DAVE DAVIES, HOST:
This is FRESH AIR. I'm Dave Davies, in for Terry Gross. If you're a fan of the movie "Office Space," as I am, you might remember this moment when Tom Smykowski, one of the guys working at the digital firm Initech, comes running up with bad news for his office mates.
(SOUNDBITE OF FILM, "OFFICE SPACE")
RICHARD RIEHLE: (As Tom Smykowski) I've been looking all over for you guys. Have you seen this? I knew it. I knew it.
DAVID HERMAN: (As Michael Bolton) What? It's a staff meeting. So what?
RIEHLE: (As Tom Smykowski) So what? We're all screwed, that's what. They're going to downsize Initech.
AJAY NAIDU: (As Samir Nagheenanajar) What are you talking about, Tom? Now, how do you know that?
RIEHLE: (As Tom Smykowski) How do I know? They're bringing in a consultant. That's how I know. It happened at Initrode last year. You have to interview with this consultant. They call them efficiency experts. But what you're really doing is interviewing for your own job.
HERMAN: (As Michael Bolton) Tom, every week you say you're going to lose your job, and you're still here.
RIEHLE: (As Tom Smykowski) Not this time. I bet I'm the first one laid off.
DAVIES: And Tom, played by Richard Riehle, would be laid off by the dreaded consultants, of course. Our guests today, New York Times reporters Walt Bogdanich and Michael Forsythe, have a new book about management consultants that operate on a, well, much, much larger scale. The book is about McKinsey & Company, a firm that operates in more than 60 countries and employs more than 30,000 people. Bogdanich and Forsythe write that McKinsey, which has enormous influence on business and public policy, presents itself as a company that is values driven, caring not just about clients and profit but about communities and the world. But their book is full of examples of McKinsey engaging in ethically questionable work, from helping companies boost tobacco and opioid sales to working with repressive authoritarian regimes, including Saudi Arabia and Russia and, like the consultants in "Office Space," helping many companies downsize, outsource and offshore jobs and reduce employee benefits.
Though McKinsey is tight-lipped about its work, refusing even to disclose its client list, Bogdanich and Forsythe managed to get hundreds of internal McKinsey documents and interview more than a hundred present and former McKinsey employees. Walt Bogdanich is an investigative reporter for The Times, who's been awarded three Pulitzer Prizes and four George Polk Awards. He previously produced stories for "60 Minutes," ABC News and The Wall Street Journal. Michael Forsythe is also an investigative reporter for The Times. He previously worked for Bloomberg News, where he shared in a George Polk Award. Their book is "When McKinsey Comes To Town: The Hidden Influence Of The World's Most Powerful Consulting Firm."
Well, Walt Bogdanich, Michael Forsythe, welcome to FRESH AIR. You know, there are a lot of management consultants that are supposed to help companies, nonprofits and government agencies improve what they do. Give us a sense of what makes McKinsey unique.
WALT BOGDANICH: This was Walt speaking. It's unique because they hire the best and brightest, and that they have values, a set of values that they insist their consultants, you know, adhere to. They put those values on the walls of each office. And when they come in, you know, they're lectured about that. And what we did is we tried to look at those values and how well they played out in real life. The most important value, No. 1 on the list, which I think got them in a lot of trouble, is that the client's interest always comes first. So what does that mean when you have an opioid manufacturer who's pushing opioids in the middle of an epidemic? That's a dilemma that they faced. And invariably, they sided with the client.
DAVIES: You write that they hire a lot of young recruits, really sharp people, out of business school. And you spoke to some of these folks. What did they hear from McKinsey recruiters that appealed to them, made them want to work for McKinsey?
MICHAEL FORSYTHE: So this is Mike. And McKinsey has a very, very strong appeal to these elite, Ivy League-educated either MBA students or even out of undergraduate schools. It's got such a marquee name. But McKinsey has something else. They have a pitch, which they present to these students, that if you join McKinsey, you can make an impact on the world. And invariably, those pitches will include examples of some of the things that McKinsey consultants do - for example, helping fight polio or spread polio vaccines in Nigeria, or maybe even tackling climate change. And that's a very appealing pitch to a lot of students who may not want to go work for Goldman Sachs or JPMorgan, an investment bank where it's all about making money. The idea, the opportunity, the chance to have this enormous influence and to make a difference is appealing to many of these students. The problem is, as we write in the book, when they come and actually work at McKinsey, many of those students, those young people - extremely bright people - are disabused of that. And many of them, in turn, have come and spoken to us.
