by Sarah Butcher About a day agoWhen you can't decide
If you’re an academic high achiever with aspirations to work for a world-leading firm of the sort that hires exceptional people, you’ve probably considered the tripartite of finance careers, consulting careers, or tech careers. If so, you’ve probably also weighed-up the top names in each sector – the Goldmans, the Bains, the Googles.
Your decision shouldn’t just be about the tasks involved, however. Before embarking upon a career, you also need to consider the culture. And the culture across tech, consulting and finance is very different.
Academics at Claremont Graduate University and the Questrom School of Business at Boston University in the U.S. have concocted a new way of quantifying cultural differences and working out where you fit. Titled ‘Career Culture,’ and defined as, “beliefs and practices that prescribe what is valued for career success in the organization”, they say you can use it to answer questions like, “‘‘How do I know if the people here are really ‘my kind’ of people?’’, ‘‘How can I tell if the firm’s values and expectations of employees, especially junior employees, are compatible with the way I want to be at work?’’, ‘‘How can I develop and thrive here?”
The academics split cultures into four categories: prestige cultures, apprenticeship cultures, protean cultures, and merit cultures. They suggest that working out where you want to work is as much about working out which of these cultures you want to work within as whether you want to do the job itself.
Do you fit with the ‘prestige culture’ at a Goldman Sachs or a Morgan Stanley?Investment banks like Goldman Sachs and Morgan Stanley have prestige cultures, say the researchers. They are very concerned with reputation and they hire people from elite institutions who will enhance their reputations. They’re big on status symbols and they have prominent office buildings in prestigious locations. They pride themselves on bring “career springboards” that will launch employees’ careers for the future (even if they don’t stay with the firm). Their emphasis is on “extrinsic values” – they hire the “very best people” and they offer tangible rewards like, “visible achievement, distinction, external recognition, and status.”
You’ll fit with a prestige culture if you agree with the following statements:
Do you fit with the ‘apprenticeship culture’ at Bain & Co.?If leading investment banks have a prestige culture, the academics say leading consulting firms – like Bain & Co, – have ‘apprenticeship cultures.’
Here, they say the emphasis is more upon “intrinsic values.” You’ll be valued and rewarded if you demonstrate behaviours that are, “self-directed and guided by personal values.”
You’ll fit with an apprenticeship culture if you agree with the following statements:
Do you fit with the ‘protean culture’ at Google?At Google and tech firms, the researchers suggest the culture is different again. Here, it’s all about autonomy. It’s about, ‘following your passion.’ You don’t have to follow a prescribed career path and you get a high degree of freedom. It’s not about conformity and assimilation, although you are expected to show “colleagueship and community.” Like apprenticeship cultures, protean cultures are for people who like intrinsic values: taking pride in your work, helping people, distinguishing yourself in your career.
A protean culture won’t work for you if you like a hierarchical and structured approach to your career. It will work for you if you agree with the following statements:
Do you fit with the ‘merit culture’ at blue chip corporates?And if none of the above sound like you? There’s always the ‘merit culture’ which the academics say is in evidence at big corporations like P&G and GE. Here, they say it’s all about proving yourself and advancing based upon effort and achievement. This might sound a bit like banking, but the academics argue it’s not the same. In a prestige culture, you’re hired based upon existing achievements (and are expected to perpetuate them), in a merit culture they say you’re expected to prove yourself on the job.
You’ll apparently fit with a merit culture if….
A bit of each?By this stage you (like us) might be thinking that this corporate culture thing is overdone. Google has big prestigious offices. Investment banks like to hire the best of the best, but they also like to pride themselves on being meritocracies, to pay for performance, to coach people and to instil corporate values. Surely, therefore, they’re a bit of each.
The academics have foreseen this criticism. “You probably won’t find pure types anywhere,” they admit – acknowledging that McKinsey & Co, is a little bit prestige and a little bit apprentice. Ultimately, they suggest you use their cultural groupings as a framework rather than a definitive categorization (‘there is value in pushing yourself to discern the primary type [that characterizes the organization you want to join].”)
