House of Lies

by Martin Kihn

  Or it would be—if not for McKinsey.

  They run the model. In any consulting engagement, the model—pronounced The Model—is the nexus of power. It is an Excel workbook, or multiple workbooks, that is built carefully over a period of weeks with an elaborate cross-mesh of references and formulas so complex it is only really understood by its maker, and often not even by her. The model is a holy thing, like Nomad in Star Trek. It accepts your offerings and issues its cryptic response, which is never questioned, only puzzled over.

  McKinsey is the maker, and it is never happy.

  The model is a mathematical re-creation of the New York City economy, specifically its overall gross city product. The inputs demanded from each subteam are employment numbers and total output, or value-add.22 These inputs are demanded weekly, sometimes biweekly, in little groups or big groups by month and then by year, according to a complicated schedule McKinsey claims it disseminated early on but no one seems to be able to find.

  You talk to the McKinsey guy quite often. The conversations go like this:

  MCKINSEY: When are you going to send the template? [It requires submissions using McKinsey-standard templates, which look funny.]

  YOU: Oh—was it due today? Which template?

  MCKINSEY (being patient): The one with today’s date on it. It’s in the file name. Today’s date. Can you see it?

  YOU: Did we get that one?

  MCKINSEY: Do you need another copy of the stuff we sent last week? It’s the same thing I sent you Monday? And yesterday?

  YOU: I got it. It’s kind of hard to read.

  MCKINSEY: Is English your first language? I’m kidding—listen, why don’t you look it over and get back to me.

  YOU: When do you need it by?

  MCKINSEY: We kind of need it by ten minutes ago. But I can give you guys longer. I usually do, right?

  YOU: Are we holding you up?

  MCKINSEY (veneer dropping): It’s just… we prefer to work internally.

  Four weeks of this makes you feel really stupid. You begin to believe you don’t deserve to work with McKinsey. You really don’t have what it takes, and this is a depressing and liberating thought. You have found your people: the truly second-rate.

  You believe this until you see the final presentation and read the final report.

  McKinseyites dress in black. They wear black suits and crisp white shirts and thin black ties and walk together like the men in Reservoir Dogs. They are the Men in Black. Long after others abandoned jackets and ties, they persist. BCG, Bain, Booz Allen Hamilton—the three B’s they consider their closest competitors—all three have built B-business-casual workplaces. But not McKinsey. They are taller, smarter, better looking, and better dressed.

  But are they really better?

  Their work is certainly simpler than your firm’s. Despite being the only management consultancy with a full-time graphics “guru” on staff, McKinsey churns out presentations as plain as any on the planet. There are few words on the page, in large fonts. There are graphs and boxes here and there with straight lines and a minimal use of color. Clip art is vanquished. Curved arrows and “starburst” patterns so beloved of cubicle jockeys are avoided. Every inch of every slide says “We are strategic thinkers. We are the avatars of Truth. We are the Oracle. These are our words.”

  Less is most definitely more, you believe. You have gotten so sick of words you barely talk at all anymore. People don’t shut up. We live in a country of yappers and it’s getting worse. You love ballet—you love how no one talks. “Words,” said Lenny Bruce, “are all lies.” And so they are.

  So you are predisposed to the McKinsey approach. Or you would be if it were in service of the truth. In the case of the New York City Partnership, however, it appears to be employed in the service of saving McKinsey time. For simpler slides, true or not, have the advantage of being much easier to create. The clean boxes and fourteen-word messages seem to say “We leave all the really complicated hard work we did off the slide, because you couldn’t understand it. Here’s the bottom line.”

  Other firms, much less secure, tend to put all the complicated hard work on the page, where the client can actually see it. Maybe this is a mistake.

  A typical McKinsey slide might look something like this:

  Whereas a typical slide produced by your firm would look more like this:

  Which is better? It depends on the content, of course; McKinsey’s aura allows it to get away with a lot less content. Doubtless the firm has done brilliant work for its storied clients—for United Airlines and Kmart and Enron and DaimlerChrysler, for General Motors and the city of New York, and so on. But top-tier consulting is a secret industry, conducted in the dark, and you have not been allowed to see this brilliant work. All you have seen is the work McKinsey did for the New York City Partnership.

  In the end, McKinsey enrages all six other firms by entirely rewriting the final presentation the night before it is to be delivered to ex-President Bill Clinton, among others. “We’re consulting our graphics expert,” they say. The final result has almost no graphics.

  Afterward, your principal says, “My key take-away from this project is we’re better than we think we are.”

  It’s sad, how bad you think you are. There is an element of self-loathing in all consultants.

  One Anand Raghuraman, a leader of the AT Kearney team participating in the project, was quoted in the New York Times in late November: “My wife is an elementary-school teacher, and when I talk to friends I always used to say, ‘at least one of us does something good for society.’ Here, for the first time, I could say I was actually doing something for society.”23

  The New York City Partnership consulting coalition’s findings were ignored by the city, and not a single one of its recommendations was adopted.24

  By December, your firm’s New York office approaches half its former size. Two of its five floors are leased back to the building’s landlord. Your office, once home to five busy media strategy consultants, holds only you for the duration of the NYCP job. And then you are demoted two floors, as the twenty-fourth floor is abandoned forever.

