Random finds (2018, week 51) — On McKinsey and the pursuit of unsavory business, Patagonia and the business to save our home planet, and cold discovery
I have gathered a posy of other men’s flowers, and nothing but the thread that binds them is mine own.” — Michel de Montaigne
Random finds is a weekly curation of my tweets and, as such, a reflection of my fluid and boundless curiosity.
This week: How McKinsey & Company turns tyranny into a client; Patagonia’s mission to save our home planet; what is lost when we “listen to Spotify” rather than songs?; the misguided drive to measure learning outcomes; Makers and Takers; why we should keep trudging down a pre-trodden path; a calm and quite place for people mckinsin a remote Chinese village; and, finally, whatever happened to ‘high culture’?
McKinsey and the pursuit of unsavory business
In an article for The New York Times, Walt Bogdanich and Michael Forsythe describe, in sobering detail, McKinsey & Company’s activities to help raise the stature of authoritarian and corrupt governments across the globe.
According to Anand Giridharadas, the author of Winners Take All and himself a former McKinsey consultant, the artcile “shows why businesspeople are so glaringly unfit to shape public life: the business mind is trained in the micro, trained to see the marginal effect of things. It struggles to grasp ideas like enabling, legitimizing, complicity, or to see systems.”
The Bogdanich and Forsythe article comes less than two months after The New York Times reported that the Saudi Arabia government had targeted and punished several dissidents after they had been identified as critics in a report by McKinsey.
“Notwithstanding its statement that the report on Saudi Arabia was meant for internal use only, McKinsey and other consultants must be aware of how their work may affect every stakeholder involved, said Susan Harmeling, associate professor of entrepreneurship at the USC Marshall School of Business and an expert in business ethics. This is especially true with government work, where large consulting agencies are in position to influence key leaders, she said.
‘Any action you take, any information you produce, anytime you put something in writing, you need to know this could get into a lot of different hands,’ Harmeling said. ‘That’s then out there or potentially out there and you have to think about Could this hurt somebody? Could this get to the wrong place?’” Jordyn Holman writes in McKinsey Says It’s ‘Horrified’ Saudi Arabia Report May Have Been Misused.
“For a quarter-century, [McKinsey] has joined many American corporations in helping stoke China’s transition from an economic laggard to the world’s second-largest economy. But as China’s growth presents a muscular challenge to American dominance, Washington has become increasingly critical of some of Beijing’s signature policies, including the ones McKinsey has helped advance,” Bogdanich and Forsythe write in How McKinsey Has Helped Raise the Stature of Authoritarian Governments.
But according to an investigation by The New York Times, which included interviews with 40 current and former McKinsey employees, as well as dozens of their clients, McKinsey’s role in China is just one example of its extensive — and sometimes contentious — work around the world.
“Its clients have included Saudi Arabia’s absolute monarchy, Turkey under the autocratic leadership of President Recep Tayyip Erdogan, and corruption-plagued governments in countries like South Africa. In Ukraine, McKinsey and Paul Manafort — President Trump’s campaign chairman, later convicted of financial fraud — were paid by the same oligarch to help burnish the image of a disgraced presidential candidate, Viktor F. Yanukovych, recasting him as a reformer,” Bogdanich and Forsythe write.
“While other consulting companies serve similar clients, none have the stature to confer credibility quite like McKinsey, a confidant for 92 years to many of the world’s most admired companies.”
“McKinsey defends its work around the world, saying that it will not accept jobs at odds with the company’s values. It also gives the same reason that other companies cite for working in corrupt or authoritarian nations — that change is best achieved from the inside,” Bogdanich and Forsythe write.
“Still, some analysts, veteran diplomats and experts on global governance see McKinsey’s role in a different light.
While the United States pulls back from international cooperation and adopts a more nationalist stance, companies like McKinsey are pursuing business in countries with little regard for human rights — sometimes advancing, rather than curbing, the contentious tactics of America’s biggest rivals.