DAVIES: Right. Yeah. You write that among the values, besides putting the client's interest first, that the company says that they stand by are always observing high ethical standards, upholding the obligation to dissent, to let people within the firms pass on work they don't like or object to something that troubles them, you know? You know, I wonder if the fact that McKinsey hires smart, idealistic young people was a help in your reporting, since those who become disillusioned might be inclined to help you with, you know, internal documents or interviews. Give us a sense of the kind of material that you got that helped you document these stories in this book.
BOGDANICH: Yes. The fact that they're bright and hard-working and have principles and that's why they came to McKinsey really was helpful to us, because, as Mike pointed out, when they see what's happening out in the field, they become disillusioned. They become angry. They may come talk to us. They may give us documents. And in fact, they did give us documents. McKinsey is an extraordinarily secretive company. And I think, as an investigative reporter, that's one of the great appeals of looking into this company. It's hugely influential. It discloses no clients. It discloses no information it gives them. And it's not accountable to anyone. And so you have this immense concentration of power and no accountability. And we thought, as journalists, as investigative reporters, this is our job, to look at accountability. We thought we would look at it here, and we found there wasn't any.
DAVIES: McKinsey prizes it's discretion, that it protects clients' privacy. And one thing that you write that they do that a lot of consultants don't is that they will - are willing to represent parties who are on opposite sides of, you know, a policy or a business dispute or a legal dispute. What kind of issues does that raise? How does McKinsey explain this?
FORSYTHE: So it's been a long-standing policy at McKinsey for many, many decades. And they do make this clear to whoever hires them that they will represent competitors. So for example, if they're representing General Motors, they could also be representing Ford or general - or Chrysler. And so they - this is what they do. And the way they solve this is they say they set up internal firewalls inside the system. So if you're consulting for General Motors, say, you're not allowed for some period of time to consult for Ford. In other words, those secrets that you're learning at General Motors, or maybe the strategy that you're telling General Motors on how to beat Ford, you're not going to be able to go over to Ford and tell Ford how to beat GM.
DAVIES: And that restriction is on the individual consultants - right? - as opposed - they're saying that you in this role have to be quiet about it, right?
FORSYTHE: That's right. And the company is extremely stovepiped. People are discouraged from, you know, talking at lunchtime, for example, about the client work they're doing. You're only supposed to really talk about your client work, you know, within your circle of people on the - what they call the CST, the client service team. But in so many instances in the book, you know, we see where there is crossover, that there is information that - you know, there are certain consultants that work for one company, and then they also are working for another company. Purdue Pharma, the opioid-maker, is one example. The senior partner working there was also working for Endo. So they were working for both clients.
But where that conflict really comes to light is the fact that McKinsey's working for the companies and also the regulators that regulate them and especially the Food and Drug Administration. And we see this with the opioid-makers, which has come out in the public, and then also with tobacco companies. McKinsey has been working with tobacco companies since 1956. And they've also been consulting recently for the FDA's section that regulates the tobacco industry and also for vaping. McKinsey was a consultant for JUUL and was also consulting - it was also working with the FDA, again, under the same offices that would oversee vaping and nicotine. So that's something that is a big part of the book, something we emphasize, this conflict between advising for the companies and the regulators themselves.
BOGDANICH: McKinsey promotes itself and promotes the idea of, you know, survival of the fittest and the free market system. But when you look closely at how they do business, you find in the health care field - which is important 'cause it affects us all - that they control or have influence on every part of the health care delivery chain. It's one thing to say you - or to work for Company A and also Company B, a competitor. I mean, that affects maybe one corporation's bottom line or the other. But it's entirely different and far more impactful for most Americans that the fact that they have this conflict of interest in health care, health care services, where companies that have - their goal is making more money, while also they're advising the regulators that oversee them, that's a problem.
