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McKinsey to pay $573M to settle claims over opioid crisis role: source

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351–360 of 572 posts

Re: McKinsey to pay $573M to settle claims over opioid crisis role: source

#351

Let's not forget, these are the same consultants that did work for Enron, work leading up to the 2008 financial crisis.[0] McKinsey is also advising various government agencies on optimizing their Covid-19 response[1], generating revenue of $100m and counting. [0] https://en.wikipedia.org/wiki/McKinsey_%26_Company#Controver... [1] https://www.propublica.org/article/how-mckinsey-is-making-10...

This type of scenario is probably the primary reason for the existence of management consulting firms: to have someone to point the finger to when risky decisions go tits up.

Re: McKinsey to pay $573M to settle claims over opioid crisis role: source

#352

Ex McK-Intern here: From my short-term experience, I'd say there are folks who genuinely want to help their clients while others are mostly in for the prestige and the money. The business model of staffing young graduates alongside more experienced people is actually quite reasonable as the experts could steer the overall project while the juniors would do the number crunching and info gathering. I personally see the…

I've worked with all of the big five and I can assure you there is little to no value that they bring to the table. It's all smoke and mirrors dressed up in suits and sprinkled with corpo-talk that makes no sense if you're a domain expert.

Also, deploying clueless but well dressed junior people and only sending the seasoned specialists to extinguish fires is not a reasonable model. I mean it is if your sole goal is to rip off your client with delivering minimum value.

Re: McKinsey to pay $573M to settle claims over opioid crisis role: source

#353

When company management wants to make a big change they hire consultants to provide cover and justification for it. The consultants role is to agree to and implement whatever the management's desired change is. The consultants exist to provide an air of authority behind the decision and to act as a smokescreen to the employees facing the change. If the plan succeeds, upper management takes the credit. If it fails, th…

> When company management wants to make a big change they hire consultants to provide cover and justification for it. [..] Companies like McKinsey will say whatever you want them to say, and there is no shortage of conflicting case studies to 'prove' their points.

Not really, there are plenty of cheaper companies you can hire to do this when you know the solution and just need to bring in someone to do something unpopular - McKinsey is expensive!

In my experience there are 4 key types of job. I've put my own percentages for what I have experienced, but different people in different companies will obviously vary dramatically.

* Problems where the client genuinely doesn't know the right solution, and wants you to help (30%-40%)

* Problems where the client knows a kind of half-baked solution, or has a load of ideas, and wants you to make a fully-baked solution (30%-40%)

* Problems where the client knows the solution, and you are assisting in implementation/further work because the client doesn't have resource or time to do it, or wants someone with specific skills that they don't have internally, for example procurement support, negotiating a merger/acquisition, time sensitive projects e.t.c. (20%)

* Problems where the client knows the solution, and just wants you to tell it to them in a report because that gives it authority or the consultants can take the blame (less than 10%)

Re: McKinsey to pay $573M to settle claims over opioid crisis role: source

#354
post #204
post #188

$573M will be minimally felt at the organization level. It is less than 5% of global revenues.

5% of total revenue is a MASSIVE charge. Most companies in the world have profit margins lower than that. They will absolutely feel that in their financial statements.

This is not a retail merchant. This is a big five consultancy. I can assure you their margins are well above 30%.

Re: McKinsey to pay $573M to settle claims over opioid crisis role: source

#355

I know someone who worked for McKinsey for a few years, and some of the projects he described were straight up slimy. The one I recall right now was helping a big payday lender (read: large scale loan shark) figure out how to get their money back from people who were behind on their payments. The problem was that they can only attempt to withdraw so many times from someone's bank before they're banned, so the agreed…

Considering the sacrifice and hard work that people make to get into a top management consultancy, no one leaves due to ethical concerns. If they do, the entire world comes to know about it through self-promotion (hire me! buy my book! hear my TED talk). People rationalize morally questionable behavior in all walks of life. Management consultants aren't even the decision makers who have to pull the trigger, and it's far easier to sleep at night as an advisor than it is an operator.

Re: McKinsey to pay $573M to settle claims over opioid crisis role: source

#357
post #151

Earlier quoted context omitted.

That’s incredibly normal. It’s a regularly negotiated term that’s used to shield the wrongdoer from continued civil liability. Frankly, I think it’s such transparent bullshit that we should abolish it. Really, you admit to no wrong doing but you’re willing to fork over half a billion because ...?

If you're going to be made to pay out and concede liability, why not simply go to trial and suffer the same legal fate? It's not there as a mere legalese recitation or to shield the defendant's ego. To finish your rhetorical question, the reason you pay out but admit no wrongdoing is in recognition of the risk of financial liability stemming from the litigation.

I want them to go to trial. I think it’s incredibly unseemly that we as a society bring down the hammer on individual drug dealers, but let corporate ones wash the blood off their hands with shareholder money.

Each one of these people deserves a pair of steel bracelets and their day in court in front of a jury of their peers.

Re: McKinsey to pay $573M to settle claims over opioid crisis role: source

#359

Earlier quoted context omitted.

As a very early P2P lending participant in the early days of Prosper Lending, I've seen the other side of this. Many borrowers adopt a mindset that they have earned the money they borrowed and don't feel that they need to pay it back. I came in to Prosper with a distaste for the apparent predatory lender tactics and came out with an appreciation that not everything that seems predatory really is. While there are plen…

Asserting your debt as more important than someone's housing does seem like a pretty shitbag thing to me.

I understand the compassion behind your point, but to play devils advocate: doesn’t every bank that holds mortgages and every landlord assume this very thing?

Fall behind far enough and your debt takes priority over staying in your home. Hell, even the government will kick you out if you fall behind far enough on property taxes

Re: McKinsey to pay $573M to settle claims over opioid crisis role: source

#360

This is far too low. A fine large enough to destroy the company (as was effectively done to Purdue) would have been the only palatable outcome. And even more importantly, legal repercussions for all their employees who were personally responsible for this. All this settlement achieves is 'a cost of doing business', as they say. It's not punishment or deterrence. McKinsey and other companies like them will do similar…

If big companies started facing consequences for their actions our economy would fall apart.
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