  The Rainmaker’s old office is gutted by the next tenant, a Scottish bank.

  It is the coldest day in the warmest winter in human history when you show up at McKinsey for your interview. A first-year business school student, you have had exactly three months of schooling in the ways of industry. You feel as though you know next to nothing, and you are about to be proved right.

  McKinsey’s New York offices are in midtown on the East Side, not far from the United Nations. It is a deceptively undecorated suite in an indifferent silver-toned building. You think of the CIA, how it hides in dull quarters and sits behind nondescript doorways making trouble.

  You wait with the other potentials, not making small talk. You look each other over openly. There is a table, and a very beautiful HR woman with hair as red as Dana Scully’s gives you a name tag. You smile at her and she looks sick. You take coffee and stand, waiting your turn. The room smells like a doughnut, but there are no snacks whatsoever. Your hands are still cold. And you are terrified.

  Consulting interviews are unique in the world of interviews for one reason: the case.

  Throughout the fall, you have been preparing for this. You know it’s out there—you all do. How many times have you been told by second-years,25 “Relax—just be yourself” and “They only want to see how you think”? That last one especially is repeated so often by recruiters and second-years as to become a kind of mantra: They just want to see how you think…

  That, you think, is the problem.

  A typical case goes like this: After the cursory slam through the résumé, your top-tier interviewer will say, “Okay, would you like to do a case?”

  And you say, “Absolutely not.”

  In your mind, that is—in the room itself, you say, “But of course.”

  “Are you familiar with the [insert interviewer’s favorite industry here] bus
iness?”

  “Some…”

  “Well, I was at a client in [this godforsaken industry] last year and they had a problem. It went like—”

  “Do you mind if I take notes?”

  “Please.” [waits] “Okay—so I was at this client and she said…”

  That’s another thing—right after they say, “They only want to see how you think,” those second-years always offer, “Ask permission to take notes.”

  Now, this exchange has become a kind of leaden scripture and an inside joke among interviewers. Every single consulting case begins with this same ridiculous exchange—“Do you mind if I take notes?” “Please”—passed along from generation to generation like a predisposition to madness…

  It turns out there are two very distinct versions of the case: (1) the one you read about in the Columbia Business School Management Consulting Association’s Case Interview Guide and similar books from Wharton and the Vault, and (2) the one you actually get. Case 1 is terrifyingly complex, involves graphs and charts and hard math on the fly while you figure out distribution patterns for, say, bicycle wheels in war zones around the world—all leading to a moment, within the twenty-minute time limit, of pure and crystalline epiphany when you sob out, “Aha—I’ve cracked the case!”… and you deliver an answer (“You should consolidate all your manufacturing in Thailand”) so simple it has the ring of the oracular.

  Case 2 is so simple you think you heard it wrong. Then you ask a lot of leading questions to try to make it more complex. Then you think: This is easy. And the pain begins…

  The classic version of Case 2 is this: “Your school cafeteria workers all decide to go on strike, leaving hoards of hungry MBA students with nowhere on campus to eat. The Hamilton Deli is across the street, and its workers are not on strike. The deli is a pretty good size and offers a full selection of sandwiches, drinks, doughnuts, and coffee. During the strike, the owner’s really excited and expects a windfall. And for the two weeks the cafeteria workers are out, there are lines literally down the street outside the deli. Business is booming. But at the end of the month, when the owner does the final tally of his receipts, he sees his profits are only up about 10 percent. What went wrong?”

  There is a classic version of Case 1 but you don’t understand it. Something about leasing time on communications satellites… it’s a McKinsey case.

  “You”—you hear it, like a whisper in a dream, and then it’s louder—“You!” A wonderful smell, like a lavender bath; a gentle tap, a dog’s nose on your left shoulder…

  “YOU!”

  And YOU! are startled awake—you have been daydreaming—and it’s Dana Scully leading you to the office where you are to have the first of your two scheduled forty-five-minute interviews at McKinsey.

  Like many women, Dana is much better looking sitting down. Her body’s kind of lumpy. For this, you are thankful.

  The man who greets you is younger than you. McKinsey, it seems, is younger than you. You have not seen an old McKinseyite. It’s like Harvard Business School, which hardly enrolls a single person over thirty: Seasoning is not the taste of choice. So the young man squeezes your hand and asks you to sit. He’s got short, tight curls on his head and a big, fat pen in his left hand. This he bangs and bangs and bangs on his right palm for forty-five straight minutes, once per second, bang bang bang.

  “You know,” he starts, “who is buying all these apartments?”

  “I’m sorry?”

  “You figure—look, say I’m making one-twenty, one-twenty-five, right? I’ve got to be in the top one percent of earners in the country, right? If the median is something like—let’s make it thirty thousand. One-twenty-five plus the bonus—but they’re selling apartments in this city that are barely livable for like half a million dollars. Who’s buying these apartments? Do you know?”

