McKinsey and BCG Need To Leave Russia Now
Despite recent PR to the contrary, both consulting companies continue to choose profits over values by continuing their work in Russia.
I was a consultant with McKinsey from 2003 to 2006, and that continues to become ever more embarrassing.
McKinsey’s CEO Bob Sternfels wrote an e-mail to ex-McKinsey employees on Thursday March 3rd which can only be described as a smokescreen. An effective one at that, as it led to many stories like the FT’s “Accenture and McKinsey join corporate stampede to exit Russia.” In fact, the responses of those two firms couldn’t be more different. We’ll get back to Accenture in a minute.
The key paragraph in Bob’s e-mail is this:
“On Wednesday, we suspended service to all state-owned entities and, effective today, we are suspending all client work in Russia. For projects underway, we will complete existing engagements. This is also in keeping with our values.” (emphasis added)
Let’s be perfectly clear — Bob is saying McKinsey is staying in Russia. McKinsey engagements can be up to a year in length, but are almost always at least 6 weeks. This almost certainly means most of their work will continue past the end of the war, and almost certainly means McKinsey’s actions will apply zero pressure on Vladimir Putin. McKinsey’s “values,” promoted as they are within the firm, appear to mean saying things that sound like values while limiting any impact on the commercial interests of the firm.
It’s one thing to not leave Russia, and it’s another thing entirely to make it seem like you’re leaving Russia without leaving Russia. One’s the wrong decision, and the other adds an element of seedy deception that makes me, as an ex-employee, deeply ashamed.
Christoph Schweitzer, CEO of BCG, managed to take Bob’s e-mail and raise it to an almost clownish level. From his email to ex-BCG employees on the same day:
“Today, we have decided to suspend our work with Russian clients. While honoring our contractual obligations, we have already started to wind down work where possible and will not take on any new work.”
Honouring our contractual obligations! Obligations! I mean, what more could Christoph do, given, you know, the contracts and all? Christoph too is saying that he’s staying in Russia, and elsewhere complained that things were tough for him because Russia is an “unique and complex” environment for doing business. You know what’s unique and complex Christoph? When a massive army invades your country without provocation.
Providing a contrast to these two CEOs are the actions of the consultancy Accenture. From their press release on the very same day: “Accenture is discontinuing our business in Russia.” A simple, straightforward, moral decision with no exceptions and no blather about “values.” Russia attacked Ukraine without provocation and we’re leaving. Period. Somehow the Financial Times felt fit to equate them in their headline, but there is no equivalency. Accenture strong; McKinsey weak.
Roland Berger, another consultancy, made that decision two days earlier and declared on their Russian website:
“President Putin’s war cannot go without consequences for business. Therefore, we decided on March 1st to end any activity for Russian clients.”
You will all have read about various companies taking real and costly stands against Russia, from BP’s sale (and massive loss) on their Russian assets to IKEA closing all its Russian stores — it’s 10th biggest market. McKinsey and BCG’s actions are laughable in context.
I have no doubt that both McKinsey and BCG will claim their work has some special kind of complexity that regular people just can’t understand, and which requires a different answer. Take it from someone who worked there — this is complete nonsense. They’re just consulting companies and their primary product is powerpoint presentations. The only risk here is to the current and future success of their operations in Russia. And when that takes precedence over this horrific aggression by Putin, one can no longer claim to have “values.” At least not ones that any normal person would understand.
All corporate leaders should be applying a very basic test: it’s September 2nd, 1939 and Nazi Germany has just invaded Poland, unprovoked. How comfortable are you continuing to do business with Germany? Now apply that to Russia and their unprovoked invasion of Ukraine.
If you’re still not sure, ask IBM. I bet they’d like a do-over.
As I watch, helpless, while Ukraine is savaged by an unlawful attack, applying pressure to companies to take a moral stand and exit Russia is the only thing I can think to do. I’d ask anyone with a connection to either McKinsey or BCG to write them, post about them, yell at them directly, right now.
Bob, Christoph: apply the 1939 test, find your values, and end all operations in Russia, right now.