Consultants get a bad rap. Some may argue unfairly so. But when you pause to consider what McKinsey & Company has been up to recently, it seems this negativity might be well-earned.
From offering bad advice to working with corrupt entities, the consulting powerhouse has been embroiled in scandals around everything from corporate culture complaints to big pharma cuddling and conflicts of interests.
However, McKinsey’s largest scandal came last month when the company agreed to pay $574 million dollars to US authorities as part of a settlement for its role in America’s raging opioid crisis which killed almost half a million Americans between 1999 and 2018, and is still ongoing.
McKinsey had to pay these reparations after working with pharmaceutical companies like Purdue Pharma to push OxyContin – a now ubiquitous opiate-derived painkiller – onto the US market.
Prosecutors investigating McKinsey’s role in the crisis found that the consultancy company had “turbocharged” the sale of addictive opioids, including advising its pharma clients on how to aggressively sell the addictive drugs – including marketing the drugs through doctors who were more likely to prescribe them.
“Few firms have ever paid this large a penalty, for anything. As for scrutiny, McKinsey is clearly facing more than it used to,” Duff McDonald, author of The Firm: The Story of McKinsey and Its Secret Influence on American Business, told TRT World.
The fallout has shaken McKinsey internally; managing partner Kevin Sneader, 54, was voted down in February to be replaced by Bob Sternfels.
Sneader’s ousting was set in motion in February when Sternfels and another hopeful, Sven Smit each won enough votes to jettison Sneader who had led the firm since 2018. When Sneader officially steps down on July 1st, will become the first managing partner to serve only one three-year term since 1976. Sternfels, 51, will be the 13th partner to lead the troubled consultancy firm since its inception in 1926.
The Financial Times reports that Sternfels’ current role is “akin to a chief operating officer” and in his new role as global managing partner he will be given the challenge of “stabilising a consultancy shaken by reputational crises that have raised questions about its culture, growth strategy and governance.”
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