How do you get one of the world’s most secretive business organizations to cooperate with the writing of a book that promises to air plenty of dirty laundry? Apparently, a nod from Jamie Dimon doesn’t hurt.
In a conversation with business-spin watcher Jack Flack, author Duff McDonald explains the unique challenges of writing The Firm, a full history the inner workings and impact of McKinsey & Company.
JF: McKinsey is well-known in corporate circles, but almost completely unknown to the general public. What interested you enough to take on a book?
DM: It was Jamie Dimon's idea, in a way. While I was working on my biography of Dimon, we talked a few times of his highly critical view of executives who can't seem to function without expensive management consultants. When he stopped speaking, he took a breath and said, "Except for McKinsey. They're different."
JF: So how do you research a book on an organization that is actually famous for its secrecy?
DM: The same way that you'd research any topic. Though one thing was different. One of the most difficult challenges on most projects is finding people to speak on-the-record while criticizing an individual or a company. But in this case, it was actually the opposite -- it was harder to find satisfied customers to talk. That's part of the whole compact of strategic and management consulting, which is that McKinsey, or any other consultant, doesn't get to publicly claim credit for a great idea. That will always accrue to the CEO.
JF: Given McKinsey's reputation for secrecy, what was your research strategy? Did you start with McKinsey itself, or avoid them as long as you could to fly under the radar?
DM: I spent some time gathering straw before I contacted them - three or four months. But you can only get so far talking to people you can be sure won't alert the subject to your work. It turned out, though, that they'd known all along. I'd told some 21-year-old on a dive boat in Barbados about it, thinking it was a safe move. His father-in-law is a partner at McKinsey. These people are everywhere.
JF: McKinsey is feared by some as today's version of the Illuminati, with tremendous but invisible influence. Did that ever concern you?
DM: Not in the slightest. Some CEOs, alumni and others are legitimately afraid of crossing them, for fear of being blackballed out of a community with long reach and influence. But what are they going to do to me? Get me fired? I don't even have a full-time job. They're smart enough too, to realize that outright or overt attempts to make my job more difficult could just as easily backfire as do as intended. More to the point, this isn't a criminal organization or even one that I was accusing of doing illegal things. People have been criticizing McKinsey since McKinsey's been in business. They're used to it.
JF: So you’re not checking under your car? And your phone calls are getting returned?
DM: There have been no repercussions. Things tend to play out that way when you give both sides a hearing. Again, what are they going to do to me?
JF: What surprised you most during the research process?
DM: I think the most surprising thing was that even companies that have received bad advice from McKinsey still tend to continue using them. From what I can tell, many big companies who can afford McKinsey consider it a required expense, if only for the purpose of maintaining contact with a great "aggregator" of best business practices and otherwise. Hell, even those clients whose information Anil Kumar was selling to Raj Rajaratnam remained clients of McKinsey after Kumar's arrest.
JF: How was the interaction with McKinsey? Did they circle the wagons?
DM: It took McKinsey a while to come around to what I would describe as meaningful, if still contained, cooperation. They're professional, they're responsive, and more candid with an outsider shoving his nose into their affairs than you might expect. While I would have liked to spend a lot more time with them or rooting around the company archives, the help they did provide proved invaluable to the book.
JF: What do you think prompted the shift?
DM: From what I'm told, they spoke to Jamie Dimon or one of his people. And he told them that while I might not write the book they'd want, it would be fair and balanced. Apparently, I'm the Fox News of authors. But I really don't know. Maybe they hoped it would die on the vine, and when they realized it wasn't going to, decided that cooperation was a better strategy than stonewalling.
JF: So what kind of access did you get?
DM: I spoke to several dozen senior people at the firm as well as every living managing director save Rajat Gupta. It seems he was indisposed.
JF: Any notable moments of candor?
DM: For a group of remarkably self-satisfied people, they're also remarkably self-aware of that self-satisfaction. There's a part in the book about the fact that McKinsey targets a very specific kind of hire -- the "insecure overachiever." I got that from them.
JF: In the book’s acknowledgements, you wrote that you hoped McKinsey communications director Michael Stewart would still speak to you. Any coincidence that he left McKinsey to join an agency a few months ago?
DM: Michael was great to work with. And while I'd like to think I'm powerful enough to get people fired with my writing, I'm sure his leaving McKinsey had nothing to do with this book whatsoever.
JF: Now that the book is out, what kind of feedback have you gotten from sources?
DM: People seem to love it.
JF: How about McKinsey?
DM: McKinsey, you might expect, has been a little more circumspect in their "endorsement" or even mere acknowledgement of the book's existence. I can tell you this, though -- they don't seem to hate it. Whenever an outsider writes something about a close-knit group, the outsider is going to see things a little differently than the group would have liked. And that certainly happened here. But not to the extent of the two of us looking at a color, with McKinsey calling it black and me white. It's all about the shades of grey.
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