How McKinsey helps companies avoid responsibility
From the article: <i>“McKinsey started as a business that sold candid, dispassionate advice to corporate managers, but selling advice and building a brand around it also sets up a mechanism for diffusing responsibility. The managers can say they’re just following the best available advice, and the consultants can say they’re just trying to help their clients boost profits and efficiency.“</i><p>I spent some time with an Engagement Manager at McKinsey a few years ago, and he noted one function that they provide to executives is a seemingly neutral arbiter for tough decisions that may be politically untenable inside an organization. A CEO may know exactly what drastic steps they need to take, but will face internal executive strife, board pressure, or lack of buy-in from the business to execute. McKinsey provides credibility in cases of extreme actions (layoffs, re-orgs, shutting down business functions, etc), which is why the final deliverable of an engagement will often times simply state what was already known across the organization, but in a more packaged, compelling format. The same Engagement Manager then noted that if management doesn’t know exactly the “answer” is to the question they are asking, often times the McKinsey Partner supervising the case has seen the problem enough times to generally know the solution they will recommend out of the gate, as they specialize in industries. Their team arrives and then spends the cycles putting together justification for their upcoming recommendation.<p>It seemed to me similar to the old adage “nobody gets fired for buying IBM,” executives can lean on the good will of the McKinsey brand to justify and expedite certain tricky decisions. In many cases this is about providing confidence to move in a certain direction. This has two benefits: the broader organization can be told an outside firm was able to arrive at said battle plan - ideally increasing buy-in since the “experts” recommended it, and if things go awry the executive can point to the deliverable handed off by the consultants as the sanctioned playbook. So this “diffusing responsibility” is a feature, not a bug.<p>I’ve seen two solutions to some of the implicit problems described above, neither or which are cheap or easy: either A) the management team is solid enough and garnered enough goodwill that they can navigate such troubled waters (hard to do as the business scales) or B) An organization gets large enough they can fund their own internal management consulting team to tackle tough problems on a case by case basis - Samsung has used this across their business lines.