For example, while banks might be a bit merit and a bit apprenticeship and a lot prestige, they’re not really very protean (or at least haven’t been historically). If you join a bank with the intention of following your career wherever your passion takes you, you might therefore be disappointed. Google, not so much.
From Seeking Alpha
Sep 22 2016, 13:00 ET | About: Accenture plc (ACN) | By: Jignesh Mehta, SA News Editor
Accenture ACN +2.1% has entered into an agreement to acquire Kurt Salmon to expand its capabilities in delivering end-to-end strategy consulting services to top retailers and private equity firms in a world disrupted by digital.
“With digital disruption forcing retailers to rethink their entire business and operating models, we expect continued strong demand for strategy consulting services in this industry,” said Mark Knickrehm, CEO Accenture Strategy.
BOSTON, MA--(Marketwired - Sep 14, 2016) - For the third consecutive year, The Boston Consulting Group (BCG) has earned the top spot in Consulting magazine's "Best Firms to Work For" survey. BCG is the only firm to appear on the list every year since the survey debuted in 2001 and has never been ranked outside the top five.
"There's simply no denying that BCG is the very best consulting firm to work for right now," said Joseph Kornik, Consulting's publisher and editor-in-chief. "That level of consistency is very difficult to achieve, but BCG has done it again. BCG leadership deserves plenty of credit for the firm's success."
BCG performed strongly across all six measures of employee satisfaction, ranking first in most (firm culture, firm leadership, compensation and benefits, and client engagement) and in the top five for the others (career development and work-life balance). It also scored highest on two key questions: "How interesting do you find your work to be on a typical assignment?" and "How often do you think your work has had a positive impact on clients?"
"Our highest priority -- one driven by our entire leadership team -- is making BCG the very best employer for top talent and the best place for professional growth," Tom Reichert, BCG's chairman of North America, told the magazine. "On a day-to-day basis, our culture, our collaborative apprenticeship model, and the satisfaction that comes from doing high-impact work are all core elements of our team's deep commitment and engagement."
Morale remains high, Reichert explained, because BCG continues to grow at a healthy double-digit rate, as it has for a number of years, offering an ever-expanding set of options and growth opportunities. "Our people appreciate the many opportunities to grow personally and professionally at an exceptionally fast rate -- to prepare for major leadership roles in BCG and beyond. And...they value our non-hierarchical and team-oriented culture and the ability to connect and grow with smart, talented colleagues."
Earning the top spot on Consulting's list follows other workplace honors for the firm this year. In March, BCG ranked number three on Fortune's "100 Best Companies to Work For" list, which measures companies across all industries. Demonstrating remarkable consistency, BCG has ranked in the top five on Fortune's list for six straight years and is one of only two companies to make the top dozen every year since the firm began participating in 2006.
Consulting's 2016 ranking derives from an online survey conducted this past spring and summer. Over 10,000 consultants participated, representing more than 300 firms. About three-quarters of the respondents came from the United States. The complete findings appear in the magazine's September issue and on www.consultingmag.com.
A two-page feature on BCG, drawing on an in-depth interview with Reichert, appears here.
Consulting is published by ALM, a global leader in specialized industry news and information.
For information on job opportunities at BCG, please visit the Careers section of bcg.com.
To arrange an interview with a member of BCG's leadership team, please contact Alexandra Corriveau at +1 212 446 3261 or firstname.lastname@example.org.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com.
Ashley Stahl, Forbes
I have to admit, when I first started my company and was seeking advice on how to build my business, I had no idea what management consulting was. A quick Google search of the term told me that management consulting is “the practice of helping organizations to improve their performance.”
Well good, I thought, because I was worried Google would be vague about it!
The irony, though, is that defining management consulting is vague in itself because the concept is so broad. Clients seek out management consultants for solutions to a very wide range of specific problems, whether it’s advice on how to restructure the company, guidance on revamping HR, or a plan for upgrading the company’s IT suite.
