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McKinsey damage control


alee228

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  • 2 years later...

Is it surprise that Indian does dodgy deals? Gupta has charisma, but cultural tenancies are hard to break.

 

McKinsey survives unscathed. LIkely because Gupta was retired, and so spotlight fell on him and not McKinsey.  Also, McKinsey has impressive alumni network in high places, they have a vested interest in shielding firm from any fallout. 

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  • 3 weeks later...

I agree with CbrConsultant.

 

Gupta is for all intents and purposes American, and we know that in the fall out from the financial crisis many wealthy and/or powerful American business people were found to be taking liberties with their privileged positions within society. They came from many different cultural backgrounds, and falling back on cultural stereotyping in the Gupta case does not help us understand the issues more clearly or help shine additional light on what happened.

 

In my experience, insider trading is an ongoing problem in the financial markets, but one which is only mentioned and examined during financial downturns when the government is under pressure to find money and produce reasons for the crisis (and find scapegoats to blame). 

 

But the more interesting question is why did McKinsey not suffer any real harm from the scandal?  

 

I had the privilege of chatting with Ian Davis last year at a networking event at Oxford's Said Business School. I challenged him on the McKinsey brand and why it would continue to endure. His answer was a straight forward one. He stated simply that McKinsey hires excellent staff who produce quality work in the areas where they compete. In the mine of graduates, there are 3 top firms McKinsey, Bain and BCG. But in the mind of clients, Davis said that the story is a different one. McKinsey might competing with LEK in one engagement, or BearingPoint in another. His view was that the brand is simply a function of the quality of the work which the firm continues to produce. 

 

For my part, I think Davis' argument is a strong one, but it glosses over a few details.

 

To understand why McKinsey's brand was not damaged it is important to understand "what is a brand?" McKinsey's brand is its corporate reputation, what people say about it when it's employees are not within earshot. And so, Davis' answer provides one piece of the puzzle. Even though the Gupta scandal may have looked bad for McKinsey, Davis argued that clients continue to regard McKinsey as the best consultants in the areas in which they compete. This is most likely true. However, one aspect that Davis didn't mention is that many McKinsey clients are also McKinsey alumni. As Eric mentioned, McKinsey has an impressive alumni network and the alumni have a vested interest in protecting the reputation of a firm which helped them to excel in their careers. 

 

Relevant to this discussion, Duff McDonald has produced a history of McKinsey called The Firm: The Story of McKinsey and Its Secret Influence on American Business.

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CbrConsultant, sorry, didn't mean to offend.

 

In considering these issues, I think all aspect should be considered. Even if not PC to do so.

 

As Tom suggest, insider traders caught breaking law came from many cultural backgrounds. Agree with this. 

 

Though, I did read some commentor that said Gupta's cultural background made him easy scapegoat for the WASPs.

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Eric,

 

I agree that we should be open to discussing all aspects of an issue, even if it involves a person's culture. Can I suggest, however, that if you want to make statements that concern a person's cultural background that you provide more substance and context. This will help you avoid giving us the impression that you are intolerant and prejudiced.

 

I'm not aware of Gupta being targeted based on his cultural or racial background. The reality is that he was a very well well connected and respected individual within the American business community. It may be that he was used as a high profile scapegoat, but if he was then this would be a result of his status within the business community, not his cultural background.

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