《财富》重磅专访：麦肯锡全球掌门人讨论各种争议性话题

作为全球最具影响力、最神秘的咨询公司之一，麦肯锡公司的领导人畅谈公司打算如何应对有关其业务的批评浪潮。

施南德担任麦肯锡公司全球执行合伙人还不到一年的时间，他发现公司目前在多个领域遭到了人们的批评。这位格拉斯哥人现年52岁，是一位在公司干了30年的资深人士，他开始通过接受新闻媒体和公司内部的采访，着手应对外界的批评，这在以前并不多见。

上周四，施南德给美国雇员写了一封信，阐述了其如何应对公司挨批的计划，以及某些业务方式的改革方案。一天前，他在电话中与《财富》杂志的执行主编赖新基进行了交流。在下文的对话中，施南德透露了这家私营公司给他带来的一些意想不到的事情。下文内容对原对话略有调整。

在我们采访你之前，我还记得两周前你还在旧金山，上周在纽约，现在又到了欧洲。去年你攒了多少飞行里程？

是这样的，最好别让我的妻子知道里程的事。英国航空公司在年底的做法很不错，它会给你发一封电子邮件，告诉你一年都去了哪些地方，以及飞行了多少次。但我并不会查看。

我们会将其看作是为此事的正当理由找借口。如今，我觉得我们双方都希望讨论麦肯锡在公众领域所面临的一些问题，而且有些问题涉及麦肯锡公司的透明度。我想在一开始问一些框架性的问题。首先，麦肯锡2018年的营收和利润是多少？

公司的营收约为100亿美元。作为一家公司，这是全球范围内的数字。因此，这个数字涵盖65个国家和141或142个网点。

能介绍一下盈利情况吗？

不行，这是家私营企业。这是我们不怎么讨论的话题之一。我很愿意介绍公司的营收情况，但从不透露公司的盈利情况。

排名前五的营收贡献客户都有谁？

我们一直回避讨论的一个话题就是客户的营收贡献，因为公司不会从这个角度来看待客户，而且我也觉得客户也不会从这个角度来看待公司。因为他们关注的是我们能够为他们提供的服务。我非常乐意介绍我们从事的工作，以及我们开展业务的方式。但我认为在这一点上，我们与广告行业等类似的行业有所不同，他们倒是愿意炫耀其客户和其营收，这也是他们宣传自己的一个重要方式。我们始终坚持这样一个观点：客户将自行决定如何评价公司以及我们应该为他们提供什么样的服务。我们非常乐意公布我们所从事的工作内容、工作性质，而且在这一方面比以前要开放很多。与您通话也证明了这一点。但在披露我们都有哪些大型客户方面，我们直到现在也没有这类打算。

我觉得这一点直击要害。公司公开宣布了对透明度的渴求，但实际上麦肯锡业务的性质以及它所提供的服务与透明度相违背。因此，我觉得倒不如问：公司如何提升其透明度，以及与过去相比，公司在未来会采取什么样不同的举措？

首先，我已经向你透露了我们的营收额。因此我想明确的是，这个数字对我们来说是一个开端，但我们在过去从不会花时间去做这类事情。其次，我觉得我们可以提升自身的透明度，因为我认为其中的一部分关乎麦肯锡这个机构、我们是什么样的公司、我们的业务，以及我们不为外人所知的原因。

让我通过一个例子来说明这一点，以及我认为与过去相比我们愿意为此付出的代价。我在伦敦加入公司之后，我还记得自己在预定出租车时将客户的地址写在了订单上，很快，有人告诉我不应该这样做，而是应该让出租车前往目的地两个街区之外的地点，也就是英国人所说的“附近”。但你绝不能把客户的名字写在出租车订单上。

而且在我看来，此举涉及我们始终所坚持的一个理念，就是保护客户信心和机密。但我认为这里存在一条明确的分界线，而且此举并不妨碍我们进一步向外界宣传麦肯锡是一家什么样的公司，包括全球2000名合伙人和公司领导层，以及他们都是谁，公司的组织结构，以及我们划分了六大区域的事实，这些区域展现了我们划分麦肯锡业务的方式。我觉得我们可以进一步提升麦肯锡自身的透明度。

