The McKinsey Managing Partner, Bob Sternfels, was hauled before the U.S. House of Representatives Committee on Oversight & Reform on April 27, 2022. We have not seen tin ears like this since Jack Haley trod the yellow brick road with Dorothy and Toto.
Mr. Sternfels still does not see a conflict with McKinsey’s work in advising opioid firm Purdue even as it was advising the FDA. He said that, “McKinsey did not — did not–serve both FDA and Purdue on opioid-related matters.” Michael Forsythe, Walt Bogdanich, and Chris Hamby, “Lawmakers Dismiss McKinsey’s Apology on Opioid Crisis as ‘Empty,'” New York Times, April 28, 2022, p. A21.
Let’s see. McKinsey was working with Purdue and other opioid producers to stop FDA regulations on opioid safety restrictions . At the same time, McKinsey was working with the FDA on its organizational structure and processes. Processes must not include include agency rule -making. The Barometer is quite certain the FDA never mentioned opioids, its singular biggest challenge in working with its consultant on how to run the agency. Likewise, the Barometer is quite certain McKinsey never mentioned opioids in its work with the FDA. Ergo, no conflict to see here. Move along.
The committee members were on a fool’s errand in seeking a conflicts admission from McKinsey. McKinsey does not see conflicts. McKinsey does not have conflicts. McKinsey is not subject to the ethical constraints of conflicts of interest. And McKinsey is shocked, shocked that anyone would suggest it might have had a conflict or two in its history.
Stunningly, this whopper of a stance was not the worst part of the hearing. The worst part was a McKinsey slide from its work with Purdue to turbo charge opioid sales. The slide looks like something undergraduates in a marketing class would develop for their team project. Developed at about 3:00 AM the day the team project was due, and probably after some frat-level drinking. There is a picture of a man wearing dollar-sign joke glasses fanning dollar bills. There are terms such as “regular champions” and “superstars” that Purdue was to use for its salespeople. Those reaching champion level would get cash and the chance to meet, in the boardroom, the CEO! There was even a picture of Donald Trump and “The Apprentice” logo on the slide. The Barometer wonders whether McKinsey got permission to use both the photo and the logo for its commercial purposes.
The slide tells the whole story of McKinsey — tawdry and worn sales tactics pawned off by Harvard MBAs on boards and managers too gullible to see the sophomoric content of their consultant’s work product.
There’s a reason McKinsey had to ante up $600 million to settle with the government for its role in the opioid crisis. They were pushing sales as deaths and addiction climbed. The firm was all in on selling, selling, selling. But McKinsey’s apology in the hearing was, “Who knew?” Mr. Sternfels’ only regret was that McKinsey “failed to recognize the broader context of what was going on in society around us.”
Funny, the Barometer thought that was why companies paid consultants –to tell them just that — what they were missing in running their businesses. McKinsey just joined the party to “springboard” Purdue in its “once in a lifetime” opportunity for success. Worked out really well for everyone.