Winners Take All: The Elite Charade of Changing the World

by Anand Giridharadas

  Hinton learned the McKinsey vernacular of the protocols. In the book The McKinsey Mind, by Ethan Rasiel, the firm’s protocols are distilled: Consultants first find the “business need,” or the basic problem, based on evaluating the company and its industry. Then they “analyze.” This step requires “framing the problem: defining the boundaries of the problem and breaking it down into its component elements to allow the problem-solving team to come up with an initial hypothesis as to the solution.” This is the insta-certitude at work—hypothesis-making comes early. Then the consultants must “design the analysis” and “gather the data” to prove the hypothesis, and must decide, based on the results, whether their theory of the solution is right. If it is, the next step is “presenting” in a crisp, clear, convincing way that can win over clients understandably wary of fancy outsiders’ big ideas. At last, the solution comes to the “implementation” phase, through “iteration that leads to continual improvement.”

  Hinton’s interviews for the McKinsey job had taught him an early and vital lesson about this approach to problem-solving: It was not about drawing on knowledge, and often even sneered at doing so; it was, rather, about being able to analyze a situation despite ignorance, to transcend unfamiliarity. The interview questions that struck him were of this sort: How many Ping-Pong balls would fit into a Boeing 747? What would you estimate the size of the Bolivian steel industry to be? How many razor blades are sold in Australia every year? Hinton joked that his instinct, hearing such questions, was to call a friend in this or that job who might be familiar with the relevant facts. But the point in the interviews was not to get the number right. It was to demonstrate how you reason, based on the assumptions you make. The idea, he said, was “if you break the problem down into small enough pieces that are logically related and make educated guesses combined with facts where they’re available, or at least you join the dots from the facts that you’re able to put together, you can construct a logical and compelling answer to pretty much any problem.” In other words, Hinton’s initiation into McKinsey and the protocols more generally was being urged to spit out a preternaturally confident answer to something he knew nothing about.

  As he adjusted to McKinsey’s ways, Hinton picked up the little rules and figures of speech that have become punch lines for many consulting skeptics and yet remain incredibly influential tools in business and beyond. For example, he learned that it was best to speak in lists of three, based on research about how people absorb information. If you have two important points to make, you add a third; if you have four, you combine two or just lose one. Hinton also learned the commandment against taking on excessively large problems. Do not “boil the ocean,” one versed in the protocols might tell another. The protocols tell you to reduce the scope of what is considered, limit the amount of data you drink in, to avoid becoming overwhelmed by the volume of reality you confront. And lest you worry that this shrinking of your purview will harm your ability to solve the problem, the protocols offer the eighty-twenty rule. In the early 1900s, the Italian economist Vilfredo Pareto is said to have noticed that 80 percent of Italy’s land was owned by just 20 percent of its people, and that 80 percent of the peas yielded by his garden came from just 20 percent of his peapods. These observations had given rise to the business maxim that 20 percent of many systems generates 80 percent of the results—one-fifth of one’s customers providing most of one’s revenue, to cite the most common example. The protocols told the problem-solving swashbuckler that it was possible to swoop in, find that 20 percent, turn some dials in that zone, and unleash great results. These tricks were not about looking at a problem holistically, comprehensively, from various human perspectives; they were about getting results without needing to do such things.

  At McKinsey, Hinton learned to make so-called issue trees—visual maps to help you break down a nicely scoped, eighty-twentied, pond-sized problem into its elements. It starts with a challenge such as making a bank more profitable. That increase in profitability can come through raising revenues or lowering costs, the first layer of subcategories. Each rung of subcategories must be, in firm parlance, “MECE”—mutually exclusive and collectively exhaustive. In other words, raising revenues must be entirely different from lowering costs, and all routes to the ultimate goal should pass through them. Now each subcategory can be broken down into sub-subcategories—the increase in revenue, for instance, can either come from existing businesses or new ones. And so on, until there are sub-sub-sub-sub-subcategories. To be fair, this kind of exercise can allow one to see, with a clarity that is impossible when looking at the whole, the dials that might be turned relatively easily and yet have outsize effects—for example, closing those three high-rent bank branches in Manhattan might generate 80 percent of the savings required. Yet this schematizing, whether in the McKinsey vernacular or others, can at times be limited by its arbitrariness. Categories are made that may or may not correspond with reality. Divisions are carved between things that may be connected rather than mutually exclusive. Things are broken down in the way that happens to be most obvious or useful for the parachuter, and sometimes this smashing of reality into hundreds of little pieces makes a solution seem apparent while in fact obscuring the true problem. Those who could set the parachuter right, those with valuable traditional and local knowledge, cannot speak the new language of the problem, illiterates in their own land.

  Hinton eventually took to the McKinsey way—to declaim. Coming to the firm was, he said, “a shock, but it was thrilling and exciting. And I wouldn’t have been there if it hadn’t played to many of my own strengths.” A second later, he added, “Or weaknesses.” All these years later, he was still torn about what exactly he had learned.

