NYC Paid McKinsey $27.5M to Stem Jail Violence. Instead, Violence Soared | Hacker News Reader

NYC Paid McKinsey $27.5M to Stem Jail Violence. Instead, Violence Soared

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168 pointshaltingproblem76 comments

I think the thing that is being overlooked here is that these are real people that whose safety was gamed so that a consulting firm could get paid and with the full cooperation of the very people who's job it is to ensure that safety. The way the US allows the prison system to treat human beings as simple profit points while discarding their safety or any semblance of rehabilitation is appalling.

Guards who very often work for private companies are essentially given godlike powers of life, death and torture with no consequences. Its pretty revolting how we allow wards of the state to be treated.

https://en.wikipedia.org/wiki/Death_of_Darren_Rainey (Link is disturbing)

It really appears that the US has no bottom when it comes to the treatment of its most vulnerable, and whether or not these are good people, they are in a power structure where they are indeed the most vulnerable. As a society we should strive to be better than this.

The "prison profits" slogan isn't great, because it conceals the nature of the power structure that perpetuates the system.

The US prison system is a patronage system, not a profit system. It provides stable, nontradable jobs for a large group of relatively low skill people. Guards, cops, and corporate vendors to those groups. It turns out that Microsoft is a good example of that latter category.

Managing a patronage system is a particularly potent form of political power. Patronage systems underwrite most examples of "Machine Politics", particularly Chicago style Machine Politics.

I would personally like to see the word "patronage" return to American political discourse. It's something our ancestors talked a lot about, but we don't.

Patronage systems brought down the USSR.

I worked for BCG for a few years. Like McKinsey, sharp, hard-working people. But often insufficiently experienced to advise on strategy of increasingly complex industries. Moreover, they lack the political and social capital to drive change, which is why so much of the project's success depends on the credibility of the hiring point person and the vision they already had prior to hiring the consulting firm.

The industry is outdated as its "insights" are relatively common knowledge among F500 company executives. This may be why government is hiring them more often. Regardless the industry is on the decline. I wrote about this 7 years ago:

https://www.curiousjuice.com/blog-0/bid/146227/When-not-to-h...

My perception is that the consultant's advice is rarely put into action in the end. Is this correct ? People keep on hiring consultants as some sort of marketing of the process in their project.

I think you're right but I don't know the stat behind how often the strategy gets implemented. As other have said, it has much to do with the hiring point person and if the consulting firm essentially endorses an idea s/he already had. Rarely does a consulting firm come up with a brand new strategy and convince the client to implement it.

As a former MC myself, I would add another point why people hire MC firms - Political cover.

You have an urgent problem, your stakeholders want change now, but you can get people off your back if you hire McKinsey.

Or, you know what you want to do already, but it’s a big change so you get McKinsey to sign off on it.

If it doesn’t go well you have cover ie we made the best possible decision we could - we hired McKinsey!

This. They also hire very smart people and they may well have the smartest people in the room at client meetings, so they have credibility.

It's a good business model, kind of like hiring a flashy hairdresser that gives very expensive but often terrible haircuts - but when people are told that this famous stylist did it, they all just go 'ooooh...'

This may not be the best forum for my question, but do people actually hire flashy but awful (or inconsistent) hairdressers?

Yes.

That is the standard little speech that I hear often repeated by McK employees. Like, "LOL, we don't do much, but we honestly try, but bureaucracy gets in the way." It's cute and funny on the surface, but I think it stops being funny when someone dives in deep and sees incentives that make a lot more sense than some nebulous concept of "political cover."

> His top deputy, Anthony Shorris, and other aides decided to hire a consulting firm. They solicited proposals from firms on a pre-approved list from the previous administration. Despite its lack of corrections experience, McKinsey won the contract.

> The mayor’s office denied that McKinsey was hired partly to provide political or legal cover, as did Shorris, who is now a senior adviser to McKinsey and teaches at Princeton University.

Now that's a reason a deal like this actually makes sense! I give you $27m in taxpayer money, and when I leave, you give me $x in return. That's a deal that makes a lot more sense than paying 24 year old NYU grads to solve big problems with powerpoint and linear regressions.

> the industry is on the decline. I wrote about this 7 years ago

Thanks. That would explain my perception that McKinsey has been trading on its reputation for the last 15 years at least.

At this point I'd only consider Bain, of the big three - and that's because I don't know much about them.

It's one of those system traps they liked to talk about: the industry is in decline, so the good people leave.

> The industry is outdated as its "insights" are relatively common knowledge among F500 company executives.

Do you have any examples?

Product portfolio management was a big strategy BCG employed in the 80s and 90s. I think most companies now know how to assess products to invest in, harvest, or cull.

A lot of basic statistical analysis, including regression of sales data, is no longer solely the domain of consultants. Similarly, cost level analysis (unit costs, profitability levers, margin analysis) is often done in-house via Financial Planning & Analysis teams.

The easiest sign of this is that many ex-consultants work in F500 companies so they bring their prior knowledge in-house.

A lot has changed in the past few years in management consulting. BCG Digital is the fastest growing party of the org. You have MBAs working along side with Engineers, CS PhDs, system architects. We're hiring former CERN staff, MIT (not Sloan) grads.

The Amazon apocalypse in retail made Global F2000 clients realize they needed to change how they treated tech. They wanted to buy, we found a way to sell it.