我也愿意提供更多的信息，例如我们所从事的工作。比如，有时候我觉得人们会认为公司的大部分工作都集中在公共领域。但绝大部分的工作实际上都集中在私营领域，超过了90%。

我对于麦肯锡所从事的工作有自己独特的看法，因为我一直是麦肯锡一个项目的客户，当时公司曾经是《财富》杂志前母公司Time Inc.的顾问。[注：麦肯锡还是多个《财富》会议的赞助商。]因此我知道公司为企业客户提供两类服务：一个是增长策略咨询，另一个是成本削减咨询。您能透露一下这两项业务占总营收的比例分别是多少吗？

是这样的，关于你刚才提到的分类，我们共有90种不同的划分方法。实际上，我对此并不是很清楚，我并不是打马虎眼。只是这并不是我们看待业务的方式，因为我们的划分依据在于我们所从事的不同工种，包括策略、营销、机构等等。

策略业务占公司工作量的三分之一。机构业务可能占到了一半。还有很多工作可能就是你说的增长业务，但并非全部。出于对科技变化的考虑，我们针对增长业务做出了很大的调整。因此大量的工作一直在于如何才能充分利用（商业）分析和相关能力。大多数工作都与增长有关。这也是我们为什么不能简单地按照增长业务和成本业务进行分类的原因之一。成本业务多年来一直占据着公司业务量的很大一部分。这一点在某些地域尤为突出。但我认为，如今，公司的业务确实正在转向帮助客户实现增长，因为这是我们在过去几年中一直从事的工作。

麦肯锡最近成为了众多争议的焦点。我想尽可能多地讨论一下这些问题，就从破产咨询业务开始吧，这是独立于管理咨询之外的一个业务。针对美国司法部破产管理部发起的诉讼，你最近同意支付1500万美元的罚金。你曾经公开说过，麦肯锡会就披露冲突的方式听取意见，人们对这一点产生了质疑。这里是指谁的意见？

我希望尝试并确保通过对此进行重申来明确这件事情。首先，我们始终遵循美国破产管理部和破产法庭的指引，并一直积极响应其指引。这基本上就是我想强调的内容，而且我们将继续响应他们提供的各类指引。我们同意进行和解的原因在于我们可借此将这个问题抛诸脑后，并打造或重塑我认为多年来我们认为自己所拥有的事物——与美国破产管理部的合作关系。

但美国司法部在和解中表示，麦肯锡与客户沟通的方式“不够坦诚”，而且对其客户和投资“披露的不够充分”。我之所以提起这件事，是因为它与麦肯锡“准确判断”的整体声誉不符。他们实际上在说，你们的判断不够准确。我想问你是否同意这一声明，以及你们会作何调整。

正如我说的那样，和解的一个主要原因在于我们尊重他们的观点，而且我们也希望大家继续向前看。因此，我也不打算去再度去揣摩破产管理部声明的含义。

《纽约时报》对你们的对冲基金、MIO合伙人以及麦肯锡投资办公室进行了广泛报道。它认为对冲基金过于神秘，而且会投资与麦肯锡有业务往来的公司。你对此有什么看法？

首先，我们从一开始就非常明确地表示，我们尊重《纽约时报》按其想法撰写文章的权力。就这件事来说，我们认为，而且我们一直坚持认为，MIO是一家独立的子公司，于30年前成立。

这家公司有着很长的历史，我并不认为它有什么特别的秘密，而是一家受监管的公司，而且接受众多机构的监管。但它独立于我们的咨询活动，也有一些报道能够佐证这一观点。而且我觉得，最终，说句实话，我们对《纽约时报》的这些文章所描述的内容感到十分失望，而且在我们看来，它们在讨论自身试图得出的结论时采用了与对话不怎么相关的案例。