DAVIES: We need to take a break here. Let me reintroduce you. We're speaking with Walt Bogdanich and Michael Forsythe. Their investigative reporters for The New York Times. Their new book is "When McKinsey Comes To Town: The Hidden Influence Of The World's Most Powerful Consulting Firm." We'll continue our conversation in just a moment. This is FRESH AIR.
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DAVIES: This is FRESH AIR. And we're speaking with New York Times investigative reporters Walt Bogdanich and Michael Forsythe. They have a new book about the international management consulting firm McKinsey & Company. It's called "When McKinsey Comes To Town."
Let's talk about some of the specific areas that McKinsey's work raised questions. You cite one example. In 2007, Walmart hired McKinsey to do a study of employee benefits. What were the findings? And what was the impact?
BOGDANICH: Well, they found that many of the workers were being paid so little and the insurance coverage was so scant that many of them - in fact, I believe it was most of the children - were being covered under Medicaid, a program for the poor. In other words, they weren't being paid enough money to buy their own health insurance, and Walmart was not paying for their health insurance to the point where they would feel comfortable. So they hired McKinsey, and they came to the conclusion that, well, you know, maybe, you know, you need to cut back on certain things.
DAVIES: And what was the impact? What did they cut?
BOGDANICH: One of their findings was that workers who stayed at the company - I mean, this is what you would typically want to find if you were running a company, loyal employees. Well, what they discovered is that they were making more money than the people that were just hired. Of course, that's the situation. And McKinsey thought that was not a prudent way to keep your profits up. So they were recommending not keeping a lot of those employees, high-paid employees, on the job.
DAVIES: Right. So you always have fresh people coming in at low wages and find other ways to encourage the better-paid folks to leave.
BOGDANICH: That's correct.
DAVIES: You know, you both reported on McKinsey's work with Purdue Pharma, whose promotion of OxyContin has been widely documented and the subject of an awful lot of legal action and civil and criminal penalties. What was McKinsey's role here?
FORSYTHE: So McKinsey's been working with Purdue Pharma for - started working for them almost 20 years ago, about 20 years ago. And McKinsey did a lot of work for Purdue Pharma. And this - one of the issues. Obviously, Purdue Pharma developed the drug OxyContin, which took off like wildfire, and, you know, it began to be abused in large quantities and many people say helped set off the opioid crisis in the United States, which has killed hundreds and hundreds of thousands of people.
And McKinsey came in to Purdue Pharma and, in one instance, was trying to boost sales at the company, boost sales of OxyContin, and used the word turbocharge. They developed sales programs to work with Purdue's sales force, to work with doctors and get information about doctors and who - which doctors were most likely to prescribe opioids, OxyContin, in great quantities and to target those doctors. So McKinsey used its smarts, its ability to take large reams of data and distill that and to find a way to target people, like doctors, in order to boost sales of an addictive drug. That's one thing McKinsey did. McKinsey also did some work with Purdue Pharma to help develop a tamper-resistant formulation for OxyContin as well. So they do the sales work, and they also do some of the R&D work as well.
DAVIES: Yeah. You know, I think there's a question of timing here that matters. I mean, I think in the early days of OxyContin, a lot of people didn't realize its addictive power, partly because it was misrepresented. At the time that McKinsey was recommending that Purdue turbocharge its sales, were those dangers known? Had there already been, you know, questions raised, litigation, about these drugs causing addiction?
FORSYTHE: That's right. So McKinsey's - those magic words, turbocharge, were used in materials McKinsey put together for Purdue Pharma in 2013. This is well after the dangers of OxyContin and the addictive power of OxyContin were widely known. And in fact, after there was already legal action against Purdue Pharma for that very problem and for Purdue Pharma's marketing of OxyContin. So it was well-known at that point. And yet, McKinsey drove right in.
BOGDANICH: Which is pretty much the same thing that they did with tobacco. I mean, look, you know, opioids - a terrible, you know, disaster, killed, you know, now close to a million people - you know, vaping, addicting the next generation of young nonsmokers. But when you look at tobacco, the most lethal consumer product in American history, McKinsey worked for them for over a half century and long, long, long after it was well-known that people were dying from it and that the tobacco companies were lying about the risks that people faced in smoking. But McKinsey continued. Despite all of the warnings, despite the surgeon general in 1964, despite two federal judges that labeled them racketeers or liars, they continued to work for them. And I thought it was important to ask them why. Why did they continue after this was well-known? And they wouldn't answer it.
