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How McKinsey Lost Its Way in South Africa

nytimes.com

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Re: How McKinsey Lost Its Way in South Africa

#21

Post by wernsey »

sgift wrote: post #9
sonnyblarney wrote: post #5

Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do really anything really wrong or corrupt, there are other actors who are clearly to blame, but let's blame the Western Colonialists! This is a bad meme. First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. The…

> Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do really anything really wrong or corrupt, there are other actors who are clearly to blame, but let's blame the Western Colonialists! That's the long and short of it. I read that article twice now and all comes down to 'South African law forced them to get a local…

The allegations are more that McKinsey specifically chose a partner that they knew was well connected with the political elite in order to have government business sent their way.

Yes, it is true that the South African law forced them to get a local partner. During the apartheid years black people were limited in where they were allowed to work, and this law is an attempt to rectify the past. Unfortunately this law is also abused by well connected politicians to enrich themselves and their cronies.

Where things went wrong for McKinsey here is that the local partner they chose, Trillian, had a shareholder that was a well known associate of the Gupta brothers, and the Gupta brothers had a relationship with the president, Zuma, and his son. It also later emerged that the CEO of Eskom and his CFO had a relationship with the Gupta brothers.

[1] https://www.dailymaverick.co.za/article/2017-09-14-scorpio-a...

Re: How McKinsey Lost Its Way in South Africa

#22

Post by apexalpha »

sonnyblarney wrote: post #5

Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do really anything really wrong or corrupt, there are other actors who are clearly to blame, but let's blame the Western Colonialists! This is a bad meme. First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. The…

>First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. They're smart people who make slides. Sometimes they have specific knowledge.

This!

These 'management consultancy' firms are essentially programming libraries in real life: they recycle and reuse proven methods from other companies (that they worked for) and use it at yours so you don't have to reinvent the wheel.

Don't hire consultants for something your organisation can (and should!) do itself and don't ask them for advise on something that can't be realistically quantified in excel.

And watch out for managers using consultancy firms to outsource decision making.

Re: How McKinsey Lost Its Way in South Africa

#23

Post by ti_ranger »

sonnyblarney wrote: post #5

Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do really anything really wrong or corrupt, there are other actors who are clearly to blame, but let's blame the Western Colonialists! This is a bad meme. First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. The…

"--> So why isn't this article about the Guptas?

Shouldn't the headline be: "Indian-South African Gupta family swindles South Africa yet again?""

1)A corrupt transaction requires the cooperation of at least two parties. If the Guptas could not find any co-conspirators, their ability to extract money from the South African government would have been reduced.

2)There are enough articles about the Guptas; there hasn't been enough coverage of the companies that enabled their corrupt transactions.

"But they're clearly not the bad guys, and not even 'knowing enablers'."

They aren't good guys, and they most certainly were enablers, the fact that they didn't do enough due diligence to 'know' is on them, and they will need to account for this and/or suffer the consequences.

Re: How McKinsey Lost Its Way in South Africa

#24

Post by xkcd-sucks »

jessaustin wrote: post #19
mad_tortoise wrote: post #15

Earlier quoted context omitted.

You are totally wrong as another commentator pointed out. Mckinsey knowingly incited and spread racial hatred for their personal gain, and pushed the idea of "white monopoly capital" so that the ANC could leverage that as a political point. The result being highly inflamed racial tensions on their part, not only this but they were paid by Gupta linked companies and organisations. The Gupta's, an Indian billionaire fa…

You're going to have to link to something if we're to have any idea what you're talking about. The only thing in TFA that seems remotely related to this racial stuff is this: They were part of a notably diverse group. Given South Africa’s historic battle against apartheid, it was a point of pride at McKinsey that more than 60 percent of the office’s 250 employees were black South Africans. This doesn't seem like a ba…

>It seems unlikely that ANC would have needed to hire management consultants to identify racial inequality as a political issue

But a great way to convince white people that it's an issue

Re: How McKinsey Lost Its Way in South Africa

#25

Post by anonu »

My favorite McKinsey failure is the one where UBS (the Swiss Investment Bank) brought them in circa 2000 to understand how they could better expand in the USA. McKinsey said something along the lines of "Well - you guys have very little subprime mortgages exposure and we think this is the next hot thing - you guys need to move all your chips into subprime".

