In 2001, Edwin Black published a book on IBM and it’s technologic involvement with the Holocaust. In IBM and the Holocaust: The Strategic Alliance Between Nazi Germany and America’s Most Powerful Corporation, Black tells the story of how IBM’s German subsidiary used the Hollerith punch-card technology to identify and catalogue Jewish people within the country. Whilst I’ve yet to read the book I discovered in our local library stocktake sale, it’ll be interesting to see—through the work of investigative journalism or critical design studies—just how much things have not changed since the 1930s.
Parallels with the IBM and Nazi story can be found in the 2022 book When McKinsey Comes to Town written by Walt Bogdanich and Michael Forsythe which I have read over the last ten days. Building on testimony from former McKinsey-ites, internal documents and publicly available information (including court cases), the authors have pulled together compelling evidence of a company that has wreaked havoc across many parts of the world. Bogdanich and Forsythe tell us that whether in South Africa, the UK, Saudi Arabia or across America, McKinsey has used it’s questionable management ‘expertise’ in support of despots, death and destruction. It’s a compelling read and not only because of the forensic analysis of disastrous (and life-taking) McKinsey advice for global leaders in theme parks, tobacco and vaping, insurance, steel manufacture, public transport, national government and health care amongst many others.
One example—the acquisition of Elixir by McKinsey in Saudi Arabia—to enable it to get closer to the Saudi Royal Family raised my eyebrows (2002, p.249). McKinsey bought Elixir in 2017 at a time when such acquisitions were avoided in deference to “organic growth” (ibid). But since then, we’ve seen many acquisitions by large corporate firms like McKinsey.
In McKinsey’s case, the acquisition in question made sense when trying to get closer to Saudi ministerial posts but, I wondered, why all these design company acquisitions? What do the Big Four consulting firms see and need in acquiring design agencies such as Lunar (McKinsey), Fjord (Accenture) Fluid (PwC), Brandfirst (Deloitte)? Is this merely a purchase of the client book and a removal of a threat to core management consulting business? Once the purchases are made, how does life in those firms change? Is design being embedded into core business? Or are assets stripped and staff let go as each of the consulting firms extract capital value and remove said competition?
After reading When McKinsey Comes to Town and watching the PwC tax scandal unfold here in Australia [see the ABC explainer here: https://www.abc.net.au/news/2023-06-05/pwc-pricewaterhousecoopers-government-tax-leak-scandal-explained/102409528] I cannot help but take the sceptical view. In his analysis of management consultancies, researcher Andrew Sturdy at the University of Bristol repeatedly shows that the role of management consultancies in the public sector results in ‘demand inflation’ (a growth in demand for even more external consultancy services) and ‘operational inefficiency’, although this does not necessarily suggest a ‘hollowing out’ of internal expertise within these public sector organisations as is often the public perception. Regardless, the purchase of design capability—bringing design-led approaches ‘in-house’ to consultancies like McKinsey—can only hollow out the market for independent, ground-breaking design researchers and practitioners who are now unlikely to compete with the wealth and power of a big four consultancy, at least when tackling the largest public challenges like inequality, health, housing and energy transition.
Whilst we undoubtedly need to take a closer look at the impact of the management consultancy acquisition of design studios, we also need to take the broader view and—as concerned citizens—ask ourselves if we really want these unethical businesses anywhere near our critical public services? I suspect we do not.