When Mckinsey Comes to Town

New York Times investigative reporters Walt Bogdanich and Michael Forsythe argue that behind McKinsey & Company's reputation as the world's most prestigious management consulting firm lies a pattern of harmful advice, pervasive conflicts of interest, and a culture of secrecy that has shielded the firm from accountability for decades.

The book opens with two case studies. At U.S. Steel's Gary, Indiana, plant, McKinsey implemented a cost-cutting plan called "The Carnegie Way" in 2014, leading to maintenance worker layoffs and restricted parts purchasing. Two workers died from electrocution in incidents tied to reduced staffing, and the government fined the steelmaker a total of $14,500. The CEO departed with a $4.54 million bonus after the company posted a $180 million loss. At Disneyland, McKinsey recommended sweeping maintenance cuts in 1997. A supervisor warned that safety was deteriorating and was later terminated. A series of accidents followed, including a riverboat incident that killed a passenger, a ride malfunction that left a four-year-old with permanent brain damage, and the 2003 Big Thunder Mountain derailment that killed Marcelo Torres. In both cases, the authors argue, McKinsey bore no consequences because it offered advice, not orders.

The authors examine the firm's culture and recruiting. McKinsey attracts roughly 200,000 applicants per year, hiring only one to two percent, and markets itself as offering purpose alongside wealth. Its foremost stated value, "put client interests ahead of the firm's," draws criticism from former consultants who argue it amounts to serving clients without moral limits. Several former employees describe moments of disillusionment: One quit after being assigned to help fire 1,500 workers; another wrote that he found himself "a party to the most damaging forces affecting the world" (25). Beginning in 2018, media reports about McKinsey's work with opioid manufacturers and autocratic governments triggered internal crisis. Kevin Sneader, elected managing partner, oversaw a new code of conduct but was voted out after a single term in 2021, the first managing partner ousted in 45 years.

A central thread of the book traces McKinsey's role in widening income inequality. In 1950, consultant Arch Patton conducted a landmark study of executive compensation for General Motors, helping launch decades of escalating CEO pay, which rose from 20 times a worker's income in 1950 to at least 351 times by 2020. The firm became what historian Duff McDonald calls possibly "the single greatest legitimizer of mass layoffs" in modern history (38–39), aggressively promoting offshoring and advising corporations on workforce reductions.

The authors document McKinsey's strategy of leveraging government consulting for profit. In Illinois, the firm did pro bono work in the 1990s, then secured more than $75 million in paid state contracts without competitive bidding. At the federal level, McKinsey held over $1 billion in government contracts, including at least $130 million with the U.S. Food and Drug Administration (FDA), while simultaneously advising pharmaceutical companies subject to FDA regulation.

The book covers McKinsey's work for U.S. Immigration and Customs Enforcement (ICE). The firm signed a contract worth more than $20 million during Obama's last year in office. After Trump took office, the project's scope shifted; McKinsey's own internal description of the work read, "Transformation design to increase arrests" (79). The firm recommended spending cuts on food, medical care, and supervision at detention facilities. A 2019 ProPublica investigation published in The New York Times triggered an internal revolt, with hundreds of employees challenging the firm's justifications.

The authors trace McKinsey's deepening ties to the Chinese government. The firm advised at least 26 state-owned enterprises designated as strategically important by Beijing. McKinsey publicly championed Beijing's Belt and Road Initiative, a global infrastructure and trade program, and the Made in China 2025 industrial policy. In 2018, the firm's Greater China team held its annual retreat in Xinjiang, four miles from a camp detaining Uyghur Muslims, a Turkic ethnic minority. Meanwhile, McKinsey took in hundreds of millions of dollars from the U.S. Defense Department, creating a conflict between its Chinese and American client bases.

A chapter uncovers McKinsey's previously unreported, decades-long relationship with the tobacco industry, dating to at least 1956. The firm simultaneously advised the FDA's Center for Tobacco Products on regulation and the world's biggest cigarette companies, a dual role unknown to senior former FDA officials. When Juul emerged as the dominant e-cigarette brand, McKinsey consulted for both Juul and its eventual investor Altria, helping Juul prepare its FDA submission and surveying which flavor names appealed to teenagers.

The book's most consequential revelations concern opioids. From 2004 to 2019, Purdue Pharma paid McKinsey $83.7 million. In 2013, the firm presented a strategy to "turbocharge" sales of OxyContin, a powerful prescription opioid, by targeting the heaviest prescribers and lobbying pharmacies to loosen restrictions. In 2017, McKinsey proposed that Purdue pay distributors a rebate for every OxyContin overdose. Two senior partners discussed destroying documents related to their Purdue work; both were later fired. McKinsey agreed to pay more than $600 million to settle investigations by state attorneys general. The authors also reveal that McKinsey cultivated a relationship with Alex Azar, Trump's Health and Human Services secretary, through the same partners who advised Purdue.

The authors argue that McKinsey's public advocacy for climate action contradicts its work for major polluters. Using internal records, they reveal the firm worked for at least 43 of the 100 companies responsible for the most carbon dioxide emissions since 1965. Former consultant Erik Edstrom, who joined the firm to combat climate change, discovered the Australian office celebrating a 26 percent production increase at a coal mine. In 2021, more than 1,100 employees signed an open letter demanding disclosure of clients' emissions.

The book traces McKinsey's role in promoting credit securitization, the bundling and selling of loans as tradable securities. Consultant Lowell Bryan launched the firm's "Securitization Project" in 1986, and McKinsey partners spread the concept to banks worldwide. Between 2001 and 2008, more than $27 trillion in assets were securitized, contributing to the 2008 financial crisis, which produced $22 trillion in losses and millions of foreclosures.

A chapter on insurance reveals how McKinsey redesigned Allstate's claims system after the insurer's 1995 spin-off from Sears, replacing experienced adjusters' judgment with a computer program calibrated to reduce payouts. Allstate's profit soared sixfold, and McKinsey sold the methodology to competitors. The authors also examine McKinsey's ties to Enron, led by former consultant Jeffrey Skilling, and the Houston Astros, managed by former consultant Jeff Luhnow, as parallel cases of results-driven cultures that collapsed into scandal.

The book's longest investigation covers South Africa, where senior partner Vikas Sagar secretly communicated with associates of the politically powerful Gupta family while cultivating relationships at state-owned enterprises. McKinsey negotiated a contract with the power company Eskom potentially worth $700 million without competitive bidding. Multiple government investigations exposed contractual irregularities, and the firm refunded more than $100 million.

In Saudi Arabia, McKinsey's practice grew from two projects in 2010 to 137 by 2016 under Crown Prince Mohammed bin Salman (MBS). The firm produced a report identifying Saudi dissidents, including Omar Abdulaziz, as having negative online influence. Within months, Abdulaziz's phone was hacked, his brothers were jailed, and journalist Jamal Khashoggi, who had been collaborating with Abdulaziz, was murdered inside the Saudi consulate in Istanbul.

A final chapter traces McKinsey's half-century involvement with Britain's National Health Service (NHS). The firm helped shape the 2012 Health and Social Care Act, which opened NHS spending to private companies including McKinsey client UnitedHealth Group. During the COVID-19 pandemic, McKinsey charged over half a million pounds to provide a "vision, purpose and narrative" for Britain's failed test-and-trace program.

The authors conclude that McKinsey's problems are structural. Its decentralized partnership model gives senior partners enormous latitude with insufficient oversight, while its culture of secrecy shields the firm from accountability. Nearly 100 current and former employees spoke to the authors, motivated by the gap between McKinsey's stated values and its actions.