Fast forward 7 to 8 years and the US was hit with one of the biggest financial crises ever. Caused by what? Sub-prime debt. UBS had some of the biggest debt writeoffs - maybe 2nd to Citi.

Source: There is a post-mortem report that UBS released after the financial crises that explains how they got there.

Re: How McKinsey Lost Its Way in South Africa

#26

Post by monique212 »

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Re: How McKinsey Lost Its Way in South Africa

#27

Post by richardw »

sonnyblarney wrote: post #5

Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do really anything really wrong or corrupt, there are other actors who are clearly to blame, but let's blame the Western Colonialists! This is a bad meme. First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. The…

"Ah well we charged a bit more than we should have and we were a bit weirded out by working with the mafia, but we didn't actually kill anyone so really we were basically angels."

The Gupta's are known crooks. That's where the ultimate blame lies. That doesn't stop this from being a great cautionary tale for consulting companies who work in countries where this type of thing is more likely.

Re: How McKinsey Lost Its Way in South Africa

#28

Post by tim333 »

sonnyblarney wrote: post #5

Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do really anything really wrong or corrupt, there are other actors who are clearly to blame, but let's blame the Western Colonialists! This is a bad meme. First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. The…

Maybe "Indian-South African Gupta family in association with Indian McKinsey partner swindle South Africa yet again?"

>The #GuptaLeaks includes emails between Essa and Sagar dating back to August 2014 https://www.dailymaverick.co.za/article/2017-09-14-scorpio-a...

That was a couple of years before "McKinsey hired a private investigative firm to dig into Trillian’s background" and found to their shock Essa ran it.

Some more on Sagar https://www.biznews.com/sa-investing/2017/07/14/vikas-sagar-...

Re: How McKinsey Lost Its Way in South Africa

#29

Post by hectormalot »

jessaustin wrote: post #17

Also troubling was the fact that McKinsey had won the contract without competitive bidding. One finds this nugget more than halfway through longish TFA. This really buries the lede. Without a competitive bid process, a public organization is at the mercy of its stupidest and most corrupt officials. When a tiny town in the middle of nowhere wants an abandoned building torn down, they don't call the mayor's cousin. The…

Don’t really agree with the idea that everything should be tendered. Tenders are a poor fit for complex situations where the complete path is not clear. To use your analogy: what if the tender included selecting the building to tear down as well as demolishing it? Without further specification, the winner of the tender could have an abnormally low price, be incentivized to pick the easiest building to demolish, and leave the rubble on site because you forgot to define what demolish actually means.

In coding terms: if you can do it waterfall then you can probably tender it, otherwise I’m not so sure.

Re: How McKinsey Lost Its Way in South Africa

#30

Post by sonnyblarney »

apexalpha wrote: post #22
sonnyblarney wrote: post #5

Ok, I find this very problematic - along the lines of 'Hey, our country is massively corrupt and dysfunctional, and these Westerners came in and didn't do really anything really wrong or corrupt, there are other actors who are clearly to blame, but let's blame the Western Colonialists! This is a bad meme. First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. The…

>First - don't trust McKinsey or any consultants to implement anything unless it's been done before and clear. They're smart people who make slides. Sometimes they have specific knowledge. This! These 'management consultancy' firms are essentially programming libraries in real life: they recycle and reuse proven methods from other companies (that they worked for) and use it at yours so you don't have to reinvent the…

They actually do novel stuff, that's not 'off the shelf' - they have smart people who can make smart assertions ... but implementation is hard in any context.
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