可否介绍一下你提到的这些报告，是否会公开发表？

没有这个必要，因为其中一篇报告由波多黎各监视委员会委托撰写，名为Luskin Report。它实际上发表于《纽约时报》早间版的一篇文章。这是一篇为该机构撰写的一篇完全独立的评论，并非是我们写的。而且文章的措辞围绕的是名为MIO的独立机构。我刚刚偶然才知道这件事：“麦肯锡敏锐地意识到了其工作的保密性质。它已经建好了组织构架，并采取了相关政策和流程，公司已经执行，也将继续执行这些政策和流程。这些政策和流程的设计初衷，而且在实际中也是用于维持客户的信心，保证麦肯锡业务的咨询方和投资方的信息不会遭到泄露，并尽可能地降低发生冲突的概率。”这并不是我说的话，而是来自于独立报告。令我们感到失望的是，[《纽约时报》]并未像我们预期的那样对这一点给予重视。这也是我觉得对该报道的报道方式感到失望的原因。

据《纽约时报》报道，对冲基金董事会大多由麦肯锡合伙人或前合伙人构成。这个消息准确吗？这一点是否也会让公司无法回避这个问题？

我觉得重要的一点在于了解MIO的业务范围，而且我能透露的内容也是有限的，因为很明显，我们现在讨论的内容所涉及的问题关乎公司与其他方的诉讼案件。[注：施南德指的是破产重组公司创始人杰·阿里克斯向麦肯锡发起的诉讼，双方属于竞争关系。]

但我认为，人们有必要了解董事会的工作内容。它在审核时的依据是MIO所开展的一小部分投资的实际去向，而且这部分投资并不属于基金中基金（fund-of-funds）这类活动。但我们的投资活动90%都是基金中基金。基本上没有投资自由裁量权。因此它实际上涉及余额的问题，然而说到余额，它反过来又会反映发生的事实。因此董事会无法真正对实际中发生的任何投资决策进行监管。

麦肯锡会考虑出售对冲基金业务吗，这样就会撇清与公司的关系，而不是依然保持商业关系。因为毕竟利用对冲基金对合作伙伴的基金进行投资没有什么不妥。

30年前，公司没有这些可供选择的选项。别忘了，基金成立之时便是这样一个情况，还有，公司把创建基金作为一种保障措施，因为麦肯锡合伙人无法投资个人股权，而且公司有这一方面的规定，以确保任何投资活动的稳健性，并独立于公司的日常咨询业务。很明显，我们必然会考察任何有助于实现这一目标的举措，但正如你所提到的那样，我们可以考虑的选项有很多。[出售基金]不失为其中的一个选项。

我想换个宽泛的话题，但我觉得这个话题对你也很重要，与客户选择有关。你因为在南非、沙特以及美国政府机构的客户工作而受到指责。我想先从高层说起，麦肯锡选择客户时都遵循什么标准？

标准有很多。其中一个是，我们得明确是否能够利用这一合作带来积极、长效和重大的影响。这是不是说我们实际上必须给客户的工作带来积极影响，而且真正带来长期的影响呢？我觉得这一点是一个意识问题，或者较以往加强这方面的意识。因此，它自然也就成了我非常重视的问题之一，也是公司非常重视的问题：我们如何确保不用狭隘的眼光来看待这个问题，而是去了解整个社会影响，以及与任何客户有关的次级影响？

因此，这是我们在今后会真正更加重点关注的问题，而且我觉得这也是当我们看待批评意见时我一再强调的内容。这些批评数十年前就已经存在了，而且我们曾在某些领域犯过错误。其中一个问题在于扩大“公司在与客户打交道时所扮演的角色”的定义，而且说得直白点，就是更多地去关注我们为客户提供服务的环境和背景。因为这一方面经常会出现我们曾经遇到的一些问题。

能不能介绍的更具体一点，因为这一点很有意思，但很泛泛，可否介绍一些麦肯锡不会涉足的一些领域？

首先，当我们考虑为客户提供服务时，我们非常热衷于了解其诚信，包括其个人和机构的诚信，而且这绝对是我们所遵循的标准之一。如果要我说公司在南非犯过哪些错误，公平地讲，可能其中最大的错误莫过于疏远了客户，而且与我们从未打过交道的第三方打得火热，但这个第三方却与客户有业务往来。

