It was in the early years of high school when a friend talked about his uncle who had gone to the US and earned an MBA from Harvard. He said that his uncle had joined a consulting group called McKinsey. That was the first time that I had ever heard of such a consulting business.
By the time I became an undergraduate student, McKinsey was a familiar name that even popped up a bit in the newspapers and magazines that I read especially at the wonderful library at the American consulate.
Well into graduate school, management consulting started disagreeing with my view of the world. A cartoon suggested that management consultants essentially did what the executives wanted to do but did not want to do because they knew that labor would get upset by the decisions. But, now, the executives could hide behind the facade of the recommendations of consultants.
Despite my own take on McKinsey, I was delighted to read in the news that an Indian-American, Rajat Gupta, had become the global head of McKinsey. I scored another win for my people!
Not long after that came the downfall. Gupta showed that my people could engage in white collar crimes too! I blogged about it in May 2011. Gupta was charged with having leaked insider information to Raj Rajaratnam, a Sri Lankan-born hedge fund tycoon who was found guilty of securities fraud.
Gupta was quickly removed from prominent corporate and philanthropic boards, and was “shunned by business leaders who were once his friends.”
A year later, in June 2012, I blogged again about Gupta when he was found guilty and was given a prison sentence. The prosecuting US Attorney phrased it well: “Having fallen from respected insider to convicted inside trader, Mr. Gupta has now exchanged the lofty boardroom for the prospect of a lowly jail cell.”
It was consultants like McKinsey who popularized the phrase “right sizing” among executives, even in the public sector. Heck, even in higher education.
In the lead up to the decision that resulted in quite a few layoffs at the university where I worked—including my own layoff—the then president sent the campus a three-page, single-spaced memo to the campus about the process of rightsizing the university. Perhaps the fact that he came from a business school background made him familiar not only with the phrasing but also of the typical McKinsey MO regarding right sizing. The consultants provide their right sizing recommendations and move on; the president laid off people and moved on (retired.)
Having observed McKinsey from the sidelines for four decades, of course I was drawn to this book: When McKinsey Comes to Town: The Hidden Influence of the World’s Most Powerful Consulting Firm.
I was eager to find out what the book had about Rajat Gupta. The book reminds me of something that I had forgotten—Mckinsey’s role in the Enron debacle. When the crimes are too many, it is not easy to keep track of them all. Thankfully, the authors—Walt Bogdanich and Michael Forsythe—have not forgotten McKinsey’s notorious crimes. Every chapter in the book could easily be used as a case study on how not to do consulting!
Before it went bankrupt in 2001, Enron was “America’s seventh-largest publicly traded corporation.” When it collapsed, it was a spectacular bankruptcy. The authors write:
McKinsey wasn’t implicated in anything illegal, a relief to the firm’s managing partner, Rajat Gupta, who was so worried he dispatched Mckinsey’s lawyer Jean Molino to assess the situation.
In his personal life, Gupta wouldn’t be so fortunate. After leaving the firm, he was sent to prison for insider trading.
Was Gupta a reformed man after his prison sentence? Nope.
The playbook for these sorts of attempted returns to public life is well established: Express contrition, forgive your tormentors, espouse the hard lessons learned.
That is not Mr. Gupta’s approach. He is aggressively unrepentant. He maintains he is innocent despite the jury verdict against him on three counts of securities fraud and one charge of conspiracy.
The authors note in the Epilogue:
One former McKinsey consultant wrote anonymously, “To those convnced that a secretive cabal controls the world, the usual suspects are Illuminati, Lizard People, or ‘globalists.’ They are wrong, naturally. There is no secret society shaping every major decision and determining the direction of human history. There is, however, McKinsey & Company.”
PS: Why the “jalebi” in the title?
Gupta and Rajaratnam often referred to themselves and their allies in insider-trading as the “Indian mafia.” So, of course, I had to play on a famous line from The Godfather: “Leave the gun, take the cannoli.”
PPS: Want to read about the awesome public library from where I borrow books like this one?