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The Japanese word amakudari, meaning descent from heaven, applies neatly to the senior jobs former McKinsey highups often land. Kevin Sneader’s fall from the apex of the elite consultancy is more abrupt: he has been voted out as global managing partner after high-profile crises.
McKinsey recently agreed a $574m settlement with US states for advising pharmaceutical groups on opioids strategy. It meanwhile closed an investment bank research team amid controversy over data provenance.
These events have tarnished McKinsey’s shine. Partners will hope removing Sneader from his leadership role will allow the consultancy to repair the brand mystique it partly depends on to win business.
An important asset here is McKinsey’s 42,000-strong alumni group, spread across 123 countries. Evidence of this is seen around the globe, from Sundar Pichai who heads up Google to Greek prime minister Kyriakos Mitsotakis.
Lex research shows former McKinseyites sit on boards or in C-suites of more than 70 S&P 500 companies, more than a quarter of the index’s market capitalisation of over $30tn. Encompass all executive roles and you get close to half the market and 128 companies. That is a big sphere of influence.
The philosophy is simple: hire the best, train them well and former employees will go on to big things. Consulting has long proved a magnet for bright young people. About 22 per cent of Harvard’s latest crop of graduates opted for the profession.
In England, there is a public debate over emergency awards of public contracts. McKinsey won an early contract to advise the government on a new public health authority: six weeks work for £563,400. Former McKinseyite Dido Harding went from heading England’s test and trace programme to running the new National Institute for Health Protection.
All told, McKinsey has won £218m worth of UK central government contracts in the past three years, according to data group Tussell. That gives it the highest share among the global strategic consultancies.
Franchises such as McKinsey are incredibly robust. The risk that scandals will reduce recommendations from alumni will reduce with time. A bigger danger is that the firm is seen as representing an old elite order, not least by potential recruits. Sneader’s removal is an opportunity for McKinsey to neutralise that threat.
The Lex team is interested in hearing more from readers. Please tell us what you think of McKinsey in the comments section below
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