1 00:00:00,080 --> 00:00:02,320 Speaker 1: Hey, folks, I want to take a minute to ask 2 00:00:02,360 --> 00:00:05,600 Speaker 1: for your help. This show is a labor of love 3 00:00:05,680 --> 00:00:08,560 Speaker 1: for all of us here on the team at calling BS. 4 00:00:08,800 --> 00:00:13,560 Speaker 1: We debate which organizations to investigate. We carefully consider how 5 00:00:13,560 --> 00:00:16,479 Speaker 1: to best tell these stories. Our goal is to create 6 00:00:16,480 --> 00:00:19,759 Speaker 1: a show that exposes purpose washing and the real harm 7 00:00:19,800 --> 00:00:22,400 Speaker 1: it does in the world. But we also want to 8 00:00:22,400 --> 00:00:24,800 Speaker 1: create a show that's fun to listen to and serves 9 00:00:24,800 --> 00:00:28,520 Speaker 1: as a practical guide for entrepreneurs and leadership teams about 10 00:00:28,520 --> 00:00:32,199 Speaker 1: how to do purpose right. We're really proud of what 11 00:00:32,240 --> 00:00:35,680 Speaker 1: we've made so far, and we're super excited about getting 12 00:00:35,720 --> 00:00:37,839 Speaker 1: season three into production so we can share it with 13 00:00:37,880 --> 00:00:41,560 Speaker 1: all of you now to the help we need. So far, 14 00:00:41,720 --> 00:00:46,720 Speaker 1: we are self funded. We need a sponsor or sponsors 15 00:00:46,760 --> 00:00:49,800 Speaker 1: to help us with the cost of production. But, and 16 00:00:49,880 --> 00:00:53,200 Speaker 1: this is important, we feel like it would be disingenuous 17 00:00:53,240 --> 00:00:55,800 Speaker 1: given the theme of the show to accept money from 18 00:00:55,840 --> 00:00:58,920 Speaker 1: just anybody. It's important to us that the sponsors of 19 00:00:58,920 --> 00:01:02,920 Speaker 1: this show shared of shows values. We're looking for partners 20 00:01:02,960 --> 00:01:07,080 Speaker 1: who are purpose lead themselves, Companies or organizations that truly 21 00:01:07,120 --> 00:01:10,640 Speaker 1: walk their talk. Companies who understand the harm that purpose 22 00:01:10,680 --> 00:01:13,840 Speaker 1: washing does and who understand how important it is for 23 00:01:13,920 --> 00:01:17,520 Speaker 1: all of us that more companies embrace the path to purpose. 24 00:01:18,920 --> 00:01:21,319 Speaker 1: If you're a part of an organization like that, or 25 00:01:21,400 --> 00:01:23,959 Speaker 1: you know one that seems like a good fit, don't 26 00:01:23,959 --> 00:01:26,480 Speaker 1: hesitate to drop us a line. You can reach me 27 00:01:26,520 --> 00:01:30,880 Speaker 1: directly at Team Montague at Calling Bullshit podcast dot com. 28 00:01:30,920 --> 00:01:33,080 Speaker 1: Thanks for listening, and let's get on with the show. 29 00:01:46,040 --> 00:01:56,680 Speaker 1: McKenzie the enigmatic global consulting firm. Their influence unrivaled, their 30 00:01:56,720 --> 00:02:11,040 Speaker 1: talent extraordinary, their allure irresistible, their bullshit undetected until now. 31 00:02:14,840 --> 00:02:19,680 Speaker 1: Welcome to Calling Bullshit, the podcast about purpose washing, the 32 00:02:19,760 --> 00:02:23,240 Speaker 1: gap between what an organization says they stand for and 33 00:02:23,320 --> 00:02:25,920 Speaker 1: what they actually do and what they would need to 34 00:02:26,000 --> 00:02:29,360 Speaker 1: change to practice what they preach. I'm your host, Time 35 00:02:29,400 --> 00:02:32,800 Speaker 1: Montog You and I've spent over a decade helping organizations 36 00:02:32,840 --> 00:02:36,280 Speaker 1: define what they stand for, their purpose and then help 37 00:02:36,360 --> 00:02:41,800 Speaker 1: them to use that purpose to drive transformation throughout their business. Unfortunately, 38 00:02:42,240 --> 00:02:45,120 Speaker 1: at a lot of institutions today, there's still a pretty 39 00:02:45,160 --> 00:02:50,760 Speaker 1: wide gap between word and deed. That gap has a name, bullshit. But, 40 00:02:51,280 --> 00:02:54,000 Speaker 1: and this is important, we believe that bullshit is a 41 00:02:54,000 --> 00:02:58,680 Speaker 1: treatable condition. So when our bullshit detector lights up. We're 42 00:02:58,720 --> 00:03:03,000 Speaker 1: going to explore rethink the organization should do to fix it. 43 00:03:14,320 --> 00:03:17,480 Speaker 1: The campaign that Purdue launched when it put oxy content 44 00:03:17,480 --> 00:03:21,040 Speaker 1: on the market was designed to make doctors I think 45 00:03:21,360 --> 00:03:25,480 Speaker 1: that hoping it's rarely cause addiction. Now dozens of states 46 00:03:25,480 --> 00:03:28,840 Speaker 1: and cities to filed lawsuits accusing Purdue of helping fuel 47 00:03:28,880 --> 00:03:32,560 Speaker 1: the current health crisis with misleading marketing. I can't remember 48 00:03:32,680 --> 00:03:35,160 Speaker 1: last time the FDA was a friend or or the 49 00:03:35,320 --> 00:03:38,360 Speaker 1: spark for a rally for some of the tobacco stocks, 50 00:03:38,360 --> 00:03:41,720 Speaker 1: But that's what we saw yesterday and Run ultimately filed 51 00:03:41,720 --> 00:03:45,800 Speaker 1: for bankruptcy. Approximately twenty jobs and two billion dollars in 52 00:03:45,880 --> 00:03:50,120 Speaker 1: employee retirement funds were lost. Many executives were brought to justice, 53 00:03:50,360 --> 00:03:53,920 Speaker 1: and some of them ultimately ended up receiving prison sentences. 54 00:03:54,600 --> 00:03:59,360 Speaker 1: Many Americans are struggling and barely getting by, but not everyone. 55 00:04:00,040 --> 00:04:04,600 Speaker 1: Into the Economic Policy Institute, American CEOs were paid three 56 00:04:04,720 --> 00:04:08,520 Speaker 1: hundred and fifty one times as much as a typical worker. 57 00:04:08,640 --> 00:04:12,240 Speaker 1: The Department of Homeland Security has redirected hundreds of millions 58 00:04:12,240 --> 00:04:16,000 Speaker 1: of dollars to immigration enforcement, growing the size and scope 59 00:04:16,000 --> 00:04:18,640 Speaker 1: of ICE. The government has pulled money that was supposed 60 00:04:18,720 --> 00:04:20,800 Speaker 1: to be spent on the Coast Guard, on t s 61 00:04:20,880 --> 00:04:24,400 Speaker 1: A aviation security, and on FEMA hurricane relief. The U 62 00:04:24,520 --> 00:04:29,160 Speaker 1: S Intelligence report has concluded that Saudi Crown Prince Mohammed 63 00:04:29,160 --> 00:04:33,000 Speaker 1: bin Salmon personally approved the murder of the exiled journalist 64 00:04:33,040 --> 00:04:41,640 Speaker 1: Jamaica and Ron, the Immigration and Customs Enforcement Agency a 65 00:04:41,839 --> 00:04:47,719 Speaker 1: k a ICE, Big Tobacco, the f d A, Perdue Pharma, 66 00:04:48,440 --> 00:04:53,440 Speaker 1: Big oil, and the Saudi Arabian government. What's the thread 67 00:04:53,480 --> 00:04:57,720 Speaker 1: that connects all of these controversial organizations, governments and industries. 68 00:04:58,640 --> 00:05:05,040 Speaker 1: They have all been clients of Mackenzie. Coincidence, bad luck, 69 00:05:05,800 --> 00:05:09,279 Speaker 1: or is there something about Mackenzie that draws them into 70 00:05:09,279 --> 00:05:15,440 Speaker 1: these dark corners of capitalism? The story of McKenzie and 71 00:05:15,520 --> 00:05:20,120 Speaker 1: the story of global capitalism are inextricably linked. The firm 72 00:05:20,200 --> 00:05:24,280 Speaker 1: consults with heads of state, boards of directors, and CEOs 73 00:05:24,480 --> 00:05:28,760 Speaker 1: of most, if not all, of the most powerful corporations 74 00:05:28,760 --> 00:05:32,719 Speaker 1: and countries on the planet. You'd be forgiven for not 75 00:05:32,839 --> 00:05:37,880 Speaker 1: knowing much about Mackenzie. Secrecy is a precious organizational currency. 76 00:05:38,400 --> 00:05:41,200 Speaker 1: Few people outside the firm have a clear idea of 77 00:05:41,240 --> 00:05:45,200 Speaker 1: the full scope of their activities. Few people inside the 78 00:05:45,240 --> 00:05:49,680 Speaker 1: firm know the full scope either. What is common knowledge 79 00:05:50,080 --> 00:05:53,640 Speaker 1: is that for the past hundred years, McKenzie recruits elite 80 00:05:53,640 --> 00:05:59,400 Speaker 1: talent from only the top tier universities. Mackenzie also sells 81 00:05:59,440 --> 00:06:02,680 Speaker 1: these recruits. It's on the idea of wealth without guilt. 82 00:06:03,720 --> 00:06:07,560 Speaker 1: To the young, gifted, and ambitious, a job at McKenzie 83 00:06:07,680 --> 00:06:12,520 Speaker 1: is the ultimate initiation into success, with alumni currently holding 84 00:06:12,600 --> 00:06:16,760 Speaker 1: high positions in government, as well as running companies like Google, 85 00:06:17,200 --> 00:06:22,479 Speaker 1: Morgan Stanley, JP, Morgan Chase, IBM, Disney, and Boeing, to 86 00:06:22,600 --> 00:06:28,799 Speaker 1: name just a few. They claim to be a values 87 00:06:28,880 --> 00:06:35,320 Speaker 1: driven firm. Values like practicing high ethical standards, having an 88 00:06:35,320 --> 00:06:41,919 Speaker 1: obligation to dissent, maintaining an independent perspective, and above all, 89 00:06:42,200 --> 00:06:46,880 Speaker 1: serving the client first. If you were to visit their website, 90 00:06:47,080 --> 00:06:50,839 Speaker 1: you'd see they claim to be a purpose led company. 91 00:06:51,120 --> 00:06:55,160 Speaker 1: Their purpose to create positive, lasting change in the world, 92 00:06:56,080 --> 00:06:58,960 Speaker 1: although that purpose is a little vague. As you listen 93 00:06:59,000 --> 00:07:02,159 Speaker 1: to this story on old you'll begin to realize as 94 00:07:02,200 --> 00:07:05,400 Speaker 1: I did, that because of their power to accelerate the 95 00:07:05,400 --> 00:07:09,479 Speaker 1: adoption of new ideas across their client base, there is 96 00:07:09,680 --> 00:07:13,840 Speaker 1: no company better positioned to create positive, lasting change to 97 00:07:13,920 --> 00:07:20,480 Speaker 1: the system of capitalism than McKenzie. So do their deeds 98 00:07:20,520 --> 00:07:24,080 Speaker 1: back up their words. Does their value of serving the 99 00:07:24,160 --> 00:07:28,960 Speaker 1: client first mean that every other value comes second? Can 100 00:07:29,000 --> 00:07:31,960 Speaker 1: we trust any company to be purpose led when they 101 00:07:32,040 --> 00:07:37,760 Speaker 1: operate in almost total secrecy? Flip on your BS detectors, folks, 102 00:07:37,760 --> 00:07:40,280 Speaker 1: and join me as I talk with three people who 103 00:07:40,360 --> 00:07:43,640 Speaker 1: are deeply qualified to help us discover the truth behind 104 00:07:43,760 --> 00:07:47,960 Speaker 1: these questions and more. A New York Times investigative journalist 105 00:07:48,000 --> 00:07:50,880 Speaker 1: and co author of the new book When McKinsey Comes 106 00:07:50,920 --> 00:07:55,760 Speaker 1: to Town, followed by two former McKinsey consultants who have 107 00:07:55,880 --> 00:08:05,120 Speaker 1: worked inside the belly of the beast. Folks, I am 108 00:08:05,240 --> 00:08:09,200 Speaker 1: very excited to welcome New York Times journalist and author 109 00:08:09,440 --> 00:08:13,440 Speaker 1: Mike Forsyth. Mike, thank you for being here today, and 110 00:08:13,560 --> 00:08:17,720 Speaker 1: welcome to calling bullshit. I'm so happy to be here. Ti. So, 111 00:08:17,840 --> 00:08:20,360 Speaker 1: you and your co author, Wolf Buck Danich have written 112 00:08:20,360 --> 00:08:26,360 Speaker 1: a fascinating book about Mackenzie, which I found both fascinating 113 00:08:26,360 --> 00:08:29,800 Speaker 1: and honestly a little bit scary. What what moved you 114 00:08:29,880 --> 00:08:33,000 Speaker 1: to write about this topic? So all credit goes to 115 00:08:33,320 --> 00:08:36,640 Speaker 1: uh my co author Wald Buck dani He started looking 116 00:08:36,679 --> 00:08:43,079 Speaker 1: at Mackenzie back in because he saw that Mackenzie's work 117 00:08:43,520 --> 00:08:46,800 Speaker 1: was contributing to inequality and was it was such a 118 00:08:46,840 --> 00:08:50,320 Speaker 1: powerful secretive firm. So he was pitching two editors back then, 119 00:08:50,679 --> 00:08:53,280 Speaker 1: let's write about this firm. Our first bite of the 120 00:08:53,320 --> 00:08:59,240 Speaker 1: apple in was about mackenzie's work in South Africa. But 121 00:08:59,360 --> 00:09:01,480 Speaker 1: in that story we also mentioned a little bit about 122 00:09:01,520 --> 00:09:05,200 Speaker 1: McKenzie's work with ice. That led to, you know, another 123 00:09:05,280 --> 00:09:08,040 Speaker 1: chain of events, and we just kept writing and writing, 124 00:09:08,080 --> 00:09:12,880 Speaker 1: and we just kept writing. How would you describe what 125 00:09:12,960 --> 00:09:17,559 Speaker 1: McKenzie does. So they're a management consulting company, so more 126 00:09:17,600 --> 00:09:20,800 Speaker 1: than thirty thousand people started in the US, but actually 127 00:09:20,840 --> 00:09:23,440 Speaker 1: most of their employees are outside of the US. Now, 128 00:09:23,760 --> 00:09:26,839 Speaker 1: when you say a management consulting company, they work for 129 00:09:26,880 --> 00:09:31,680 Speaker 1: the C suite, the CEO, CFOs, CEOs, and a lot 130 00:09:31,679 --> 00:09:35,040 Speaker 1: of the time their work is garden variety cost cutting recommendations. 131 00:09:35,080 --> 00:09:37,440 Speaker 1: That's what they're known for, probably the best. You know, 132 00:09:37,440 --> 00:09:39,760 Speaker 1: they're the people you fear when they come in and 133 00:09:39,800 --> 00:09:42,840 Speaker 1: they figure out where jobs need to be cut, you know. 134 00:09:43,080 --> 00:09:46,520 Speaker 1: So there's the efficiency experts, the efficiency experts, and they 135 00:09:46,559 --> 00:09:48,640 Speaker 1: have been for they've been around for nearly a hundred 136 00:09:48,720 --> 00:09:51,480 Speaker 1: years and they've always been the efficiency experts. But they 137 00:09:51,559 --> 00:09:54,280 Speaker 1: do a lot more than that, uh, you know, they 138 00:09:54,320 --> 00:09:58,920 Speaker 1: they help with refocusing companies focusing on new lines of business. 139 00:09:58,960 --> 00:10:03,600 Speaker 1: They help governments reorganized departments such as the FDA for example. 140 00:10:04,080 --> 00:10:07,199 Speaker 1: Uh And they also, I think, and this is really important. 141 00:10:07,840 --> 00:10:10,920 Speaker 1: Over the decades, and especially since the nineteen eighties, they 142 00:10:10,920 --> 00:10:15,079 Speaker 1: have been big propagators of ideas around the world, diffusers 143 00:10:15,160 --> 00:10:20,000 Speaker 1: of knowledge, so they are very powerful propagators of information. Yeah, 144 00:10:20,000 --> 00:10:24,880 Speaker 1: they're almost like the global nervous system for the business community, 145 00:10:25,000 --> 00:10:28,839 Speaker 1: right like they are the behind the scenes transmitter of 146 00:10:28,920 --> 00:10:34,679 Speaker 1: vital information. McKenzie is an almost mythic brand in consulting. 