At the core, however, there are two main motivations for companies seeking out management consultants: They want the unbiased perspective of an outsider (i.e., non-employee) in tackling an issue, or they need a level of expertise to solve a specific problem that they can’t get from a current employee, or a combination of both.
It’s an incredibly versatile field, and demand for management consultants only seems to grow as time goes on. But is it the right career for you? Here are five things you probably didn’t know about management consulting to help you make your decision.
1. You’ll never have two identical workdays. In fact, you’ll seldom have two that are even similar. The broad range of work that goes into management consulting means coming up with creative solutions on a case-by-case basis tailored for each client, so you’ll end up with a very wide range of tasks day-to-day. If you’re the type of person who gets bored easily, this is definitely a field to look into. If you’re more of a structured person who needs a certain level of routine, it’s probably not your cup of tea.
2. You get tons of responsibilities early on,which translates into an incredible amount of experience in a short period of time. Great for those who are looking to beef up their resumes--not so great for anyone who is squeamish about working long hours and being on call 24/7.
3. You’ll get crazy access to senior management at client companies. It’s one of the things that Elodie Garson-Besançon, a management consultant at Ernst and Young based in Europe, loves about her field—high exposure to senior level individuals. One-on-one time with the C-suite is a major perk of the job that not many other professions offer. And that’s good news, given that millennials rate mentorship as a top career value.
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Sign up here to get top career advice delivered straight to your inbox every week.4. You can make bank if you play your cards right. The median salary for all geographic areas and all management consultant career levels is $86,000—not too shabby. It’s a very competitive field, but if you can get in with one of the top firms, you’re looking at close to six figures with little to no professional experience. Firms want to hire the best and the brightest out there, and they’re obviously willing to cough up the money to get them.
5. You don’t necessarily need an MBA to pursue a career in management consulting--but you’ll make more money if you do.Salaries for management consultants in their first year out of undergrad averaged $70-75K, as opposed to $160-200K for those in their first year after business school. Be careful, though. I’ve warned before that not all MBA programs are created equally, and if you don’t do your homework, your MBA could end up actually costing you.
All in all, the demand for management consultants remains high, so it seems this is a field that will only continue to grow. Especially if you’re able to carve out your niche and build a track record of success for clients, the opportunities—and the money, apparently!—are endless.
Want to work in management consulting? Here’s how much you’ll make at McKinsey, Bain and BCG in the U.S.
Maybe you’re a student or recent graduate who aspires to a career in management consulting. Or perhaps you’re working in another sector and considering a change. Or you could be a seasoned management consultant looking to see if the grass is greener at a competitor. You’ll want to know how much McKinsey & Co., Bain & Co. and the Boston Consulting Group – the MBB firms – actually pay. Historically, they have dominated the consulting landscape, were seen as the most prestigious and interesting places to work in consulting and have competed for talent with the Big Four accounting and professional services firms.
So if you join one of these prestigious management consulting firms, how high a salary can you expect?
McKinsey, Bain and BCG salaries in the U.S.Bain & Co. finished seventh among professional services firms in our 2016 Ideal Employer Rankings. It has the best-paid analysts, and while it appears to be competitive across the board, does not come out on top once you get to the more senior end of the spectrum. That said, it has a reputation for paying generous bonuses, which the data below does not factor in.
By Felix Salmon from Fusion.net
A secretive global network of the rich, the powerful, and the influential, investing in each other’s companies, and trying very hard never to talk about what they’re doing. That’s the dysfunction at the heart of crony capitalism—the system whereby the rich get richer while everybody else struggles.
It’s also a pretty good description of how McKinsey & Company works.
McKinsey is perhaps the world’s best-known management consulting firm, and a high-powered farm team for America’s corporate elite. It’s also home to a $9.5 billion private hedge fundknown as the McKinsey Investment Office. MIO invests in many companies linked to McKinsey, and has an enviable record: It has made money in 24 of the past 25 years, including a 14% return in 2014 alone. That’s much higher than the stock market or the average hedge fund.