FORSYTHE: And I'll have to add to that. So McKinsey only stopped working with the tobacco companies in 2021, last year. And as recently as 2016, McKinsey was putting together some pitches for work with Altria on loyalty programs for Marlboro cigarettes. And in one slide, which we obtained, it shows a mock-up of a loyalty - an app, an iPhone app for Marlboro cigarettes, the idea being, you know, the more smokes you buy, the more Marlboros you buy, that'll earn you points. And this particular one showed a picture of a bottle opener. You know, buy some cigarettes, and then, you can earn a bottle opener. This is the kind of material that McKinsey was putting together at a point when cigarette smoking had been banished from offices, banished from restaurants. It was widely known, you know, that this was a killer product. And yet, McKinsey continued to work with Altria and other tobacco-makers until last year.
And I do want to add also a point about the obligation to dissent. So McKinsey does allow its employees to opt out of certain work. And there are many employees who have opt out-ed (ph) of the chance to work for Altria, for, you know, the Philip - you know, formerly Philip Morris. The problem is those are usually junior people, you know, associates, the lower end, you know, relatively junior persons. And what people say, you know, who we've talked to at McKinsey, or former McKinsey people, is - said that that puts the ethical burden on those very young people. In other words, McKinsey continued to be able to work for companies like Purdue Pharma, for companies like Altria, because the ethical onus, you know, the decision not to do that work, was put on very junior people.
DAVIES: And did the junior people who declined that work find that their advancement in the company was hindered at all?
FORSYTHE: So they said that, you know, it's hard to measure that. But what it does is it excludes you from having the chance of developing a relationship with a partner. It's so important for a young McKinsey associate to build strong relationships with partners, with their sponsors, in order to get good performance evaluation reviews. McKinsey is famous for their rank-and-yank system where people are pushed out of the company. They're counseled to leave if they're not at a certain performance level. So many, many people are counseled out of McKinsey, and so there's an incredible amount of competition to develop those good relationships with partners, those good working relationships. And when you opt out of work, such as with Altria or maybe with an oil company or a coal company, you lose that chance to develop that relationship.
DAVIES: You know, there are a lot of cases in the book where McKinsey advises companies that get into trouble, in part connected to matters that McKinsey advised them on. And most of the time you say McKinsey was not charged or included in a - you know, a regulatory action. In the case of Purdue Pharma, they were sued and had to pay a penalty, didn't they?
BOGDANICH: They paid a penalty to settle the investigations that were into their conduct.
DAVIES: Six hundred and forty million dollars, right?
FORSYTHE: That's right. So it was investigations by states, states' attorney generals. And that settlement, over $600 million, came early last year, early 2021.
DAVIES: We're going to take another break here. Let me reintroduce you. We are speaking with Walt Bogdanich and Michael Forsythe. They are both investigative reporters for The New York Times. Their new book is "When McKinsey Comes To Town: The Hidden Influence Of The World's Most Powerful Consulting Firm." We'll continue our conversation after this short break. I'm Dave Davies, and this is FRESH AIR.
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DAVIES: This is FRESH AIR. I'm Dave Davies, in for Terry Gross. We're speaking with New York Times investigative reporters Walt Bogdanich and Michael Forsythe. They have a new book about the international management consulting firm McKinsey & Company. The book is based on hundreds of internal McKinsey documents and interviews with present and former employees. It presents many examples of McKinsey's work that seem at odds with the firm's professed principles of ethical conduct and social responsibility. The book is "When McKinsey Comes To Town: The Hidden Influence Of The World's Most Powerful Consulting Firm."
You know, you've noted that in forums where high-powered business and academic experts gather to discuss public policy issues, McKinsey embraces the call for action on climate change. There's a big conference in Aspen that you mention. Is this a position that the company takes a lot in its public advocacy?
FORSYTHE: That's right. If you look at the McKinsey's website, for example, if you look at their public statements, you would get the impression that McKinsey is a very green company. Internally, they work to be carbon neutral, making sure that they buy offsets for the carbon that, you know, their road warrior consultants, you know, might emit, you know, flying on all their airplanes. When you're recruited at McKinsey, sometimes, there's a test. And a lot of times, that test has an environmental component to it, you know, some scenarios where you may be trying to protect a reef or something like that. It was one example in a recruitment test, in a placement test for McKinsey.
