When McKinsey Comes To Town: The Hidden Influence Of The World’s Most Powerful Consulting Firm, By Walt Bogdunich and Michael Forsythe
In 2002, Martin Elling, along with three colleagues from the global consulting firm McKinsey & Company, published an article in the company’s quarterly magazine aimed at starting more businesses out of the pharmaceutical industry. Elling’s article argued that pharmaceutical companies are missing out on opportunities by not tracking how often individual doctors prescribe certain drugs. By aggregating such data, pharmaceutical company salespeople can direct their marketing pitches to the physicians most likely to be the highest-prescribing physicians, and the salespeople themselves are also could be better evaluated. Soon, a relatively unknown pharmaceutical company called Purdue Pharma called and hired McKinsey in 2004 to help boost sales of the opioid pain reliever OxyContin. In the face of a worsening national opioid addiction crisis and multiple state and federal investigations, prescriptions for stronger OxyContin tablets were beginning to plateau. McKinsey, led by the team, suggested “accelerating” sales through more innovative and aggressive marketing tactics. Between 2004 and his 2019, Purdue paid McKinsey his $83.7 million fee.
For decades, McKinsey has been associated with professionalism and prestige. By inviting the company’s high-priced consultants into the firm’s decision-making sanctuary, the CEO telegraphed that he wanted the smartest, most-tested advice on the market. The company was founded in 1926 by an accounting professor named James O. McKinsey, but it was his Harvard law and business school graduates who helped turn the company into a global powerhouse. The man who did it was Marvin Bower. Bauer joined the company in 1933 and infused the culture with excellence and purpose. McKinsey was a ‘practice’, not a ‘business’, and its work for its clients was an ‘engagement’ rather than a ‘project’. work. “
The company hired new consultants from the best schools — Harvard Business School is a favorite hunting ground — and now receives as many as 200,000 applicants each year, often hiring only 1-2% of them. . His starting salary, including bonuses, is $195,000, but one of the reasons so many talented new graduates want to work for this company is the company’s “values.” Ethics are said to be embedded in the culture. Recently, McKinsey began telling new hires that it’s working to solve some of the world’s toughest problems, targeting issues like poverty and climate change.
In recent years, however, the company’s reputation has turned around as the media and public have turned their attention to McKinsey and its influence. As New York Times reporters Walt Bogdunich and Michael Forsyth document in their deeply reported book When McKinsey Comes To Town: The Hidden Influence Of The World’s Most Powerful Consulting Firm, McKinsey has worked with opioid makers, hostile authoritarian governments. , tobacco companies, and the U.S. Immigration Service responsible for family separation policies at the southern border. Reading Bogdanich and Forsythe, it’s hard to imagine a company turning down a paying client. Many of the company’s recommendations follow a predictable, Milton Friedman-inspired playbook that calls for “right size,” an absurd euphemism for laying off workers, and spending on food, health care, and supervision. It focuses on other forms of cost reduction, such as reducing Detainees at the border.