you will present a critical review of McKinsey's latest dark chapter, the opioid scandal which the company settled with $574m in February 2021 (FT 2021).
Below are three resources to help you get started with the necessary background research on this case.
you will present a critical review of McKinsey's latest dark chapter, the opioid scandal which the company settled with $574m in February 2021 (FT 2021).
To develop the art of great business podcasts, you are invited to listen to Episodes 01, 02 and 03 ofThe Company Doctor Podcast Series(available here:Link(Links to an external site.)). These episodes strike a great balance of gravity (professionalism) and levity (lightness).
TOPIC. The McKinsey's opioid scandal. Your audience is a global business audience and your story must bring something interesting and new to them. After briefly presenting what happened at McKinsey, you will discuss and present your take on the following 5 points: 1.1) which ethical issues sit the core of this story; 1.2) who was involved and which role they played; 1.3) what is the McKinsey's ethical framework (culture, code of ethics/conduct, people etc.) and what went wrong; 1.4) how could have McKinsey avoided this scandal 1.5) what should McKinsey do in the aftermath.
FT+%282021%29+Tom+Peters_+McKinsey%E2%80%99s+work+on+opioid+sales+represents+a+new+low+.pdf 23/02/2021 T m Pe e : McKin e k n i id ale e e en a ne l Financial Time h :// .f .c m/c n en /82e98478-f099-44ac-b014-3f9b15fe6bc6 1/4 T Pe e : McKi e i e f he bigge e l e f MBA g ad a e , a d i i i hi i ela ed he O C i a ai Tom Pe er FEBRUARY 15 2021 The ri er i an a hor on managemen and hi ne book i E cellence No : E reme H mani m This month McKinse agreed to pa nearl $600m to settle claims that its ad ice had e acerbated the deadl US opioid crisis. The cons ltanc ad ised P rd e Pharma on pa ing rebates to pharmacies based on the n mber of people ho died or became addicted after taking the compan s painkiller O Contin. One 2017 presentation bloodlessl calc lated that if P rd e paid $14,810 per e ent , and 2,484 c stomers of the CVS pharmac chain o erdosed or became addicted in 2019, P rd e o ld pa CVS $36.8m that ear. As a McKinse al mn s, m reaction as simpl : Dear God! M decades of pride in the firm e aporated as I read of the settlement. In fact, I asked a colleag e, in earnest: Sho ld I remo e McKinse from m CV? Stepping back, I orked for McKinse from 1974-1981. I signed on after getting m MBA from Stanford, and as delighted and pro d of the job offer, hich I accepted in a flash. O i i McKin e T m Pe e : McKin e ’ k n i id ale e e en a ne l TOM PETERS M f e c l a c de a e ha i g i h b i e ch l g ad a e 23/02/2021 T m Pe e : McKin e k n i id ale e e en a ne l Financial Time h :// .f .c m/c n en /82e98478-f099-44ac-b014-3f9b15fe6bc6 2/4 Indeed, I as at McKinse in 1980 hen I rote m first article on the organisation-effecti eness research I as doing for the firm. It co ered the highlights of hat o ld become In Search of E cellence, m book ith Bob Waterman. It emphasised the importance of organisational c lt re; in esting in people; tr ing a jillion things rather than sticking to a prescribed plan; and m fa o rite, hat He lett-Packard s top e ec ti es called managing b andering aro nd. That is, leaders sho ld sta in direct and constant to ch ith front-line orkers rather than sit in their offices che ing o er spreadsheets. When m article came o t, the m ck hit the fan at McKinse s Manhattan headq arters. The firm s bread and b tter and brand as strateg first, strateg second, no ifs or ands or b ts. I as told that the head of the Ne York office anted me fired immediatel . Onl inter ention from McKinse s managing director Ron Daniel sa ed m job. To me, that angr reaction sa s a lot abo t ho McKinse ended p pa ing almost $600m to 49 states to settle, itho t admitting liabilit , allegations that it rged P rd e Pharma to t rbocharge O Contin sales ia tactics that incl ded the rebate form la. I am angr , disg sted and sickened. The McKinse I ser ed as in m e perience an hono rable instit tion. Ho co ld this ha e happened to m belo ed emplo er? Nostalgia is a f nn thing. I am 78. M great pals from m time at the firm incl de Waterman, and I had close friends at the firm from Dallas to Tok o and M nich. I can honestl sa that I ne er itnessed an thing that e en approached dishono rable beha io r. B t before I don a holier-than-tho cape, I m st admit that I ha e onl kno n and orked ith t o people ho did time in a federal prison. Both ere from McKinse . One as Jeff Skilling, the Enron chief e ec ti e ho dro e the compan into fra d and bankr ptc . The other as m close friend and former McKinse top dog Rajat G pta, ho ser ed time for insider trading. I ne er e perienced the tiniest bit of nto ard beha io r from either one b t I cannot claim that the good old da s ere in fact the good old da s. McKinse is no a giant ith more than $10bn in re en e, 130-pl s offices, and 30,000 emplo ees. Si e can be a significant contrib tor to corporate misbeha io r. B t I think the problem goes deeper. McKinse is one of the biggest emplo ers of MBA grad ates, and has been a top choice for man ears, e en decades. 