instead of a helicopter and that's not unique. Over the years, they have repeatedly complained that McKenzie oversells his Brilliance, in the words of a Fortune article, while some of his work can be very sophisticated most of the time.

The firm simply reorganizes the sales forces or designs, buys the numbers and reduces the size to reduce overhead and those are just obvious first thought ideas, essentially McKenzie is a company that projects a large amount of confidence to sell a product frequently hassle-free at sky-high prices, making them truly the Salt Bay of companies you've had salt from before, but have never had salt from. a moron and let's talk for a minute about downsizing because there is a long history of companies hiring consulting firms like McKenzie and very soon after aggressively cutting costs this is disguised in fancy terms like finding efficiencies and organizational rationalization, but what that means It often means Mass layoffs and layoffs are sometimes necessary, but they are always painful and much more painful than an Ivy Leage 20-something who considers himself a business genius could imagine 24 years ago.

Mackenzie allowed a documentary crew rare access to film a training session. for young consultants who completed an exercise in which they played the role of advising a real-life client. Here they are joking about how they would break the news that layoffs would be necessary. We have a very simple strategy, what do you say? That is not our communication strategy. Look, I'm not a violent person, but if all that blew up, I would absolutely go around singing It's Raining Men, but that's emblematic of an important role that consultants like McKenzie play, essentially allowing executives to say: I know the job cuts It's bad news, but it's what McKenzie told us to do, as a book about the company says, and it's certainly gold for management consultants looking for a justification for Savage's cost-cutting, as well as a convenient scapegoat to blame, although there is one area in which Mackenzie has Historically advised the exact opposite of cost cutting and that is, executive pay.

Starting in 1950, a consultant of his named Arch Patton began advising executives. corporate leaders who were underpaid writing books as men money and motivation executive compensation as a leadership instrument His advice was tremendously popular that for a time Patton personally accounted for almost 10% of the company's turnover and later came to be seen as a important contributor to the skyrocketing EX itive salary, in fact, when he was asked in the 1980s how he felt about the effect of his work. his response was simply guilty and although it's hard to gauge the tone of that, I only hope he was a sober and thoughtful guilty and not, as seems much more likely, a mischievous and mischievous guilty.

Could Ed answer who throws the punch. In short, McKenzie's advice may be costly, but it's obvious that the predictions can be deeply flawed and it has arguably helped increase economic inequality in this country, all of which is pretty surprising coming from a company whose leader has already seen summarizing its core mission this way: Our purpose is to create positive,

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ing change in the world, yes, but is it? Because let's talk about that. A quick look at McKenzie's Client List shows a group of firms doing everything they can to do the exact opposite of positive, lasting change because it's not just Those oil and gas companies I mentioned earlier, The Firm also started advising to the tobacco industry in 1956, long after we knew that smoking caused cancer.

You might be thinking, come on John, it was the 50s, a lot of people were okay with smoking back then, but you should know that McKenzie only stopped working with tobacco companies in 2021, which is true, too late. It'll be like finding out that Subway canceled Jared's contract today. Wait, he was still doing commercials from prison, how could anyone think this was okay? and if you think that was damaging, mckines also worked with Purdue Farmer, they actually earned almost $84 million in fees from Purdue for advice on pricing Oxycontin turbocharger sales. In fact, listen to the Massachusetts AG explain how intimately involved Mckenzie was in pdue. sales process McKenzie Consultants actually accompanied Purdue sales representatives to thedoctors' offices here in Massachusetts to criticize them about how effective they were at selling oxyon.

It's true, they did Ride Along and I honestly didn't think I could feel any sympathy for Puru sales reps until I found out they were stuck in a car with a McKenzie consultant for hours. Yes, you mentioned that you went to Harvard. Can we please shut up and go sell some poison? But they are not just private companies. Remember that Mackenzie is hired frequently. For example, in 2014 New York City hired Mackenzie to figure out how to reduce violence at Reiko, a project whose cost ballooned to $27 million. It was a good use of money, but the city Corrections chief at the time insisted that McKenzie was worth every penny, if we made any progress it was because of McKenzie's help in areas where we needed help.

Wow, that's high praise for claiming that McKenzie was the sole reason for any progress made at Rikers. It would be a pretty impressive compliment if you didn't know anything about Rikus' status. So what imaginative strategies did McKenzie try to implement? I don't know, just stuff. fun things like expanding the use of Tasers and aggressive dogs. It's a very innovative thought for people literally trapped inside boxes, but his big project was an anti-violence program called reboot and he claimed that violence had decreased by more than 50% in the reboot facilities, which sounds great and luckily it turned out that number was false because jail officials and McKenzie Consultants had reported that they had jointly manipulated the reset program by stacking the units with inmates they believed were unlikely to fight or attack staff.

