Bob McCann used to say that a consultant is someone who takes your watch and then tells you what time it is. We should always have been wary of consultants. When I was at Quaker Oats in the 1980s, they told us to diversify – in the 1990s they told us to consolidate to our core. There are some very good people at McKinsey and Bain (I’m sure elsewhere too) – but if you’re not working with someone who’s really good, it’s your job to beware.

Like any corporation, some oversight and regulation is necessary to ensure accountability. But consulting is a form of work that somewhat defies logic because it demands complete focus on the customer’s success rather than a focus on one’s own revenue.

I have worked for one of the “big four.” The culture in these firms is sometimes questionable but they know better. Everyone knows the difference between right and wrong. The issue is to always pick “right.” Regrettably, when firms decide to stray from the path, they bring additional scrutiny upon themselves and their entire industry. Bad decisions may have impacted the retail consulting world but that does not mean that there are not very good consultants within all of these firms.

McKinsey scandalous? Ya think? Wow. They are now synonymous with consulting gone bad and capitalism at its worst. Having said that, I can’t think of a similar case where something as directly evil as their newly uncovered deeds has happened in retail consulting. Perhaps because the “sell” and even the product is much simpler in most cases, I’m not sure, but figuring out a way that stores can be more productive in the path of the e-commerce tsunami certainly seems more benign right from the start than scheming out a way to sell more addictive drugs.

It is all about the money.

But it is also about doing business. The judgment should not be who you work for but the job you are doing. If the country’s largest buyer of military equipment is Saudi Arabia, how can we criticize another organization for doing business with this authoritarian regime? Should I not teach college students in China because China’s government is authoritarian?

Transparency is the answer. If there were transparency, they would not be involved in the opioid crisis or government scandals internationally. If they are engaged in unlawful projects, they, too, should go to jail.

Do they need regulation? That would be another can of worms. In many cases, that won’t happen as they are intimately involved in the government and with our politicians. A code of conduct would be nice.

Having worked at both Accenture and Deloitte I can firmly say that regulation is not needed. Senior leadership at the major consulting firms knows full well that their reputation is essential in order to maintain business continuity. Clear policies and practices are in place to ensure confidentiality as well as prevent conflict of interest. If one group of consultants is advising a manufacturer and a different set is advising a government regulatory entity those involved know full well how to practice ethical methods and processes. If they do not, it is their career that is at risk. Now the issues cited relative to McKinsey, especially the South Africa story, are well known and while it happened many years ago it did inform their practices over the past several decades. I look at consulting the same way I do representing defendants vs. being the prosecution in court. As a defense lawyer you take on a case because the defendant needs your expert assistance. Are some of those defendants risky and could cause a black eye? Yes.… Read more »

It’s amazing that the consulting industry has made it this far without some sort of oversight. Government regulation won’t stop these behaviors, mostly because business will always drive the engagement. But consulting firms should be pro-active in setting standards before the lawmakers step in.

One would hope that individuals involved in the consulting industry, not dissimilar to other industries, are acting professionally and with good intent. That said, consulting often gets low marks when it comes to honesty and reliability. More regulation will not overcome those who have less-than-reputable approaches.

If a consultancy practice earns a bad reputation due to systemic illegitimacy, they will likely have a difficult time regaining their footing. I believe that because of a few bad apples you don’t chop down the entire tree.

Properly aligned and with good practices, an outside viewpoint from a consultancy can bring significant value. Personally speaking, the insights and experience offered by our firm’s boutique and focused consulting for more than 40 years has certainly served our industry partners well!

McKinsey and other major consultancies are profit-seeking enterprises. How they get their revenues and continuously secure YoY growth is a function of their network/relationships, the quality and impact of the deliverables, and thought leadership which is more important here than in other industries. As comps get more difficult, lapses in ethics are more likely. Senior partners set the tone and expectations and realize firm and personal reputations are crucial to long-term success. The luster and seduction of large deals test principles. The largest consultancies need strong internal controls and oversight mechanisms combined with clear guiding principles that shape decisions within a transparent framework. When engagements hit nine or 10 figures, ethics becomes the first casualty. There are many smaller consulting companies that do tremendous work. While they also need guiding principles, the probability of an ethics lapse is significantly lower as they live or die according to their reputation. Clients need to do their homework, be internally clear as to why they are hiring, understand the motivations of the consultants and take responsibility for the… Read more »

So, what do you think about public defenders selected by the courts? Their job is to defend those who otherwise might not afford attorneys — and that includes those who are guilty of a crime. I think it’s impossible and not in the interest of free enterprise to set criteria for consulting companies. And for those companies, countries and agencies that are bad actors, there will always be those who assist them, whether they are grouped in the category of consultancies, foreign agents or those individuals who get paid to advise.

I have never been fond of the big consulting firms and made a conscious decision not to ever use them as a CIO – especially after cleaning up a big mess they’d made at one shop.

I used to say about a different one, “Have a five minute conversation over dinner, watch the consultant scribble on a napkin and the answer is always seven figures.”

None of this is new, though the scale and scope are sort of shocking. There was some oversight instituted, I think when the same firm that would audit would then send in its own consultants to “fix the problems they’d found.” I believe they can’t do that anymore. For the rest? Well…

The problems with global consultancy are two-fold and the path to solution is unique to each issue. 1. What to do about suspect business practices and the improprieties noted? This is not a problem that needs to be solved through regulatory oversight. The solution is best originated by the leadership of the Big 4 cleaning up their respective shops. Firms can differentiate by electing to not participate in certain types of projects or to represent bad actors. David Slavick commented how the option always exists to avoid specific categories due to philosophical or foundational policies. Those choices paint the firms’ brand and over time the marketplace will (or should) walk away from firms that continually pursue questionable clients and projects. 2. Do their services bring value for money? As I understand it, the biz dev process in this sector revolves around the C-Suite. When CEOs gain the confidence to not hire one of the Big 4, the balance of fees and services will begin to balance out. Maybe CEOs and their Boards need to have… Read more »

McKinsey has over 30,000 employees. I seriously doubt my one instance (good or bad) will influence the company or its market reputation. The company has been embroiled in scandals, political and apolitical because of one key fact — they work with powerful people at the heads of organizations. There will always be temptation and working with power means the allure of power and in turn scandal at all levels. However, consultants serve a critical need and sometimes they are used as a scapegoat for power, which the best firms have learned how to manage and mitigate. Even if they needed oversight, the independent nature of the business makes it almost impossible.

McKinsey has been under scrutiny because of its numerous connections to scandals. Their activities have been incredibly fallacious. Retailers are already struggling with the economic crisis. On top of that, wrong advice from such consulting firms can potentially do irreparable damage. However, everyone is aware of the housing crisis in 2008. Every accused party managed to bail out. In a similar vein, there’s a possibility McKinsey will be able to do so too.