Consultants and Conflicts of Interest: Fast Action

April 7, 2022

My recollection is that a Northwestern graduate named Edwin Booz cooked up big chunks of modern consulting. Was this a year ago? Maybe three years? Nope. Mr. Booz helped Sears become a high-value resource in 1914. Eddie had a master’s in psychology, not business. Think about that. What modern consulting has become began in the climate wonderland of Chicago. You remember. The city with big shoulders.

Flash forward to 2022. “Citing ProPublica’s Reporting on McKinsey, Senators Propose Bill Addressing Contractors’ Conflicts of Interest” stated, after patting itself vigorously on its / thems back:

Yet the consultancy [McKinsey], which is known for maintaining a veil of secrecy around its client list, never disclosed to the FDA that other McKinsey consulting teams were simultaneously working for some of the country’s largest pharmaceutical companies. McKinsey’s commercial clients at the time included companies, such as Purdue Pharma and Johnson & Johnson, that were responsible for manufacturing and distributing the opioids that decimated communities nationwide. In some instances, McKinsey consultants working for drug makers even helped their clients ward off more robust FDA oversight.

McKinsey is one of the heirs to Eddie’s insight that clueless outfits would pay big money for reports written in summary format with lots of bullet points, horizons, and snappy aphorisms. BCG, another blue chip consulting firm, must be credited for taking General Eisenhower’s quadrant diagram and pioneering the era of easy to understand graphics and simple words like “dog” and “star” and “cash cow.”

From pop psychology to snazzy charts, the blue chip consulting business has been roaring along for more than a century. Now the opioid thing combined with the blue chip consulting firm “we’re special” thing may result in meaningful regulation.

Note I wrote “may.” Does anyone believe that government agencies can regulate the firms upon which the very same government agencies depend for advice, guidance, and a reason to have meetings.

Get real.

Here’s the wrap up to the article:

Jessica Tillipman, an assistant dean and government procurement law expert at George Washington University Law School, called the legislation a welcome development. As government contractors have merged in recent decades, the industry has grown more concentrated, increasing the risk of conflicts of interest, and the federal contracting industry, Tillipman said, could use clearer guidance on disclosure requirements tied to the private-sector work of government contractors. “Any attempt to address these growing problems is a good thing,” Tillipman said, “and important to ensuring that we reduce these risks in the government procurement system.”

What? Fix procurement? Let’s see. I estimate that another century will pass before draft regulations emerge from joint meetings between an executive branch agency and Congress. That time estimate may be too optimistic.

Think of the consultants needed to work on the issues related to regulating consultants. Think of the meetings. Think of the revolving door opportunities. Think of the inputs from law firms and accounting firms which must be obtained.

Think of the meetings. Psychology, not business acumen, fuels consulting as it did from the git go. What did that unusual poet say in “Chicago”? This sticks in my mind:

And they tell me you are crooked and I answer: yes…

Proud of it too.

Stephen E Arnold, April 7, 2022


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