第二个案例涉及会让我们陷入纯政治领域，或者在一定程度上带来一些真正的问题的客户与局面，而此时我们希望做的就是确保我们所从事的领域能够带来积极的贡献。例如，我对我们在经济发展、就业以及教育领域的工作感到自豪，但我希望确保在从事其他领域工作的时候，我们可以非常明确地掌握我们所处的环境，我们并不希望让自身陷入那些不是很好的领域。

因此具体来说，以沙特为例，相关文章所介绍的内容是错误的。[注：施南德指的是有关沙特经济政策反应的报道，它根据社交媒体评论批评了沙特政府。]需要澄清的是，这篇文章并非是针对政府机构。但它确实谈到了政府，而且使用了分析技巧讨论了个人对未出台政府紧缩政策的反应。我们所采取的举措是为了确保此事不会再发生。

你在最近的电视采访中提到，公司在沙特的客户并非是内政部或国防部，那客户都有谁？

没有客户。我想解释一下。这是一位同事制作的麦肯锡内部文件，为了展示如何将分析技巧应用于社交媒体。但误会的根源在于，它并非是针对政府的文件。再者，使用公共数据的原因是为了凸显人数，我觉得是80万条推文，我可能记错了，但有大量以推文形式出现的公众文章。此举的目的是发现那些潜水的人。我并非是为此找托词。它本不应该发生的。这类事情是一个明显的错误，我们本不应该做这种事情。但它并非是针对政府。

你是否曾经或将对现有客户接洽进行从上到下的审核，以确定每项业务都能满足公司的新标准？

简单来说，这是我们即将敲定的事情之一。我们现在正在努力制定一套评估客户的新规定，而且不仅仅限于客户，因为也有可能是你所研究的个别议题，而不仅仅是客户本身。我们打算将这些规定应用于所有的客户资产组合。因此要回答你的问题，简单的答案是“是的”，我们将把这个框架应用于现有客户和新客户。现有客户有很多基本上都位于较为成熟的大型地域，而且这些地区的监管力度也很大。因此我们的首要工作在于应对那些我们认为具有更多争议性话题的领域或地域，以确保我们能够将这些标准最先应用于这些领域和地域。

你是否觉得此举会在短期内造成公司营收的下滑，能否接受这一点？

是的，当然。我们的目的是确保公司能够对所开展的业务感到安心，并树立工作信心。选择正确的客户是这项工作的重要组成部分。即便此举会导致公司不得不在近期内做出一些真正的调整，我们也为此做好了准备，确实如此。

你提到了很有意思的一点，大多数现有客户要么受到了监管，要么接受来自于政府机构或标准制定实体的监管。麦肯锡基本上对此毫无监管。在你看来，麦肯锡和其他管理咨询公司是否会实施某种程度的外部监管以及客户行为审查？

首先，我们受到了大量的审查，而且这种审查首先来自于我们的客户，同时还来自于公司外部，形式多种多样，不管是媒体还是我们的确在受监管领域开展业务的事实，正如你一开始在某些问题中提到的内容。

麦肯锡的声誉是否因为我们讨论的这些话题受到了影响？

公司日积月累的声誉源于5500名麦肯锡团队成员为其客户提供的服务。最近几周令我感到最惊讶的是我们客户的反应，他们和我们同舟共济，是我们的支持者。如果说有什么不满意的地方，那就是敦促我们提升对外公开的力度。曾经有一名首席执行官几乎是含着泪对我说，我想你已经意识到，在麦肯锡的努力下，这家公司以及城镇才能活下来，这个位于美国中西部的城市有一家很大的公司，差点就破产了，因为它所在的钢铁市场如今正处于异常艰难的时期。因此，我认为我们有必要提醒我们自己，公司的声誉完全取决于客户对我们的评价。与一直以来我所了解的评价相比，他们目前的评价没有什么变化：“我们十分了解麦肯锡团队，我们信任他们，对其充满信心。”