‘It is more likely they enable these regimes and likely become complicit,’ said David J. Kramer, a former assistant secretary of state. ‘They don’t want to alienate regimes, or they would lose business.’”
Bogdanich and Forsythe subsequently describe McKinsey’s entanglements in Ukraine and China, e.g. its participation in the latter’s ‘Smart Cities’ program. The idea of smart cities is to make them more manageable by collecting data from sources like cameras. But in an authoritarian state like China, this raises broad concerns with scholars and human rights advocates who argue this will only strengthen China’s surveillance state.
“Police patrols cannot be everywhere, for instance, but predictive analytics can deploy them in the right place at the right time,” McKinsey wrote in a report in June. But according to Samantha Hoffman, a fellow at Australia’s Strategic Policy Institute, “It is about political control.”
It is worth pointing out that McKinsey’s retreat was held in the Silk Road city of Kashgar, one of China’s most heavily policed cities where as many as 500 Uyghur children have been placed in a ‘closed school’ and ethnic Muslims are held in indoctrination camps. Here, they are forced to attend classes on how to be law-abiding citizens, while evidence is emerging that they are also being forced to take jobs in new factories. According to rights advocates, the mass detentions in the Xinjiang region are the worst collective human rights abuse in China in decades.
Also interesting are McKinsey’s close links with VEB, a Russian government-owned bank which is directly overseen by Vladimir Putin’s inner circle. The bank has come under close scrutiny in Congress and by the special counsel investigating possible collusion in the 2016 election (in the same year, Jared Kushner, President Trump’s son-in-law, met the bank’s former chief).
“McKinsey’s work in Russia is extensive. Its Moscow office, the largest of the Western consulting firms working there, has handled about 2,000 projects, working with market leaders in oil, gas, banking and retail, as well as the mining of diamonds, gold and coal,” Bogdanich and Forsythe write.
“McKinsey says it takes jobs in Russia — or anywhere in the world — only when it believes it can make a positive contribution. McKinsey also says its consulting is not political in nature, but focused on helping people lead better lives. The firm has plenty of accomplishments to point to. […]
And McKinsey is far from the only American company working in legal ways with companies under sanctions. Some American officials have long argued that getting involved in the Russian economy not only benefits the American companies working there, but can also help foster better business practices and a greater appreciation for democratic principles overseas.
Others see little evidence of that. Robert G. Berschinski, a State Department official in the Obama administration, said business leaders and policymakers often believed that actively engaging with authoritarian governments would lead to economic reform, which in turn would drive political reform.
‘But what is becoming increasingly clear, in Russia, China and Saudi Arabia — in all three of those instances — that belief has not proven to be true,’ he said.”
In some cases, McKinsey’s work may have made things worse.
Calvert W. Jones, a University of Maryland professor, crisscrossed the Gulf monarchies in the Middle East as part of her research evaluating the work of management consultants in what she calls ‘the black box of authoritarian governance.’
“‘Even if democracy itself remains a distant hope, so the thinking goes, experts might improve the daily lives of citizens in fundamental ways,’ Ms. Jones wrote.
Her conclusions are not likely to make it into recruiting videos for consulting companies seeking idealistic college graduates.
‘In the beginning, the best of them want to help, want to do real research, provide data and expert opinions,’ she said. But after initially speaking their minds, she said, they gradually stop. ‘They engage in the art of not speaking truth to power,’ she said. ‘They self-censor, exaggerate successes and downplay their own misgivings due to the incentive structures they face.’
Outside experts might even reduce, rather than encourage, domestic reform, Ms. Jones said, partly because consultants are often unwilling to level with the ruling elite. The issue is becoming increasingly relevant, she said, as ‘the number of experts circulating around the world continues to grow.’
The expansion is clear enough in the lobby of the Ritz-Carlton hotel in Riyadh on a weekday morning. There, a former Western diplomat quipped, you can watch the consultants departing for their jobs ‘like bats leaving a cave.’”