McKinsey is willing to admit that MIO exists (it even has a very, very thin website), but they’re not willing to say much more than that. And beyond MIO, in the interstices of decades-old McKinsey friendships, we have no idea at all how many investments McKinsey-connected individuals make in each other’s companies.
Now, thanks to the Panama Papers, we have a tiny sliver of a window into one such scheme. It’s domiciled in a Caribbean tax haven, all but untraceable, and comes complete with a Panamanian lineage and a meaningless name: Brightao.
The Panama Papers, which were obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with Fusion and other media partners, have exposed the offshore holdings of heads of state and criminals, highlighting the potential for corruption, tax evasion, and other illicit activities within this parallel financial universe. The papers also provide a rare window into the wealth, privilege, and opportunity afforded the lucky members of the McKinsey elite, and their friends.
Brightao, founded in 2007, is a shell company in the British Virgin Islands. The founder was Peter Walker, a 43-year veteran of McKinsey and a globally recognized expert in both China and the insurance industry. The company’s founding shareholders include Sandy Weill, the financial services empire-builder who created Citigroup; legendary M&A banker Gary Parr; and various McKinsey ex-colleagues.
Brightao was created in the service of one of Walker’s protégés at McKinsey—a high-flying Chinese technocrat named Heidi Hu. It allowed big-name financiers, including current and former McKinsey employees, to invest in Hu’s nascent yet promising insurance company, even if that may have violated the spirit of McKinsey’s own rules against investing in the same companies it advises.
Hu graduated from Fudan University, one of the best in China, got her master’s degree from Chinese People’s University, and co-founded Gallup’s China branch while still teaching there. Gallup sent her to the U.S., where she got a PhD in marketing from the University of Nebraska, and joined McKinsey.
While working at McKinsey, Hu founded a Chinese insurance brokerage named Mingya. In 2007, with the support of Walker and his well-connected colleagues, she quit McKinsey to become the full-time executive chairperson of Mingya in China.
Thanks only to the Panama Papers, we know what happened next: Hu began to raise money for Mingya from deep-pocketed investors, including Walker and his friends. (McKinsey refuses to say whether MIO invested in Mingya.) When financiers like Walker and Weill wanted to invest in Chinese companies, they weren’t allowed to do so in their own name: foreign investmentneeded to be structured through some kind of corporate joint venture. So when Walker and his friends decided to invest in Hu’s company, they hired a Washington law firm, which decided that they needed to create a brand-new company, an investment vehicle that would be used to invest in Mingya. They called it Brightao.
There was no good reason why Brightao should be based in the U.S., with its myriad taxes and regulations—and so it wasn’t. Instead, a Panamanian law firm, Mossack Fonseca, was charged with creating a new entity in the British Virgin Islands, a jurisdiction that tries very hard to make incorporation of new companies as easy as possible.
Of course, there are other benefits to founding a company in the British Virgin Islands instead of in the U.S. For one thing, companies in the British Virgin Islands don’t pay any corporate income tax. As a result, as long as any profits remain offshore, they remain untaxed.
There are secrecy benefits, too. Were it not for the Panama Papers leak, the details of Brightao and its shareholders would have been entirely confidential. Even after the leak, Brightao’s principals would not comment on the record for Fusion. Their general rule seems to be that the less that’s said about any of this, the better. At McKinsey, the press office would not make Walker available, or talk about any possible MIO investment in Mingya; they wouldn’t even say why they’re declining to respond.
Brightao’s formal incorporation came in 2007, with a star-studded list of founders—star-studded, at least, by the standards of the American financial services industry. There was Weill, with 1,368,900 shares; Parr, with 513,350 shares; and Thomas Hardy, a former McKinsey partner turned private-equity honcho, who was in for 256,700 shares (he’d go on to buy 440,000 more in April 2008). There were smaller investors, too, including Mike Conway, Weill’s chief of staff, who bought 13,700 shares (1% of his boss’s investment) on his own behalf. Fittingly, the biggest investor of all, with 2,374,250 shares, was Walker himself. None of the investors would tell Fusion how much they paid for their shares.
