All photos © Am Ang Zhang 2014
“You can’t get fired for hiring McKinsey & Company.”
It often goes unmentioned, but McKinsey has indeed offered some of the worst advice in the annals of business. Enron? Check. Time Warner’s merger with AOL? Check. General Motors’s poor strategy against the Japanese automakers? Check. It told AT&T in 1980 that it expected the market for cellphones in the
in 2000 would amount to only 900,000 subscribers. It turned out to be 109
million. The list goes on. United States
A thought-provoking new book called “The Firm: The Story of McKinsey and Its Secret Influence on American Business,” which comes out next Tuesday, offers a fascinating look behind the company’s success.
The book, by Duff McDonald, chronicles McKinsey’s rise but also raises an important question about it that is applicable to the entire netherworld of consultants, advisers and other corporate hangers-on: “Are they worth it or not?”
The answer amounts to hundreds of billions of dollars annually. Indeed, the army of advisers whispering into the ear of Verizon and Vodafone (its C.E.O. is a former McKinsey partner) over the weekend for their work on the $130 billion deal stand to make over $200 million alone. And, perhaps most important, they don’t have to give the money back if the deal turns sour.
Mr. McDonald’s book explores the remarkable and intriguing disconnect between the advice McKinsey offers and the ultimate results.