Thursday 10 March 2011

McKinsey's culture in question

An interesting column in today's Financial Times by John Gapper. He argues that the charging of the ex-CEO Rajat Gupta with insider trading is a severe strain on the firm's perceived governance culture. Gapper makes the perceptive point that McKinsey that:

It is hard to believe that trading on price-sensitive inside information from clients is rife inside the puritan, strait-laced firm – if evidence of that emerged, it would soon collapse, as Arthur Andersen did after Enron. But the accumulation and sharing of privileged knowledge is integral to how it works and it cannot afford its corporate and government clients to pull the shutters down.

This goes to the heart of McKinsey business model and is another useful piece of evidence in establishing the link between corporate culture and strategy. It is also an interesting reflection on a weakness of the McKinsey 7S model - that Shared Values (at the heart of the model) may well not be shared with your key client base. I wonder what their own consultants would advise?


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