So there are many, many public statements. And the firm has been very upfront about the fact that climate change is real and that the world has to address this problem. It's urgent. And McKinsey's also been extremely - you know, again, used their ability to analyze data to quantify the problem, to show how urgent it is. And they've taken that to forums such as the Aspen Ideas Festival that's held every summer in Aspen. That's their public stance.
But what we found in researching this book is that while McKinsey is very good about articulating the dangers of climate change and the urgency to solve it, at the same time, they're working with some of the world's biggest polluters. And, well, if that work was, you know, to abate carbon, to reduce carbon, to fight climate change, that would be laudable. But in many instances, we found that wasn't the case.
DAVIES: So what are some examples of their work with carbon emitters?
FORSYTHE: So one example we looked at was a company in Canada called Teck Resources. Teck Resources mines metallurgical coal. This is the coal that's used in steel mills, like the one in Gary, Ind., for example, to refine - to smelt steel. And they - McKinsey worked for this company on many different projects, and those projects were focused on increasing the efficiency of the company. There was one study, for example, that was simply called drill and blast. Other studies were, you know, coal process optimization. So this was the focus. It was the idea of making this Canadian company, which is one of the world's largest producers of this metallurgical coal, into a more efficient coal miner.
So McKinsey also works for Chevron, for Shell, for BP, for Exxon and, for the last 50 years, for Saudi Aramco as well, the world's biggest oil company. And again, we looked at some of the projects. We were, you know, again, able to have some visibility into what McKinsey was doing even though it's a very secretive company. And the work it was doing for Chevron, for example, it'd have nothing to do with reducing carbon output and everything to do with increasing the efficiency of the company.
DAVIES: The efficiency in extracting oil, in other words.
FORSYTHE: To make it a more efficient extractor of oil.
DAVIES: You know, you write about a consultant at McKinsey, a young man named Erik Edstrom, who was troubled by some of the work there that seemed inconsistent with McKinsey's public evangelism about climate change. Tell us about him and where his career went at McKinsey.
FORSYTHE: That's right. So Erik is an Army veteran, U.S. Army veteran, and very passionate about the environment. After the Army, he went to study at Oxford and to - on the - focusing on the environment. Then, he found himself in Australia. And he was working for a competitor and then went to work for McKinsey. And what he found is that the focus in Australia is - for - it's a very resource-focused place, and there's lots of big mining companies there. And that was, in many ways, the bread and butter of the McKinsey office in Melbourne where he worked. And he didn't want to work for companies that were polluters, that were mining coal, for example. But he found that that - you know, that was the main focus of the work there.
And he, being a McKinsey consultant, was able to take a real close look at this. And he found that because of the work McKinsey was doing with some of these polluters, that an individual McKinsey consultant, because of the efficiency gains that they gave to, say, a coal miner, was individually responsible for megatons of carbon dioxide going into the atmosphere. This really upset him. He called it out to his management. And when he left McKinsey, which would have been in July of 2019, he wrote what I would say is the mother of all goodbye letters, pointing out this conflict here, that a company that is publicly so committed to reducing carbon dioxide emissions, so focused on protecting the environment, in reality was actually making the problem worse.
DAVIES: That was in 2019. You write that this debate continued within the company. And in - I think it was 2021 - is this right? - that 1,100 employees signed a letter urging the company to change its policies on carbon emissions. What was the management's response?
FORSYTHE: So this letter came out around March of 2021, and it was aimed towards Earth Day, which was the following month. And the idea was that McKinsey - you know, they were very concerned about the fact that it was very unclear which companies McKinsey was working for, and they wanted to be able to quantify that and to show - you know, to be more transparent about the work that McKinsey did with some of these big polluters. And they brought it up to management's attention. And there are many people in management at McKinsey who were very sympathetic to the idea of fighting climate change, reducing carbon emissions.
But the word that came back is that it's - these companies are too important, you know, and we would never be able to be effective in reducing carbon emissions if we walk away, if we don't work for the Aramcos of the world, the ExxonMobils of the world. If we're not working with them, how can we possibly help them reduce their carbon emissions? The problem with that is that it looks like a lot of the work that McKinsey does with these companies is - has nothing to do with reducing carbon emissions.