Read McKinsey’s response in which they state that the article in The New York Times “crossed the line into criticism that is not justified by the facts of what we do and how we serve our clients.”
“The McKinsey article brilliantly shows why businesspeople are so glaringly unfit to shape public life: the business mind is trained in the micro, trained to see the marginal effect of things. It struggles to grasp ideas like enabling, legitimizing, complicity, or to see systems.
It also illustrates how the business worldview is guided by Pangloss positivity. If we advise the Saudis, they will modernize. If we show Yanukovych better policies, he will become a reformer. There is so little grasp of human darkness, of the possibility of unintended outcomes.
This is not a story about bad people. It’s a story about people who are spectacularly unqualified to think about problems bigger than what an individual corporation should do.
The first time I read a Harvard Business School case study, so much clicked about why things are as they are. Huge, complicated societal dilemmas are invariably framed as: What should the CEO do? That’s the entire lens. The CEO’s-eye view is simply not the societal view.
This is the whole enchilada of the problem. A company that thinks it is doing good by making money helping authoritarians rule — and then spending the proceeds on research on the impact economy and social enterprises. We don’t need you to do good. We need you not to do harm.” — Anand Giridharadas on Twitter
Patagonia and the business to save our home planet
“Even after starting Patagonia in the ’70s, Yvon Chouinard continued to think of himself as a climber, a surfer, a kayaker, a skier, a blacksmith. Anything but a suit. He viewed politicians and businessmen as sleazy and corporations as ‘the source of all evil.’ Chouinard was, by his account, a rebel, a misfit and a student of Zen whose heroes were John Muir, Henry David Thoreau and Ralph Waldo Emerson,” Marc Gunther writes in The Patagonia Adventure: Yvon Chouinard’s Stubborn Desire to Redefine Business.
Today, Patagonia stands in sharp contrast with McKinsey. For the past 45 years, the American outdoor clothing company has been a business at the cutting edge of environmental activism, sustainable supply chains and advocacy for public lands and the outdoors. Its mission has long been, “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
In just the last few years, Patagonia “has expanded its used clothing program, amped up its investment in sustainable startups, launched an activist hub to connect its customer base directly with grassroots environmental organizations, and taken the Trump administration to court over its public lands policy,” Jeff Beer writes in an article for Fast Company.
But for the 80-year-old company founder, Yvon Chouinard, this isn’t enough. Earlier this week, together with Patagonia’s CEO Rose Marcario, he informed employees that the company’s mission statement has changed to something more direct, urgent and also crystal clear: “Patagonia is in business to save our home planet.”
In an interview with Fast Company’s Jeff Beer, Chouinard “says the shift in mission may sound trivial–obviously those ubiquitous fleeces aren’t going anywhere — but it is actually fundamental to almost every aspect of the company. The key is in its expression of urgency, to signal to everyone inside the company and out, that this isn’t just about climate change, it’s a climate crisis.”
Chouinard told Beer, “This is Pearl Harbor. The whole country, and whole world, has to mobilize to do this… It’s triage. I remember when I was a kid during World War II, we didn’t have any meat to eat. There was no beef, there was no sugar, people had to grow their own gardens. The whole country mobilized. That’s what has to happen now. So I didn’t think we were taking climate change seriously enough. We were supporting too many causes that were working on symptoms and not actual causes and solutions.”
“The new mission statement impacts every single job in the company,” Beer writes. “About six months ago, Chouinard gave the HR department some new marching orders. ‘Whenever we have a job opening, all things being equal, hire the person who’s committed to saving the planet no matter what the job is,’ [Chouinard] says. ‘And that’s made a huge difference in the people coming into the company.’”
