Can McKinsey Change its Tone at the Top?

March 1, 2021
LRN Corporation

The recent leadership shakeup at the top of McKinsey & Company should serve as another reminder about the importance of tone at the top when it comes to company culture, ethical decision-making and their connections to the bottom-line.

The New York Times' DealBook posed a great question: Is McKinsey losing its grip? Partners at the consulting firm in late February voted out their global managing partner, Kevin Sneader, as the company deals with bad press and fallout from a number of ongoing controversies.

It’s the first time since 1976 a McKinsey leader didn’t won a second term.

The decision came shortly after McKinsey agreed to pay 49 states almost $600 million for its role in the opioid crisis. The firm worked with Purdue Pharma to "turbocharge" the sales of OxyContin during the U.S. opioid epidemic, in which more than 232,000 people have died from prescription opioid overdoses over the last 20 years.

McKinsey has faced scrutiny the last few years for its work with U.S. Immigration and Custom Enforcement and its tough deportation policies during the Trump administration; its work with a state-owned power provider in South Africa that was mired in corruption; and an investigation into its failure to disclose conflicts of interest in its corporate bankruptcy practice, for which it paid $15 million to the U.S. Justice Department.

The company admitted last year its decision-making "fell short" of the company’s ethical standards and didn’t "take into account the broader context and implication" of its work with Purdue, according to NPR.

A CEO told the Financial Times he spoke with Sneader after the opioid lawsuits became public two years ago. The chief executive said Sneader "knows that McKinsey needs to change its culture, that you could say it’s just a couple of bad actors here and there, but honestly it’s a cultural thing."

The next global managing partner at McKinsey is going to have a difficult, yet potentially critical, job to do: rebuilding and reinforcing an ethical and moral culture that radiates throughout the firm. Purpose is important, and moral leadership is scalable. But it needs to start at the top.

About the Author

LRN Corporation

Ethics and compliance leader providing tools, education, and advisory services for global companies to inspire principled performance. LRN’s overall approach recognizes the inherent limitations of rules and regulations in influencing behaviors. In our view, focusing on actions that help build and maintain a values-based culture will mean more compliance and reduced costs as a result of tangible and sustainable behavioral change.

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