147 00:10:34,760 --> 00:10:39,880 Speaker 1: They have a reputation for being incredibly smart, extremely effective, 148 00:10:40,320 --> 00:10:45,640 Speaker 1: and intensely secretive. My first question here really is how 149 00:10:45,679 --> 00:10:48,640 Speaker 1: did you get the access that you needed to even 150 00:10:48,679 --> 00:10:51,960 Speaker 1: tell this story. There's a lot of ways we did it. 151 00:10:52,280 --> 00:10:56,240 Speaker 1: One thing that surprised us early on was people coming 152 00:10:56,320 --> 00:11:00,000 Speaker 1: to us working at McKinsey or had just left McKinsey 153 00:11:00,160 --> 00:11:03,360 Speaker 1: to tell their stories. And it took a while, but 154 00:11:03,400 --> 00:11:07,720 Speaker 1: we realized why because mackenzie is such a different company 155 00:11:07,760 --> 00:11:11,480 Speaker 1: from like say Goldman Sachs or some private equity company, 156 00:11:11,559 --> 00:11:14,600 Speaker 1: where you know, there's no pretense when you work there, 157 00:11:14,320 --> 00:11:17,320 Speaker 1: You're there to earn money, you're there to be part 158 00:11:17,360 --> 00:11:20,920 Speaker 1: of unfettered capitalism if you're at Goldman Sachs, right. But 159 00:11:21,240 --> 00:11:26,000 Speaker 1: at Mackenzie, they lure very idealistic, very intelligent people into 160 00:11:26,040 --> 00:11:29,840 Speaker 1: the company. Their recruiting pitch is all about making a difference, 161 00:11:30,200 --> 00:11:34,160 Speaker 1: and they talk inevitably in their recruiting pitches talking about 162 00:11:34,360 --> 00:11:36,120 Speaker 1: things you could do to make the world better, you know, 163 00:11:36,160 --> 00:11:39,240 Speaker 1: with climate or you know, with health, things like that. 164 00:11:39,559 --> 00:11:44,440 Speaker 1: And it's because of that that people when they got there, 165 00:11:44,440 --> 00:11:47,160 Speaker 1: realized they've been sold a bill of goods, and they 166 00:11:47,200 --> 00:11:49,320 Speaker 1: came to us, and some of them came with some 167 00:11:49,440 --> 00:11:53,600 Speaker 1: extraordinary information. And this didn't surprise me, to be honest, 168 00:11:54,240 --> 00:11:59,520 Speaker 1: because Mackenzie does use that technique of trying to trying 169 00:11:59,520 --> 00:12:02,720 Speaker 1: to rude people who really want to make a positive 170 00:12:02,760 --> 00:12:04,640 Speaker 1: impact on the world, and they recruit from some of 171 00:12:04,679 --> 00:12:08,280 Speaker 1: the best schools around the world. A large group of 172 00:12:08,280 --> 00:12:12,000 Speaker 1: people both inside the company today and also people who 173 00:12:12,000 --> 00:12:15,000 Speaker 1: have left the company who feel some loyalty to it, 174 00:12:15,080 --> 00:12:17,160 Speaker 1: right they joined it for the right reason. They want 175 00:12:17,200 --> 00:12:19,120 Speaker 1: to kind of protect it. You know. The impression I 176 00:12:19,120 --> 00:12:21,760 Speaker 1: get from your book is many of them hate seeing 177 00:12:22,000 --> 00:12:27,120 Speaker 1: when the company gets involved in unsavory things or things 178 00:12:27,200 --> 00:12:29,199 Speaker 1: that are, you know, they know are going to damage 179 00:12:29,240 --> 00:12:31,480 Speaker 1: the brand. It almost feels like they come to McKenzie's 180 00:12:31,520 --> 00:12:35,920 Speaker 1: defense sometimes some people. The more senior the people are, 181 00:12:36,000 --> 00:12:39,160 Speaker 1: the more they come to mckensey's defense, it seems. Uh. 182 00:12:39,200 --> 00:12:41,840 Speaker 1: And it's the younger people that you know, haven't spent 183 00:12:41,920 --> 00:12:44,080 Speaker 1: their whole lives there are that the prime of their 184 00:12:44,120 --> 00:12:47,360 Speaker 1: lives there who can move on and do other things 185 00:12:47,400 --> 00:12:50,440 Speaker 1: that are more likely to come to us. So it's true. 186 00:12:50,480 --> 00:12:53,120 Speaker 1: I think the majority of the whistleblowers we had are 187 00:12:53,120 --> 00:12:57,440 Speaker 1: the really good sources we had were on the younger side. Yeah, 188 00:12:57,520 --> 00:12:59,240 Speaker 1: And it was over and over again in the book 189 00:12:59,240 --> 00:13:01,760 Speaker 1: that the young can Sultan's kind of rose up when 190 00:13:01,800 --> 00:13:05,400 Speaker 1: there was, you know, malfeasance of of one kind or another. 191 00:13:06,160 --> 00:13:09,080 Speaker 1: It's it's good to see that there are internal checks 192 00:13:09,080 --> 00:13:12,400 Speaker 1: and balances as well. So you touched on this, but 193 00:13:12,440 --> 00:13:14,680 Speaker 1: I want to dig a little bit deeper. The company 194 00:13:14,720 --> 00:13:18,880 Speaker 1: also claims to be purpose let itself and they say 195 00:13:18,920 --> 00:13:22,880 Speaker 1: their purpose is to create positive, enduring change in the world. 196 00:13:23,440 --> 00:13:25,760 Speaker 1: And so right out of the gate, what do you 197 00:13:25,840 --> 00:13:29,760 Speaker 1: think about that purpose? Having written that this book, I 198 00:13:29,800 --> 00:13:33,680 Speaker 1: think it's a very noble purpose. Agree, The whole point 199 00:13:33,720 --> 00:13:36,440 Speaker 1: of the book is that they don't live up to 200 00:13:36,480 --> 00:13:39,600 Speaker 1: that purpose in many important ways, and some of the 201 00:13:39,640 --> 00:13:42,760 Speaker 1: work that they do does real harm to the world. 202 00:13:42,920 --> 00:13:46,280 Speaker 1: But you know, they also have values, and that's the 203 00:13:46,360 --> 00:13:49,040 Speaker 1: crux of the problem is that their number one value, 204 00:13:49,480 --> 00:13:52,280 Speaker 1: you know, over the decades, has been to serve the 205 00:13:52,400 --> 00:13:57,600 Speaker 1: client first. So, um, let's get into some of the 206 00:13:57,720 --> 00:14:01,520 Speaker 1: things that really opened my eyes in this book. One 207 00:14:01,520 --> 00:14:04,439 Speaker 1: of the many unexpected things that I got from it 208 00:14:04,640 --> 00:14:10,240 Speaker 1: is mackenzie's role in a number of aspects of let's 209 00:14:10,280 --> 00:14:14,960 Speaker 1: call it lead stage capitalism. So, for instance, income inequality. 210 00:14:15,160 --> 00:14:19,200 Speaker 1: I never thought about McKenzie when it came to that topic. 211 00:14:19,680 --> 00:14:22,880 Speaker 1: Can you talk about how the firm had a role 212 00:14:23,160 --> 00:14:26,240 Speaker 1: in the you know now vast and growing divide between 213 00:14:26,280 --> 00:14:30,640 Speaker 1: workers and managers. There are so many ways that mckensey's 214 00:14:30,640 --> 00:14:32,320 Speaker 1: had a big role in this. But it started in 215 00:14:32,480 --> 00:14:36,080 Speaker 1: nineteen fifty and McKinsey had been hired by General Motors 216 00:14:36,120 --> 00:14:39,840 Speaker 1: to do a study about a compensation for its executives 217 00:14:39,880 --> 00:14:43,680 Speaker 1: and and mckensey looked at compensation at many companies and 218 00:14:43,800 --> 00:14:46,480 Speaker 1: it was this hot shot partner, young guy named Arch 219 00:14:46,600 --> 00:14:52,040 Speaker 1: Patton back in nineteen and he made an amazing discovery. 220 00:14:52,440 --> 00:14:56,960 Speaker 1: He discovered that workers pay was catching up to executive pay, 221 00:14:57,000 --> 00:14:59,840 Speaker 1: or was growing faster than executive pay. So the game 222 00:15:00,400 --> 00:15:04,320 Speaker 1: between executives and workers was narrowing. Well wasn't big enough. 223 00:15:04,480 --> 00:15:07,720 Speaker 1: And you know, and this was a time when labor 224 00:15:07,800 --> 00:15:10,280 Speaker 1: unions were strong. There had been you know, something called 225 00:15:10,280 --> 00:15:12,720 Speaker 1: the Treaty of Detroit, where you know, workers got all 226 00:15:12,760 --> 00:15:15,120 Speaker 1: sorts of benefits, you know, so that they wouldn't strike. 227 00:15:15,760 --> 00:15:20,000 Speaker 1: So this got spread around from company to company, and 228 00:15:20,680 --> 00:15:23,560 Speaker 1: some companies executives didn't like the fact that they were 229 00:15:23,640 --> 00:15:26,600 Speaker 1: ranked lower than other ones, and it started this race 230 00:15:26,640 --> 00:15:29,600 Speaker 1: to the top where the companies would raise pay for 231 00:15:29,640 --> 00:15:33,160 Speaker 1: their executives based on these McKenzie studies. That happened year 232 00:15:33,240 --> 00:15:35,680 Speaker 1: after year after year, and this guy arch Patton would 233 00:15:35,680 --> 00:15:38,800 Speaker 1: publish these unfortunate he published these in the Harvard Business Review. 234 00:15:39,160 --> 00:15:42,720 Speaker 1: So company executives started knowing what people in other industries 235 00:15:42,720 --> 00:15:46,480 Speaker 1: were making. They didn't want to be behind. Stock options 236 00:15:46,480 --> 00:15:51,240 Speaker 1: started becoming in vogue. Mckensey did these compensation studies, you know, 237 00:15:51,320 --> 00:15:53,920 Speaker 1: for for individual companies and became a very big part 238 00:15:54,480 --> 00:15:57,240 Speaker 1: of the firm's work. And this guy alone was billion 239 00:15:57,240 --> 00:16:01,920 Speaker 1: about ten of all revenue at mckinn z at the time. Yeah, 240 00:16:02,000 --> 00:16:04,520 Speaker 1: so he built a huge practice and you could you 241 00:16:04,600 --> 00:16:06,640 Speaker 1: kind of go, let's see, let's who are you going 242 00:16:06,680 --> 00:16:08,560 Speaker 1: to call if you want to get a get a 243 00:16:08,640 --> 00:16:13,320 Speaker 1: raise and you're a CEO, call call our chip McKenzie, 244 00:16:13,520 --> 00:16:19,320 Speaker 1: right right. Yeah. Simultaneously though, McKenzie is as the efficiency 245 00:16:19,440 --> 00:16:23,240 Speaker 1: expert showing some of those same companies how to cut 246 00:16:23,320 --> 00:16:28,840 Speaker 1: costs by downsizing and then ultimately offshoring talent to other 247 00:16:28,960 --> 00:16:33,600 Speaker 1: countries to drive compensation of workers lower. That's right. So 248 00:16:33,800 --> 00:16:37,840 Speaker 1: offshoring was all the vogue at McKinsey in the nineties. 249 00:16:37,960 --> 00:16:41,480 Speaker 1: There were mckensey partners writing books about the benefits of 250 00:16:41,480 --> 00:16:45,760 Speaker 1: off shoring globalization. You know, McKenzie would just talk about 251 00:16:45,800 --> 00:16:49,200 Speaker 1: this with endless companies and they would put slides in 252 00:16:49,400 --> 00:16:52,680 Speaker 1: slide decks about the benefits of globalization, that benefits of 253 00:16:52,760 --> 00:16:56,400 Speaker 1: moving your work to China from the United States. And 254 00:16:56,760 --> 00:17:00,560 Speaker 1: so because of their reach and all these corporate ward rooms, 255 00:17:00,680 --> 00:17:03,640 Speaker 1: they were able to spread this gospel about the benefits 256 00:17:03,640 --> 00:17:07,720 Speaker 1: of off shorey. So just to unpack this, McKenzie profits 257 00:17:07,760 --> 00:17:11,800 Speaker 1: by helping shareholders profit by firing American workers on mass 258 00:17:11,880 --> 00:17:15,560 Speaker 1: in some cases, or firing them and moving their jobs overseas. 259 00:17:16,320 --> 00:17:20,200 Speaker 1: And then they also profit by helping management profit by 260 00:17:20,240 --> 00:17:23,800 Speaker 1: starting an executive pay practice that drives CEO pay into 261 00:17:23,840 --> 00:17:28,080 Speaker 1: the stratosphere. That's quite clever, and it leads to a 262 00:17:28,240 --> 00:17:31,959 Speaker 1: second eye opening aspect of the book. I learned that 263 00:17:32,040 --> 00:17:37,280 Speaker 1: in multiple industries and engagements, mackenzie often profits from working 264 00:17:37,320 --> 00:17:40,400 Speaker 1: for both sides of an issue. I was really struck 265 00:17:40,440 --> 00:17:45,160 Speaker 1: by their relationship with not only Big Tobacco, who they 266 00:17:45,160 --> 00:17:49,320 Speaker 1: worked with for years, but also their relationship with the 267 00:17:49,359 --> 00:17:54,400 Speaker 1: FDA Center for Tobacco Products, which is responsible for regulating 268 00:17:54,720 --> 00:17:57,320 Speaker 1: Big tobacco, and they worked with those entities, as I 269 00:17:57,400 --> 00:18:03,240 Speaker 1: understand it, simultaneously, they also consulted with Jewel, which at 270 00:18:03,240 --> 00:18:07,000 Speaker 1: the time claimed to be a smoking cessation product, as 271 00:18:07,359 --> 00:18:10,720 Speaker 1: Jewel wound up marketing their product to teens and thereby 272 00:18:10,760 --> 00:18:16,359 Speaker 1: addicting an entirely new generation to nicotine. And this strategy 273 00:18:16,400 --> 00:18:19,720 Speaker 1: of working multiple size of the problem has has netted 274 00:18:19,720 --> 00:18:23,120 Speaker 1: the company massive fees over the years, has it not? 275 00:18:23,760 --> 00:18:27,560 Speaker 1: It really has. Almost since the beginning of McKenzie, they've 276 00:18:27,560 --> 00:18:29,840 Speaker 1: been happy, and they've they've made it clear that they 277 00:18:29,880 --> 00:18:33,320 Speaker 1: work for multiple companies in the same industry, so for example, 278 00:18:33,320 --> 00:18:35,920 Speaker 1: they could work for four GM and Chrysler at the 279 00:18:36,000 --> 00:18:39,159 Speaker 1: same time. But but what you said is on a 280 00:18:39,240 --> 00:18:43,760 Speaker 1: different level entirely when McKenzie is working for both the regulator, 281 00:18:43,800 --> 00:18:46,800 Speaker 1: with the FDA being the poster child, and then the 282 00:18:46,840 --> 00:18:50,320 Speaker 1: companies that are actually regulated. And as you pointed out, 283 00:18:51,800 --> 00:18:55,280 Speaker 1: the the idea that McKinsey was working um for big 284 00:18:55,280 --> 00:18:58,080 Speaker 1: tobacco and they only stopped working for big Tobacco in 285 00:18:59,320 --> 00:19:04,120 Speaker 1: one Yeah, and I guess somehow this is all legal 286 00:19:04,480 --> 00:19:08,720 Speaker 1: question mark, So that is a question. It appears to 287 00:19:08,760 --> 00:19:11,800 Speaker 1: be legal. You know, McKenzie had to pay more than 288 00:19:11,840 --> 00:19:15,240 Speaker 1: six hundred million dollars are settled with these states attorneys 289 00:19:15,280 --> 00:19:18,560 Speaker 1: general investigations last year into their work with opioid makers. 290 00:19:18,920 --> 00:19:23,119 Speaker 1: They write Perdue and oh Melon crossed several of the 291 00:19:23,160 --> 00:19:27,639 Speaker 1: opioid makers Jay and Jay that that they admitted no wrongdoing. 