First, and although McKinzie to this day defends that program and denies skewing the results, it is notable that when Prua later analyzed the Rikers numbers overall, they found that prison violence had actually increased by almost a 50% since McKenzie started his job and honestly you have to hand it to McKenzie, there are not many companies that can be paid 27 million of taxpayer money to somehow make Rikers even worse and it's not just about prisons . McKenzie's government clients also include regulators, which can get a little strange when you consider that McKenzie also represents corporate clients, for example, remember how he worked with Padu Farmer while he was working for them, he was also working with the FDA, which It sure seems like a clear conflict of interest and it was one that even Mr.

Positive and Lasting Change here found a bit difficult. to explain to Congress after the fact, okay, so let me ask you: did you disclose to the FDA your McKenzie's work at the same time that you disclosed to the FDA that Mckenzie was working at the same time that he was working for the FDA that he was working? For Purdue, did you disclose to the FDA that we made it clear to you in multiple cases that the people involved had experience in both pharmaceuticals and opioids, stating my time, Mr. Sternfels, they had no experience, they were identical humans working for both at exactly the same time? and there is a big difference between having experience working for both and actively working for both at the same time.

It's the same difference between telling your wife about your ex-girlfriend and telling your wife about your current girlfriend. One is dramatically worse than the other and it's easy. Porter was right: there were multiple cases where McKinzie Consultants worked for pdue and the FDA at the same time. At one point, four consultants working on an FDA contract to improve drug safety were simultaneously working for Padu on projects designed to persuade the FDA of the safety of puu's product—one project even had them writing scripts for that Padu used them in a meeting with the FDA about the safety of pediatric oxy content pediatric oxy oxy for children you know, like in that episode of Dora the Explorer when the backpack is getting a little too heavy and Boots gives him something to calm down.

Now McKenzie claims that there was no conflict there and that the nature of his work for the FDA and Purdue was different, which is a little hard to accept considering they sold out to Purdue. At the time, with the idea that they had special knowledge about the FDA, they told puu in 2014 that they brought unmatched capability based on who we know and what we know, including the FDA, who we have supported for over 5 years, so wait for McKinzie, who So the work you did for the FDA was totally different or did it help you bring an unmatched ability to do UC?

It can not be both. This is not Schroedinger's contract. You can't claim to be relevant and unrelated. Depending on who you're talking to and at this point you could stop Rikers Tobacco Opioids, those are already some pretty nasty stains on a company's record, but here's the thing: all the examples so far are just from the US Remember that McKenzie now has offices all around the world and from there they have approached some truly terrible clients, they have worked for a Russian defense contractor and they are so deeply embedded in the Saudi Arabian government that the Saudi Ministry of Planning has been dubbed the McKenzie ministry and loudly defends his work there saying he feels it is making the country a better place, but that feat of mental gymnastics became a little more complicated after Jamal Kogi was murdered just months later .

Mackin's Head at the time was at CNB trying to defend his work in the country and reassure everyone that they had a strict moral code, the work we do and we think a lot about the work we do must be work that makes a positive difference, Of course, and that's why I'm in favor of doing business with a murderer. It's okay for you, no, it's not okay at all, and you, and when, when you find out that your client is a murderer, you do what you walk, you walk, oh, you walk, does that sound good, except here's what Didn't they make him walk, did they kill his client? and dismembered a journalist and McKenzie responded by participating in a major Saudi investment conference that same month, even as other companies pulled out, so unless the walk is short, walk to the front of the line and pick up your lanyard for another fun

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end at journalist cho at the business jamboree that you are full of, but wait, wait, because it gets even worse because it later emerged that in one of

mckinsey

's reports he highlighted three people who fueled a negative conversation on Twitter about the Saudi government's policies.

This is that slide that features names, images, reviews and Follow accounts and subsequently some of those people were, and you won't believe it, targeted by the Saudi government. In fact, one of his phones was hacked, revealing Communications with, you guessed it, Jamal Kogi. Now, at this point, I have to tell you that McKenzie insists. There is no evidence that the slide deck was related to the death of Jamal Kogi or exposed dissidents and that the deck was not prepared for the Saudi government; In fact, when this story broke they initially said that the primary intended audience for the reports was internal and that they were horrified by the possibility, however remote, that it might have been misused in some way, but come on, it's Saudi Arabia, even if that report didn't fall into their hands and please, what part of the way Saudi Arabia operates made them think that a McKenzie would be good to put together a created list of shit-talking dissidents, you are working on one of the routine Toist journalist regimes in the Middle East and thought it was completely fine to make a list like this because the potential for misuse was remote What are you talking about?