Walker had delivered for Hu, not only with cash but also with connections. Hu was photographed with her boldface-name investors in the Chinese press, which was wide-eyed at her friendship with “the big crocodiles of Wall Street.” There was even a quote from AIG founder Hank Greenberg, saying that Hu was “born to be in the insurance business” and would one day be as successful as he was.
Similarly, Hu had delivered for Walker. As a high-flying international insurance expert and a Chinese national, she was perfectly placed to build an insurance empire. After all, since China lacks an effective social safety net, families are forced to rely on private insurance and will need more and more of it as the country becomes richer.
By offering to let Walker and his circle invest in her business, Hu was giving them an opportunity to invest directly in an early-stage Chinese company that had the potential to become enormous. It was essentially a “friends and family” round, where entrepreneurs raise cash from the people closest to them, both personally and professionally. Except in Hu’s case, her network comprised some of the biggest names in the global insurance industry, who could help her out with strategic advice whenever she wanted.
Just like Walker, Hu didn’t respond to multiple requests for comment. We therefore have no idea whether Walker’s investment in Hu’s company was disclosed to his consulting clients in the insurance industry and in China. Management consultancies like McKinsey have turned access to information into a veritable business model: it’s common for them to advise many competitors within an industry, giving them the ability to tell everybody else what “best practice” is.
Still, McKinsey is famously averse to taking direct equity stakes in the companies it advises: As Anita Raghavan reported in her book “The Billionaire’s Apprentice,” such arrangements were considered to “pose outright conflicts of interest in some cases and in others were totally at odds with the culture of the firm.”
In the end, even with all its advantages, Mingya didn’t quite work out as Hu had hoped. She quit the company in 2009, and while her shareholders would still love to see a healthy return on their investment, at least one of them has decided to sell. Weill ceased to be a Brightao shareholder in October 2014, when, the Panama Papers show, he sold all of his 1,368,900 shares to Conway, his own chief of staff.
The Panama Papers reveal only so much: We don’t know how much Conway paid for those shares or how he funded that investment. He wouldn’t tell Fusion when we asked. Conway, for one, has clearly learned the value of secrecy in this McKinsey-dominated world. Maybe if Mingya ever does get acquired for some huge sum, he can use the resulting windfall to kickstart his own financial services startup. He might even be able to get McKinsey to invest in it.
Managing director Peter Lacy suggests there are growing opportunities around sustainability
Written by Seb Murray | Inside View on Top Jobs | Monday 16th May 2016 00:50:00 GMT
© PAUL J.RICHARD
Like any good steward of sustainability, Peter Lacy, a boss of Accenture Strategy, loves a dose of his own medicine. “It’s positive luxury,” he smiles, eyes drifting down to his wrists.
In the middle of a presentation on floor 27 of London’s eleventh tallest skyscraper, the Walkie Talkie, Peter points to his cufflinks. Donned with a crisp navy blue suit, a diamond white shirt and spotted pocket square, they were craft by ethical retailer Elvis & Kresse from a recycled fire hose.
“It was 30 years old and it saved people’s lives,” Peter laughs. “I love that we saved it from going to a landfill.”
When it comes to sustainability, recycling and much else besides, few deliver more than Peter. He is the managing director of one of the world’s top management consulting firms, after all.
Accenture Strategy, a vast wing of the $70 billion professional services company, is in the vanguard of responsible business. The frim helps organizations, such as Unilever and most of the Fortune 500, pivot their strategies to drive profit while delivering a positive economic, environmental and social impact.
Such triple-bottom-line thinking is what gets Peter’s juices flowing. Amped-up and bubbly, his sticking point is thecircular economy — a way of doing business that tries to decouple economic growth from the overuse of resources.
“It’s one of the most disruptive forces we will see,” he says, to spectacular views of the City. “It’s a $4 trillion-plus market opportunity.”
