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McKinsey on long-term capitalism

Traditionally I’ve been in two minds about McKinsey. On the one hand I’ve admired their global reach and ability to influence chief executives and politicians.

Like all the management consultancies, they jumped on sustainability and responsible business five or so years ago as a new long term trend they could “monetise”, as they might put it.

(Thankfully no management consultant I have come across has yet said there is a “burning platform of opportunity for CR”. That was a term I used to hear them say all the time in the dot.com boom. It was usually uttered by a perma-tanned silver-haired partner often named after a second division Scottish football team, a ‘Hamilton Academical’ or ‘Partick Thistle II”, working for a big management consultancy in the US and who lived on permanent conference calls. For ages I mis-understood and thought a “burning platform” meant someone had accidentally set their treehouse on fire. But I digress)

On the other hand, I have found the management consultancy industry’s volte-face away from shareholder value to ‘stakeholder considerations’ a little abrupt and nakedly commercial. And I cannot forget Malcom Gladwell’s point about McKinsey creating Enron’s management ethos (and more).

The recent accusations being bandied about in high-profile US court cases also leave something of a sour taste in the mouth.

About four years ago, we published an excellent and thoughtful essay on McKinsey’s culture and history at this link. (free to my blog readers)

I would imagine the court case currently in the news involving a former McKinsey partner is a one-off, rather than a systemic problem. McKinsey had better hope so, or they could go the way, spectacularly, of Arthur Andersen not a decade ago.

Given McKinsey’s power to influence powerful individuals, the 2005 essay “The biggest contract” by then-MD Ian Davis (in response to the Economist’s broadside against CSR) was a smart move and a watershed moment of sorts for responsible business.

It didn’t tell anyone working in the field anything new, but it represented a serious shift towards sustainability in the upper echelons of management consulting.

Now that thinking has been updated and expanded to summarise the challenges of long term capitalism and sustainable economic thinking in a new Harvard Business Review essay. It’s by the current McKinsey boss, Dominic Barton, and it’s well worth a read.

I have ’embedded’ it below in the blog, and those reading via email can click on a link below to get it. You should all print it out and read it.

That’s not because it points out anything new, but what it does superbly is summarise the challenges, and sensible potential solutions for governments and business.

This kind of clear, easy to read in the back of a limo/front of a plane summary is vitally important. As we know, people in power have to read selectively and concisely. So articles like this, in publications with a wide reach, such as HBR, can really make a difference.

Decide for yourself, but I think it’s an excellent piece. Click here or read below for some solid insight.

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