  * * *

  —

  Hinton was learning the protocols to work his way into the arena of business. Yet even as he was absorbing them, the protocols were leaping beyond business, conquering domains far afield with their atomizing method. The protocols had grown out of corporate problem-solving, but increasingly MarketWorlders were employing them to elbow into the solution of social problems traditionally considered in other ways, by more public-spirited actors. And the more people accepted the idea of the protocols as essential to public problem-solving, the more MarketWorld was elevated over government and civil society as the best engine of change and progress.

  Our age of market supremacy has blessed the protocols with a remarkable change of fortune: They have evolved from being a specialized way of solving particular business problems to being, in the view of many, the essential toolkit for solving anything. The protocols are increasingly seen as vital training for working in charity, education, social justice, politics, health care, the arts, newsrooms, and any number of arenas that used to be more comfortable with their own in-house apprenticeship. Organizations like the Gates Foundation hire the protocol bearers to solve the problem of education for poor children in America. Civil rights organizations put protocol bearers on their boards, taking not only their money but also their advice. As we’ve seen, young people like Hilary Cohen are persuaded by the surrounding culture that only by learning the protocols can they help millions of people.

  Few things better illustrate how far the protocols have spread than the rise of a new kind of consulting firm, dedicated to fighting for the oppressed using the tools of business. One of them, TechnoServe, founded in 1968, advertises itself as “Business Solutions to Poverty,” and offers an example of how the bearers of the protocols elbow their way into the solution of social problems simply by offering their own style of diagnoses. TechnoServe calls itself a “leader in harnessing the power of the private sector to help people lift themselves out of poverty.” And right up front, it declares a theory of change straight out of MarketWorld: “By linking people to information, capital and markets, we have helped millions to create lasting prosperity for their families and communities.” It is possible to read into this that people are poor because of
the absence of these linkages, not because of caste, race, land, hoarding, wages, labor conditions, and plunder; not because of anything anyone did—or is doing—to anyone else; not because of reversible decisions societies have taken.

  And while this is highly questionable as social theory, it is a shrewd posture, because if the problem is a lack of linkages, those who are good at making these kinds of linkages are elevated as solvers. Those who propose to solve problems in other ways—especially by looking at power and resources and other things unsettling to winners—are sidelined by this theory. And if TechnoServe has a limited view of what afflicts poor people, it may be because of who leads it. Its managers come, in the main, from corporations, in areas such as investment banking, management consulting, health care, and fund management, and from brand-name companies such as Morgan Stanley, Credit Suisse, Monsanto, Qwest, Cargill, Barclays, and (several times over) McKinsey. Perhaps the clearest signal of TechnoServe’s faith in the power of the protocols to cure injustice—rather than, say, life experience—is the constitution of its board. Of twenty-eight board members listed online, twenty-six are white as of last check.

  If TechnoServe emphasizes the missing linkages between poor people and the right information, capital, and markets, a rival firm, Bridgespan, argues that too many good solutions are too small—another theory of what keeps people poor that, usefully, does not implicate the rich. If TechnoServe is dominated by ex-McKinsey types, Bridgespan is a landing strip for alumni of another of the Big Three consulting firms, Bain & Company. Its world-changers have a “passion to enhance social mobility and bring about equality of opportunity,” the firm says. Bridgespan lays out a theory of change up front: It helps poor people by helping the things that help them grow bigger in scale than they presently are. Its approach “takes on complex problems and identifies practical solutions that can help organizations understand and overcome their biggest barriers to scaling impact.” One of Bridgespan’s cofounders went to Harvard Business School; the other taught there and is the author of such articles as “Transformative Scale,” “Scaling Impact,” “Scaling What Works,” and “Going to Scale.” Doing more of what works was certainly acceptable to MarketWorld.

  The bearers of these protocols were, ironically, rushing in to shape the solution of problems that their methods were complicit in causing. Corporate types from the energy and financial industries were drafted into charitable projects to protect the world from climate change, even if their way of thinking about profit, as practiced in their day jobs, was a big part of why climate change was happening. Business leaders were drafted into strategizing for women’s rights, even if their tools were to blame for the always-on work culture that made it harder for so many women to claim their rights and for the tax avoidance that made women-friendly policies like universal daycare more elusive. And, as at the Soros event, they were viewed as essential to increasing equality, even if their analytical frameworks and their atomizing of the realities of workers and communities had helped to increase inequality.

  The protocols and those who employed them did have a lot to offer the world of social problems: rigor, logic, data, an ability to make decisions swiftly. As they spread into the work of battling disease or reforming education, they could do a great deal of good and allow people’s money and time to go further than they could have without it. But there was always a price, and part of that price was that problems reformatted according to the protocols were recast in the light of a winner’s gaze. After all, the definition of a problem is done by the problem-solver and crowds out other ways of seeing it. Kavita Ramdas, a longtime nonprofit executive, wrote sharply of the conquest of social change by the “ ‘fix-the-problem’ mentality that allowed business people to succeed as hedge-fund managers, capital-market investors, or software-developers.” It is an approach, she wrote, “designed to yield measurable and fairly quick solutions.” The problem is the often humbler methods that the protocols displace:

  The nuance and inherent humility of the social sciences—the realization that development has to do with people, with human and social complexity, with cultural and traditional realities, and their willingness to struggle with the messy and multifaceted aspects of a problem—have no cachet in this metrics-driven, efficiency-seeking, technology-focused approach to social change.