  “People who can afford them.”

  “Obviously. I mean—if I can’t get a one-bedroom on the Upper East Side, then I’m wondering what’s going on? Am I right here? What do you think?”

  What you think is: Is this the case?

  “Well…” you start—

  “But never mind. Where do you live?”

  “Queens.”

  “I’m sorry. Okay—” he glances down at a piece of paper on his desk, a résumé—“How’s Wharton?”

  Wharton? “I think… it’s a good school…?”

  “Yeah—gotta hate those winters though, huh? Now listen—I see from this you have a kind of an unusual background for consulting, right? I had a background too—I was, I had been what you call unusual before I went to HBS.”26

  “What did you do?”

  “I carried a bag for P and G—I was a salesman in the Northeast. I handled detergent products—Tide, you know?”

  “Sure—”

  “So tell me, how did you like the Peace Corps?”

  You have never been in the Peace Corps. You wonder if this is some sort of extreme interview tactic.

  “¿Habla Español?” he prompts.

  “Not really—”

  He shakes his head, with pity. “Then you shouldn’t put it on your résumé.”

  “I didn’t.”

  You look at the piece of paper upside down on the desk in front of him. It is, of course, the wrong résumé. He doesn’t seem too fazed when you point this out to him; in fact, it’s almost as though he thinks you’re lying. Like you really are the guy who said he could speak Spanish after his years in the Peace Corps.

  “Look,” he says, “we don’t have much time here—let’s do a case, okay?”

  “Okay.”

  “How many restaurants are there in New York City?”

  You think: You are ready for this. You have practiced with your classmates, read all the books, studied up on McKinsey to anticipate its style of case—it likes quantification, estimation—and written issue diagrams in your head while you slept. But first—

  “Do you mind if I take notes?” you ask.

  “On what?”

  “The case.”

  “You want to take notes?”

  “Is it okay? I don’t have to.”

  He nods.

  He seems sad, suddenly, as though informed of the grizzly death of a fish.

  There are long moments of utter silence as you wait for the case to begin, pencil poised.

  He breaks it. “Are you going to write something?”

  “As soon as we start.”

  “It’s done.”

  “What’s done?”

  “The case. I just gave it to you.”

  You think: What kind of mind game is he playing?

  And then you remember—what was it? He said something a minute ago—something you thought he was just saying, like to pass the time, but maybe… maybe he was saying saying it. Maybe that was the case.

  But what did he say? Something about food… now you’re hungry.

  There are no snacks at McKinsey. There is a pool table in the hallway and a minibar stocked with the cleanest empty glasses you have ever seen.

  There are no snacks… no snacks… God, you should have slept last night.

  “Do you want me to repeat it?”

  “I’m sorry. Yes.”

  “How many restaurants are there in New York City?”

  You wait for more.

  You say, “And…?”

  “That’s it.”

  “That’s the case?”

  “Are you going to try it…?”

  Of course—of course you try it. You start drawing a map.

  During your anxious preparations for this moment of high farce, you purchased the classic book on structured problem solving for business people, The Pyramid Principle. In this clearly written, highly structured book, author Barbara Minto lays out her five basic rules for solving a problem—any problem.27 These rules can be summarized as follows:

  Visualize the difference between the result you get now and the result you want

  Visualize the “structure eleme
nts” of the current situation

  Analyze each element to see if it’s the problem

  Figure out what to change

  Say how to change it

  You have never found this approach to be remotely useful in any situation. It is particularly unhelpful right at this moment, when you’re frantically trying to figure out the answer to a question that could easily be cleared up with a quick trip to the Yellow Pages. Now you’re pondering your map…

  “I’d start by segmenting the population.”

  “What population?”

  “The population of people who eat in restaurants in Manhattan.”

  “This wouldn’t just include residents.”

  “I know that. There are commuters—there are—there are visitors, people visiting, tourists—”

  “How many tourists?”

  “I don’t know.”

  “How could you find out?”

  “Count them—”

  This is fast becoming absurd. It has crossed the threshold of absurd and become absurdist.

  “How would you do that?” he says.

  You breathe in—and you survive the interview. You survive the next one, with a very scary straw-haired woman whose sister you knew back in high school (by coincidence) and whose roots are so deeply black they look dead. She laughs a lot—an awful lot for someone who is so obviously a miserable wreck. But then who are you—?

  That evening the phone rings in Queens. Your wife answers. It’s for you: McKinsey.

  You don’t get the job.

  An Analytical Digression: “On the Means by Which the Prince Maintains His Power”

  People do not understand how hardwired McKinsey is into the power grid of American business, nor how annexed it is to the Harvard Business School. It sounds hyperbolic to say Harvard and McKinsey own the U.S. economy, and it is not true. Harvard and McKinsey together do not own, run, or manage the U.S. economy. This may have been true in the 1960s and the 1970s, when McKinsey alumni were running American Express and micromanaging General Electric and HBS professors consulted to the White House.