Let’s be careful out there
That’s what the sargeant on Hill Street Blues used to tell the cops before sending them out on the beat. It’s a phrase that comes often to mind:
McKinsey and Failing Airlines. McKinsey was the central “consultant” at Swissair during the several years that led to the destruction of the Swiss airline. Their “work” cost Swissair about $60 million dollars — while it lost all profits, revenues, and assets. McKinsey is also well-known for having preached at Enron, and presented that company as a success to emulate, until the fall. Business Week: Many of the intellectual underpinnings of Enron came from McKinsey…

NYT: Now that United Airlines has filed for bankruptcy protection, the critical challenge facing the airline… is to find a business strategy that works. To that end, United has hired McKinsey… Why McKinsey? While Andersen helped cook the books at Enron, didn’t McKinsey also play a key role in that massive failure? [Jinn of Quality and Risk]


Note:  the article also lists some recommendations from McKinsey on how United can improve performance.  Unfortunately, these improvements will barely offset the monthly fees McKinsey is charging the airline. [John Robb’s Radio Weblog]
It’s not that consulting is a Bad Thing. (I should know; I am one!) But consulting that takes you away from ethics, good sense and business fundamentals? Let’s be careful out there!
PS: It’s not that airlines being in trouble is anything new. Check out the systems analysis done by UC Davis prof Kenneth EF Watt in the 70s. (I’ll see if I can find the citation.)


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