DAVIES: We need to take another break here. Let me reintroduce you. We are speaking with Walt Bogdanich and Michael Forsythe, both investigative reporters for The New York Times. Their new book is "When McKinsey Comes To Town: The Hidden Influence Of The World's Most Powerful Consulting Firm." We'll continue our conversation in just a moment. This is FRESH AIR.
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DAVIES: This is FRESH AIR. And we're speaking with New York Times investigative reporters Walt Bogdanich and Michael Forsythe. Their new book is about the international management consulting firm McKinsey & Company and ways in which its work at times seems at odds with their professed values of ethical conduct and social responsibility. The book is "When McKinsey Comes To Town."
You know, the company has done a lot more international work, I guess, in recent years, and there's some really interesting stories in here about that. You know, you write about their work in Saudi Arabia. I mean, the Saudi regime has, for many years, hired a lot of international consultants to help it with all kinds of projects. There was plenty of oil money and big plans. Do you want to just give us a sense of McKinsey's work, the scale of its work, in Saudi Arabia and some of the issues that it raises?
FORSYTHE: Right. So McKinsey's been working in Saudi Arabia since at least the early 1970s. And a lot of that work has been with Aramco, the big oil company that is the world's largest oil company, you know, the big company that - in one of the world's largest oil producers. And so over the years, the Saudi government - and I grew up in Saudi Arabia myself as a child. I left when I was 12, but, you know, in some ways it still feels like home to me. And when I was young, I saw these big, grandiose projects that the House of Saud, the king, was throwing money at. You could see it all over the town where I grew up, in Jeddah, on the west coast, on the Red Sea.
And this continued. And this is just catnip for consultants. And this - you know, the Saudi government, ministries - health ministry, education ministry, economy ministry - they needed this outside expertise. And McKinsey was there. You know, this combination of a lot of oil money, this need for expertise and then these grandiose projects was just really ideal for consultants and not just McKinsey. There were other American consulting companies that are there in force to this day. One project that is going on right now is the city of the future in northwestern Saudi Arabia, pretty close to the Israeli border, called Neom. And it is this futuristic place that is just fantastical, that is envisioned - you know, this city of the future where there's no pollution, and it's a beautiful place. It's still a vision. But McKinsey and other consulting companies have been earning millions and millions of dollars advising the Saudi government on this.
The thing about Saudi Arabia, though, is that you do need to cultivate ties with people who are plugged in with the royal court. And over the years, McKinsey has taken on as employees, consultants, some of the sons and daughters of ministers in Saudi Arabia. And because there's so many of these elite Saudis in the company, they often reflect views that are very pro-regime, pro-Saudi government.
DAVIES: You know, McKinsey's work in Saudi Arabia drew really sharp criticism after the murder of the journalist Jamal Khashoggi. It was criticized for some work that it did for the Saudi regime which may have had a role in identifying dissidents, including one who had worked with Khashoggi. You want to tell us what happened here?
FORSYTHE: That's right. So this news came out just a few weeks after the journalist Jamal Khashoggi was killed. And, you know, we know and the CIA, U.S. intelligence, has said that the crown prince in Saudi Arabia, Mohammed bin Salman, bears responsibility for Khashoggi's death. And so this - what came out was a slide deck. It's always a slide deck, no matter what you look at, McKinsey, and what area. And this one - now, McKinsey insists that this slide deck was only meant for internal use.
DAVIES: What - internal within McKinsey - is that what that means?
FORSYTHE: That's right, within McKinsey. That's what they say. And, you know, McKinsey says they're horrified, you know, if this had gotten out. And certainly it did get out because, you know, The New York Times reporters got it from two different sources that were not McKinsey. But let me tell you a little bit about what was in there.
So what they were doing is they were analyzing, basically, the influence of some of these big influencers on social media, like Twitter. Saudi Arabia's a big Twitter country. They love to tweet in Saudi Arabia. It's a really - a big place for social media. It's really taken off like wildfire there. And this slide deck that they made, that a McKinsey person made in Saudi Arabia, identifies some of the influential people on social media that are critical of Saudi policies. And one of those people - he lives in Canada now, but he had been working with Khashoggi. And he said after this slide deck came out, identifying him as one of the influential people on social media critical of the Saudi government policies, that after that came out that two of his brothers were arrested.
