Read Online The Firm: The Story of McKinsey and Its Secret Influence on American Business by Duff McDonald - Free Book Online

sentencing, he expressed remorse for the negative association McKinsey had suffered from his case despite his having retired from the firm. “I am extremely sorry for the negative comments from clients and the press that McKinsey has had to deal with,” he said. “I take some comfort that, given the strength of the firm, I hope that it will not suffer any long-term reputational harm.”
    The soul-searching at the firm and among alumni went deeper than examining the moral and ethical failures of two men. “I think it goes back to what happened after Marvin left,” says one longtime and now retired partner of the firm. “Ron Daniel didn’t entirely take up the mantle of Marvin’s value-driven approach. And that left the door open to start focusing more and more on measurement of results by financial returns. Which created an environment where someone who was very good at producing those returns could lead the firm without the checks and balances Marvin put in place. That led to two separate things. The first was Gupta. The second was the abandonment of our top-management approach.”
    He continued: “But again, it’s much larger than Gupta himself. The revelation that someone who had led the firm for ten years could haveso lost sight of the value systems that Marvin had built into the place made me aware of both how far the United States had moved in a money-is-all-that’s-important direction as well as how far the financial community had lost sight of why it was set up in the first place, which was to help actual companies doing actual things. And there is no doubt that the modern McKinsey is part of that malaise. Of course, it’s very hard to see something you gave fifteen years of your life to succumb to such a different set of values than the professional ones it once had. But to have the leading nation in the world lose its soul is a much bigger loss than the mortification of Rajat Gupta.”
    Still, there was no question that McKinsey was left to wonder how, just nine years after his death, the spirit of Marvin Bower had been so desecrated in such a short period of time. “Marvin Bower said they were greedy fucks at the end,” said one client who knew the man. “He was old but lively.” And at least in this case, it seems he was right.
Who Are We?
    In the search for answers in the midst of the Kumar/Gupta scandal, McKinsey turned inward. And it didn’t like what it saw, which was a firm that had deceived itself into thinking that the Gupta-era excesses had been left behind. It had merely papered over the problem and missed a fundamental—and permanent—change in the nature of the firm. At its current size, McKinsey could no longer assume that Marvin Bower’s principles would endure.
    “The stuff with Anil [Kumar] was noteworthy in the effect it had on people,” said Michelle Jarrard, director of firm personnel. “It was a disappointment, and we can’t pretend it’s not. You might try to tell a silver-lining story about the fact that it caused us to increase our vigilance going forward, but it’s fair to say that it hurt.” 26
    One obvious issue raised by the Kumar incident, in particular, is that of the senior person too far out on the fringe of a large and growing company. Did he engage in illegal behavior purely out of greed? Or out of frustration at not being close enough to McKinsey’s inner circle? In a sense, McKinsey might have been a victim of its own success. It was now so large that the chance of a partner’s becoming disaffected had risen along with the company’s top and bottom lines. In the 1980s, for example, about half the firm’s directors were on either the shareholders committee or the directors committee. If you weren’t one of these directors, you certainly knew many (or all) of them, so few partners could get lost in the wilderness. By 2011 that proportion had fallen to about 10 percent, and the odds of disenchantment had risen inversely.
    “I’ve talked to Dominic