其次，它源于公司招聘的雇员对公司的看法，其中一件事情一直让我感到非常震惊，我刚刚拿到了数据。公司迎来了其最抢眼的招聘季之一，这一期间，媒体对公司的报道可谓是满天飞。为什么会出现这种情况，这并非是因为我们招聘的年轻人没有崇高的理想，他们充分意识到了以一种让所有人都能引以为豪的方式开展业务的重要性。原因在于他们看到公司能够与其互动，并对于自身所犯的错误毫不避讳，而且确实有意愿认真审视所从事的业务，并对其提出严苛的质疑。

因此，我们是否因此受到了影响。答案是肯定的。但我知道，而且坚信，我们即将要做的就是展示我们已经听到了，而且有倾听、行动的意愿，同时确实相信，当我们回归时，我们将变得更加强大，因为我们将在这个发生着深刻变化的时代重新定义并提升从业的职业标准，这不仅仅是为了公司，也是为了公司的整体业务。（财富中文网）

译者：冯丰

审校：夏林

The leader of one the world’s most influential and secretive consultancies talks about how the firm plans to respond to a wave of criticism of its practices.

Kevin Sneader, less than a year into his role as global managing partner of McKinsey & Co., finds his firm under attack on multiple fronts. The 52-year-old Glaswegian and 30-year veteran of the consultancy has begun to address the criticism, both by granting relatively rare interviews with the news media and within his own firm.

On last Thursday, Sneader released a letter to the firm’s U.S. employees, addressing his plan to answer McKinsey’s critics—and reform some of its ways. The day before, he spoke by phone with Fortune Executive Editor Adam Lashinsky. In the conversation below, Sneader divulges quite a few surprises about the privately held firm. What follows is a lightly edited version of the conversation.

Before we dive in, I was thinking that two weeks ago you were in San Francisco, last week you were in New York, and now you’re in Europe. How many air miles did you log last year?

Well, I prefer my wife not to find that out. British Airways had this wonderful idea at the end of the year, which is to send an email that shows all the places you’ve been and the number of times you’ve been around the world. I stayed away from it.

We’ll mark you down as evasive for a legitimate reason on that one. Now, I know we want to talk about the issues that McKinsey has been facing in public and some of the issues around McKinsey’s transparency. I thought I’d start with some framing questions. First of all what were McKinsey’s 2018 revenues and profits?

Our revenue is running about 10 billion U.S. dollars. And as a firm, that’s a global number. So that covers our 65 countries and 141 or 142 locations.

Can you say what the profitability is?

No, this is around the private partnership. It’s not one of the things we do talk about. I am more than happy to talk about revenue. But I think profit is something we won’t disclose.

How about the top five revenue producing clients?

One of the things that we’ve always shied away from is talking about the clients in the sense of revenues because it’s not the way we think about them, and it’s not the way I think our clients think about us. Because what they’re focused on is what we do for them. I’m very happy to talk about the kind of work we do, and the way in which we do that work. But I think at this point, we, unlike for example the advertising world, where they boast about their clients and their revenues and that’s very much a part of how they describe who they are, we’ve always taken a view, that it’s up to our clients to disclose how they see us and what we do for them. What we’re very happy to disclose is kind of the mix of what we do, the nature of that work and be far more open than we have in the past. That’s why I’m on the phone talking to you. But I think actually to disclose who our largest clients, that’s something we’ve not yet got our heads around today.

I think that cuts to the heart of the matter. You are publicly professing a desire to be transparent, but the nature of McKinsey’s very practices and what the services it offers are works against transparency. So perhaps I’ll just ask you how you can be more transparent, and what will you do that is different from what you’ve done in the past?

Well, first of all, I told you our revenue number. So let’s be clear, we’ve already started with one number that we certainly spent no time on in the past. Secondly I think we can be more transparent about ourselves, because I think part of this is the McKinsey organization, who we are, what we do, how we’ve been mysterious.

I’ll just give you an anecdote to bring that home and how far I think we are willing to go versus where we’ve been. When I joined the firm, in London, I remember booking a taxi, and I booked it to the client location, and I was very quickly told you don’t do that. You book the taxi to two blocks away, or as we say in the U.K., ’round the corner. But you certainly never put the client name on a taxi booking.