“We’re losing the planet because of climate change, that’s the elephant in the room. Society is basically working on symptoms. Save the polar bear? If you want to save the polar bear, you got to save the planet… Forget about the polar bear, they’re toast anyway. So I decided to make a very simple statement, because in reality, if we want to save the planet, every single company in the world has to do the same thing. And I thought, well, let’s be the first.” — Yvon Chouinard, the founder of Patagonia
“Books increasingly don’t have covers: The rapid rise of tablets and e-readers has led to more books being read on screens, which de-emphasize the cover as both a visual identifier and a physical delimiter. A cover once represented a book’s tangible individuality, its discreteness. Now, on screens, covers persist as vestigial rectangular images, superfluously ornamenting search results or PDFs,” Drew Austin writes in Cold Discovery.
Does that shift in emphasis mean readers engage more directly with texts themselves, rather than judging books by their covers as the cliché warns? But what is lost when we “watch Netflix” rather than shows and “listen to Spotify” rather than songs?
“Self-consciousness about what we are reading isn’t the only thing likely to vanish with book covers. Beyond letting readers publicly signal their identities, covers are part of a whole regime of organizing information and space that is now in danger of disappearing. While the design of libraries and bookstores prioritizes the coherent visual display of book covers and spines so that people can navigate collections and find the singular physical objects the covers signify, the endlessly rewritable surface of the screen dispenses with that arrangement. Screens foreground the digital platform itself as singular, and thereby assimilate any particular text into the theoretically unlimited succession of information they can display. The distinct identity that a particular cover conveys has been traded for a standardizing consistency that unifies everything displayed on a screen as data flowing in a broader stream.”
“Platform algorithms,” Austin writes, “introduce their own form of deception, feeding users content according to biases and affordances that are frequently opaque, obfuscated, concealed, or misleadingly represented. At their most transparent, streaming services like Spotify reductively mirror your past choices back to you; Netflix, however, has gone as far as to covertly recontextualize movie screen shots for its menu displays based on individual viewers’ data, in order to entice those viewers to watch more — an algorithmic subversion of the physical cover that is slightly different for everyone.
These dynamics highlight how, on platforms like Spotify and Netflix, specific artists and their works are not the objects offered to the users for consumption — a focus that covers supported. Instead, the object of consumption is the platforms themselves. More than watching certain shows, we watch Netflix; more than listening to songs, we listen to Spotify; more than reading particular books, we read our Kindles. We can choose not to pay attention to the details beyond that. Our peers frequently don’t know what we’re watching, listening to, or reading, but we don’t necessarily know either.”
“For centuries, the cover has functioned as the gateway to a work, priming us to receive what’s within. […] The cover helps to situate a work’s accessibility; it is ‘infrastructure,’ as Sanford Kwinter writes in an essay for Harvard Design magazine […]. Far more than a container or shell for content, the cover is an interface between that content and human society, the intermediate layer that positions the information in the world.
If covers are infrastructure, what adjacencies do they create? They not only make it possible to find a particular printed book or vinyl record in physical space; they also organize the very existence of spaces dedicated to perusing that media. Record stores depend upon covers, as surely as a city depends on roads. Each governs our ability to explore,” Austin writes.
Digital platforms offer “a more refined, rationalized, and totalizing kind of infrastructure. Because they accomplish their specific goals so effectively — efficiency, legibility, and breadth of selection — they tend to rapidly replace their analog predecessors once they appear. When we engage with these platforms, however briefly, they envelop us with their logic and their norms.”
“Legible, contextualized environments are something humans deeply desire. Urban theorist Kevin Lynch, in his 1960 book The Image of the City, called this ‘imageability.’ He argued that ‘a vivid and integrated physical setting, capable of producing a sharp image, plays a social role.’ Such a setting provides ‘the raw material for the symbols and collective memories of group communication,’ which in turn ‘gives its possessor an important sense of emotional security.’ So a bookstore, from this point of view, is not just a place to find books, but a place to confirm a sense of belonging, one rooted in a shared sense of how things are categorized and organized.
Platforms deplete those forms of imageability that we are used to. They are effective, to an unprecedented degree, at placing global-scale variety and informational agency at their users’ fingertips, but this often fails to foster ‘emotional security’ as we know it,” Austin argues.
