• Jason Nisse

Secret Sauce Goes Sour

If you, unlike Public Enemy, believe the hype, both Coca Cola and KFC have secret recipes. It’s a cunning marketing trick by the two purveyors of unhealthy products from the deep south of the US, and has been a key element of their phenomenal success.

Another industry which depends on a secret sauce is management consultancy. Management consultants see themselves as problem solvers, cutting through the complexity of organisations to help them run more efficiently. Cynics say that they’re people who ask you a question and charge you a fortune to replay the answer to you.

The influence of the big consulting firms – Accenture, Boston Consulting Group, Bain & Co, the big four accountants and the like – shows that the formula of having some very bright folk crawl over your business in the search of the recipe to success is working. The UK Government is estimated to spend over £1bn a year with consultants helping out on tricky issues such as Brexit and the Covid-19 pandemic.

And the most prominent purveyor of the secret sauce strategy is McKinsey & Co, whose methodology and influence have given it an almost mythical quality. The business has been going for nearly 100 years, has over 30,000 consultants and an alumni network that includes global CEOs and leading politicians, and advises everyone from the US Government to leading Chinese tech companies.

But what happens if there a fly in the magic ointment? McKinsey has been running into some pretty major turbulence in recent times.

First came its involvement with the Gupta brothers, a controversial business family in South Africa which had an uncomfortably close relationship to former President Jacob Zuma. Work for the Guptas by PR agency Bell Pottinger led to the collapse of that company. McKinsey’s global managing partner Kevin Sneader was forced to issue a grovelling apology for the businesses’ action and the South African office was “restructured”.

Then came McKinsey’s support for a US drug maker called Purdue which wanted to “turbocharge” sales of opioid Oxycontin over a 15 year period, contributing to the prescription drug crisis in the US that has claimed 100s of lives including pop stars Michael Jackson and Prince. This week McKinsey settled the charges against it, paying $573m in penalties.

Thirdly McKinsey was forced this week to suspend its CIB Insights team, which sells information to Wall Street financial firms, because it found potential breaches of confidentiality.

The question is – if you are a purveyor of secret sauce to organisations and you are shown to:

a) Not be able to spot a reputational risk from working with a dodgy client;

b) Happily support an unethical and potentially dangerous marketing programme;

c) Fail to keep confidential information secret;

then how can you convince organisations that they should adopt strategies you suggest when your own methodologies have obvious flaws.

It will be interesting to see how McKinsey communicates its way out of this crisis, because at the moment the secret sauce seems to have a sour aftertaste.

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