And that talks to the way in which I think we’ve always thought about guarding client confidences, maintaining their secrets. But I think where the line can get drawn is being very clear that that doesn’t mean we can’t be much more open about who we are. More open about our 2,000 partners worldwide, more open about the leadership of the firm, who it is, how we organize ourselves, the fact that we have six regions, that those regions represent our take on how we divide up the McKinsey world. I think we can be much less mysterious about McKinsey itself.

I’m also happy to give more information, like the kind of work that we do. So for example, sometimes I think the way it’s written you would think that a huge part of our work would be in the public sector. But overwhelmingly, our work is in the private sector, 90% plus.

I have a unique perspective on the kind of work that you do in that I have been on the client side of a McKinsey engagement, when you advised Time Inc., the former owner of Fortune. [Note: McKinsey also is a sponsor of several Fortune conferences.] So I know you do two kinds of work for corporate clients, growth strategy on the one hand, cost-cutting advice on the other hand. Can you tell me what the revenue mix is between those two product lines?

Well, we slice and dice in 90 different ways than you’ve just described. And actually I don’t know that, and I’m not trying to play games here. It’s just not the way we would look at it because we look at it against the different types of work we do, whether it’s strategy, marketing, organization, and so on.

Strategy is about a third of what we do. Organization is probably about half that number. And much of that work would probably fall under what you were describing as growth, but not all of it. We have been a big shift towards growth because of the change in technology. So a lot of work has been about how do we make the most of (business) analytics and related capabilities. Most of that work is growth related. And that’s one of the reasons why a simple cut between growth and costs doesn’t really work. Cost work for many years was a big part of the firm’s activity. And particularly in some different geographies. But I think now there’s really been a shift toward helping our clients with growth because that’s what we’ve been doing over the last few years.

McKinsey has confronted a long list of controversies recently. Let’s address as many as we can, starting with your bankruptcy-advisory business, a separate business from your management-consulting business. You recently agreed to pay a $15 million fine involving an action brought by the U.S. Trustee Program of the Department of Justice. You have said publicly that McKinsey relied on advice for the way it made its disclosures of conflicts, which have been called into question. Whose advice was that?

I want to try and make sure I restate that just to be clear. First of all, we’ve always relied on and been responsive to guidance from the U.S. Trustee and the bankruptcy courts. That’s essentially what I was saying, and we will continue to respond to whatever guidance they provide us. We agreed to that settlement so that we could put that issue behind us, and build or restore what I think we felt we had over the years, which is a collaborative relationship with the U.S. Trustee.

But the Justice Department said in your settlement that McKinsey “lacked candor” in the way that it communicated with clients, and that it made “insufficient disclosure” about its clients and investments. I bring this up because it stands at odds with the entire reputation of McKinsey, which is to use good judgment. They are essentially saying you did not use good judgment, and I’m asking you if you agree with that statement and how you’ll change that.

As I said, one of the main reasons for that settlement is that we respect their views. And we are keen that we move on. So I’m not going to second-guess the statement of the U.S. Trustee.

The New York Times has written extensively about your hedge fund, MIO Partners or the McKinsey Investment Office. It concludes the hedge fund is overly secretive and that it invests in companies that McKinsey does business with. What’s your response?

First and foremost, one of the things we’ve been very clear on from the start is that we respect the right of The New York Times to write up whatever it wants. I think on this one, we believe, and we have asserted consistently, that MIO is a separate subsidiary. It was established 30 years ago.

It’s got a long history. I don’t think it’s particularly secretive. It’s regulated. There’s a lot of oversight of it. But it is separate from our consulting activities. There’s been reports into it that have validated that view. And I think as a result, to be frank, we were disappointed with the way they had described, used examples that in our view were not really relevant to the conversation in terms of talking to the points they were trying to make.

Can you discuss the reports you’re talking about and will you publish them publicly?

