Motley Fool Money McKinsey’s Hidden Influence
Nov 6, 2022
Michael Forsythe, an investigative reporter for The New York Times and co-author of "When McKinsey Comes to Town," dives deep into the hidden power of McKinsey & Company. He discusses why Fortune 500 companies shell out millions for their advice and exposes the ethical dilemmas behind their influence, especially in the pharmaceutical and auto insurance sectors. Forsythe also sheds light on the troubling advice given to U.S. Steel, raising questions about consulting practices that prioritize profits over safety and ethics.
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McKinsey's Influence
- McKinsey stands out among consulting giants due to its prestige, global reach, and long-standing relationships with Fortune 500 companies and governments.
- It offers access to high-level executives and a broader diffusion of knowledge compared to other firms.
Value Proposition of McKinsey
- Fortune 500 companies pay McKinsey millions for knowledge, its diffusion, and the prestige of their advice.
- Sometimes, McKinsey's imprimatur justifies painful decisions like job cuts, which companies already knew they needed to make.
McKinsey's Impact on Walmart
- At Walmart, McKinsey advised letting go of long-term employees due to higher costs, aligning with Walmart's low-price strategy.
- This showcases McKinsey's focus on client interests, even if it leads to negative societal consequences.