Anyone hoping to secure a job at Peter’s company should have a firm grasp of the concept. Accenture Strategy is one of the foremost employers of MBAs. The firm works closely with a string of elite business schools, from Wharton and Duke Fuqua of the US to INSEAD in Europe and Singapore.
Zoe McLoughlin, head of consulting at London Business School, says: “There are lots of opportunities at Accenture Strategy.”
Accenture added 53,000 more employees in 2015 and consulting revenue grew by 3% year-over-year to $16.2 billion. Many of the opportunities are in emerging areas such as digital transformation, but sustainability strategy and the like are growing areas too, suggests Peter.
Speaking to BusinessBecause, he says: “We need people at Accenture who can bring a different perspective. There is increasingly a role for this [the circular economy]” in management consulting.
Accenture Strategy values MBAs, Peter adds: “We are the biggest employer of MBAs in the world.”
As a manager for digital transformation at the company, Andrew Whelan knows that better than most. He graduated with an MBA from London’s Cass Business School in 2013, and joined Accenture Interactive, a marketing and advertising unit, a year later.
“AI requires candidates to have a very strong balance of personal and technical skills, and a real passion for their area of expertise,” Andrew says.
He adds: “We proudly employ and collaborate across diverse skill-sets, including design thinking, analytical consulting skills and technical development. Above all we want innovators who are able challenge conventional thinking.”
Meanwhile, Accenture’s Peter believes MBA students, as the world’s future business leaders, will need to shift companies’ strategies from linear value chains to circular ones. By addressing the huge underutilization of natural resources, the circular economy could give companies a competitive advantage. It’s already sprouted disruptive business models — think Airbnb, already valued at $25 billion.
“Business models are key to the success of the circular economy,” he says. “It's a way to re-orient how we do business — globally.
From Forbes, Peter Cohan ,
McKinsey alumni lead many organizations.
Sadly for the firm’s reputation at least three of those executives — Valeant’s to-be-replaced CEO, Michael Pearson; Enron’s former CEO Jeff Skilling, and McKinsey’s former Managing Partner, Rajat Gupta — have run into significant problems.
This brings me to a question: Is the conduct that trashed the reputations of these alumni a McKinsey bug or a feature?
Before getting into this question, a disclosure – in business school I received a job offer from McKinsey’s New York office and chose to work elsewhere.
But I still had the benefit of many of McKinsey’s great ideas — not the least of which isThe Pyramid Principle — a technique developed by Barbara Minto who taught it to me.
The idea is that CEOs face hundreds of possible issues on which to focus their attention.
Minto advocated that decision-makers consider three topics to pick the most important one:
It is no accident that I framed the start of this blog along the lines that Minto suggested (though the question I selected should have had a yes/no answer to be consistent with her approach).
To answer that question, it is worth pointing out that McKinsey alumni occupy prominent leadership positions.
According to Duff McDonald’s 2013 book, The Firm, “A few years ago, more than 70 past and present CEOs of Fortune 500 companies were McKinsey alumni, and in 2011 more than 150 McKinsey alumni were running companies with more than $1 billion in annual sales. A 2008 study by USA Today calculated that the odds of a McKinsey consultant becoming CEO of a public company were the best in the world, at 1 in 690.”
Among these is Morgan Stanley CEO, James Gorman, a former McKinsey senior partnerwho has presided over a 22% decline in its stock price since taking over in January 2010
There are three other prominent business leaders who are McKinsey alumni (none were partners) and two of them — Google CEO Sundar Pichai and Facebook COO Sheryl Sandberg — still enjoy good reputations.
The third — Credit Suisse CEO since July 2015, Tidjane Thiam – enjoys a prominent position but it seems that he is presiding over some unpleasant surprises at the investment bank he runs.
Thiam said last month that he was caught off guard by large, risky positions by the bank’s traders and did not learn of the problems — that forced the bank to take $1 billion in writeoffs – until January 2016, according to Bloomberg.