292 00:19:27,800 --> 00:19:31,399 Speaker 1: And that's a constant theme. And you know, the certainly 293 00:19:31,440 --> 00:19:33,960 Speaker 1: the Congress has been really looking into this conflict as well. 294 00:19:33,960 --> 00:19:37,680 Speaker 1: There were some very testy hearing back in April when 295 00:19:38,160 --> 00:19:41,320 Speaker 1: members of Congress were asking the head of mackenzie, this 296 00:19:41,359 --> 00:19:43,680 Speaker 1: guy named Bob stirred Fell's point, like, you know, how 297 00:19:43,720 --> 00:19:46,000 Speaker 1: can you work for the f d A and uh, 298 00:19:46,640 --> 00:19:49,479 Speaker 1: the regulated companies like Perdue at the same time. Now, 299 00:19:49,520 --> 00:19:51,360 Speaker 1: of course he would say, well, the work we did 300 00:19:51,400 --> 00:19:53,760 Speaker 1: for the f d A wasn't specific to any of 301 00:19:53,760 --> 00:19:58,720 Speaker 1: these companies, so there was no conflict, right, yeah, so 302 00:20:00,119 --> 00:20:06,480 Speaker 1: legal or potentially legal? Would you consider that to be ethical? No? No, 303 00:20:06,800 --> 00:20:10,439 Speaker 1: straight up no, yeah, you know, and neither right. And 304 00:20:10,440 --> 00:20:12,400 Speaker 1: one thing we discovered is we talked to some people 305 00:20:12,400 --> 00:20:15,000 Speaker 1: at the FDA or former people, senior people. Hey, did 306 00:20:15,040 --> 00:20:18,520 Speaker 1: you know that McKenzie was also advising these drug makers, 307 00:20:18,520 --> 00:20:20,520 Speaker 1: these tobacco makers at the same time they were advising you, 308 00:20:20,560 --> 00:20:24,000 Speaker 1: And they didn't know it was. They were surprised, which 309 00:20:24,040 --> 00:20:27,280 Speaker 1: is terrible. It's right, you know. And I've always thought 310 00:20:27,400 --> 00:20:30,040 Speaker 1: mackenzie's secrecy is a little bit of just a kind 311 00:20:30,040 --> 00:20:32,920 Speaker 1: of marketing ploy to create mystique, but it does seem 312 00:20:33,000 --> 00:20:35,840 Speaker 1: like it's it's actually a really important part of their 313 00:20:35,880 --> 00:20:40,280 Speaker 1: business model, because if you have total secrecy on everything 314 00:20:40,320 --> 00:20:43,960 Speaker 1: that you're working for, both internally and externally, you can 315 00:20:44,000 --> 00:20:47,400 Speaker 1: get away with stuff like that. That's right. We only 316 00:20:47,400 --> 00:20:50,640 Speaker 1: know what we've uncovered, but you know, there's lots more 317 00:20:50,680 --> 00:20:54,239 Speaker 1: secrets out there, I'm sure. Uh, And You can do 318 00:20:54,280 --> 00:20:57,320 Speaker 1: a lot of things if no one knows what you're doing. Right. 319 00:20:57,800 --> 00:21:00,280 Speaker 1: There was another story that you told in the book 320 00:21:00,320 --> 00:21:02,600 Speaker 1: that I don't know whether this is working two sides 321 00:21:02,640 --> 00:21:05,040 Speaker 1: of an issue, but I did find it cynical. You 322 00:21:05,119 --> 00:21:10,159 Speaker 1: tell the story of Dixon Pinner, who is or was 323 00:21:10,280 --> 00:21:14,560 Speaker 1: Mackensey's head of sustainability at the Aspen Ideas Festival, talking 324 00:21:14,600 --> 00:21:17,760 Speaker 1: about the pressing need for corporations to take quick and 325 00:21:17,840 --> 00:21:22,800 Speaker 1: dramatic action on climate change. That's great at the Aspen 326 00:21:22,840 --> 00:21:26,600 Speaker 1: Ideas Festival. But this is a company that worked for 327 00:21:26,920 --> 00:21:31,080 Speaker 1: years and continues to work with some of the biggest 328 00:21:31,320 --> 00:21:34,600 Speaker 1: fossil fuel companies in the world. Right, So we called 329 00:21:34,680 --> 00:21:36,520 Speaker 1: McKenzie out on this in a story in The New 330 00:21:36,560 --> 00:21:39,240 Speaker 1: York Times a year ago, and it's a you know, 331 00:21:39,280 --> 00:21:42,320 Speaker 1: it's a big chapter in our book. Again. If mackenzie 332 00:21:42,359 --> 00:21:44,800 Speaker 1: was working with big oil, you know, the gas companies, 333 00:21:44,840 --> 00:21:48,160 Speaker 1: the coal miners, to reduce their carbon emissions, that would 334 00:21:48,160 --> 00:21:51,280 Speaker 1: be laudable. And Dick and Penner, he's like, he's head 335 00:21:51,280 --> 00:21:54,440 Speaker 1: of the sustainability for them. He he knows about climate change. 336 00:21:54,440 --> 00:21:57,240 Speaker 1: He he can really do a great presentation showing how 337 00:21:57,359 --> 00:21:59,520 Speaker 1: urgent the problem is. And he's done lots of great 338 00:21:59,560 --> 00:22:03,080 Speaker 1: report The problem is, I tell you, we did this 339 00:22:03,160 --> 00:22:07,240 Speaker 1: story a year ago, and McKenzie is unapologetic about its 340 00:22:07,280 --> 00:22:09,879 Speaker 1: work with these companies. What we tried to do, and 341 00:22:09,920 --> 00:22:11,639 Speaker 1: it's in the book, is to show that a lot 342 00:22:11,720 --> 00:22:14,240 Speaker 1: of their work with these companies has nothing to do 343 00:22:14,880 --> 00:22:16,960 Speaker 1: with cutting their carbon emissions. It has everything to do 344 00:22:17,040 --> 00:22:20,119 Speaker 1: with making them a more profitable and more productive coal 345 00:22:20,200 --> 00:22:24,119 Speaker 1: mining company or oil company or gas company. In on 346 00:22:24,160 --> 00:22:27,640 Speaker 1: their website, there all these studies of McKenzie is doing 347 00:22:27,720 --> 00:22:30,520 Speaker 1: all this, these words about, you know, committed to protecting 348 00:22:30,560 --> 00:22:33,840 Speaker 1: the planet, committed to reducing emissions, and yet at the 349 00:22:33,840 --> 00:22:37,760 Speaker 1: same time, these big clients that they're working for are are, 350 00:22:37,920 --> 00:22:40,639 Speaker 1: you know, some of the world's biggest polluters. Yeah, some 351 00:22:40,800 --> 00:22:43,400 Speaker 1: of the data that you have in the book is incredible. 352 00:22:43,440 --> 00:22:45,520 Speaker 1: Let me just read a bit. Is a note I 353 00:22:45,560 --> 00:22:48,600 Speaker 1: wrote here for myself for a firm committed to protecting 354 00:22:48,640 --> 00:22:54,160 Speaker 1: the planet. McKenzie counts seventeen mining and fossil fuel companies 355 00:22:54,200 --> 00:22:58,640 Speaker 1: among its biggest clients. Collectively, those clients have earned McKenzie 356 00:22:58,720 --> 00:23:01,520 Speaker 1: hundreds of millions of dollars in recent years. Since two 357 00:23:01,600 --> 00:23:04,960 Speaker 1: thousand and ten, McKenzie has worked with forty three of 358 00:23:05,040 --> 00:23:08,360 Speaker 1: the hundred companies that have pumped the most carbon dioxide 359 00:23:08,359 --> 00:23:12,720 Speaker 1: into the atmosphere since nineteen sixty five. These forty three 360 00:23:12,760 --> 00:23:15,840 Speaker 1: companies were responsible for thirty eight percent of the entire 361 00:23:15,960 --> 00:23:21,639 Speaker 1: planets carbon dioxide output in and Chevron number three on 362 00:23:21,680 --> 00:23:25,080 Speaker 1: the list, paid McKenzie fifty million dollars in fees in 363 00:23:27,160 --> 00:23:31,080 Speaker 1: So they're hardly not in the carbon business and for 364 00:23:31,119 --> 00:23:35,320 Speaker 1: them to make any claims about being pro sustainability seems 365 00:23:35,400 --> 00:23:38,960 Speaker 1: ridiculous to me and a little dangerous. It does. And 366 00:23:39,040 --> 00:23:42,040 Speaker 1: I tell you, you know, they were apologetic about their 367 00:23:42,080 --> 00:23:45,280 Speaker 1: work with opioid makers, they were apologetic about their work 368 00:23:45,400 --> 00:23:49,200 Speaker 1: in South Africa, but they are not apologetic about their 369 00:23:49,240 --> 00:23:51,920 Speaker 1: work with these carbon emeters. And that's not to say 370 00:23:51,920 --> 00:23:54,800 Speaker 1: that mckenzy doesn't do good work, you know, on sustainability. 371 00:23:54,840 --> 00:23:57,119 Speaker 1: They do some and uh and they do work with 372 00:23:57,160 --> 00:24:00,800 Speaker 1: some great green companies and and that's a fact, but 373 00:24:01,280 --> 00:24:04,280 Speaker 1: they also do you know what we outline that these 374 00:24:04,320 --> 00:24:06,879 Speaker 1: work with these big polluters. You know, one of the 375 00:24:06,960 --> 00:24:08,399 Speaker 1: things that you point out in the book is that 376 00:24:08,480 --> 00:24:11,520 Speaker 1: McKenzie is really good at spreading ideas and they've done 377 00:24:11,520 --> 00:24:15,080 Speaker 1: it many times over their history, and we're now feeling 378 00:24:15,400 --> 00:24:18,600 Speaker 1: what I hope is a new day dawning in capitalism, 379 00:24:18,720 --> 00:24:22,679 Speaker 1: and mackenzie could be tremendously powerful if they decided to 380 00:24:22,760 --> 00:24:27,200 Speaker 1: really get behind, for instance, conscious capitalism. I couldn't agree more. 381 00:24:27,359 --> 00:24:30,320 Speaker 1: One of the things McKenzie does really well is higher 382 00:24:31,160 --> 00:24:34,760 Speaker 1: really smart people who will work their butts off. And 383 00:24:35,040 --> 00:24:38,639 Speaker 1: if those people can be harnessed to consistently do things 384 00:24:39,200 --> 00:24:42,320 Speaker 1: that are good and will make the world more sustainable 385 00:24:42,359 --> 00:24:46,080 Speaker 1: and more equitable, you know, all within the free market framework, 386 00:24:46,320 --> 00:24:49,960 Speaker 1: which is not a contradiction, then hats off to them 387 00:24:50,760 --> 00:24:55,040 Speaker 1: if they can do that. Let's touch on another topic 388 00:24:55,280 --> 00:24:58,679 Speaker 1: that is contained in the book which I did not realize, 389 00:24:58,840 --> 00:25:03,680 Speaker 1: which is McKenzie's were with authoritarian governments. You tell two 390 00:25:03,760 --> 00:25:07,560 Speaker 1: stories about this, McKenzie's work with the Chinese government and 391 00:25:07,600 --> 00:25:11,800 Speaker 1: their work with the Saudi Arabian government, and it just 392 00:25:11,840 --> 00:25:15,440 Speaker 1: struck me that mackenzie is is very good at finding 393 00:25:15,520 --> 00:25:20,560 Speaker 1: growth industries and attaching themselves to them, and authoritarianism seems 394 00:25:20,600 --> 00:25:24,440 Speaker 1: to be spreading around the globe. Is this the new 395 00:25:24,520 --> 00:25:29,080 Speaker 1: growth industry for mackenzie? So um, After we wrote about 396 00:25:29,080 --> 00:25:31,640 Speaker 1: their work in China, after we wrote about their work 397 00:25:31,640 --> 00:25:35,480 Speaker 1: in Saudi Arabia. McKenzie did say that they've changed the 398 00:25:35,560 --> 00:25:39,280 Speaker 1: way they select clients and now they say they will 399 00:25:39,320 --> 00:25:44,520 Speaker 1: not work for the defense ministries, justice ministries, lease interior 400 00:25:44,560 --> 00:25:49,119 Speaker 1: ministries of authoritarian countries. Um. But a lot of the 401 00:25:49,240 --> 00:25:51,680 Speaker 1: harm and a lot of the power in authoritarian countries 402 00:25:51,760 --> 00:25:55,000 Speaker 1: is not in those ministries. It's in the ministry of economy. 403 00:25:55,040 --> 00:25:58,359 Speaker 1: For example. If you're working to make an authoritarian country 404 00:25:58,400 --> 00:26:03,439 Speaker 1: like Saudi Arabia more robust that the theocratic autocratic House 405 00:26:03,480 --> 00:26:07,200 Speaker 1: of Saoud, you know, more sustainable, you do, You're doing 406 00:26:07,240 --> 00:26:09,720 Speaker 1: that through the Ministry of Economy. And that's what we've 407 00:26:09,760 --> 00:26:13,280 Speaker 1: found that that work is still continuing McKenzie still in 408 00:26:13,280 --> 00:26:18,240 Speaker 1: Saudi Arabia and in China. We also discovered that McKenzie 409 00:26:18,560 --> 00:26:20,919 Speaker 1: for a time was a real champion of some of 410 00:26:20,960 --> 00:26:25,520 Speaker 1: these marquee Chinese policies that were meant to burnish Chinese 411 00:26:25,520 --> 00:26:28,840 Speaker 1: power throughout the world. They have come out publicly and 412 00:26:28,840 --> 00:26:32,000 Speaker 1: said they've changed their ways with regard to, for instance, 413 00:26:32,000 --> 00:26:36,359 Speaker 1: the Chinese government. Are they explicitly not working with Chinese 414 00:26:37,400 --> 00:26:41,800 Speaker 1: government owned or run companies. No, no, no, they have 415 00:26:41,880 --> 00:26:44,600 Speaker 1: not said that at all, So they they are still 416 00:26:44,640 --> 00:26:47,639 Speaker 1: working with some of the biggest Chinese state owned companies. 417 00:26:47,920 --> 00:26:51,080 Speaker 1: What we looked at in our book is the nineties 418 00:26:51,119 --> 00:26:55,040 Speaker 1: six Chinese companies, which are the centrally managed state owned 419 00:26:55,080 --> 00:26:58,520 Speaker 1: companies that they're called the John Young Ta. These are 420 00:26:58,560 --> 00:27:02,040 Speaker 1: the companies that are the basis for Chinese state power. 