Just announced, a final settlement of the lawsuits filed against McKinsey and Company, the nation’s leading management consultants, on behalf of 47 states, the District of Columbia, and five US territories. It’s over the company’s leading role in the drive to “turbocharge” (their term, I believe) Purdue Pharma’s opioid sales in the midst of a prescription painkiller epidemic. Settlement amount: $573 million.
McKinsey agrees $600m settlement over role in opioids crisis
Doesn’t sound like that much. McKinsey’s yearly revenue is now over $10 billion. Still, we’re told to consider it a breakthrough in terms of holding high-priced consulting firms at least partly accountable for the advice and support they give their clients.
No admission of wrongdoing, I see. Although if you didn’t think you did something wrong, why pony up almost six hundred million bucks? It’s money that will help fund treatment efforts, partial compensation for the vast damage done. Not that it’s easy to quantify such things in dollar amounts. It’s the best the plaintiffs could extract, in the circumstances.
Say, would the actions of a consultant and a big corporation acting in concert qualify as a conspiracy of sorts? Interesting question. On one hand, I imagine they didn’t set out to deliberately harm their customers. Their focus was increasing revenue. What could be more capitalist than that? Purdue hired them to show the company how to survive and even grow richer in the teeth of the worst drug epidemic in US history – one where the company’s products played a key role. They did their job all too well.
Now it’s time to pay the piper. I can’t help wondering if there are sighs of relief around the HQ offices in New York. Is the feeling that the company got off relatively light, dodged a bigger caliber bullet? Or will heads roll, the way they often do? “Sorry, Tom, looks like we’ll need a few volunteers to fall on their swords. We nominate you.” I actually heard that said to some poor schmuck at a meeting. Will the expense involved translate to layoffs? Back in the day, companies sometimes referred to staff reductions as red meat. I’m not making that up.
Maybe the company views such settlements as the cost of doing business, the way a corner drug dealer will talk about the risk of getting busted. After all, when your business operates in 69 countries all over the world, this kind of thing has to have happened before.
Could this be the time for some serious internal organizational stock-taking? Or perhaps the Board sees no reason to get everybody upset. Try to be more careful going forward — don’t leave so many incriminating documents and emails lying around. Be more cautious when it comes to vetting prospective clients.
Reminds me of friends who after a divorce vow never to remarry. In my experience, they rarely stuck to such promises. Sometimes they even remarried the same person a second or third time.
I don’t mean to pick on McKinsey, as I doubt the other big consulting firms of that type would have done much different. In the short term, it probably made eminent business sense. They got paid handsomely. It looked good on the quarterly returns.
Now: time for another project.