“We have only just begun to assimilate these platform landscapes into our understanding of the world. Kevin Lynch believed that an intelligible physical environment — the kind that Netflix and Spotify have left behind — could, at its best, provide a foundation for ‘the symbols and collective memories of group communication.’ Imageability guards against solipsism, providing cues that force us to acknowledge a reality not specifically tailored to our own preferences and enabling a joy beyond what individual experience alone can bring. At their worst, platforms threaten to send each of us down our own decontextualized rabbit hole, weakening collective narratives and exposing us to active attacks on what Renee DiResta calls ‘society’s ability to operate with a shared epistemology.’
While many lament the transition to a digital realm that doesn’t naturally accommodate those familiar communal symbols and many others uncritically embrace it, a healthy synthesis of the two positions is possible and even necessary. We can acknowledge the widespread arrival of a new technological medium and learn how to create shared meaning within it that is as robust as more established forms of meaning, though not subject to its constraints. This will likely require different platforms, norms, and behaviors than those we have now. Lynch coined the concept of imageability as it was receding from automobile-stricken urban environments. We may need more theorists like him to help us recognize new forms of digital imageability, ones worth preserving and developing before they too start slipping away.”
And also this …
“Consider that holy grail of learning outcomes, critical thinking — what the philosopher John Dewey called the ability ‘to maintain the state of doubt and to carry on systematic and protracted inquiry,’” Molly Worthen writes in The Misguided Drive to Measure ‘Learning Outcomes.’
“Teaching it is not a cheap or efficient process. It does not come from trying to educate the most students at the lowest possible cost or from emphasizing short, quantifiable, standardized assignments at the expense of meandering, creative and difficult investigation.
Producing thoughtful, talented graduates is not a matter of focusing on market-ready skills. It’s about giving students an opportunity that most of them will never have again in their lives: the chance for serious exploration of complicated intellectual problems, the gift of time in an institution where curiosity and discovery are the source of meaning.
That’s how we produce the critical thinkers American employers want to hire. And there’s just no app for that.”
In Want to Kill Your Economy? Have MBA Programs Churn out Takers Not Makers, adapted from her book Makers and Takers, Rana Foroohar explores why business education has failed business.
“Business schools by and large teach an extremely limited notion of ‘value,’ and of who corporate stakeholders are. Many courses offer a pretense of data-driven knowledge without a rigorous understanding and analysis of on-the-ground facts. Students are given little practical experience but lots of high-altitude postulating. They learn complex mathematical models and ratios, but these are in many cases skills that are becoming somewhat devalued. As Nitin Nohria, dean of the Harvard Business School, admits, ‘anyone can teach you how to read a P&L [profit-and-loss statement] or value a derivative; those kinds of things have become commoditized.’ The bigger challenge is to teach America’s future business leaders how to be curious, humane, and moral; how to think outside the box about problems like funding the research for a new blockbuster drug. And how to be strong enough to stand up to Wall Street when it demands the opposite.”
“Yet ironically, many business leaders, even those who have MBAs themselves, have begun to question the value of these programs. ‘I went to business school before I knew any better, kind of like sailors get tattoos,’ jokes former GM vice chairman Bob Lutz, whose book Car Guys vs. Bean Counters decries the rise of the MBAs. The problem with business education, according to him, is that students are taught not what happens in real business — which tends to be unpredictable and messy — but a series of techniques and questions that should take them to the right answers, no matter what the problem is. ‘The techniques, if you read the Harvard Business School cases, they are all about finding efficiencies, cost optimization, reducing your [product] assortment, buying out competitors, improving logistics, getting rid of too many warehouses, or putting in more warehouses. It’s all words, and then there’s a sea of numbers, and you read it all and analyze your way through this batch of charts and numbers, and then you figure out the silver bullet: the problem is X. And you’re then considered brilliant.’ The real problem, says Lutz, is that the case studies are static — they don’t reflect the messy, emotional, dynamic world of business as it is. ‘In these studies, annual sales are never in question. I’ve never seen a Harvard Business School case study that says, Hey, our sales are going down and we don’t know why. Now what?’”