We don’t need to because one of them is a report that was commissioned by the Puerto Rico Oversight Board. It’s called the Luskin Report. It was actually published the morning of the New York Times article. It’s a completely independent review commissioned for that entity, not by us. And it had choice words about the independence of the entity called MIO. I just happened to have just picked it up: “McKinsey is acutely aware of the confidential nature of its work. It has organized itself and adopted policies and procedures, which it has enforced and continues to enforce, that are designed to, and in fact do, maintain client confidences, ensuring that information does not leak between the consulting side and the investing side of McKinsey’s business, and minimizes the likelihood of conflicts.” That’s not my words. That’s the word of that independent report. We were disappointed that didn’t get the prominence we would have thought [in The New York Times]. That’s why I think I was frustrated with the way the coverage unfolded.

The Times reported that McKinsey partners or ex-partners make up the majority of the hedge fund’s board of directors. Is that accurate. and won’t that make it impossible to put this question behind you?

I think it’s important to understand what the MIO does and does not do. And there’s a limit to how far I can talk about this because obviously we’re getting into territory where I could venture into some of the issues which are the matter of litigation between us and another party. [Note: Sneader is referring to litigation against the firm brought by Jay Alix, founder of a bankruptcy restructuring firm that competes with McKinsey.]

But I think it’s important to understand what that board does. It only reviews after the fact what has actually happened to the small part of the investments that MIO makes that are actually not covered by fund-of-funds type activity. That covers 90% of the activity. Essentially there’s no investment discretion. And so we’re talking about the balance and in that balance again, it retrospectively looks at what’s happened. So it does not have real oversight into any of the investment decisions that are actually being made.

Would McKinsey consider selling the hedge fund so that it no longer has any relationship with McKinsey, other than a commercial relationship? Because after all, there’s nothing stopping you from investing your partner funds in a hedge fund.

Thirty years ago those options didn’t exist. It’s worth remembering this dates back to when the fund was founded, and remember it was founded to provide a way of ensuring, given that McKinsey partners cannot invest in individual equities, we had a mechanism to ensure that any investment activity was robust and distinct from the day-to-day consulting activities of the firm. Obviously, we should look at anything that helps in that regard, but as you can appreciate, there’s lots of options we could consider. That [selling the fund] could be one of them.

I want to turn to a broad topic that I know is important to you, which has to do with client selection. You’ve taken heat for client work you’ve done in South Africa, in Saudi Arabia, with arms of the U.S. government. Let me start high level. What are McKinsey’s criteria for choosing clients?

There are several criteria. And one of the things that they include is obviously being clear on whether we use this space to make a positive lasting and substantial difference. So are we actually going to be positive impact on what that client does? And really achieve lasting impact. I think that includes being aware of the — be more aware than we were in the past, so this is one of the issues I’m certainly looking at hard and we’re looking at hard: How do we make sure that we don’t just take a narrow lens to that, but that we understand the social impact, the second order effects of being involved with any client?

And so that’s one of the things we’re really looking to add more emphasis towards, and I think it’s one of the points that I’ve repeatedly made is when we look at the criticism, which dates back over decades, we’ve made mistakes in some places. And one of the things is to broaden that definition of how we think about the role we play with a client, and frankly, be more aware of the environment and the context in which we’re serving clients. Because that is part of what creates some of the issues that we’ve run into.

Why don’t you take a moment and be more specific, because while that’s interesting it’s also general, and perhaps you might address something that would constitute a no-go zone for McKinsey engagement?

First and foremost, when we think about serving clients, we are very keen to understand their integrity, who they are individually and institutionally, and that is absolutely one of the criteria we apply. And if I look at some of the mistakes we made in South Africa, to be fair, perhaps one of the biggest mistakes was allowing ourselves to be associated, in this case, not with our client so much, but with a third-party that we never engaged with, but was engaged by the client.

A second example is to look at clients and situations where it gets us into I would say territory that is fundamentally political or in some way creates some real problem when we want to make sure that we are working in areas where we’re making a positive contribution. So for example, I’m proud of the work we do in economic development. I’m proud of the work we do in employment, I’m proud of the work we do in education. I want to make sure that if we’re working in other areas, we’re very clear on the conditions on which we work, and we’re not going to get ourselves into areas that are not good.