DAVIES: And is there any suspicion that identifying this dissident in Canada who was in touch with Khashoggi might have, in some way, contributed to Khashoggi's murder?
FORSYTHE: Well, you know, of course, McKinsey would say this - he was a well-known dissident already, that - so it's not clear whether the McKinsey slide deck is what, you know, led to this person's problems with the Saudi government. And I will say that, you know, McKinsey would say that they have changed the way they pick clients now especially in nondemocratic regimes. And so, you know, now what McKinsey will say is that they are not allowed to work for the interior ministries, you know, the police or defense or justice ministries in these autocratic states. That's their policy now.
DAVIES: And that had something to do, I'm sure, with the reporting that the two of you and others at the Times have done over the past few years.
BOGDANICH: No question about it. I don't think these changes would have come about if the media had not been looking at them.
FORSYTHE: Right. So McKinsey does have these new policies, and it is a result after all the media scrutiny including by Walt and myself. But there is a problem. In fact, there's a couple of problems that McKinsey is going to have to overcome before this can really, really take root. And one of them is the - just the nature of the company itself. It's set up like a law firm with these very independent partners spread all over the world who run fiefdoms, basically.
And how can, you know, the center, the headquarters of the company - if there even is a headquarters of McKinsey - I guess you'd call it New York. How do they control a partner in China, who knows so much more than they do about what's going on inside of China? How can they oversee those kind of projects or proposals for projects? How do they have - possibly understand when those partners around the world have so much power to say yay or nay to projects? It's really difficult, I think, to - for a company that is so decentralized to have a real handle on that.
And I think the other problem is that McKinsey's got to feed the beast. You know, senior partners, partners at McKinsey make millions of dollars a year, and there's thousands of these people now. That's a huge demand for - that's a huge burden on them in the sense that they have to pay these salaries. And in order to keep paying these salaries, they have to keep generating work. So there is a conflict there between being more selective on who you choose as a client and paying your consultants who think they deserve to be paid as much as any Goldman Sachs banker because, darn it, they went to school, they went to Harvard, they went to Yale, they went to Stanford with these very same Goldman Sachs and JPMorgan bankers. So they should be getting those kind of salaries, too. Well, to keep paying them those salaries, they need to keep taking on clients.
DAVIES: I guess the other question one might ask is if you applied the same scrutiny to another large consulting firm - and there are many others - and you had the same access to their records, do you think you could find similar findings, that you could make a similar case?
FORSYTHE: You probably could. Those companies - for example, you know, in the course of reporting this book, we've actually done a couple of stories about Boston Consulting Group, BCG, which is - it's really the main competitor to McKinsey. Not because we set out to write about BCG, but in the course of looking at McKinsey, we discovered that, in fact, the real story, or maybe a more compelling story in some cases, may be with BCG. This came out when we were looking at Angola, for example, and we did a story about BCG's work in Angola. I had thought we were writing a McKinsey story, but it turned into a BCG story.
And another instance is actually the work in Saudi Arabia, which we do mention in the book, that Boston Consulting Group did have a - build a strong relationship with the crown prince there, Mohammed bin Salman, and his office. And so it does happen, but those companies aren't McKinsey. It's McKinsey that comes off the lips of those people at Harvard and Stanford. If you're not going to work for Google, if you're not going to work for a big bank on Wall Street, it's McKinsey that's on their lips, not usually Bain or BCG although they certainly are good second and third choices.
DAVIES: Walt Bogdanich, Michael Forsythe, thank you so much for speaking to us.
BOGDANICH: Thanks for having us.
FORSYTHE: It's our pleasure.
DAVIES: Walt Bogdanich and Michael Forsythe are investigative reporters for The New York Times. Their new book is "When McKinsey Comes To Town: The Hidden Influence Of The World's Most Powerful Consulting Firm."
Coming up, John Powers reviews the third season of the Hulu comedy-drama series "Ramy." This is FRESH AIR.
(SOUNDBITE OF SUSAN ALCORN QUINTET'S "NORTHEAST RISING SUN")
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