The Helsinki Bus Station Theory, first outlined in a 2004 graduation speech by Finnish-American photographer Arno Minkkinen, claims, in short, that the secret to a creatively fulfilling career lies in understanding the operations of Helsinki’s main bus station, writes Oliver Burkeman, who believes the theory deserves greater exposure. So he invites you to imagine the scene.
“It’s a bus station like any big bus station — except, presumably, cleaner, and with environmentally-friendly buses driven by strikingly attractive blond(e)s.
There are two dozen platforms, Minkkinen explains, from each of which several different bus lines depart. Thereafter, for a kilometre or more, all the lines leaving from any one platform take the same route out of the city, making identical stops. ‘Each bus stop represents one year in the life of a photographer,’ Minkkinen says. You pick a career direction — maybe you focus on making platinum prints of nudes — and set off. Three stops later, you’ve got a nascent body of work. ‘You take those three years of work on the nude to [a gallery], and the curator asks if you are familiar with the nudes of Irving Penn.’ Penn’s bus, it turns out, was on the same route. Annoyed to have been following someone else’s path, ‘you hop off the bus, grab a cab… and head straight back to the bus station, looking for another platform.’ Three years later, something similar happens. ‘This goes on all your creative life: always showing new work, always being compared to others.’ What’s the answer? ‘It’s simple. Stay on the bus. Stay on the fucking bus.’”
“There are two reasons this metaphor is so compelling […]. One is how vividly it illustrates a critical insight about persistence: that in the first weeks or years of any worthwhile project, feedback — whether from your own emotions, or from other people — isn’t a reliable indication of how you’re doing. (This shouldn’t be confused with the dodgy dictum that triggering hostile reactions means you must be doing the right thing; it just doesn’t prove you’re doing the wrong one.) The second point concerns the perils of a world that fetishises originality. A hundred self-help books urge you to have the guts to be ‘different’: the kid who drops out of university to launch a crazy-sounding startup becomes a cultural hero… yet the Helsinki theory suggests that if you pursue originality too vigorously, you’ll never reach it. Sometimes it takes more guts to keep trudging down a pre-trodden path, to the originality beyond. ‘Stay on the fucking bus’: there are worse fridge-magnet slogans to live by. Just make sure you take it off the fridge when your prudish relatives visit.”
Shulin Architectural Design has created a serene reading space for residents of the Liangjiashan village, located in an ancient mountain forest in China’s Wuyi County. Aimed at providing a calm and quite place for children, young people and the elderly, the book house incorporates a semi-outdoor open space on the ground level while the upper floor encloses two rounds of back-shaped bookshelves and several reading areas.
Surrounded by mountains and the dense forest, Shulin Architectural Design‘s book house sits not far from the village’s square, beside which are well-preserved courtyard houses made of rammed earth. Ten columns hold the entire wood and steel structure creating a semi-outdoor patio on the ground level, complete with a water surface that reflects nature, time and space.
“What education is about, the assumption was, is the attainment of culture. By culture was meant an understanding of life and what is most important in it. This understanding is obtained through experience, observation, insight, and the ability to get outside oneself to view the world from a larger than merely personal perspective. Culture at this depth comprised a compound of a sense of the past, an understanding of what morality was about, and intelligence. The novelist Mario Vargas Llosa notes that ‘culture has always signified a combination of factors and disciplines that, according to a broad social consensus, are what define it: a recognition of a shared heritage of ideas, values, works of art, a store of historical, religious, and philosophical knowledge in constant evolution, and the exploration of new artistic and literary forms and of research in all areas of knowledge.’
The study of the past is the main portal through which culture is acquired; and once through that portal, the art of the past — visual, musical, above all literary — is the chief route to culture. Study of the great art of the past, the imbuing of tradition, was also thought the most certain way to ensure that there will be important art in the present and in the future.” — Joseph Epstein, Whatever Happened to High Culture?