Above The Fold
In 1973 during my first job in management consulting and while facing a decision with a client, my mentor Nathaniel Hill said, “Do you want your actions to be above the fold?” Yes, I’ve been around long enough to remember and appreciate the impact of his reference.
This morning, I read The New Republic article (dated February 13, 2024) entitled, “The American Consulting Firms That Live in Fear of Their Murderous Clients” [1] and to which was added a subhead, “What keeps companies like McKinsey in the business of whitewashing the regimes of bloodthirsty dictators? Increasingly, it’s the consequences of crossing them.” [2]
That certainly got my attention.
In sum the author, Casey Michel, addresses the work of the (US) Senate Permanent Subcommittee on Investigations focusing on behaviors of several consulting firms working in Saudi Arabia. During the hearings, according to the article, “As senators discovered while grilling the witnesses, these consultants claimed they couldn’t reveal what, precisely, they’re actually doing on behalf of the Saudi regime or even how much money they’re making in the process.” [3] Further, “…they all claimed they want to reveal what they were doing and that they wanted to comply with senator’s subpoenas for information – but they couldn’t do it because of a particular occupational hazard; threats from the Saudi regime itself.” [4] Consultants “claimed that, unfortunately, their Saudi work had to be kept secret, even from American legislators, because revealing it would contravene Saudi law [italics added.” [5]
Senator Richard Blumenthal, Chair, said, “You say you are [caught] between a rock and a hard place, but you have chosen sides .. you have chosen the Saudi side, not the American side.” [6] Adding, if the consulting firms (McKinsey, Boston Consulting Group, and Teneo) continue their defense, it would “create a dangerous and unsupportable precedent—that American companies can shield commercial interactions with foreign governments that are directed towards the United States from oversight simply by choosing to have their contracts governed by foreign law.” [7]
On the other hand one can argue very effectively, I think, that any consulting firm can work where they wish and doing what they are hired to do (within legal guidelines, of course). That is, a multinational professional services firm may consult in, for example, Saudi Arabia and, in doing so, it would be subject to that country’s laws and regulations, including nondisclosure and confidentiality agreements. [Note, and therefore free from intrusive investigation from a foreign government, in this case, the U.S. Senate Subcommittee on Investigations. The reverse also holds, what if a foreign firm was working in the U.S. and working under a confidentiality/nondisclosure agreement and a foreign country wanted to pierce that veil?]
But this is not my concern; my concern is one of reputational damage. Go re-read the Title and Subhead. I’ve written about it before (see also Consulting Ethics Concern, Once Again, Lions, TIgers, Consultants, Oh My!, Reputational Damage, The High Cost of Ethics Lapses in Consulting).
In talking about this article with Liz Weber, Chair of the Ethics Committee of the Institute of Management Consultants USA (IMC USA) I got her, very appropriate, take on the article, “As a consultant, you can choose to get yourself into any situation so be prepared to face potential scrutiny.” Essentially the same as what I heard echoed my mentor in 1973, “Do you want your actions to be above the fold?”
While McKinsey, BCG, and Teneo may totally be in their rights at this hearing, the fact they are part of public hearing and being written about is a bit problematical to me. They are, by virtue of this hearing, appearing ‘above the fold’ (at least today).
What continues to gall me about reading negative publicity (e.g., ‘the situation’ Ms. Weber referred to) about consulting is that there is an easy fix – believe in and adhere to a simple, yet complete Code of Ethics. I have done so for 35 years and all members of the Institute of Management Consultants do so as well; see our Code of Ethics. [As a side note, I do believe if these firms had adhered to parts of code #1, #6, #7, and #13 this would have been enough guidance to question their contracting in Saudi Arabia, although, I do not know enough about their work to definitively opine; these are offered only for your thoughts and consideration.]
Reputational damage is, unfortunately, too easy to create and it takes time and dollars to reverse the situation. Writing about McKinsey’s public ethics lapses, once again, makes me wish one thing for their leadership: that the leaders make ethics a center feature of the firm’s practice, especially in these times. After all, both McKinsey & Co. and IMC USA were (partially) founded by the same consulting professional, Marvin Bower, and both organizations were founded on a strong ethics platform. [8]
I’m out’ta here for now.
[1] https://newrepublic.com/article/178942/consulting-firms-saudi-arabia-hearing
[2] Ibid, page 1
[3] Ibid
[4] Ibid
[5] Ibid
[6] Ibid
[7] Ibid
[8] A PDF of Bower’s book is currently on McKinsey’s website and referenced, McKinsey’s Marvin Bower: Vision, Leadership, and the Creation of Management Consulting, page 204, “There was a backbone in the firm that was nonnegotiable when it came to matters of ethics.” Marvin Bower, personal files (McKinsey’s Partners’ Conference, 1992).