This is a government led by Muhammad bin Salman, a man who, and this is true, once arrested his own mother. Did you think that if the NBS stumbled upon a list of their hazers it would just send them a big message? No hard feelings about all the Edible Arrangement diss stuff, that's wrong with you and, for what it's worth, a former McKenzie consultant called that whole internal document complete nonsense and look, McKenzie will claim that all the examples I've given you given tonight are simply The isolated cases are not representative of their work in general, in fact, they will say that they have renewed their client selection policies and that if a client or a proposed project does not meet our standards, we will not do the work although They are still working in Saudi Arabia.

Saudi, so the standards seem flexible at best, also want to tell you that they do a lot of projects, like helping clients roll out vaccines or supporting refugees and rebuilding Ukraine, which is very good, but Think about it this way, how many uplifting McKinzie projects do you like? more hugs at the puppy mill or making grandma live forever, would you need to hear something to effectively counter the opioid epidemic? Help Rikers even more and make a list of Saudi Arabian snitches and look, it's not just McKenzie with these problems that his main competitors have had. them too, BCG was also in deep relations with the Saudis and Bane was banned from state contracts in South Africa for a decade thanks to his role in a massive corruption scandal and I'm not even saying the consulting industry should be abolished to receive external feedback on the best.

Internships can make a lot of sense for an organization, we certainly need to preserve a career path for high-achieving Taipe Liars who don't want to commit to law school and want to spend their best years flying business class to Dallas. Companies can feel free to hire as many fresh-faced dark sociopaths as they want to take the heat for the layoffs and atrocities they were already launching in the first place, whether it's a free country or not, depending on where McKenzie's office is, But their work is as they really claim. impacts the lives of millions of people, they should not become invisible and should expect much more accountability for their mistakes and until that happens, the least they can do is be a little more transparent with their recruiting videos.

Hi, here at McKenzie we are an elite group of strategists, thinkers, analysts, innovators, guys named Braden and Delta Platinum. Sky Miles Reward Members here to drive customer success on any business project. We are proud to say that McKenzie alumni include many of the most powerful. People on Earth and also Pete Buddha judge that at Mackenzie we truly believe that great Consultants can come from anywhere, which is why our workforce features an incredibly diverse range of graduates from across the Ivy League, including Cornell, as well That if you are an ambitious college senior or an MBA Graduate who needs to be told he is special or he will die.

We would like you to consider a career McKenzie. The best part of my Harvard education was the look on people's faces when I said I was going to Harvard. I'm really passionate about being in groups that impress people and being able to continue that at McKen has been very rewarding. One of the interview questions I was asked in my final round was how much wood would a groundhog throw if a groundhog could throw wood sounds like a silly question, but it's actually a smart way to test your approach to problems and how many hours billable can speak.

In my case, here at McKenzie you will have the opportunity to change the world by serving a surprisingly wide range of clients, but not just anyone. For example, we are proud to not work for tobacco clients and since the beginning of this sentence we have not done so. We have clients who appeal to all interests, local interests, foreign interests and even conflicts of interest. I worked for the FDA and Purdue Pharma in the At the same time, I can't believe they let me do that, my mom said it shouldn't be illegal and that worried me a lot until I remembered that she's not a consultant, of course she wouldn't understand that I was basically talking to an ape.

We hold our employees and customers to a higher personal and ethical standard. McKenzie's core values ​​will always have a phone call, not now, it's the Saudis. In fact, I have to accept this. I think it might be what you have, BR, but. The point is, you'll use your special big twenty-something brain, free of practical experience, to develop custom solutions that address the company's specific needs. What we recommend is finding significant efficiencies by laying off people at the bottom of the company and paying them. more for the people at the top hey, that's me with the money signs, that's me at the top, okay, look, we believe there are three great institutions left in the world: the Marines, the C church and McKenzie, that's because that the mark of any good institution is matching outfits. evasion of responsibility through institutional secrecy and the mistaken belief that you are saving the world because at the end of the day we are Mackenziewe are McKenzie we are McKenzie we are McKenzie and we are capable of anything and we are guilty of nothing I love that I mean it's true we can't you know it can't touch us it's true yes