421 00:27:02,440 --> 00:27:06,040 Speaker 1: And so there are many of these companies that mckensey 422 00:27:06,160 --> 00:27:09,160 Speaker 1: works for. In fact, we never found them really working 423 00:27:09,240 --> 00:27:12,920 Speaker 1: for the you know, the interior ministries the defense ministries 424 00:27:12,960 --> 00:27:15,640 Speaker 1: in these countries, but they don't have to work with 425 00:27:15,760 --> 00:27:19,840 Speaker 1: those ministries necessarily to be engaged in work that's in 426 00:27:19,960 --> 00:27:24,399 Speaker 1: direct opposition to, for instance, the interests of the United States, 427 00:27:24,880 --> 00:27:27,119 Speaker 1: that's right. So you know, one of the areas we 428 00:27:27,240 --> 00:27:29,760 Speaker 1: we looked at was their work for a company called 429 00:27:29,840 --> 00:27:34,359 Speaker 1: China Communications Construction Company, which builds those artificial islands in 430 00:27:34,400 --> 00:27:37,080 Speaker 1: the South China Sea that some people fear will turn 431 00:27:37,160 --> 00:27:39,840 Speaker 1: that area into just a big Chinese lake. We know 432 00:27:39,920 --> 00:27:43,880 Speaker 1: that the Pentagon is really concerned about this, and McKinsey 433 00:27:43,920 --> 00:27:45,960 Speaker 1: obviously works for the Pentagon as well, And so there's 434 00:27:45,960 --> 00:27:50,280 Speaker 1: another contradiction there. Yeah, it's it's odd and I guess 435 00:27:51,160 --> 00:27:52,840 Speaker 1: you know this has to do with the perspective that 436 00:27:52,840 --> 00:27:55,600 Speaker 1: you take my guests would be and and you keep 437 00:27:55,640 --> 00:27:57,960 Speaker 1: me honest here. The way they defend that is to say, 438 00:27:57,960 --> 00:28:00,040 Speaker 1: we're a global company, We're not a US come I. 439 00:28:00,240 --> 00:28:03,440 Speaker 1: We don't have anybody's particular interests in mind. We want 440 00:28:03,440 --> 00:28:07,760 Speaker 1: to help the people who pay us to advance their 441 00:28:08,600 --> 00:28:13,440 Speaker 1: their agenda, whatever that agenda is. That maybe so, but 442 00:28:14,280 --> 00:28:16,840 Speaker 1: I'm sorry. You know, if you're working for one client 443 00:28:17,160 --> 00:28:20,679 Speaker 1: and the interests are opposed to another client, especially if 444 00:28:20,680 --> 00:28:25,240 Speaker 1: that clients, you know, the US government, and if the 445 00:28:25,280 --> 00:28:29,240 Speaker 1: work in Mackenzie's doing is in contradiction to national security, 446 00:28:29,520 --> 00:28:33,480 Speaker 1: I think that's something that they called out. Okay, so 447 00:28:33,600 --> 00:28:36,720 Speaker 1: other shocking stories, and we'll just touch on these. Mackenzie's 448 00:28:36,840 --> 00:28:41,920 Speaker 1: role in securitized debt. You know, this idea of turning 449 00:28:42,080 --> 00:28:46,080 Speaker 1: debt into essentially a stock that other people can buy 450 00:28:46,240 --> 00:28:48,480 Speaker 1: or a security that other people can buy to get 451 00:28:48,560 --> 00:28:52,520 Speaker 1: debt off your books, which in many ways lead directly 452 00:28:52,640 --> 00:28:56,360 Speaker 1: to the housing collapse and bankrupting at least tens, if 453 00:28:56,360 --> 00:29:00,320 Speaker 1: not hundreds of thousands of Americans. They did of work 454 00:29:00,360 --> 00:29:04,360 Speaker 1: at Purdue literally using the word turbo charging sales of 455 00:29:04,360 --> 00:29:08,920 Speaker 1: OxyContin in the middle of the opioid pandemic. It was 456 00:29:08,960 --> 00:29:12,760 Speaker 1: obviously already clear that this was a problem when McKenzie 457 00:29:12,800 --> 00:29:15,120 Speaker 1: stepped in and tried to help produce pharmacs sell more 458 00:29:15,240 --> 00:29:18,400 Speaker 1: of this stuff. Which leads to the question that I 459 00:29:18,440 --> 00:29:20,920 Speaker 1: have about this company, which is, is there a client 460 00:29:21,080 --> 00:29:24,880 Speaker 1: you think they would not take on? Um? I am 461 00:29:24,920 --> 00:29:27,600 Speaker 1: sure there are clients they would not take on. And 462 00:29:27,760 --> 00:29:30,080 Speaker 1: you know, we don't hear about the clients they reject. 463 00:29:30,200 --> 00:29:34,080 Speaker 1: McKenzie says, they actually turned down a lot of work. 464 00:29:34,320 --> 00:29:39,200 Speaker 1: I don't know what that work is specifically. Yeah, okay, 465 00:29:39,440 --> 00:29:42,680 Speaker 1: So just to to round this up a little bit, 466 00:29:42,720 --> 00:29:45,000 Speaker 1: I found myself as I read the book and listen 467 00:29:45,040 --> 00:29:48,760 Speaker 1: to all these stories, having a lot of thoughts about this. Mackenzie, 468 00:29:49,520 --> 00:29:51,640 Speaker 1: in one way or another, has been at the scene 469 00:29:51,640 --> 00:29:54,480 Speaker 1: of some of the most egregious examples of capitalism run 470 00:29:54,480 --> 00:29:56,600 Speaker 1: a muck, and throughout the book you pointed out that 471 00:29:56,680 --> 00:30:02,120 Speaker 1: in many cases the strongest criticism can from within, most 472 00:30:02,200 --> 00:30:06,040 Speaker 1: often from young consultants who joined to make a positive 473 00:30:06,040 --> 00:30:08,840 Speaker 1: and lasting change on the world, Like the Sign says, 474 00:30:09,040 --> 00:30:12,600 Speaker 1: and we're shocked by what they discovered when they got 475 00:30:12,640 --> 00:30:15,520 Speaker 1: in there. And you know, this is part of a 476 00:30:15,560 --> 00:30:20,560 Speaker 1: broader movement among young people who are demanding change. And 477 00:30:21,160 --> 00:30:24,160 Speaker 1: I guess my question is, how do you think mackenzie 478 00:30:24,200 --> 00:30:29,560 Speaker 1: stays relevant in that changing landscape and continues to win 479 00:30:29,720 --> 00:30:33,440 Speaker 1: with talent. If you look at the mckensey website, you 480 00:30:33,560 --> 00:30:36,600 Speaker 1: could be forgiven for thinking that they are the poster 481 00:30:36,760 --> 00:30:40,760 Speaker 1: child for responsible capitalism, for ethical capitalism. It's all about 482 00:30:40,840 --> 00:30:44,520 Speaker 1: doing good, it's all about saving the planet. So on 483 00:30:44,560 --> 00:30:49,200 Speaker 1: the surface, they seem like a very ethical company, but again, 484 00:30:49,760 --> 00:30:53,600 Speaker 1: the work that makes them a lot of money oftentimes 485 00:30:53,720 --> 00:30:59,040 Speaker 1: is in contradiction to their stated values as a company. Well, 486 00:30:59,080 --> 00:31:01,800 Speaker 1: in addition to claiming to be purpose led themselves, they 487 00:31:01,920 --> 00:31:05,720 Speaker 1: also claim to be helping clients make the transition to 488 00:31:05,800 --> 00:31:08,600 Speaker 1: being purpose led today. It's a big way to make money, 489 00:31:09,280 --> 00:31:13,800 Speaker 1: it's it is. Yeah, I just question their credentials. We 490 00:31:13,840 --> 00:31:15,640 Speaker 1: certainly do. But you know they can make a lot 491 00:31:15,680 --> 00:31:19,280 Speaker 1: of money helping companies with their environmental these e s 492 00:31:19,320 --> 00:31:21,760 Speaker 1: G goals or you know that that's that's a big 493 00:31:21,800 --> 00:31:26,480 Speaker 1: way to make money. And so advises on this. Yeah, 494 00:31:26,880 --> 00:31:30,400 Speaker 1: one other quick um area that I wanted to delve into. 495 00:31:30,440 --> 00:31:33,520 Speaker 1: His values. They have numerous values and they all sound 496 00:31:33,640 --> 00:31:36,760 Speaker 1: as values tend to really really great, But there are 497 00:31:36,960 --> 00:31:40,320 Speaker 1: three that I wanted to probe on. The first is 498 00:31:40,960 --> 00:31:45,000 Speaker 1: preserving client confidences. You know, their renowned for secrecy. They 499 00:31:45,120 --> 00:31:49,760 Speaker 1: claim that it's for their clients. But the other revealing 500 00:31:49,800 --> 00:31:51,920 Speaker 1: thing about your book is that this policy of total 501 00:31:51,960 --> 00:31:55,480 Speaker 1: secrecy has been incredibly profitable for them, and I guess 502 00:31:55,480 --> 00:31:58,880 Speaker 1: my question is do you think that can endure? You know, 503 00:31:59,040 --> 00:32:02,040 Speaker 1: secrets are just harder to keep these days, so do 504 00:32:02,120 --> 00:32:05,440 Speaker 1: you think that policy is going to change. I don't 505 00:32:05,440 --> 00:32:08,400 Speaker 1: think it's going to change. I think it's baked into mckenzy. 506 00:32:08,680 --> 00:32:11,800 Speaker 1: And some of that is legitimate tie because, for example, 507 00:32:12,120 --> 00:32:14,840 Speaker 1: if they have trade secrets that they learned from a company, 508 00:32:14,880 --> 00:32:17,320 Speaker 1: they can't reveal that, so they have to be trusted 509 00:32:17,360 --> 00:32:21,360 Speaker 1: to keep those secrets. But it is becoming easier in 510 00:32:21,400 --> 00:32:25,720 Speaker 1: some ways, you know, through lawsuits, through whistleblowers, through very 511 00:32:25,800 --> 00:32:29,360 Speaker 1: idealistic young people who just they're not going to take 512 00:32:29,400 --> 00:32:33,560 Speaker 1: it anymore and they want to work for an ethical company. 513 00:32:33,720 --> 00:32:36,960 Speaker 1: So I do believe in you know that it does 514 00:32:37,040 --> 00:32:40,480 Speaker 1: depend though on continued attention by journalists. If there's not 515 00:32:40,560 --> 00:32:44,240 Speaker 1: attention paid to these companies, then I think that secrecy 516 00:32:44,480 --> 00:32:49,480 Speaker 1: and especially the malign aspects of that secrecy will continue. 517 00:32:49,960 --> 00:32:55,040 Speaker 1: Another value observe high ethical standards. How are they doing here? Yeah, 518 00:32:55,120 --> 00:32:57,240 Speaker 1: well I think, uh, you know, there's some there's some 519 00:32:57,320 --> 00:33:00,320 Speaker 1: issues there. I guess the real question is one happens 520 00:33:00,320 --> 00:33:03,400 Speaker 1: when this value contradicts either the secrecy value or the 521 00:33:03,440 --> 00:33:06,440 Speaker 1: firm's profitability. You know, lots of companies have values and 522 00:33:06,480 --> 00:33:10,360 Speaker 1: mission statements, and usually they they're really meaningless, right. I 523 00:33:10,440 --> 00:33:13,360 Speaker 1: do think mckensey is different. Um, they really take this 524 00:33:13,400 --> 00:33:17,040 Speaker 1: stuff seriously. They you know that people are always talking 525 00:33:17,080 --> 00:33:20,560 Speaker 1: about values at McKinsey. They have a Values Day, you know, 526 00:33:20,920 --> 00:33:23,640 Speaker 1: they stand down and talk about values every year, and 527 00:33:24,080 --> 00:33:26,760 Speaker 1: you see it an email after email after email. The 528 00:33:27,960 --> 00:33:30,000 Speaker 1: another value I'll have to say is that the right 529 00:33:30,080 --> 00:33:33,360 Speaker 1: to dissent, the obligation to dissent if you see something wrong, 530 00:33:33,800 --> 00:33:36,360 Speaker 1: you say something, and that that is a value that's 531 00:33:36,400 --> 00:33:39,040 Speaker 1: invoked a lot, and that's helped us write our book 532 00:33:39,120 --> 00:33:43,080 Speaker 1: because of these incredible emails that these young mckensey associates 533 00:33:43,120 --> 00:33:45,800 Speaker 1: are writing, for example about their work with ICE, uh, 534 00:33:45,920 --> 00:33:49,960 Speaker 1: you know, immigration and customs enforcement. And so there's that value. 535 00:33:49,960 --> 00:33:52,840 Speaker 1: But you know, kind of like with Lord of the Rings, 536 00:33:52,840 --> 00:33:55,400 Speaker 1: where there's one ring, you know, that rules them all, 537 00:33:55,560 --> 00:33:58,360 Speaker 1: one ring that binds them the the one value that 538 00:33:58,480 --> 00:34:03,240 Speaker 1: is above all the other values is the client interests 539 00:34:03,280 --> 00:34:07,240 Speaker 1: come first. Client interests come first. And but that's a 540 00:34:07,520 --> 00:34:11,480 Speaker 1: If your client is a bad actor and you're working 541 00:34:11,840 --> 00:34:16,360 Speaker 1: unstoppably to help, what is your responsibility then in the world, 542 00:34:16,480 --> 00:34:20,640 Speaker 1: right do you have none? I mean so so yes? Um. 543 00:34:20,719 --> 00:34:25,279 Speaker 1: The obligation to keep your client confidences and to put 544 00:34:25,360 --> 00:34:29,600 Speaker 1: the clients interests above the firms can lead you to 545 00:34:30,320 --> 00:34:34,160 Speaker 1: basically doing things that, from a societal point of view, 546 00:34:34,200 --> 00:34:40,480 Speaker 1: are just unethical. Yeah. Um, okay, here's a here's a 547 00:34:40,680 --> 00:34:43,640 Speaker 1: really self serving question for you, Mike. You know, you're 548 00:34:43,680 --> 00:34:47,240 Speaker 1: obviously a professional journalist, and we're obviously amateurs at calling bullshit. 549 00:34:48,200 --> 00:34:51,200 Speaker 1: We just follow our nose, and so far, our nose 550 00:34:51,280 --> 00:34:56,920 Speaker 1: has led us to do individual episodes on Jewel, BP, Course, Civic, 551 00:34:57,080 --> 00:34:58,920 Speaker 1: all of whom are mentioned in the book, and the 552 00:34:58,960 --> 00:35:02,600 Speaker 1: FDA also in the book. And I was just blown 553 00:35:02,600 --> 00:35:05,880 Speaker 1: away to discover that the common denominator between all of 554 00:35:05,920 --> 00:35:09,879 Speaker 1: those entities is mckensey. What do you make of that? 555 00:35:10,880 --> 00:35:14,919 Speaker 1: They're everywhere, They're they're absolutely everywhere. They work for all 556 00:35:14,960 --> 00:35:18,239 Speaker 1: these companies, and they work for all these government agencies. 557 00:35:18,560 --> 00:35:21,040 Speaker 1: So if you scratch the surface at a lot of companies, 558 00:35:21,080 --> 00:35:24,840 Speaker 1: you know, you'll discover mackensey. Was there another thing that 559 00:35:24,920 --> 00:35:28,480 Speaker 1: I found myself thinking over and over again, how little 560 00:35:28,560 --> 00:35:31,200 Speaker 1: I understood about the ways in which the world that 561 00:35:31,239 --> 00:35:33,399 Speaker 1: we all live in today has been shaped by this 562 00:35:33,480 --> 00:35:40,680 Speaker 1: one firm. And it's easy to really make up a 563 00:35:40,719 --> 00:35:44,640 Speaker 1: fairly scary story about their impact by connecting a few dots. 564 00:35:44,680 --> 00:35:47,399 Speaker 1: If I told you the story, it would go kind 565 00:35:47,400 --> 00:35:52,200 Speaker 1: of like, well, the relentless focus on helping corporations externalized 566 00:35:52,320 --> 00:35:57,240 Speaker 1: cost like pollution, and also by downsizing and all shoring 567 00:35:57,320 --> 00:36:02,200 Speaker 1: talent and advocating for executive pay has led to the 568 00:36:02,200 --> 00:36:07,319 Speaker 1: climate crisis and also income inequality, as well as the 569 00:36:07,360 --> 00:36:11,319 Speaker 1: destruction of the middle class, which leads to depression and 570 00:36:11,360 --> 00:36:16,160 Speaker 1: anxiety in in the devastated middle class, and political polarization, 571 00:36:16,400 --> 00:36:21,720 Speaker 1: which leads to the opioid crisis and the rise of authoritarianism. 