Questionable ethics, a culture of secrecy, astronomical prices: McKinsey & Company’s reputation has been badly shaken in recent years, but this has not prevented Quebec and Ottawa from awarding tens of millions of euros to the American consulting firm.
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McKinsey’s most recent setbacks began in South Africa in 2017, when the company was embroiled in a massive corruption scandal that also involved Canadian companies Bombardier and EDC. Other scandals then broke out elsewhere.
“The ‘McKinsey Values’ state that consultants must put the client’s interests ahead of the company’s. But when a customer is bad, McKinsey can do real harm,” New York Times reporter and author Michael Forsythe, along with colleague Walt Bogdanich, said of the shocking book When McKinsey Comes to Town, published last fall, to the journal.
In their book, the two journalists recount how McKinsey pushed Walt Disney to cut maintenance on its amusement park rides, which led to fatal accidents in the late 1990s and early 2000s, and credit McKinsey’s work for authoritarian states like Saudi attentive Arabia, Russia and China.
customers in Quebec
McKinsey has made a name for itself advising major corporations around the world, including Desjardins and Bombardier in Quebec. In a book published in 2014, journalist Duff McDonald argues that McKinsey may be the entity that has “most legitimized” mass layoffs in modern history.
So why do governments rely so heavily on such a sulphurous company?
“Because in politics, like anywhere else, everyone is afraid to make important decisions,” replies Mr. McDonald. […] McKinsey consultants use data-driven analysis to suggest they can predict the future, making it easier to make decisions in the face of the unknown.”
Bureau-Blouin works there
McKinsey has had a presence in Montreal since 1991 and counts among its advisors former student leader Léo Bureau-Blouin and Marc Tellier, former CEO of the publisher Pages Jaunes.
However, the most powerful Quebecer at McKinsey is Éric Lamarre, who headed the Montreal office from 2006 to 2011 and the Canadian subsidiary from 2011 to 2016. He currently sits on the company’s board of directors.
Several of the scandals that have rocked McKinsey in recent years occurred when Canadian Dominic Barton served as the firm’s global director from 2009 to 2018.
However, starting in 2016, the federal government began awarding more and more contracts to McKinsey. In six years, Ottawa will have paid more than $66 million to the company, half of it in fiscal 2021-2022.
The following year, Prime Minister Justin Trudeau appointed Mr Barton ambassador to China, a position he held until the end of 2021.
McKinsey has also convinced public decision-makers in Quebec. In recent years, the Legault government, Hydro-Québec, the Caisse de depot and Investissement Québec have paid around US$50 million for the firm’s advice.
No wonder. One of McKinsey’s strategies is to make itself indispensable to its customers.
“When you join an organization, you should spread out and do everything there,” summarizes a former company cited in When McKinsey Comes to Town.
McKinsey in brief
- Foundation, endowment : 1926
- Income: over $15 billion
- Customers : 3000
- Employees worldwide: over 40,000
- Arrival in Canada: 1968
- Employees in Canada: more than 1000
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