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we should look at anything that helps in that
regard, but as you can appreciate, there are
lots of options we could consider. That could
be one of them.
You’ve taken heat for client work you’ve done in
South Africa, in Saudi Arabia, with arms of the
U.S. government. What are McKinsey’s criteria for
choosing clients?
There are several criteria. And one of the
things that they include is obviously being
clear on whether we use this space to make
a positive, lasting, and substantial differ-
ence. When we look at the criticism, which
dates back over decades, we’ve made mistakes
in some places. And one of the things is to
broaden that definition of how we think about
the role we play with a client and, frankly, be
more aware of the environment and the con-
text in which we’re serving clients.
So what constitutes a no-go zone for a
McKinsey engagement?
First and foremost, when we think about
serving clients, we are very keen to under-
stand their integrity, who they are individually
and institutionally. If I look at some of the
mistakes we made in South Africa, to be fair,
perhaps one of the biggest mistakes was allow-
ing ourselves to be associated, in this case, not
with our client so much but with a third party
that we never engaged with, but was engaged
by the client.
If you take the Saudi Arabian situation [in
which McKinsey consultants wrote a report on
reaction to government policies that identi-
fied regime critics], the document that was
produced, that was a mistake. To be clear, it
was not produced for a government entity. But
it did talk about, and it used, analytical tech-
niques to talk about the way in which individ-
uals had reacted to that government’s austerity
measures that should not have happened. And
the actions we’re taking are designed to ensure
that does not happen again.
It was an internal McKinsey document that
was produced to showcase how you can apply
analytic techniques to social media. And of
course, by using public data, it was highlight-
ing people who between them had something
like—I think it was—800,000 tweets. I might
get that number wrong but a huge number of
public utterances in the form of tweets. This
was not identifying people who were lying
low. I’m not excusing it. It should not have
happened. But it was not for the government.Have you undertaken a top-to-bottom review of
every existing client engagement to determine if
each one meets your new standards?
That is one of the things we are finalizing.
We’re working right now to put together a
new set of ways in which we evaluate clients.
And not just clients because it could also be
the individual topic on which you’re work-
ing. We are intent on applying that to our full
client portfolio.Do you anticipate, and would you be comfortable
with, that resulting in a short-term decrease in
firm revenues?
Yes. Of course. Our intent is to make sure we
feel comfortable and confident about the work
we’re doing. And selecting the right clients is a
key part of that work. And if the consequence
of that is in the near term we have to make
some real changes, then we’re prepared to do
that, yes.McKinsey itself is unregulated and not subject to
the kind of scrutiny and oversight your clients are.
Do you see a scenario where that changes?
First of all, we feel a lot of scrutiny, and that
scrutiny first and foremost is from our clients.
But it also comes from the outside world in
many different forms, whether it’s media or
the fact we do operate in areas that are regu-
lated, as you’ve already pointed out in some of
the questions you asked me at the beginning.Has McKinsey suffered a hit to its reputation?
Our reputation is made every day when
5∏ thousand McKinsey teams go to serve
their clients. One of the things I’ve been very
struck by in recent weeks is the response
of our clients, who are standing by us and
standing with us. We’ve also had one of our
best recruiting seasons, and it’s been right in
the midst of all this media publicity. So have
we taken a hit? Of course. But I know what
we’ll do is show that we hear, we’re listening,
we’re acting, and we’ll come back stronger
because we’ll redefine and raise the bar on
what it means to be a professional at a time
of great change, not just for us but for busi-
ness as a whole.“we’ve
always
thought
about
guarding
client
confidences.
but that
doesn’t
mean we
can’t be
much more
open about
who we are.”