572 00:36:21,760 --> 00:36:26,680 Speaker 1: So we can't blame McKenzie for this whole mess, of course, 573 00:36:28,000 --> 00:36:32,239 Speaker 1: But maybe we got started on this because of the 574 00:36:32,280 --> 00:36:35,840 Speaker 1: feeling that that McKenzie, you know, had a role in this. 575 00:36:36,360 --> 00:36:40,520 Speaker 1: What so many McKenzie consultants and former consultants say, is 576 00:36:40,560 --> 00:36:44,320 Speaker 1: that McKenzie is an accelerant. Several people who used that word, 577 00:36:44,600 --> 00:36:49,919 Speaker 1: they're an accelerant. They didn't invent assets securitization, but they 578 00:36:49,960 --> 00:36:54,160 Speaker 1: spread the gospel. They didn't invent offshoring, but they spread 579 00:36:54,200 --> 00:36:58,640 Speaker 1: the gospel. They didn't invent shareholder capitalism, but they spread 580 00:36:58,680 --> 00:37:02,680 Speaker 1: the gospel. Yeah, I think that's that's a great point, 581 00:37:02,680 --> 00:37:05,120 Speaker 1: and it's a great way to think about them, you know, 582 00:37:05,200 --> 00:37:10,880 Speaker 1: for for better or worse. Okay, So just a reminder, 583 00:37:11,040 --> 00:37:16,040 Speaker 1: mackenzie's purpose is to help create positive, enduring change in 584 00:37:16,080 --> 00:37:19,600 Speaker 1: the world. And so Mike, if you you know, we're 585 00:37:19,760 --> 00:37:23,880 Speaker 1: able to give them advice on how they could change 586 00:37:23,880 --> 00:37:26,920 Speaker 1: to better live that purpose, what would you tell them? 587 00:37:26,960 --> 00:37:28,959 Speaker 1: You know, I'm not a philosopher and I don't play 588 00:37:28,960 --> 00:37:32,400 Speaker 1: one on TV. But when you see unethical behavior, you 589 00:37:32,480 --> 00:37:35,600 Speaker 1: know it. It doesn't take a genius to know that 590 00:37:35,680 --> 00:37:38,479 Speaker 1: you shouldn't be working for a hospital to extract money 591 00:37:38,480 --> 00:37:42,560 Speaker 1: out of poor people. You shouldn't be pushing opioids. You 592 00:37:42,600 --> 00:37:45,840 Speaker 1: shouldn't be working for big tobacco. You shouldn't be working 593 00:37:45,880 --> 00:37:48,480 Speaker 1: for the Saudi government to make them more sustainable, or 594 00:37:48,560 --> 00:37:52,560 Speaker 1: with Chinese government ministries. It doesn't take a genius. There 595 00:37:52,560 --> 00:37:55,920 Speaker 1: are gray areas, of course, but they need to have 596 00:37:56,040 --> 00:37:58,799 Speaker 1: a lot more of and I don't use this word 597 00:37:58,840 --> 00:38:01,600 Speaker 1: a lot, but a lot more EQ a lot more 598 00:38:01,640 --> 00:38:04,640 Speaker 1: emotional quote that they don't have that now. They're so 599 00:38:04,719 --> 00:38:07,480 Speaker 1: focused on their spreadsheets and their slide decks than in 600 00:38:07,600 --> 00:38:10,520 Speaker 1: so many cases they lose sight of the big picture 601 00:38:10,880 --> 00:38:13,480 Speaker 1: and that's the purpose of their work and the ethics 602 00:38:13,560 --> 00:38:15,640 Speaker 1: of their work. So they need to be much more 603 00:38:15,680 --> 00:38:19,640 Speaker 1: conscious about that. Mike, last question on this show. We 604 00:38:19,680 --> 00:38:22,320 Speaker 1: have a tool, or to use a McKinsey ism, a 605 00:38:22,440 --> 00:38:26,520 Speaker 1: technology called the B S scale to measure the gap 606 00:38:26,600 --> 00:38:30,040 Speaker 1: between word. Indeed, it goes from zero to one hundred, 607 00:38:30,719 --> 00:38:34,440 Speaker 1: zero being the best zero b s and one hundred 608 00:38:34,520 --> 00:38:38,560 Speaker 1: being the worst total bs. So on that scale, how 609 00:38:38,600 --> 00:38:42,160 Speaker 1: would you rate mckensey. So this goes against all the 610 00:38:42,239 --> 00:38:45,520 Speaker 1: instincts as a journalist to give you this number, but 611 00:38:45,520 --> 00:38:47,879 Speaker 1: but I'm gonna do it. I would have to give 612 00:38:47,960 --> 00:38:50,680 Speaker 1: them a ninety. So they're they're way up there on 613 00:38:50,840 --> 00:38:52,959 Speaker 1: the BS. And you know, I think our whole book 614 00:38:53,000 --> 00:38:56,680 Speaker 1: has been calling out the b s at mckensey. They 615 00:38:56,719 --> 00:38:59,880 Speaker 1: do lots of great work, they have lots of great people. 616 00:39:00,360 --> 00:39:02,960 Speaker 1: So many people at McKenzie I am their friends. I 617 00:39:02,960 --> 00:39:08,000 Speaker 1: would you know. They're great people, but on such important, 618 00:39:08,040 --> 00:39:11,719 Speaker 1: big issues around the world, they really fall short and 619 00:39:11,840 --> 00:39:14,800 Speaker 1: it clashes so much with what they say in public 620 00:39:14,840 --> 00:39:18,719 Speaker 1: on their website. Mike, thank you so much for being 621 00:39:18,719 --> 00:39:21,920 Speaker 1: here today. This was an awesome conversation and thank you 622 00:39:21,960 --> 00:39:23,640 Speaker 1: for the work that you're doing. Please keep it up. 623 00:39:23,920 --> 00:39:28,120 Speaker 1: Thank you very much. Time. It was a real pleasure, folks. 624 00:39:28,719 --> 00:39:32,520 Speaker 1: It is time to make the call. Is mackenzie really 625 00:39:32,960 --> 00:39:36,920 Speaker 1: creating positive and lasting change in the world? Based on 626 00:39:36,960 --> 00:39:41,399 Speaker 1: what I've heard so far, I gotta call bullshit. If 627 00:39:41,440 --> 00:39:45,560 Speaker 1: your purpose is to create positive, lasting change, then you 628 00:39:45,600 --> 00:39:48,040 Speaker 1: have to help the world think long term rather than 629 00:39:48,080 --> 00:39:52,319 Speaker 1: continuing the fixation with the latest quarterly results. If you're 630 00:39:52,360 --> 00:39:55,759 Speaker 1: going to create positive, lasting change in the world, you 631 00:39:55,800 --> 00:39:58,480 Speaker 1: have to decide that there are good client dollars and 632 00:39:58,520 --> 00:40:01,359 Speaker 1: there are bad client dollars, and you have to learn 633 00:40:01,440 --> 00:40:05,279 Speaker 1: to say no to the bad client dollars. And if 634 00:40:05,320 --> 00:40:09,360 Speaker 1: you want to create positive, lasting change, you have to 635 00:40:09,400 --> 00:40:11,520 Speaker 1: have the courage to take a stand on issues that 636 00:40:11,560 --> 00:40:16,200 Speaker 1: matter to the next generation of McKinsey consultants and McKenzie clients. 637 00:40:18,560 --> 00:40:22,680 Speaker 1: McKenzie has had multiple chances over the years, especially lately, 638 00:40:22,880 --> 00:40:26,000 Speaker 1: to make some of these changes. So far they have 639 00:40:26,120 --> 00:40:31,880 Speaker 1: completely failed. But as you know, we believe that bullshit 640 00:40:31,960 --> 00:40:34,960 Speaker 1: is a treatable condition. So right after the break, we're 641 00:40:34,960 --> 00:40:37,960 Speaker 1: going to talk with two x McKinsey consultants about actions 642 00:40:37,960 --> 00:40:41,839 Speaker 1: the firm could take to turn things around. Stick with us, 643 00:40:52,840 --> 00:40:56,680 Speaker 1: all right, folks. I am very excited to introduce today's experts, 644 00:40:56,960 --> 00:41:02,040 Speaker 1: both ex mckensey consultants, Rizwan Nave and Eric Edgstrom. We're 645 00:41:02,040 --> 00:41:04,520 Speaker 1: going to help us help McKenzie to better live their 646 00:41:04,560 --> 00:41:08,879 Speaker 1: stated purpose. Welcome to calling bullshit. Pleasure to be here. 647 00:41:09,040 --> 00:41:12,080 Speaker 1: It's great to be here. So Rizonant, please tell us 648 00:41:12,080 --> 00:41:14,200 Speaker 1: a little bit about your background, about your work at 649 00:41:14,280 --> 00:41:18,200 Speaker 1: McKenzie and and also what made you decide to to 650 00:41:18,360 --> 00:41:21,360 Speaker 1: leave the firm. I'm a professional with about a decade 651 00:41:21,360 --> 00:41:25,640 Speaker 1: of experience in the broader natural resources space. About half 652 00:41:25,680 --> 00:41:27,800 Speaker 1: of that or five years at McKinsey, where I was 653 00:41:27,840 --> 00:41:30,920 Speaker 1: a consultant and then an engagement manager in our Electric, 654 00:41:30,960 --> 00:41:33,560 Speaker 1: Power and Natural Gas practice, which is a subgroup of 655 00:41:33,600 --> 00:41:37,400 Speaker 1: our broader global energy and Materials group. My job at 656 00:41:37,480 --> 00:41:41,319 Speaker 1: McKenzie as an engagement manager was to lead teams and 657 00:41:41,360 --> 00:41:44,919 Speaker 1: work with the senior sea level leadership and board level 658 00:41:44,960 --> 00:41:48,239 Speaker 1: clients and the power and sustainability space. I've worked on 659 00:41:48,360 --> 00:41:53,080 Speaker 1: both highly emitting and decarbonizing clients, but the latter part 660 00:41:53,120 --> 00:41:55,680 Speaker 1: of my career I would say was almost exclusively focused 661 00:41:55,680 --> 00:41:58,800 Speaker 1: on energy transition topics. At this point, maybe it's worth 662 00:41:58,840 --> 00:42:01,920 Speaker 1: talking a little bit about the context around in my departure. 663 00:42:03,080 --> 00:42:06,480 Speaker 1: For myself, I try to work within paras line trajectory 664 00:42:06,600 --> 00:42:10,440 Speaker 1: to articulate a different way to help these clients decarbonized 665 00:42:10,440 --> 00:42:14,080 Speaker 1: into articulate that the firm should measure, disclose set and 666 00:42:14,200 --> 00:42:18,640 Speaker 1: aspiration for reducing its client emissions and take steps gradually 667 00:42:18,640 --> 00:42:22,799 Speaker 1: over time to calibrate such that it's edging this portfolio 668 00:42:22,880 --> 00:42:26,000 Speaker 1: towards a Paris and line trajectory. I couldn't fully explain 669 00:42:26,160 --> 00:42:30,560 Speaker 1: why we were running into leadership not giving us time 670 00:42:30,760 --> 00:42:34,200 Speaker 1: or not fully engaging or various explanations as to why 671 00:42:34,239 --> 00:42:37,560 Speaker 1: this is complex and needs a second look. And after 672 00:42:38,440 --> 00:42:41,279 Speaker 1: sort of months of being stuck in this, myself and 673 00:42:41,320 --> 00:42:44,640 Speaker 1: a few other colleagues were quite motivated articulated in a 674 00:42:44,760 --> 00:42:47,479 Speaker 1: letter to senior leadership that we need to do more 675 00:42:47,520 --> 00:42:50,040 Speaker 1: on our client emissions that we carry immense risk as 676 00:42:50,040 --> 00:42:54,440 Speaker 1: our clients irrevocably alter the Earth's environment with their emissions, 677 00:42:55,280 --> 00:42:58,480 Speaker 1: and we, you know, open this to an audience inside 678 00:42:58,480 --> 00:43:02,399 Speaker 1: the firm globally, We've got eleven signatures within a week, 679 00:43:02,440 --> 00:43:05,240 Speaker 1: I believe, and then suddenly the same folks who couldn't 680 00:43:05,320 --> 00:43:08,879 Speaker 1: give us as much time were very attentive. Yeah, that's 681 00:43:08,880 --> 00:43:11,680 Speaker 1: a huge number of people. Just contextually how many people 682 00:43:11,760 --> 00:43:16,880 Speaker 1: work at Mackenzie I would say around thirty. That letter, 683 00:43:18,040 --> 00:43:22,799 Speaker 1: in functional terms also went nowhere. After months of this, 684 00:43:23,200 --> 00:43:28,920 Speaker 1: you know, having seen the frankly very uninspirational response, I 685 00:43:28,960 --> 00:43:33,440 Speaker 1: resigned and articulated in an email to senior leadership, copying 686 00:43:33,880 --> 00:43:37,880 Speaker 1: the majority of our sustainability practice globally, where by I 687 00:43:38,440 --> 00:43:43,200 Speaker 1: essentially laid out the case that we do have some responsibility. 688 00:43:43,280 --> 00:43:45,799 Speaker 1: If we take credit for our impact, we are also 689 00:43:45,800 --> 00:43:49,640 Speaker 1: associated with the negative externalities of that impact, and we 690 00:43:49,719 --> 00:43:52,440 Speaker 1: cannot profess to the world and shout to the rooftops 691 00:43:52,480 --> 00:43:56,920 Speaker 1: that we are the greatest private sector catalyst for decarbonization 692 00:43:56,960 --> 00:44:01,640 Speaker 1: globally while continuing to serve easily the worst polluters on 693 00:44:01,680 --> 00:44:04,319 Speaker 1: the planet that are not on even on a trajectory 694 00:44:04,400 --> 00:44:09,080 Speaker 1: and essentially resisting or I'll try refusing to institute even 695 00:44:09,120 --> 00:44:15,440 Speaker 1: the most basic modicum off measurement, disclosure, targets, setting and policies. Right, 696 00:44:15,960 --> 00:44:18,880 Speaker 1: I think that context will be very helpful for people, 697 00:44:18,920 --> 00:44:22,400 Speaker 1: and it's it's hard to argue with your logic. So, Eric, 698 00:44:22,800 --> 00:44:25,120 Speaker 1: just as Raiswana has done, can you tell us a 699 00:44:25,120 --> 00:44:27,600 Speaker 1: little bit about yourself and also the situation that you 700 00:44:27,680 --> 00:44:30,319 Speaker 1: found yourself in that caused you decide to move on 701 00:44:30,360 --> 00:44:33,160 Speaker 1: from the firm. So I grew up in Massachusetts and 702 00:44:33,320 --> 00:44:37,120 Speaker 1: my first career was in the military. I attended West 703 00:44:37,160 --> 00:44:40,960 Speaker 1: Point and deployed to Direct Combat where I led troops 704 00:44:41,160 --> 00:44:45,719 Speaker 1: in Kanadahar Province, Afghanistan, and after that was part of 705 00:44:45,719 --> 00:44:48,760 Speaker 1: the Honor Guard, where I was the Presidential Escort platoon 706 00:44:48,840 --> 00:44:55,520 Speaker 1: leader during the Obama administration. From I realized that the 707 00:44:55,560 --> 00:44:58,880 Speaker 1: military was not sort of the public service good, especially 708 00:44:58,960 --> 00:45:02,800 Speaker 1: that particular mission, the War on Terror, since military service 709 00:45:02,920 --> 00:45:06,560 Speaker 1: is not an absolute good, that I wanted to find 710 00:45:07,000 --> 00:45:10,640 Speaker 1: a different way to apply myself to the you know, 711 00:45:10,760 --> 00:45:14,080 Speaker 1: my my vocation in the world. And so I attended 712 00:45:14,120 --> 00:45:16,920 Speaker 1: Oxford and did a dual degree, doing an MBA in 713 00:45:16,960 --> 00:45:21,040 Speaker 1: a Master science studying climate change, and I moved to Australia, 714 00:45:21,440 --> 00:45:26,719 Speaker 1: so I joined McKenzie in and while I was there, 715 00:45:26,760 --> 00:45:30,799 Speaker 1: I found that the projects that were available were not 716 00:45:31,040 --> 00:45:35,160 Speaker 1: anything like what we're advertised, and rather than what you 717 00:45:35,239 --> 00:45:39,520 Speaker 1: might see on a mckensey website which talks about vaccine, 718 00:45:39,920 --> 00:45:44,640 Speaker 1: cold storage or renewable energy, that in practice is far 719 00:45:45,200 --> 00:45:48,279 Speaker 1: and few in between. The difference, of course, between sort 720 00:45:48,320 --> 00:45:50,839 Speaker 1: of puffery of any business where they try to make 721 00:45:50,920 --> 00:45:53,959 Speaker 1: themselves look like number one and we have the best 722 00:45:54,040 --> 00:45:58,439 Speaker 1: flavor was very different with mckensey. You're you're actively saying 723 00:45:58,440 --> 00:46:01,520 Speaker 1: that we're taking a very positive role and that they're 724 00:46:01,560 --> 00:46:04,120 Speaker 1: hanging their hat on the notion that this is going 725 00:46:04,160 --> 00:46:06,680 Speaker 1: to be something that we're going to work on. And 726 00:46:06,840 --> 00:46:08,680 Speaker 1: to set the stage, you know, we went on a 727 00:46:08,760 --> 00:46:11,360 Speaker 1: firm off site to Port Douglas in the Great Barrier 728 00:46:11,440 --> 00:46:15,680 Speaker 1: Reef and the consultants would go out for a day 729 00:46:15,719 --> 00:46:18,000 Speaker 1: trip and go snorkeling to look at the coral reefs 730 00:46:18,000 --> 00:46:22,239 Speaker 1: which were actively dying, and then they would return back 731 00:46:22,400 --> 00:46:26,000 Speaker 1: to work where they would help increase extraction at a 732 00:46:26,040 --> 00:46:29,360 Speaker 1: thermal coal site. And I remember hearing people say stuff 733 00:46:29,360 --> 00:46:30,959 Speaker 1: like well, at least you know, we got a chance 734 00:46:31,000 --> 00:46:33,920 Speaker 1: to see it before it died out, and it was 735 00:46:34,600 --> 00:46:38,919 Speaker 1: basically through our own work or the firm zone work 736 00:46:39,040 --> 00:46:43,759 Speaker 1: rather that it was making the likelihood of a sustainable 737 00:46:43,800 --> 00:46:47,440 Speaker 1: future ever harder to achieve. So that's sort of some 738 00:46:47,480 --> 00:46:52,680 Speaker 1: of the stuff that I was passionate about, and you know, 739 00:46:52,719 --> 00:46:55,759 Speaker 1: it was more than just the work and acknowledging that 740 00:46:55,880 --> 00:46:59,400 Speaker 1: Mackenzie is an a moral institution. They're only doing what 741 00:46:59,560 --> 00:47:03,120 Speaker 1: earns the dollars. That's not necessarily a bad thing if 742 00:47:03,160 --> 00:47:07,080 Speaker 1: they advertise themselves as such. Yeah, exactly. That's that's a 743 00:47:07,160 --> 00:47:10,480 Speaker 1: key belief that we have on the show is it 744 00:47:10,600 --> 00:47:13,359 Speaker 1: just needs to do what it says on the label, right, 745 00:47:13,719 --> 00:47:17,560 Speaker 1: and and if you're transparent about just wanting to make money, 746 00:47:17,640 --> 00:47:20,040 Speaker 1: we're fine with it. But it's when you say that 747 00:47:20,160 --> 00:47:23,360 Speaker 1: your purpose is to help create positive, enduring change in 748 00:47:23,400 --> 00:47:29,319 Speaker 1: the world, and then your activities belie another agenda. Absolutely. 