But Credit Suisse’s Chairman, Urs Ronner, said on March 31 that “Credit Suisse managers were aware of the trading positions,” according to Bloomberg.
But let’s look at the travails of three former McKinsey partners.
Valeant, the Quebec-based drug company that’s restating its financial results, in negotiation with lenders from whom it has borrowed $30 billion, and under investigation by regulators, has suffered a 73% plunge in its stock price in 2016, according to the Economist.
But Valeant — whose former CEO, Michael Pearson worked at McKinsey for 23 years, describes itself as “bringing value to our shareholders.”
Pearson’s McKinsey career was capped by years as head of its pharmaceuticals practice. His theory about the industry was that ”it wasted too much money not just on R&D but also on personal secretaries, public relations, and investment banking advice,” according to Bloomberg.
Valeant asked Pearson what to do and he suggested it “cut its research spending, to concentrate first on dermatology and then on growing through acquisitions,” wroteBloomberg.
Valeant offered the CEO job to Pearson which he took in 2008. As Bloomberg reported, he acquired other drug companies, cut staff, raised drug prices, and got Valeant into a complicated relationship with mail order pharmacy, Philidor.
After he graduated from Harvard Business School, Rajat Gupta joined McKinsey as a consultant and rose up the ranks to become its managing partner.
But with one quick phone call in September 2008 Gupta threw much of it away. And the results of that decision led him in June 2014 to FMC Devens in Ayer, Mass. where he sat until his early release on January 5 to detention with an ankle bracelet at his home in Westport, Conn.
Gupta was released from that a few days early on March 11, according to IndiaWest.
A Kolkata, India native, Gupta was orphaned as a teenager. He graduated with a B. Tech in Mechanical Engineering from India Institute of Technology, Delhi in 1971 and entered Harvard Business School – graduating with an MBA in 1973 after which he spent 34 years at McKinsey.
He became Managing Partner in 1994 and held that position until 2003, leaving the firm in 2007.
Along the way, he was a member of the board of public companies like Goldman Sachs and Procter and Gamble. But in June 2012, “he was convicted of insider trading and sentenced [in October 2012] to two years in jail and a $5 million fine,” according to theEconomist.
Gupta could have faced eight years in jail; however, Judge Jed Rakoff let Gupta off with a relatively light sentence. Rakoff said that “Gupta is a good man. But the history of the country and the world is filled with good men who do bad things,” noted the Economist.
Gupta was convicted of calling Raj Rajaratnam, a former hedge fund manager who is serving an 11 year sentence at FMC Devens, to share a market-moving piece of information he had just learned in a Goldman Sachs board meeting.
Rajaratnam – in whose hedge fund Gupta had invested $13 million, according to the Times, used the information leaked to him by Gupta 23 seconds after leaving a Goldman board meeting – that Warren Buffett had agreed to pay $5 billion for preferred shares of Goldman Sachs – to buy 175,000 Goldman shares ahead of the 6 p.m. public disclosure of that news – yielding Rajaratnam a $1.2 million profit, according to the Financial Times.
Enron’s former CEO Jeff Skilling – now serving a 14 year prison sentence (reduced by a decade) for cooking Enron’s books from which he will be released in 2017 – was a former McKinsey partner.
Skilling oversaw a human resources policy that featured high turnover in employees, investment in hiring highly-pedigreed talent and off-balance-sheet financing.
Skilling also hired McKinsey to architect Enron’s decade-long expansion from a natural-gas-pipeline company into a complex trader of water, timber, and high-speed broadband.
A McKinsey senior partner, Richard Foster, attended six Enron board meetings between October 2000 and October 2001, according to the Guardian.
Should you invest in a company that’s run by a former McKinsey partner?
You might not want to invest, but these three examples suggest that you could trade.
The strategy? Buy shares on the announcement of that CEO’s appointment, enjoy the rapid run up in the stock price, and then sell when the CEO’s face graces the covers of the leading business media outlets.
Remember two things they might not teach you at McKinsey: