It’s an excellent next step to explore the McKinsey Group, a consulting firm whose influence has become a subject of considerable discussion and scrutiny. While we previously touched upon broader political blueprints like Project 2025, delving into McKinsey offers a fascinating look at how private entities can deeply embed themselves within and reshape various sectors of government and industry.
McKinsey & Company is described as a “shadowy and parasitic consulting firm at the heart of nearly every industry in America”. Despite its claim to operate on a “no policy policy,” free from a driving ideology or bias, its history and worldview, when tracked, suggest a different narrative. It has been positioned as a “secret agent in the war on working people”.
Let’s delve into its methods and impact as revealed in the sources.
Genesis and Operational Philosophy McKinsey was founded shortly after a period of significant corporate mergers, specifically from 1895 to 1904, when 1800 companies were consolidated into just 157 “megacorporations” such as U.S. Steel, Nabisco, General Electric, and AT&T. This historical context suggests a firm born into an era of massive industrial restructuring.
In terms of its operational approach, consultants, ideally, are meant to add “brainpower” to companies, coming in as outsiders to “look at a problem in a new way”. However, McKinsey’s specific “modus operandi” (M.O.) is quite distinct: it largely focuses on “layoffs” and making other “cuts and recommendations that totally hurt workers and consumers”. It serves to provide CEOs with “clever seeming reasons” to justify decisions like entering new markets, laying off staff, or closing divisions.
The firm cultivates a “symbiotic relationship” with its clients, where its advice is “confidential”. If projects succeed, clients “take all the credit”. But if things go wrong, the blame falls on the client, with the implicit reasoning that since the “best consulting firm” was hired, any failure “must have been something else”. This allows McKinsey to largely escape accountability. A former McKinsey employee even described the firm’s strategy as advising new recruits to “wedge yourself in and spread like an amoeba” within organizations, acting like a “Trojan horse”. This system, while “great for short-term profits and shareholders,” is “not so great if you care about jobs or safety”.
McKinsey’s Pervasive Influence Across Sectors
- Healthcare Industry: Healthcare is described as McKinsey’s “bread and butter” and an area where it has caused “some of the most damage”. Major clients include pharmaceutical companies like Johnson & Johnson and large managed care insurance companies such as Anthem, Aetna, and Blue Cross Blue Shield. In one striking instance, McKinsey was contracted by Providence Medical, a tax-exempt hospital required to provide free care to poor people, to “design a program to get more patients to pay their medical bills”.
- Regulatory Bodies and Conflict of Interest: A significant concern arises from McKinsey’s simultaneous engagement with both regulated industries and their regulators. For example, McKinsey worked for Philip Morris and Juul while also advising the FDA office responsible for regulating tobacco. The reporting indicates that the FDA staff were often unaware that McKinsey was advising the tobacco companies they were meant to regulate.
- Retail and Labor Practices: McKinsey’s recommendations extend to fundamental aspects of worker compensation and benefits. For Walmart, it suggested “reducing its overall investment in profit sharing and 401k programs, lower its company-paid life insurance coverage, and move employees to consumer-driven health plans”. Notably, McKinsey & Company estimated that Walmart alone accounted for as much as 25% of U.S. productivity gains from 1995-1999.
- Theme Parks and Safety: The firm’s influence even impacted safety. In the 1990s, McKinsey advised Disneyland on overhauling its maintenance program. This followed a period where Disneyland had a “spotless record”. However, after McKinsey’s involvement, accidents occurred, including one where a person was killed due to wheel failure on a roller coaster, with cited causes being staffing and maintenance. Despite this, McKinsey escapes accountability due to its behind-the-scenes role and confidential advice.
- Government and Public Sector: McKinsey works for various governments, including the Saudi, Chinese, and American. The firm sometimes undertakes “pro bono work” as a way to “get in the door,” only to later charge for services. An illustrative example is Illinois, which, despite being “about $1,000,000 of debt to basic medical services,” paid “75 million to McKinsey” for Medicaid restructuring. This highlights a perceived “dependency” on consulting firms like McKinsey that has been “fostered in our government,” a dependency described as a “generation-long project” to untangle.
Internal Dynamics and External Critique
Within McKinsey, there’s a noted “obligation to dissent,” but this dissent “doesn’t mean” it will lead to any change, merely that one won’t “get fired for speaking out”. This suggests a culture where alternative views are tolerated but ultimately subsumed by the firm’s established recommendations.
The broader critique of McKinsey’s practices is significant. The Department of Justice (DOJ) is reportedly investigating McKinsey’s work on opioids “criminally for the first time”. There has also been political discussion about banning McKinsey from federal contracts, though it’s acknowledged that other consulting firms like Bain, Boston Consulting Group, Deloitte, and Accenture offer similar services, suggesting that simply banning one firm might not solve the underlying issue of dependency.
It is also worth noting that Stafford Beer, a prominent figure in cybernetics and operational research, received a contract to advise on the “organization of McKinsey’s” after David Hertz took on a role with the firm. This occurred while McKinsey was “reorganizing many of the most famous British institutions”. Beer even recounts an ironic situation where he offered to mediate a public dispute between the head of British Steel and a minister, both personal friends, just prior to leaving for his McKinsey assignment, only for both to decline his mediation. This offers another glimpse into the firm’s high-level engagements and the unique positions it holds in both government and industry.
In essence, McKinsey operates as a powerful, behind-the-scenes force, enabling companies and governments to pursue strategies that often prioritize financial metrics and efficiency gains, even at the cost of jobs, safety, or social welfare, while consistently sidestepping direct accountability for the outcomes of its advice.