749 00:47:29,600 --> 00:47:34,200 Speaker 1: So the apex of the experience of sort of descent 750 00:47:34,320 --> 00:47:39,120 Speaker 1: within Mackenzie to try to realign the values of the firm. 751 00:47:39,239 --> 00:47:42,840 Speaker 1: We're at Values Day in twenty nineteen, and so every 752 00:47:42,920 --> 00:47:47,200 Speaker 1: year Mackenzie gets together to take you know, a hot wash, 753 00:47:47,360 --> 00:47:49,799 Speaker 1: look at their values and say did we live them? 754 00:47:49,880 --> 00:47:52,680 Speaker 1: This last year, where did we fall down, where did 755 00:47:52,719 --> 00:47:55,040 Speaker 1: we come short? And what might we do to improve 756 00:47:55,440 --> 00:47:58,359 Speaker 1: our values as a company, which is a great thing. 757 00:47:58,800 --> 00:48:04,280 Speaker 1: I was in the audience and the senior partner responsible 758 00:48:04,440 --> 00:48:09,000 Speaker 1: for the Asia PAC practice for Australia New Zealand came 759 00:48:09,080 --> 00:48:11,719 Speaker 1: up to the microphone and said, like, our values need 760 00:48:11,760 --> 00:48:15,239 Speaker 1: to continue to evolve as the sort of atmosphere and 761 00:48:15,680 --> 00:48:18,880 Speaker 1: what society expects of us continues to evolve. And he 762 00:48:18,960 --> 00:48:21,720 Speaker 1: said something to the effect of we should no longer 763 00:48:21,800 --> 00:48:26,360 Speaker 1: be serving clients that kill people or cheat their customers. 764 00:48:27,320 --> 00:48:30,360 Speaker 1: And I raised my hand and amongst an audience of 765 00:48:30,480 --> 00:48:34,719 Speaker 1: five people, was like, how do you reconcile this with 766 00:48:34,760 --> 00:48:38,600 Speaker 1: what we're doing with, for instance, the military, that these 767 00:48:38,640 --> 00:48:42,279 Speaker 1: actions would be considered state terrorism. We're not legally at 768 00:48:42,320 --> 00:48:45,200 Speaker 1: war with these countries that were actively bombing, and you know, 769 00:48:45,200 --> 00:48:48,160 Speaker 1: I continue to serve these clients, and so I also 770 00:48:48,200 --> 00:48:50,160 Speaker 1: you know that that didn't get me a lot of 771 00:48:50,360 --> 00:48:56,440 Speaker 1: UM positive attention, UM. And in my leaving email, I 772 00:48:56,880 --> 00:49:01,400 Speaker 1: articulated these same arguments, not really seeing any client names, 773 00:49:01,440 --> 00:49:03,960 Speaker 1: as I have not mentioned any client names in this discussion, 774 00:49:04,360 --> 00:49:08,799 Speaker 1: and I was banned from the McKenzie Alumni network so 775 00:49:09,160 --> 00:49:11,919 Speaker 1: this is a an act that I think has only 776 00:49:11,960 --> 00:49:15,880 Speaker 1: happened to other people that were insider trading, for instance. 777 00:49:16,120 --> 00:49:19,440 Speaker 1: So I had the same level of response for challenging 778 00:49:19,520 --> 00:49:23,640 Speaker 1: McKenzie's client service record as would an insider trader, and 779 00:49:24,000 --> 00:49:28,040 Speaker 1: that seems counter to McKenzie's culture. I mean, my culture. 780 00:49:28,400 --> 00:49:30,440 Speaker 1: Can I hop in there real quick? Of course, it's 781 00:49:30,520 --> 00:49:33,200 Speaker 1: not discounter to the culture. The firm has a stated 782 00:49:33,320 --> 00:49:38,080 Speaker 1: policy two policies. One is the obligation to dissent, this 783 00:49:38,200 --> 00:49:41,440 Speaker 1: notion that if you are a dissenter, you're not only 784 00:49:41,600 --> 00:49:44,040 Speaker 1: should feel supported to speak up, but you have an 785 00:49:44,080 --> 00:49:47,800 Speaker 1: obligation to speak up, which I presume Eric felt. And 786 00:49:47,840 --> 00:49:50,040 Speaker 1: then the second policy is, you know, this policy of 787 00:49:50,080 --> 00:49:53,439 Speaker 1: non retaliation, which also was not applied. And I think 788 00:49:53,440 --> 00:49:58,160 Speaker 1: it's important to read the intentions in terms of the 789 00:49:58,239 --> 00:50:00,880 Speaker 1: actions and entity takes and not in terms of what 790 00:50:00,960 --> 00:50:04,480 Speaker 1: it says. In this case and in this case, uh, 791 00:50:04,640 --> 00:50:07,640 Speaker 1: one can derive from the actions that you know the 792 00:50:08,719 --> 00:50:12,520 Speaker 1: firm is not open to certain types of descent and 793 00:50:12,600 --> 00:50:18,600 Speaker 1: does not see certain types of retaliation as inappropriate. That 794 00:50:18,600 --> 00:50:22,239 Speaker 1: that tells you a lot about the actual culture of 795 00:50:22,280 --> 00:50:25,359 Speaker 1: the company. I appreciate both of those stories. A great deal, 796 00:50:26,000 --> 00:50:28,759 Speaker 1: and our our take on on that kind of thing 797 00:50:28,760 --> 00:50:33,040 Speaker 1: we call it bullshit, a gap between word indeed, and 798 00:50:33,360 --> 00:50:36,719 Speaker 1: we also believe that that bullshit is a treatable condition, 799 00:50:36,880 --> 00:50:38,880 Speaker 1: but it has to be addressed through action. And so 800 00:50:38,960 --> 00:50:41,160 Speaker 1: that's what we heard it really today to talk about 801 00:50:41,400 --> 00:50:45,719 Speaker 1: UM is to get into some ideas to bring mckensey's 802 00:50:45,760 --> 00:50:50,000 Speaker 1: actions more closely in line with its stated purpose. So 803 00:50:50,560 --> 00:50:52,960 Speaker 1: I wonder if I could ask you, riz want to 804 00:50:53,040 --> 00:50:56,200 Speaker 1: lead us off in in a couple of minutes or less, 805 00:50:56,520 --> 00:51:00,600 Speaker 1: you know, what would you tell mckensey Global man partner 806 00:51:00,680 --> 00:51:04,560 Speaker 1: Bob stern Fells or or other McKenzie leaders to change 807 00:51:04,560 --> 00:51:08,040 Speaker 1: at McKenzie to better live their purpose, which is just 808 00:51:08,080 --> 00:51:11,239 Speaker 1: to remind folks to help create positive, enduring change in 809 00:51:11,280 --> 00:51:17,600 Speaker 1: the world. In my opinion, asking Bob, hey, you know 810 00:51:17,840 --> 00:51:20,680 Speaker 1: you should do these things, we already did that. So 811 00:51:20,760 --> 00:51:23,799 Speaker 1: in my opinion, the question to ask really is what 812 00:51:23,840 --> 00:51:27,279 Speaker 1: will society do? What will states and regulators do? Is 813 00:51:27,400 --> 00:51:30,000 Speaker 1: just trust us going to cut it? Should privately own 814 00:51:30,040 --> 00:51:33,440 Speaker 1: professional services firms be exempt from emissions measurement and disclosure 815 00:51:33,520 --> 00:51:36,759 Speaker 1: just because of their choice of financing? The question is 816 00:51:36,800 --> 00:51:40,200 Speaker 1: what will climate focused organizations do from the UN Climate 817 00:51:40,239 --> 00:51:43,600 Speaker 1: Compact and nonprofits? Are they willing to continue to engage 818 00:51:43,960 --> 00:51:46,920 Speaker 1: the services of firms knowing full well that they have 819 00:51:47,080 --> 00:51:50,640 Speaker 1: these contradictions and conflicts of interest in their portfolio? What 820 00:51:50,800 --> 00:51:54,600 Speaker 1: will governments do? What will new hires do? So to Bob, 821 00:51:54,640 --> 00:51:57,720 Speaker 1: I would say what market signals as you're waiting for 822 00:51:57,880 --> 00:52:01,520 Speaker 1: what's more, surveys that show that this is the number 823 00:52:01,640 --> 00:52:06,640 Speaker 1: one concern across alumni, current students, current employees with regards 824 00:52:06,680 --> 00:52:10,600 Speaker 1: to client emissions? Is he waiting for a lawsuit? Will 825 00:52:10,640 --> 00:52:13,000 Speaker 1: that be too late? Like I would ask those questions 826 00:52:13,000 --> 00:52:16,000 Speaker 1: because in my opinion, society needs to subject the firm 827 00:52:16,040 --> 00:52:19,239 Speaker 1: to material consequences and disclosure and then the firm will 828 00:52:19,280 --> 00:52:23,440 Speaker 1: be incentivized to act. So, to paraphrase, you were reply 829 00:52:23,560 --> 00:52:29,680 Speaker 1: to this question, McKenzie isn't or can't fix itself and 830 00:52:29,760 --> 00:52:33,759 Speaker 1: so others must fix it? Is that fair? I mean 831 00:52:33,920 --> 00:52:36,319 Speaker 1: we can simply derive that from the actions they have 832 00:52:36,480 --> 00:52:41,640 Speaker 1: taken thus far. Right. Okay, Um, that's bleak, But I 833 00:52:42,040 --> 00:52:45,200 Speaker 1: understand why you would take that position given the story 834 00:52:45,239 --> 00:52:48,239 Speaker 1: that you've just told us. So fair enough, Eric, any 835 00:52:48,280 --> 00:52:50,960 Speaker 1: thoughts about that? I mean, I think riz one is 836 00:52:51,000 --> 00:52:55,560 Speaker 1: spot on that the firm is going to respond to 837 00:52:55,880 --> 00:53:00,000 Speaker 1: the environment in which it exists. If it's no longer 838 00:53:00,000 --> 00:53:03,480 Speaker 1: a profitable with the calculus that they do to continue 839 00:53:03,520 --> 00:53:07,239 Speaker 1: serving these clients, they will stop doing it. And what 840 00:53:07,280 --> 00:53:12,160 Speaker 1: are the costs? Well, the firm doesn't manufacture anything. Mackenzie 841 00:53:12,560 --> 00:53:15,759 Speaker 1: doesn't produce any hardware. They rely on people to do 842 00:53:15,800 --> 00:53:19,120 Speaker 1: the work. If people stop showing up to apply to 843 00:53:19,200 --> 00:53:22,080 Speaker 1: mckenzy and say, like, I want to work at a 844 00:53:22,200 --> 00:53:25,760 Speaker 1: top tier consulting firm that isn't turbo charging the climate crisis, 845 00:53:26,320 --> 00:53:30,400 Speaker 1: Bob will get the message right now. The the book 846 00:53:30,480 --> 00:53:33,600 Speaker 1: that was released by the two New York Times reporters 847 00:53:33,920 --> 00:53:37,560 Speaker 1: is effectively a reputational hand grenade, and they pulled the 848 00:53:37,560 --> 00:53:39,799 Speaker 1: pin and they handed it back to Bob. He has 849 00:53:39,840 --> 00:53:45,560 Speaker 1: decided to sit on it um. The question, now that 850 00:53:45,760 --> 00:53:51,600 Speaker 1: the world knows some of the negative externalities that they multiply, 851 00:53:52,520 --> 00:53:55,080 Speaker 1: is what are they going to do about it. One 852 00:53:55,120 --> 00:53:57,480 Speaker 1: of the quotes in the book from a former senior 853 00:53:57,520 --> 00:54:03,120 Speaker 1: partner talked about it effectively being long term stupid to 854 00:54:03,200 --> 00:54:06,120 Speaker 1: continue these practices. I mean, this is the thing. Mckensey 855 00:54:06,200 --> 00:54:08,719 Speaker 1: is a business consultancy and it says it's looking to 856 00:54:08,800 --> 00:54:11,839 Speaker 1: make enduring change in the world. So it has this 857 00:54:12,000 --> 00:54:16,800 Speaker 1: long term view, but it's it's it's giving clients bad advice. 858 00:54:17,000 --> 00:54:20,040 Speaker 1: And when you're talking about being a great place to 859 00:54:20,280 --> 00:54:24,640 Speaker 1: retain exceptional talent um if you ask any gen z R. 860 00:54:25,080 --> 00:54:27,000 Speaker 1: Do you want to work at a company that knowingly 861 00:54:27,160 --> 00:54:30,400 Speaker 1: is making the most important issue facing the planet worse? 862 00:54:30,920 --> 00:54:33,440 Speaker 1: What are they going to do? So I I, you know, 863 00:54:33,560 --> 00:54:36,960 Speaker 1: hope that this gets out to all those undergrads at 864 00:54:37,080 --> 00:54:40,360 Speaker 1: Princeton and m I T and cal Tech and University 865 00:54:40,360 --> 00:54:43,240 Speaker 1: of Michigan and Georgia Tech. And when they're thinking about 866 00:54:43,440 --> 00:54:46,000 Speaker 1: what they want to do, are they in the interview 867 00:54:46,080 --> 00:54:49,319 Speaker 1: room going to ask that associate partner what are you 868 00:54:49,360 --> 00:54:52,040 Speaker 1: guys doing about this? And are you continuing to serve 869 00:54:52,080 --> 00:54:55,000 Speaker 1: these clients? They will get the message and they will change. Yeah, 870 00:54:55,560 --> 00:54:59,800 Speaker 1: I agree, thank you for that. And Eric, just directly, 871 00:55:00,040 --> 00:55:04,480 Speaker 1: would you do to fix mackenzie? What they will do 872 00:55:04,680 --> 00:55:07,359 Speaker 1: is respond to market forces. What I hope they do 873 00:55:07,600 --> 00:55:11,800 Speaker 1: would be to fix themselves as you might um hope 874 00:55:11,800 --> 00:55:16,279 Speaker 1: for as well, independently and separate for starters in a 875 00:55:17,200 --> 00:55:22,160 Speaker 1: first responder sense, stop the bleeding, So stop serving clients 876 00:55:22,600 --> 00:55:26,279 Speaker 1: on topics and This is the big distinction. It is 877 00:55:26,280 --> 00:55:30,440 Speaker 1: not an objection to serving fossil fuels and coal companies. 