Just read the book ‘When McKinsey comes to town’… the parallels with EM play book is scary.
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The funny thing about these consulting groups is many of the people who we hire from them to do studies are former ExoonMobil employees. I’ve offended wondered how wise this is. They left the company and may have an axe to grind with ExxonMobil. Could they be trying to burn the company down to get revenge and our executives are too impressed by their slides to see it?
Yes, some of McKinsey’s cultural insight isn’t awful. However, they give EM a package that it is up to EM to implement. The painful stuff (outsourcing) falls right down the alley of things ExxonMobil can actually accomplish. The positives (if there are any), like perhaps culture change and less internal work, we are incapable of succeeding at. So we execute the worst of the worst, and any good suggestions fall by the wayside.
Did a little reading on McKinsey after this post and it is quite fascinating. Would be interested if anyone has insight on their full assessment….aside from the 2-3 slides we recently saw trying to justify outsourcing and functional silos.
EM uses McK quite often, but even McK consultants have noted that the symptoms of “sunflower management” is the strongest they’ve seen anywhere.
Rank and yank: 5 performance buckets with the bottom bucket being let go. Right out of McKinsey playbook to Enron.
Meh...just go watch office space.
The HR cuts were a direct copy and paste from McKinsey; cut, cut, cut. What EM didn’t expect though was the extensive attrition of the excellent and outstanding buckets.
From Corporate Research E-Letter No. 29, November 2002
…pay attention to “new breed of tightly focused and vertically specialized ‘petropreneurs” and tell me that doesn’t sound familiar.
“Enron is the house that McKinsey rebuilt. The brightest minds at the world’s most prestigious consulting firm helped turn the lumbering old-economy gas distribution dinosaur into a new-economy success story envied by every corporation in America.” So wrote the British newspaper The Observer (March 24, 2002), which went on to wonder if McKinsey would suffer “collateral damage” from Enron’s collapse.
McKinsey’s relationship with Enron started in the 1980s, early in the life of the company created by the merger of InterNorth and Houston Natural Gas. Enron so valued the advice provided by McKinsey that in 1990 it hired the lead partner on the account, Jeffrey Skilling, to be its chief executive. Skilling, following the practice of numerous McKinsey alumni who took executive positions with clients, used his new post to continue giving consulting contracts to the firm. During the 1990s, McKinsey played a key role in helping Enron fashion its plan for transforming energy markets. By 2000, one of the firm’s senior partners was regularly attending Enron board meetings.
In addition to its internal work, McKinsey publicly held up Enron as a model of a new way to do business. A 1997 article in the firm’s journal, McKinsey Quarterly, celebrated Enron’s “new breed of tightly focused and vertically specialized ‘petropreneurs.’” A 2001 article in the same publication praised Enron for having “built a reputation as one of the world’s most innovative companies by attacking and atomizing traditional industry structures.”
The big question is what involvement McKinsey may have had in the practices that brought Enron down. In a cover story on McKinsey in its July 8, 2002 issue, Business Week quoted McKinsey Managing Partner Rajat Gupta as saying that “we did not do anything that is related to financial restructuring or disclosure or any of the issues that got them into trouble.” Yet as Business Week and other publications have pointed out, the McKinsey Quarterly published a 1997 article favorably describing Enron’s use of off-balance-sheet financing--the practice that the company took to extremes and that played a central part in its downfall.
Found the summary. Clearly DW has drank deeply of this koolaide. Also note that Enron was their energy poster child. Closely read the Enron investigation. With our emperor has no clothes mentality and competency problems coming from attrition and outsourcing, tell me we aren’t going to soon be toeing the same line? The only one who wins is McKinsey.
And to high performers leaving to McKinsey…. Yes, they are more morally vapid.
Good book. McKinsey and other consulting companies are valuable assets to improving ExxonMobil efficiency.