Interesting that you think the two are mutually exclusive. Personally, I'd consider consulting advice to systematically hook an entire country onto opioids to be "useless BS" much in the same way I'd consider schemes to fix bread prices as "useless BS". Both are cases of rather obvious approaches that are not only legally and ethically bankrupt, but more importantly fundamentally unsound and unsustainable as growth strategies.
Mcks wasn’t asked for advice on ethics, they were asked advice on increasing sales.
If you go to a Tattoo artist and ask for a portrait tattooed on your face, it might be gauche as hell, but that didn’t change the fact the artist might’ve done a great job.
Not even close to a comparable analogy. A better analogy would be yours, but where the ink disappears after 1 day and the person getting the tattoo dies a day later.
That's not the point; you can't say their advice is ineffective, while also condemning them for being effective.
The top comment derisively states:
"The whole business is a scam built around sending in some 26 year-old with an Ivy League degree and $100 haircut to regurgitate snippets from articles in HBR"
In the context of fining the company $500MM for being too effective.
At least in the US, where the punishment is relative to the crime; the court clearly agrees about their efficacy.
I'm not sure there is that much dissonance. In the opioid case, they gave effective advice, but it wasn't necessarily of very high quality - the reason you wouldn't do what McKinsey suggests isn't because you didn't think of it but because you would find immoral and illegal.
The reason McKinsey was being sued isn't because they were giving effective advice, but because it was likely illegal.
Because of this I'd understand that both can be the case. That said, I'm not sure McKinsey is always as ineffective as the top comment suggests.
You don't need groundbreaking innovation in sales from your consultants to keep selling too much opioids, a product that mostly sells itself. Better consultants should probably try to stop you, however.
Their advice was highly effective in bringing the company to bankruptcy, if that's the metric you were aiming for. Aside from destruction of private and public equity.
To play devil's advocate, they could be both ineffective and harmful. Just because they succeeded in getting the company to do something, that not mean it was the right thing. The sale of the drugs could have produced a net loss as well as harmed the people who bought them.
You can be effective at selling opiates to people, but then end up in an investigation for selling them illegally and thus neutralising any of the revenue you had initially brought with fines for doing so illegally. Here's no effect.
Of course a lot of brutal strategies work well in environments which do not expect them. However trusted environments are often more efficient.
With a comma? Ineffective doesn't mean no-effect, it means 'not the intended effect'.
I.E. "McKinsey worked with Purdue to implement an ineffective business strategy that resulted in bankruptcy for the business, due the harmful nature of the product and the predatory nature of the strategy."
A $500MM fine is a bit beyond "shame on you for taking dirty money".
I doubt any marketing firms working for Purdue was fined $500MM despite contributing to the same outcome. And that's because they didn't have the same impact.
The justice system metes out punishment relative to one's contribution to the crime.
The fine seems related to the amount of damning quotes that came from McKinsey produced materials. They left a bigger paper trail than anyone else.
Like this sort of thing:
"One was to give distributors a rebate for every OxyContin overdose attributable to pills they sold. The slides are notable for their granular detail.
For example, McKinsey estimated that 2,484 CVS customers would overdose or develop an opioid use disorder in 2019 from taking OxyContin. CVS said the plan was never implemented."
Not implemented, so didn't end up being effective. But damn.
They didn't want it in court because it would have made a documented legal precedent around liability.
"One former partner called the settlement hugely significant because it shatters the distance that McKinsey — which argues that it only makes recommendations — puts between its advice and its clients’ actions. For decades, the firm has avoided legal liability for high-profile failures of some clients, including the energy company Enron and Swissair, Switzerland’s defunct national airline."
1. I think that’s making a guess into their intentions which we’re not qualified to do
2. Even if we take #1 for granted, the $500MM figure is still based on something. The counter-party could’ve settled for $100MM or insisted on $1B but they reached that number for a reason.
The story doesn't end there though, does it? The recommendations _did_ result in massive public backlash, hefty fines and a whole load of other shit for both McKinsey and their client. I wonder if these companies think this route was worth it.
Personally I don't know too much about this case. But courts can find corporations liable, even if they did a terrible job. It's the same logic as putting the getaway driver in jail for attempted robbery, even if they dropped the clutch and stalled the car. McKinsey could have done a terrible job but also been liable according to courts (who probably just assume white-shoe consultants did a good job anyway).