878 00:55:30,719 --> 00:55:34,560 Speaker 1: It is serving fossil fuels and coal companies on things 879 00:55:34,600 --> 00:55:37,480 Speaker 1: that will make climate change worse. And that is the 880 00:55:37,560 --> 00:55:40,680 Speaker 1: distinction that needs to be pulled out. Of Bob's straw 881 00:55:40,760 --> 00:55:43,360 Speaker 1: man fallacy that he published in the Wall Street Journal, 882 00:55:44,560 --> 00:55:47,799 Speaker 1: premise which no journalist has the courage to look at, 883 00:55:48,600 --> 00:55:52,279 Speaker 1: is that in his comment, the snug premise is like, 884 00:55:52,320 --> 00:55:55,160 Speaker 1: we go to the extractive industries because that's where the 885 00:55:55,200 --> 00:55:59,200 Speaker 1: benefits could be. The question within that is when you 886 00:55:59,280 --> 00:56:02,319 Speaker 1: go to those science, what are you doing? And the 887 00:56:02,400 --> 00:56:06,520 Speaker 1: answer to that question is very unsavory. And so that 888 00:56:06,719 --> 00:56:09,120 Speaker 1: is what needs to be pulled out. So stop the 889 00:56:09,160 --> 00:56:12,319 Speaker 1: bleeding in the sense of stop serving clients that are, 890 00:56:12,719 --> 00:56:16,080 Speaker 1: we know, on a four degree trajectory. Stop serving them 891 00:56:16,080 --> 00:56:19,440 Speaker 1: on either a business as usual projects to help them 892 00:56:19,520 --> 00:56:23,600 Speaker 1: enable that four degree strategy, or worse um have them 893 00:56:23,680 --> 00:56:27,279 Speaker 1: do basically work that is turbo charging the problem and 894 00:56:27,640 --> 00:56:32,239 Speaker 1: making it worse. I also want to make clear it's 895 00:56:32,280 --> 00:56:34,600 Speaker 1: not that forces within the firm are not trying to 896 00:56:34,680 --> 00:56:38,560 Speaker 1: drive the change. There are many many people who struggle 897 00:56:38,640 --> 00:56:42,319 Speaker 1: with this, who are advocating for the firm to do 898 00:56:42,400 --> 00:56:48,719 Speaker 1: more on this. So I am hopeful that this disclosure, 899 00:56:48,840 --> 00:56:53,680 Speaker 1: this attention provides them the fact base that they need 900 00:56:53,800 --> 00:56:58,240 Speaker 1: to sort of progress things. Mckinseie does incredible mark helping 901 00:56:58,520 --> 00:57:02,520 Speaker 1: clients de carbonize. We are I would say the sustainability 902 00:57:02,560 --> 00:57:06,239 Speaker 1: practice quite specialized in that the question is can we 903 00:57:06,480 --> 00:57:09,359 Speaker 1: can we continue to be able to do that with 904 00:57:09,840 --> 00:57:12,880 Speaker 1: knowing what we know? As reported in the Times, The 905 00:57:13,400 --> 00:57:17,000 Speaker 1: points that riz One and I are making, if I 906 00:57:17,000 --> 00:57:20,880 Speaker 1: can put words in his mouth, is that mckensey does 907 00:57:20,920 --> 00:57:23,040 Speaker 1: a lot of good and there is a lot of 908 00:57:23,080 --> 00:57:27,920 Speaker 1: stuff that is not inherently immoral. You know, if you 909 00:57:27,960 --> 00:57:29,880 Speaker 1: look at if if you look at the portfolio of 910 00:57:29,880 --> 00:57:31,959 Speaker 1: clients and the type of work that I would see 911 00:57:32,000 --> 00:57:35,760 Speaker 1: coming across for projects, a lot of it is pretty 912 00:57:35,840 --> 00:57:40,040 Speaker 1: hum drum corporate stuff. How do you improve second line 913 00:57:40,360 --> 00:57:44,440 Speaker 1: risk at a health insurance company? How do you offshore 914 00:57:44,920 --> 00:57:47,400 Speaker 1: pet food to another country so they don't have to 915 00:57:47,440 --> 00:57:50,479 Speaker 1: pay high taxes in this country. So there's a lot 916 00:57:50,520 --> 00:57:53,960 Speaker 1: in the middle that's just this is just business work. 917 00:57:54,680 --> 00:57:57,840 Speaker 1: But it is in some instances, whether we're talking about 918 00:57:57,840 --> 00:58:02,160 Speaker 1: opioid makers, whether we're talking about turbo charging the climate 919 00:58:02,200 --> 00:58:07,040 Speaker 1: crisis or helping the defense industry at times when the 920 00:58:07,120 --> 00:58:11,439 Speaker 1: wars in which they are fighting are indefensible. Uh, those 921 00:58:11,480 --> 00:58:14,120 Speaker 1: are the topics that they should take a harder look at. 922 00:58:14,360 --> 00:58:17,840 Speaker 1: So this isn't a wholesale you know, the consulting industry 923 00:58:17,920 --> 00:58:21,640 Speaker 1: is broken completely, but there are aspects that are broken 924 00:58:21,640 --> 00:58:25,440 Speaker 1: and it leads to really horrendous and dreadful second and 925 00:58:25,520 --> 00:58:30,120 Speaker 1: third order consequences. All right, my turn, from the naive 926 00:58:30,200 --> 00:58:33,280 Speaker 1: perspective of not having been in the belly of the beast, 927 00:58:33,600 --> 00:58:37,600 Speaker 1: I I truly believe this that we are at an 928 00:58:37,600 --> 00:58:41,760 Speaker 1: inflection point in capitalism. And I think that the form 929 00:58:41,840 --> 00:58:44,800 Speaker 1: of capitalism that we have practiced for you know, the 930 00:58:44,880 --> 00:58:49,760 Speaker 1: last I don't know, five decades, I call predatory capitalism, 931 00:58:49,880 --> 00:58:54,120 Speaker 1: but a gentler name for it would be shareholder capitalism. 932 00:58:54,200 --> 00:58:56,080 Speaker 1: You know, this idea that the sole purpose of an 933 00:58:56,160 --> 00:58:59,880 Speaker 1: organization is to enrich shareholders. That idea needs to go. 934 00:59:01,120 --> 00:59:04,640 Speaker 1: And I believe in a new form of capitalism that's 935 00:59:04,680 --> 00:59:09,080 Speaker 1: now referred to sometimes as stakeholder capitalism, that acknowledges that, 936 00:59:09,200 --> 00:59:14,520 Speaker 1: instead of existing exclusively to enriched shareholders, corporations actually exist 937 00:59:14,640 --> 00:59:18,240 Speaker 1: to serve multiple stakeholders. Their employees, other members of their 938 00:59:18,280 --> 00:59:22,480 Speaker 1: supply chain, the communities that they do business in, um 939 00:59:22,520 --> 00:59:26,560 Speaker 1: as well as the planet and and I. It is 940 00:59:26,640 --> 00:59:29,040 Speaker 1: just a fact that there is no company better position 941 00:59:29,080 --> 00:59:33,600 Speaker 1: to lead capitalism in this direction than McKenzie. Taking an 942 00:59:33,640 --> 00:59:36,680 Speaker 1: optimistic point of view here, McKenzie has the biggest opportunity 943 00:59:36,720 --> 00:59:39,560 Speaker 1: of the firm's existence sitting right in front of it 944 00:59:39,640 --> 00:59:43,240 Speaker 1: to truly live its purpose and help all companies everywhere 945 00:59:43,320 --> 00:59:47,160 Speaker 1: see that we are, like really at a turning point 946 00:59:47,280 --> 00:59:50,880 Speaker 1: for humanity, and the challenges that corporations face today to 947 00:59:51,040 --> 00:59:54,640 Speaker 1: make the changes needed to save all of us are 948 00:59:55,200 --> 01:00:01,040 Speaker 1: really complicated and really difficult. Take for example, s an ability. 949 01:00:01,120 --> 01:00:04,360 Speaker 1: Just the task of remaking global supply chains to achieve 950 01:00:04,720 --> 01:00:09,680 Speaker 1: a truly circular economy is work that no single company 951 01:00:09,720 --> 01:00:13,600 Speaker 1: could possibly take on alone. No client can do that alone. 952 01:00:13,960 --> 01:00:16,560 Speaker 1: So who would you call to do that work? Only 953 01:00:16,600 --> 01:00:19,440 Speaker 1: a company like McKenzie could help its clients, you know, 954 01:00:19,600 --> 01:00:23,800 Speaker 1: truly collaborate to take that on. And so let's imagine 955 01:00:23,800 --> 01:00:27,240 Speaker 1: for a second world in which in which McKenzie pivots 956 01:00:27,280 --> 01:00:31,240 Speaker 1: to taking responsibility for helping all companies everywhere actually make 957 01:00:31,320 --> 01:00:35,400 Speaker 1: this shift. That would be positive. It would certainly be enduring, 958 01:00:36,120 --> 01:00:39,160 Speaker 1: and as both of you have pointed out right in 959 01:00:39,240 --> 01:00:43,880 Speaker 1: the War for talent, Mackenzie would win hands down with 960 01:00:44,000 --> 01:00:48,720 Speaker 1: that strategy. And the alternative is for Mackenzie to cynically 961 01:00:48,800 --> 01:00:51,840 Speaker 1: continue to mouth the words about purpose and being purpose 962 01:00:51,960 --> 01:00:56,000 Speaker 1: led while just continuing business as usual, helping companies maximize 963 01:00:56,000 --> 01:01:00,480 Speaker 1: short term profitability. And that's definitely not positive and I 964 01:01:00,560 --> 01:01:05,720 Speaker 1: honestly don't think it's going to endure either. Thoughts on that, So, 965 01:01:05,800 --> 01:01:09,720 Speaker 1: t I appreciate the framework, and I would say you're 966 01:01:09,760 --> 01:01:13,920 Speaker 1: you're totally right right the sort of freedmanesque neoliberal era 967 01:01:14,320 --> 01:01:17,400 Speaker 1: that we have lived through that has wrought the things 968 01:01:17,440 --> 01:01:19,920 Speaker 1: that we see today. You know, I don't talk to 969 01:01:19,960 --> 01:01:22,000 Speaker 1: many people who don't think that, you know, things are 970 01:01:22,040 --> 01:01:26,320 Speaker 1: working really well and like, you know, stuff is awesome, everything, 971 01:01:26,840 --> 01:01:29,560 Speaker 1: everything is awesome. And I don't talk to a lot 972 01:01:29,600 --> 01:01:31,120 Speaker 1: of people like that. I think the vast majority of 973 01:01:31,160 --> 01:01:33,800 Speaker 1: people I speak to, you know, more or less understand 974 01:01:33,840 --> 01:01:37,560 Speaker 1: that this this sort of system of incentives is not working. 975 01:01:37,600 --> 01:01:39,800 Speaker 1: It leads to a lot of the externalities you've spoken 976 01:01:39,800 --> 01:01:42,960 Speaker 1: about in this conversation, and you know, there's an awareness 977 01:01:43,000 --> 01:01:46,080 Speaker 1: that is changing that said, I I take issue it's 978 01:01:46,080 --> 01:01:49,080 Speaker 1: sort of adding prefixes to the word capitalism as that 979 01:01:49,240 --> 01:01:52,560 Speaker 1: changing sort of the core structure of how we organize 980 01:01:52,600 --> 01:01:56,520 Speaker 1: our society. Right, capitalism is capitalism. It operates under a 981 01:01:56,560 --> 01:02:00,360 Speaker 1: system of incentives. Until you ascribe the incentive is it 982 01:02:00,440 --> 01:02:04,400 Speaker 1: cannot function. So to me, the question is what will 983 01:02:04,440 --> 01:02:07,160 Speaker 1: create the structural incentives. I'll give it a specific example. 984 01:02:07,760 --> 01:02:11,080 Speaker 1: There's quite a lot of bluster with regards to climate 985 01:02:11,280 --> 01:02:14,880 Speaker 1: and sustainability. You've talked sensibly on your show about greenwashing. 986 01:02:15,320 --> 01:02:17,560 Speaker 1: If you take, for example, the list of entities that 987 01:02:17,600 --> 01:02:19,880 Speaker 1: have committed to a science based target, just count the 988 01:02:19,880 --> 01:02:22,280 Speaker 1: amount of fossil fuel companies. I think you wouldn't even 989 01:02:22,320 --> 01:02:25,800 Speaker 1: get to ten. The vast pority of those companies are food, 990 01:02:25,880 --> 01:02:30,439 Speaker 1: beverage and consumer companies. Why because consumers are far more 991 01:02:30,480 --> 01:02:34,560 Speaker 1: aware and are creating the consequence where they're desiring this change. 992 01:02:34,800 --> 01:02:38,560 Speaker 1: I think such consequences do not yet exist in a 993 01:02:38,640 --> 01:02:41,560 Speaker 1: material fashion for fossil fuel industries. If, in fact, we 994 01:02:41,600 --> 01:02:45,120 Speaker 1: see the opposite. You see the Ukraine War, you see Germany, 995 01:02:45,160 --> 01:02:48,200 Speaker 1: that sunset, it's nuclear plants in after for Kushima now 996 01:02:48,240 --> 01:02:52,280 Speaker 1: repowering coal plants. You see, you know, record profits being 997 01:02:52,280 --> 01:02:54,520 Speaker 1: posted by all and gas companies. In fact, I would 998 01:02:54,520 --> 01:02:57,400 Speaker 1: say we're going in the opposite direction. Do we really 999 01:02:57,440 --> 01:03:03,000 Speaker 1: expect a private sector professional services firm to go to 1000 01:03:03,080 --> 01:03:07,960 Speaker 1: the sea levels of hydrocarbon entities and to inform them 1001 01:03:08,000 --> 01:03:11,520 Speaker 1: that they should decarbonized when they are posting record profits? 1002 01:03:11,600 --> 01:03:14,800 Speaker 1: Do not see all the prices going down? And McKenzie 1003 01:03:15,360 --> 01:03:18,040 Speaker 1: or others entities like it, you know, have the chance 1004 01:03:18,080 --> 01:03:22,440 Speaker 1: of making exceptional amounts of feast from such work. You're saying, 1005 01:03:22,440 --> 01:03:27,760 Speaker 1: my ideas is naive, and I acknowledge that. However, would 1006 01:03:27,760 --> 01:03:31,320 Speaker 1: you acknowledge that if McKenzie is in the business of 1007 01:03:31,360 --> 01:03:35,960 Speaker 1: trying to help actually save the oil companies and the 1008 01:03:35,960 --> 01:03:39,800 Speaker 1: coal companies that they are consulting for, that it would 1009 01:03:39,840 --> 01:03:44,640 Speaker 1: be better advice to begin a transition away from fossil 1010 01:03:44,680 --> 01:03:48,600 Speaker 1: fuels as fast as they possibly can, because it will 1011 01:03:48,640 --> 01:03:50,680 Speaker 1: take them a long time to get there, and we 1012 01:03:50,760 --> 01:03:55,320 Speaker 1: don't have a long time. And the alternative is that 1013 01:03:56,240 --> 01:03:59,960 Speaker 1: government steps in and buys them, you know, essentially turns 1014 01:04:00,040 --> 01:04:03,160 Speaker 1: them into government utilities and then shut them down, right 1015 01:04:03,280 --> 01:04:05,920 Speaker 1: like or or do you think we're just going to 1016 01:04:06,000 --> 01:04:09,000 Speaker 1: spin off the edge of the cliff with capitalism running 1017 01:04:09,160 --> 01:04:12,920 Speaker 1: at full speed? Like what what is the alternative. I 1018 01:04:13,000 --> 01:04:16,720 Speaker 1: do believe that a combination is needed. Um. I think 1019 01:04:16,760 --> 01:04:20,600 Speaker 1: the private sector needs to see that eventually there are 1020 01:04:21,120 --> 01:04:24,320 Speaker 1: things that they will have to contend with. So what 1021 01:04:24,360 --> 01:04:27,360 Speaker 1: position would they like to be in after those consequences 1022 01:04:27,360 --> 01:04:32,400 Speaker 1: have occurred, and after there is some level of accountability held, 1023 01:04:32,480 --> 01:04:35,080 Speaker 1: what side of the house would they like to be in. 1024 01:04:35,280 --> 01:04:39,240 Speaker 1: I am hopeful that with increased awareness there is some accountability, 1025 01:04:39,240 --> 01:04:42,480 Speaker 1: but in my opinion that accountability is highly unlikely to 1026 01:04:42,520 --> 01:04:45,800 Speaker 1: come from actors at the top that profit the most 1027 01:04:46,040 --> 01:04:48,800 Speaker 1: from the status quo. I think that accountability is far 1028 01:04:48,840 --> 01:04:53,880 Speaker 1: more likely to come through the bottom, through employees sort 1029 01:04:53,920 --> 01:04:58,520 Speaker 1: of holding their leader's accountables, through public sector entities, through states, 1030 01:04:58,520 --> 01:05:02,680 Speaker 1: attorneys generals hold identities they work with accountable, through regulators, 1031 01:05:03,000 --> 01:05:06,680 Speaker 1: so on and so forth. I would also disagree in 1032 01:05:06,800 --> 01:05:09,960 Speaker 1: part with the framework that we should put the onus 1033 01:05:09,960 --> 01:05:13,200 Speaker 1: on business to make the changes that we need in 1034 01:05:13,240 --> 01:05:15,919 Speaker 1: the world. They're not going to. And if you think 1035 01:05:15,920 --> 01:05:20,440 Speaker 1: about businesses as a bell curve of adoption, where there 1036 01:05:20,440 --> 01:05:24,040 Speaker 1: are some the frontier, you know, five percent of the 1037 01:05:24,080 --> 01:05:27,040 Speaker 1: company's let's just say, you know, the Patagonias of the world, 1038 01:05:27,280 --> 01:05:29,720 Speaker 1: they are actively making it part of their business model. 