  Even though Hinton could seem to be an archetype of what Ramdas was condemning, he would come to criticize the great business conquest that he acknowledged being part of and at the same time wanted to escape. He called it “the Trying-to-Solve-the-Problem-with-the-Tools-That-Caused-It issue.” The spread of these protocols was, he said, a “continuation of the colonial, imperial arrogance of the enlightened white man with money and science, and noble and benevolent intentions, who will solve these problems.” The situation was no longer British colonizers helping themselves to your country. It was well-suited people with laptops offering to solve social problems, often pro bono, without needing to know much. Hinton worried that the ascendancy of this PowerPoint-greased “problem-solving” was “slightly more scientific, slightly more rational, but it’s an extension of that tradition.”

  * * *

  —

  Hinton came to these concerns slowly. He left McKinsey after five years, worked in London for several years after that, running a film studio and starting a boutique investment bank, and then ended up in China, where he fell into stints advising on complex financial transactions. That work led to projects for Goldman Sachs and Rio Tinto, which, seeing a protocol guy who had also once been a Mongolia guy, thought he might help them and their clients navigate the country’s political environment. Mongolia was in the middle of a mining boom, with large companies striking deals to extract the country’s copper and other resources. Hinton’s assignment, as he frames it, was to serve as a go-between for these firms and Mongolia, helping each side understand each other so as to mitigate risks to the project. After all, mining deals gone bad can cost investors enormously.

  Hinton’s role as a senior adviser to Goldman and Rio Tinto placed him squarely in between the companies he was working for and a country he loved, and the role was full of contradictions that, even years later, he seemed to struggle with. “I was working as a reverse advocate, but I was paid by a mining company; I was paid by an investment bank,” he said. “I’m not so naïve as to think that my role wasn’t guided by meeting their needs and their interests to a significant degree. Of course it was.” It was not yet known, to him or anyone, whether foreign business interests would help the country in the ways they promised, or whether, as had so often been the case in the history of resource extraction, take what they could and run. He was paid to believe, and convince others, that what these companies wanted was the same as what Mongolia needed—a win-win. He had been hired to reconcile what was perhaps irreconcilable. Perhaps he realized that, for at one point some years ago Hinton reached out to an iconic bearer of the protocols who was having his own doubts.

  Michael Porter, a Harvard Business School professor who is considered the founder of modern corporate strategy, had seized Hinton’s attention with a 2011 essay whose rather modest critique of the prevailing approach to business created a stir in a world not used to such friendly fire. Porter was among the most cited authors on business, and a godfather of theories about how business competition works and what makes societies “competitive” for business, which is to say attractive to it. In addition to his teaching and writing, he had gotten into the protocol-spreading business himself, starting a consulting firm called the Monitor Group and lending his advice to many health care reform efforts. “He has influenced more executives—and more nations—than any other business professor on earth,” Fortune magazine once proclaimed. And so in 2011, when Porter and a coauthor named Mark Kramer published the essay “Creating Shared Value” in Harvard Business Review, it got the business world’s attention.

  “The capitalist system is under siege,”
Porter and Kramer wrote, in a fair impression of a nineteenth-century manifesto. Business was being “criticized as a major cause of social, environmental, and economic problems.” Companies were “widely thought to be prospering at the expense of their communities.” And who was to blame? “A big part of the problem lies with companies themselves,” they wrote. And what they blamed in the companies was “an outdated, narrow approach to value creation.” Companies had become too focused on “optimizing short-term financial performance.” They had acquired a dangerous tendency to “overlook the greatest unmet needs in the market as well as broader influences on their long-term success.” Again and again, companies that employed droves of brilliant people and had high-priced outside advisers were making decisions that ignored “the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of suppliers, and the economic distress of the communities in which they produce and sell.” Porter and Kramer were critiquing a culture that had overtaken the business world: the culture wrought by the atomizing protocols that obscured context.

  Hinton eventually met with Porter to seek his advice on how to structure his companies’ deals in Mongolia to be less protocol and more human. Now, several years later, Porter was sitting in a booth at Peacock Alley, in the refined but frenetic lobby of the Waldorf Astoria in New York, explaining how he had come around to questioning the work of the protocols. He had become interested in inequality after the Great Recession, especially after seeing some data on how well many American businesses and individuals had survived it, and how badly the average citizen and worker had done by comparison. He said, “We started really thinking hard about, what are we doing at Harvard Business School? What are we teaching here? Somehow we’ve missed a big piece of the equation.” Those questions led him to his idea of “shared value”—that there were new ways of thinking about business goals and practices that would improve big companies’ relationship with their communities.