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Since McKinsey consultants visited Shell, in fact, the latter’s profits have swollen gigantically – never mind the sheer impossibility of proving that a chain of cause and effect links the consultancy with the profits. The story of Shell and McKinsey started in Venezuela, where two brilliant young consultants, Hugh Parker and Lee Walton, worked so impressively for a subsidiary that they were invited to look at Shell’s head office problems in London and The Hague. McKinsey at this time was still US-based. But its adoption by Shell, widely supposed (and with some good reason) to lead Europe’s management élite, was a gilt-edged visiting card into Europe.

If Shell, bristling with internal consultants, needed that extra something from McKinsey, then McKinsey obviously had something extra to give. Old-line British boardrooms, jammed solid with anxiety over modern problems of scale and complexity, for which they were ill equipped, rapidly took the point: so did thrusters un- sure which way to thrust. One after another the blue-chip names-ICI and the Bank of England, the Post Office and Unilever, Dunlop and the BBC, and so on, and so on- found the McKinsey medicaments irresistible.

British consultants were consumed with jealousy by this American success in winning fat assignments and, adding insult to injury, publicising it. One or two hinted darkly that the follow-up to McKinsey’s work was less inspiring than its order book. Sour grapes, no doubt; but later developments, seen in this light, are still interesting. Spillers, the flour giant, went on a McKinsey course of reorganisation and marketing orientation – its profits fell by a third between 1968 and 1970. Dunlop was another satisfied customer. In 1970, just before its marriage with Italy’s Pirelli was consummated, Dunlop’s pre-tax profits had been stuck for three years running.

The Post Office, set up as a new public corporation, combined marketing fiascos with huge deficits – at least, the Bank of England didn’t follow this precedent. Even Shell, after a few years, found the McKinsey scheme of boardroom organisation unworkable. There are other examples: but their lesson is not that McKinsey’s work was bad. On the contrary, its consultancy was probably as good as money can buy. The defects were intrinsic to consultancy itself – not to consultants. The client company gets for its fee, and for a time, the services and advice of men who (if its choice has been good) have broader experience, superior intelligence, more impressive backgrounds and sharper all-round competence than most of its managers. But the company doesn’t get new management.

Excerpted from pages 215-216 of ‘The Naked Manager by Robert Heller