1039 01:05:30,360 --> 01:05:33,920 Speaker 1: It's also a type of good that is very visual 1040 01:05:34,040 --> 01:05:37,200 Speaker 1: and that people want to present to the world as 1041 01:05:37,280 --> 01:05:39,240 Speaker 1: I'm going to signal to you that this is what 1042 01:05:39,320 --> 01:05:41,440 Speaker 1: I care about, therefore I buy this. Now, does that 1043 01:05:41,520 --> 01:05:45,600 Speaker 1: same person think about the installation that's in their home? 1044 01:05:46,200 --> 01:05:48,600 Speaker 1: You know, all of the other sort of hum drum 1045 01:05:48,640 --> 01:05:52,040 Speaker 1: goods that you're buying. Are those looked at with the 1046 01:05:52,080 --> 01:05:54,840 Speaker 1: same level of scrutiny and the answers not. And therefore 1047 01:05:54,960 --> 01:05:58,560 Speaker 1: those businesses and those industries are not incentivized to change 1048 01:05:58,560 --> 01:06:02,800 Speaker 1: as quickly as those that are more susceptible to not 1049 01:06:02,880 --> 01:06:05,640 Speaker 1: being purchased because of the way that things are made. 1050 01:06:06,000 --> 01:06:09,000 Speaker 1: So in the bell curve of adoption, you will get 1051 01:06:09,160 --> 01:06:12,919 Speaker 1: the front runners who will change on their own. There 1052 01:06:12,920 --> 01:06:15,720 Speaker 1: will be others that will, you know, receive pressure because 1053 01:06:15,720 --> 01:06:18,200 Speaker 1: employees won't want to work for them because they care 1054 01:06:18,240 --> 01:06:22,160 Speaker 1: about these issues. But that's still probably isn't the majority, 1055 01:06:22,200 --> 01:06:24,640 Speaker 1: at least not now, and so if you're trying to 1056 01:06:24,680 --> 01:06:27,640 Speaker 1: rely on that framework to get the change that we 1057 01:06:27,680 --> 01:06:30,600 Speaker 1: need in the world, it's going to fail. So, I mean, 1058 01:06:30,720 --> 01:06:35,800 Speaker 1: my perspective is that this is not a referendum on capitalism, 1059 01:06:35,840 --> 01:06:39,120 Speaker 1: and that McKenzie shouldn't be held up as it is 1060 01:06:39,480 --> 01:06:42,080 Speaker 1: good or bad, because whether or not we like Milton 1061 01:06:42,120 --> 01:06:46,040 Speaker 1: Friedman or not, it is that capitalism today does not 1062 01:06:46,360 --> 01:06:50,200 Speaker 1: accept and acknowledge negative externalities and those need to be 1063 01:06:50,240 --> 01:06:53,880 Speaker 1: priced in in order to achieve wholesale change. So that 1064 01:06:54,000 --> 01:06:59,080 Speaker 1: is the carbon tax. You know, businesses that operates by 1065 01:06:59,120 --> 01:07:01,080 Speaker 1: omitting a lot of cars are been and don't want 1066 01:07:01,120 --> 01:07:05,720 Speaker 1: to spend the capex to completely overhaul their business are 1067 01:07:05,720 --> 01:07:08,960 Speaker 1: not incentivized to push that. And that's exactly what Rizwan 1068 01:07:09,080 --> 01:07:10,960 Speaker 1: was talking about. If you get in the room with 1069 01:07:11,000 --> 01:07:14,080 Speaker 1: someone who is not incentivized to make that change, will 1070 01:07:14,120 --> 01:07:16,800 Speaker 1: be very difficult to change them from the outside as 1071 01:07:16,840 --> 01:07:20,320 Speaker 1: a third party advisor. And so I mean, the the 1072 01:07:20,360 --> 01:07:23,560 Speaker 1: onus I believe is uh, you know, on government to 1073 01:07:24,120 --> 01:07:29,200 Speaker 1: change the policies. If if McKenzie was as fearful of 1074 01:07:29,240 --> 01:07:33,000 Speaker 1: getting sued by Maura Healey and the Massachusetts State Attorney 1075 01:07:33,000 --> 01:07:36,880 Speaker 1: General as they as they were from the opioid crisis 1076 01:07:36,920 --> 01:07:41,080 Speaker 1: and paying over six million dollars for turbocharging opioid sales, 1077 01:07:41,160 --> 01:07:45,360 Speaker 1: if that same risk applied for climate change, they would 1078 01:07:45,440 --> 01:07:49,360 Speaker 1: change very quickly. So, in a long answer, the market 1079 01:07:49,440 --> 01:07:52,560 Speaker 1: does what the rules of the game allow them to 1080 01:07:52,640 --> 01:07:55,640 Speaker 1: do so. If you change the rules of the game, 1081 01:07:56,000 --> 01:07:58,120 Speaker 1: the companies that are playing in the game will also 1082 01:07:58,200 --> 01:08:01,440 Speaker 1: change their behaviors. There are so many things I would 1083 01:08:01,440 --> 01:08:04,520 Speaker 1: love to ask you and continue this conversation. Has been 1084 01:08:05,000 --> 01:08:07,680 Speaker 1: a fantastic conversation, but I have to wrap up with 1085 01:08:07,760 --> 01:08:12,200 Speaker 1: one last question for both of you. Mackenzie says that 1086 01:08:12,320 --> 01:08:16,040 Speaker 1: its purpose is to help create positive, enduring change in 1087 01:08:16,080 --> 01:08:18,120 Speaker 1: the world. And we have a tool on this show 1088 01:08:18,200 --> 01:08:22,160 Speaker 1: called the BS Index. It goes from zero to a hundred, right, 1089 01:08:22,320 --> 01:08:27,120 Speaker 1: zero being the best, zero bs being the worst. Total BS. 1090 01:08:27,920 --> 01:08:32,639 Speaker 1: What score would each of you give Mackenzie, Eric, I'm 1091 01:08:32,640 --> 01:08:35,639 Speaker 1: gonna ask you to go first. Well, I mean, Mackenzie 1092 01:08:35,720 --> 01:08:38,000 Speaker 1: loves a good twenty, so I'd give them an eight 1093 01:08:38,400 --> 01:08:42,200 Speaker 1: on this one. And the reason I would provide a 1094 01:08:42,240 --> 01:08:46,400 Speaker 1: score of eighty is the asymmetry of the damage. It 1095 01:08:46,560 --> 01:08:49,519 Speaker 1: is again not denying that there is a tremendous amount 1096 01:08:49,560 --> 01:08:53,800 Speaker 1: of positive good that they have done and continue to do, 1097 01:08:54,520 --> 01:08:58,639 Speaker 1: but on these this particular topic where they've been serving 1098 01:08:58,840 --> 01:09:03,680 Speaker 1: the fossil fuel industry for reported seventy years, the magnitude 1099 01:09:03,680 --> 01:09:08,240 Speaker 1: of that damage far outweighs and outpaces the benefits that 1100 01:09:08,280 --> 01:09:12,000 Speaker 1: are provided to your local health insurance company or another 1101 01:09:12,040 --> 01:09:15,880 Speaker 1: financial institution. So to say that that is long term 1102 01:09:15,920 --> 01:09:20,479 Speaker 1: positive um is hard to believe. Fair enough, thank you 1103 01:09:20,520 --> 01:09:24,719 Speaker 1: for that, Eric riz One. Well, if you read my email, 1104 01:09:24,760 --> 01:09:27,639 Speaker 1: you probably know the math. It's pretty similar to Eric's 1105 01:09:27,720 --> 01:09:30,800 Speaker 1: with regards to emissions. It's quite simple math. The six 1106 01:09:30,880 --> 01:09:34,280 Speaker 1: hundred sustainability projects that Bob coded in his Wall Street 1107 01:09:34,320 --> 01:09:36,200 Speaker 1: Journal article. If you put those on one side, and 1108 01:09:36,240 --> 01:09:39,640 Speaker 1: the emissions they abated, and if you put the emissions 1109 01:09:39,720 --> 01:09:42,639 Speaker 1: that we have served even on the same time horizon, 1110 01:09:42,680 --> 01:09:45,720 Speaker 1: if we were to be charitable and then put the 1111 01:09:45,760 --> 01:09:49,320 Speaker 1: outlook forward looking for those entities and continue to serve them. 1112 01:09:49,360 --> 01:09:52,760 Speaker 1: And however many projects m cain see holds and sustainability, 1113 01:09:53,080 --> 01:09:57,240 Speaker 1: I would suspect any reasonable approach, any reasonable even the 1114 01:09:57,280 --> 01:10:01,480 Speaker 1: most charitable one, would show you the same outcome, probably 1115 01:10:02,439 --> 01:10:07,479 Speaker 1: significantly worse. So what score does that lead to in 1116 01:10:07,520 --> 01:10:10,320 Speaker 1: your mind? I would love for the firm to do 1117 01:10:10,400 --> 01:10:12,800 Speaker 1: that accounting and tell the world what the score is 1118 01:10:12,920 --> 01:10:16,040 Speaker 1: and be honest about it here too. Here I'm unfortunately 1119 01:10:16,080 --> 01:10:19,479 Speaker 1: unable to say because I know exactly what that score is, right, 1120 01:10:19,640 --> 01:10:21,880 Speaker 1: But I mean, I'm asking you for a BS score 1121 01:10:21,960 --> 01:10:24,679 Speaker 1: for mckensey, like how big a bullshit or is mackensey 1122 01:10:24,760 --> 01:10:27,280 Speaker 1: when they say that they're out to create positive, enduring 1123 01:10:27,360 --> 01:10:30,960 Speaker 1: change in the world. With all the due respect to 1124 01:10:31,000 --> 01:10:34,040 Speaker 1: my colleagues, particularly in the sustainability practice, who would like 1125 01:10:34,080 --> 01:10:36,439 Speaker 1: to see that, I would suspect that many of them 1126 01:10:36,479 --> 01:10:39,960 Speaker 1: in private would agree that it's a t percent bullshit. 1127 01:10:40,479 --> 01:10:43,920 Speaker 1: I'm very inspired by both of you and and I 1128 01:10:44,160 --> 01:10:47,360 Speaker 1: very much appreciate your coming on the show today. So 1129 01:10:47,439 --> 01:10:50,760 Speaker 1: thank you both for being here. Thank you Ti, Thank 1130 01:10:50,800 --> 01:10:56,519 Speaker 1: you Ty. I'd like to end the show by giving 1131 01:10:56,560 --> 01:11:01,519 Speaker 1: mackenzie an official bullshit score. McKenzie is saying their purpose 1132 01:11:01,600 --> 01:11:06,240 Speaker 1: led and clearly are not. That's bad. They also claim 1133 01:11:06,320 --> 01:11:09,240 Speaker 1: to be in the business of helping other companies become 1134 01:11:09,280 --> 01:11:14,639 Speaker 1: purpose led. That's even worse because they're getting purpose so wrong, 1135 01:11:15,040 --> 01:11:17,960 Speaker 1: and because if they decided to get it right, they 1136 01:11:17,960 --> 01:11:23,599 Speaker 1: could do so much good. I'm giving mackenzie an that's 1137 01:11:23,640 --> 01:11:27,280 Speaker 1: the highest score we've given to date. To weigh in 1138 01:11:27,320 --> 01:11:31,160 Speaker 1: with your own score, visit our website Calling Bullshit podcast 1139 01:11:31,240 --> 01:11:34,920 Speaker 1: dot com. We'll track McKenzie's behavior over time to see 1140 01:11:34,960 --> 01:11:38,360 Speaker 1: if they decide to bring that score down you'll also 1141 01:11:38,400 --> 01:11:41,320 Speaker 1: be able to see where Mackensey ranks on BS compared 1142 01:11:41,320 --> 01:11:44,240 Speaker 1: to the other companies and organizations we featured on the 1143 01:11:44,280 --> 01:11:48,920 Speaker 1: show and to global managing partner Bob Sternfeld's if you 1144 01:11:49,040 --> 01:11:51,840 Speaker 1: heard anything on this episode that you'd like to discuss further, 1145 01:11:52,360 --> 01:12:00,519 Speaker 1: you have an open invitation if you are starting a 1146 01:12:00,560 --> 01:12:03,680 Speaker 1: purpose led business or thinking of beginning the journey of 1147 01:12:03,720 --> 01:12:07,040 Speaker 1: transformation to become one. Here are three things that you 1148 01:12:07,080 --> 01:12:13,519 Speaker 1: can take away from this episode. One, purpose matters. It's 1149 01:12:13,560 --> 01:12:16,840 Speaker 1: not marketing, it's not fluff. It's not a cynical way 1150 01:12:16,840 --> 01:12:20,720 Speaker 1: to trick young people into joining your business. Purpose is 1151 01:12:20,760 --> 01:12:23,719 Speaker 1: a key ingredient in driving a transition to a new 1152 01:12:23,840 --> 01:12:28,559 Speaker 1: and more sustainable global economy. It honestly hurts my heart 1153 01:12:28,640 --> 01:12:31,880 Speaker 1: that a company like Mackenzie is using the term so cynically. 1154 01:12:32,520 --> 01:12:38,559 Speaker 1: Do not emulate them. Two, A principle isn't a principle 1155 01:12:38,760 --> 01:12:42,519 Speaker 1: until it costs you money, and being purpose led means 1156 01:12:42,520 --> 01:12:45,599 Speaker 1: you don't take money if it doesn't align with your purpose. 1157 01:12:46,200 --> 01:12:52,120 Speaker 1: Mackenzie has not gotten that memo, have you? And Three 1158 01:12:52,960 --> 01:12:56,720 Speaker 1: yeah worth repeating, don't talk it until you're willing to 1159 01:12:56,800 --> 01:12:59,960 Speaker 1: walk it. This is literally why we started this show 1160 01:13:00,760 --> 01:13:04,000 Speaker 1: saying it is so much easier than doing it, but 1161 01:13:04,200 --> 01:13:07,120 Speaker 1: saying it and not doing it is toxic to your 1162 01:13:07,160 --> 01:13:15,920 Speaker 1: business and to the world. Don't do it. If this 1163 01:13:16,000 --> 01:13:19,840 Speaker 1: episode inspired you to create positive, lasting change in the world, 1164 01:13:20,280 --> 01:13:23,360 Speaker 1: subscribe to the Calling Bullshit Podcast on the I Heart 1165 01:13:23,439 --> 01:13:27,080 Speaker 1: Radio app, Apple Podcasts, or wherever you listen to people 1166 01:13:27,200 --> 01:13:30,679 Speaker 1: speak into your ears and friends. I'd like to ask 1167 01:13:30,680 --> 01:13:34,000 Speaker 1: for your help. If you enjoy the Calling Bullshit Podcast, 1168 01:13:34,120 --> 01:13:37,240 Speaker 1: please take a second to rate us on Apple Podcasts 1169 01:13:37,320 --> 01:13:40,880 Speaker 1: or on your preferred platform. It helps more people find 1170 01:13:40,920 --> 01:13:45,120 Speaker 1: the show and thanks to our guests today New York 1171 01:13:45,120 --> 01:13:47,519 Speaker 1: Times journalist and co author of the new book When 1172 01:13:47,600 --> 01:13:52,440 Speaker 1: McKinsey Comes to Town, Mike Forsyth, and former McKinsey consultants 1173 01:13:52,520 --> 01:13:56,840 Speaker 1: Rizwan Navid and Eric Edstrom. Learn more about them and 1174 01:13:56,880 --> 01:13:59,320 Speaker 1: get links to their work in our show notes or 1175 01:13:59,400 --> 01:14:03,880 Speaker 1: at our webs right Calling Bullshit Podcast dot com. And 1176 01:14:03,960 --> 01:14:08,559 Speaker 1: thanks to our production team Hannah Beale, Amanda Ginsburg, d 1177 01:14:08,800 --> 01:14:14,880 Speaker 1: s Moss Hailey, Pascalites, and Parker Silzer. Calling Bullshit was 1178 01:14:14,880 --> 01:14:17,880 Speaker 1: created by co Collective and it's hosted by me Ti 1179 01:14:18,000 --> 01:14:19,679 Speaker 1: Mounting You. Thanks for listening