So if you take the Saudi Arabian situation, to be specific, the document that was produced, that was a mistake. [Note: Sneader is referring to a report on reaction to Saudi economic policies that identified critics of the Saudi government based on their social media commentary.] The document, to be clear, was not produced for a government entity. But it did talk about, and it used, analytical techniques to talk about the way in which individuals had reacted to that government’s austerity measures that should not have happened. And the actions we’re taking are designed to ensure that does not happen again.

You mentioned in a recent television interview that your client in Saudi Arabia was not the Interior Ministry or the Defense Ministry. Who was the client?

There was no client. Let me explain. It was an internal McKinsey document that was produced by a colleague to showcase how you can apply analytic techniques to social media. What’s got lost in all of this is it was not produced for the government. And secondly, of course by using public data it was highlighting people who between them had something like — I think it was 800,000 tweets, I might get that number wrong — but a huge number of public utterances in the form of tweets. This was not identifying people who were lying low. I’m not excusing it. It should not have happened. It’s that kind of thing, which is clearly a mistake, and we shouldn’t have been doing it. But it was not for the government.

Have you undertaken or will you undertake a top-to-bottom review of every existing client engagement to determine if each one meets your new standards?

The short version of that is one of the things we are finalizing. We’re working right now to put together a new set of ways in which we evaluate clients. And indeed not just clients, because it could also be the individual topic in which you’re working on, not just the client themselves. We are intent on applying that to our full client portfolio. And so the short answer to your question is yes, we will apply that framework to both existing clients and new clients. Many of those existing clients are in large established geographies with high degrees of oversight already. So our priority is to work on this in areas where we think there are more controversial topics or geographies, and to make sure we apply it to those first.

Do you anticipate, and would you be comfortable with, that resulting in a short-term decrease in firm revenues?

Yes. Of course. Our intent is to make sure we feel comfortable and confident about the work we’re doing. And selecting the right clients is a key part of that work. And if the consequence of that is in the near-term we have to make some real changes, then we’re prepared to do that, yes.

You made an interesting point, that the vast majority of your clients exist in circumstances where they are either regulated or otherwise have oversight from either government agencies or standards-setting bodies, and so on. McKinsey largely has none of that oversight. Do you see a scenario where McKinsey and other management consulting firms do have some kind of outside oversight and scrutiny of its actions?

First of all, we feel a lot of scrutiny, and that scrutiny first and foremost is from our clients. But it also comes from the outside world in many different forms, whether it’s media or the fact we do operate in areas that are regulated, as you’ve already pointed out in some of the questions you asked me at the beginning.

Has McKinsey suffered a hit to its reputation because of the various topics we’ve been discussing?

Our reputation is made every day when five-and-a-half thousand McKinsey teams go to serve their clients. One of the things I’ve been very struck by in recent weeks is the response of our clients who are standing by us and standing with us. And if anything, they’ve been urging us to be more willing to go on the record. I had one CEO almost in tears saying to me, You do realize how you have kept this company alive and this town, this city in the Midwest of America, has a major employer that otherwise would have gone under because it was competing in the steel sector where things are pretty rough at the moment. And so as a result I think it’s important for us to remind ourselves that our reputation is first and foremost built by what our clients say about us. And they’re saying I think what they’ve always said: ‘We know our McKinsey team, we trust them, we believe in them.’

The second thing it’s built from what our recruits think of us, and one of the things that I’ve been very struck by is about — just got the numbers. We’ve had one of our best recruiting seasons, and it’s been right in the midst of all this media publicity. If you ask why that is, it’s not because the young people we recruit don’t have high ideals and believe in the importance of business behaving in a way that we all can be proud of. It’s because they see us engaging with them, being open about the fact we’ve made mistakes, and really being willing to look very hard at what we do, and ask tough questions about it.

So have we taken a hit. Of course. But I know, and I’m really confident that actually what we’ll do is show that we hear, we’re listening, we’re acting, and I really believe that when we come back, we’ll come back stronger because we’ll redefine and raise the bar on what it means to be a professional, at a time of great change, not just for us, but for business as a whole.