23/02/2021 T m Pe e : McKin e k n i id ale e e en a ne l Financial Time h :// .f .c m/c n en /82e98478-f099-44ac-b014-3f9b15fe6bc6 3/4 C igh The Fi a cial Ti e Li i ed 2021. All igh e e ed. In m opinion, this is not nrelated to the O Contin affair. I ha e long arg ed that e sho ld sh t do n e er damn b siness school . This rant is h perbolic, b t m reasoning is that b siness schools t picall emphasise marketing, finance, and q antitati e r les. The people st ff and c lt re st ff gets short shrift in irt all all cases. McKinse is loaded ith high-IQ MBAs addicted to spreadsheets and Po erPoint presentations. So are man other places that ha e fallen apart after all, the most prominent anal sis of the Enron fiasco as d bbed The Smar e G in he Room. F rthermore, McKinse s t pical assignment is to impro e market share and profitabilit . That combination, taken too far, is a poisono s combination in m opinion. Remember, the McKinse recommendations to P rd e ere directl aimed at e treme sales impro ement and the anal sis failed to address the potential of specific incenti es to increase addicti e, destr cti e beha io r. So ho do e fi this? B foc sing on the moral responsibilit of enterprise . Most of s ork for a b siness, hether it has si or 16,000 emplo ees. B siness is no part of the comm nit b siness i the comm nit . The pandemic and o r increased a areness of racial ineq alit ha e onl increased the need for b siness to nderstand that. I cannot close a disc ssion of hat happened at McKinse itho t taking a s ipe at Milton Friedman. He introd ced the idea that ma imising shareholder al e sho ld be a compan s raison d' tre. That led to an insane p sh for profitabilit at all costs. In estment of corporate profits in people and research has fallen thro gh the floor e er since. One rigoro s st d fo nd that the share of profits apportioned to people and R&D dropped from 50 per cent in the 1980s to 9 per cent in the 2000s. I lo ed m Stanford and McKinse ears. B t I do not remember e en a single moment directl related to the moral responsibilities of enterprise. Disregard of higher societal p rposes is nothing ne . B t for me, the McKinse -P rd e Pharma affair represents a ne lo . Le e i e e hi a icle: McKin e candal lea e bad a e for one al mna / From Lie e Lo e , Br el , Belgi m 23/02/2021 T m Pe e : McKin e k n i id ale e e en a ne l Financial Time h :// .f .c m/c n en /82e98478-f099-44ac-b014-3f9b15fe6bc6 4/4 ‘It needs to change its culture’/ is McKinsey losing its mystique? | Financial Times 23/02/2021, 10:54‘It needs to change its culture’: is McKinsey losing its mystique? | Financial Times Page 1 of 11https://www.ft.com/content/63f24181-aee0-49f4-9966-a447d79692f0 Andrew Edgecliffe-Johnson, Andrew Hill and Hannah Kuchler 2 HOURS AGO It was, in many ways, a routine piece of work for one of the consultancies to which big businesses regularly turn for advice on how to boost their profits in increasingly complex markets. The slickly-packaged Evolve 2 Excellence plan to “turbocharge” a product’s sales involved targeting its most prolific distributors, honing its messaging to boost brand loyalty, and circumventing restrictive retailers by offering mail- order deliveries to its keenest users. But the product was OxyContin, the highly addictive painkiller; the client was Purdue Pharma, a drugmaker now synonymous with America’s opioid crisis; and the consultancy was McKinsey, the most prestigious brand in an industry James McKinsey essentially created in 1926. The “E2E” plan and other details of its work for Purdue emerged in lawsuits brought by 49 US states, which McKinsey settled this month for $574m — a reckoning without precedent in an industry that typically takes no blame for how its advice is used. It was a jarring blow to “the McKinsey mystique”, a concept dating back to co-founder Marvin Bower, who laid down the principles that its partners would not take on clients about whom it had a shadow of a doubt and would always “uphold absolute integrity”. The Big Read McKinsey ‘It needs to change its culture’: is McKinsey losing its mystique? Managing partner Kevin Sneader wants to close the ‘dark chapter’ of an opioid scandal but he needs to rebuild trust in the firm 23/02/2021, 10:54‘It needs to change its culture’: is McKinsey losing its mystique? | Financial Times Page 2 of 11https://www.ft.com/content/63f24181-aee0-49f4-9966-a447d79692f0 An ambulance crew treat a man who collapsed after an opioid overdose in Boston, US. McKinsey has been paid millions of dollars for designing and implementing opioid marketing