Great to hear about these changes! My observation is that strategy plays out in years and requires customer/industry insights that usually comes only from a lot of experimentation and error. The very nature of consulting, where you flit from case to case (even if in the same industry), seldom seeing what failed and why, makes me think they are unlikely to have this kind of deep customer/industry insight.

Why does it seem like McKinsey is impervious from their pseudoscience mistakes? This is one of many instances where McKinsey acted in bad faith, and flat out lied about their numbers. If any other business did that, they’d have a tarnished reputation. As an “elite” consulting firm, shouldn’t that be the nail in their coffin?

military industrial complex i think

No, that's why Boeing, Raytheon, et al are impervious to their mistakes. McK is impervious because they contract in such a way as to never actually have to deliver anything. A sea wolf sub is a tangible deliverable. You can tell it's not fit for purpose in a physical fashion. You can always BS around the kinds of soft deliverables that are specialties of McK.

I get the impression if you're at McKinsey you're basically a "made man" and are impervious to most normal professional consequences for failure, provided that failure does not significantly reduce billing. Also the people who hire you are in the same situation. So things like this are inevitable.

they all went to harvard so obviously if you question them you’re in the wrong

McKinsey is often hired to provide 'intellectual firepower' behind a proposed change that a high-level manager already wants to make. As such, McKinsey isn't really coming up with any original idea, so their past 'proposals' are somewhat irrelevant.

This is my experience working with McKinsey. The consultants on our team were incredibly smart and incredibly hard working, but internal politics and selling ideas to stakeholders is a huge part of their value.

It carries a lot of weight to say you worked with McKinsey on a proposal.

I don’t understand this. Isn’t it common knowledge that hiring McKinsey or other consultants is often to do what you wanted while off loading the blame on the consultants? But because it’s a known reason for consultants shouldn’t it stop working? Why do people humor it and go along with the farce? Even then, even if they weren’t just cover, the person who hired them and let them do something poorly thought out or wrong should have responsibility.

"Outside experts" are a way for a so-called managerial class to signal that they are "taking action" while offloading negative outcomes and any accountability to firms like McKinsey via blame-shifting. The voting public is not exactly allowed to weigh in on whether high-priced consultants should be engaged.

It's like "third party investigation."

In other words, BS with no teeth.

But how is it tolerated if that’s a common purpose? Like the cat should be out of the bag by now on that tactic.

Pretty sure they're paid to provide bad numbers and take the fall for the results. New York wanted to say it was doing something and it was successful, McKinsey helped them do it, and when someone bothered enough to fact check and they got caught McKinsey now takes most of the heat.

This will eventually lead to The Whorf Effect[1]. Nice work while they can get it though.

1: https://tvtropes.org/pmwiki/pmwiki.php/Main/TheWorfEffect

Because they are often there to tell someone what they want to hear, and give them a report to cover that person’s backside. No one ever got fired for following McKinsey, even if McKinsey was just an echo chamber.

When I see articles like this I always think about a few things:

1) Hiring a consulting firm is a great way to get the heat off of your own back. It's amazing this works too, because, at the end of the day, the consultants don't have control! They just make recommendations that you can choose to accept or not. NYC was in full control the entire time but here they get to shift the blame to a 3rd party without any actual control. What a great deal as a manager to remove culpability.

2) It's amazing how much everyone hates consultants and immediately begin to pile on them in these cases without any consideration for the culpability of those who took the recommendations. It makes #1 that much stronger!

3) Ultimately whenever I see this I place the blame squarely on the shoulders of the people who took the recommendations and implemented them. Don't let them (the managers of NYC jails) shift the blame to an out group you're conditioned to hate when the entire locus of control is on the managers!!!

You call McKinsey when you have a problem to be solved. And, you lose the opportunity to observe the contrapositive. There are many documented cases of: call McKinsey -> things get worse, but in most cases (personal opinion) the outcome would have been significantly more dire had McKinsey’s proffered solution not been implemented. It’s difficult in the public sector, but most contracts these days have kpi bonus/claw-back clauses.

Simply put, they are aware of their biases, they try and adjust contractually to align, they have smart people (because they can afford to be picky) who have a tremendous work ethic. Just don’t let them anywhere near Swiss Airways! [1]

[1] https://tbkconsult.com/did-mckinsey-company-kill-swissair/

Flip a coin.

Heads we gain credit for giving you an amazing strategy, tails you lose because you don't know how to implement our amazing strategy.

It's a Heads I Win Tails You Lose situation.

Nobody gets enduringly rich being a roulette player.

But it's surprising how lucrative it can be to set yourself up as a Roulette Coach.

That really is the quote of the day. Well played.

> the outcome would have been significantly more dire had McKinsey’s proffered solution not been implemented

It's the classic can't-be-wrong-no-matter-what-happens situation. Since there is no practical way to re-run the experiment, they can always claim "at least we made it less bad." And the clients are prone to buy into it also, because it makes them look like they didn't make a bad decision to engage the consultants.

Same thing frequently seen with politicians and their supporters.

The one time I worked with McKinsey, they were "OK." The partner and one of the two associates were sharp. (The other mostly just arrogant.) On the one hand, they didn't come to any conclusion markedly different from what we (the product people) had already concluded.

That said, I'm sure they gave upper management some validation that we weren't just drinking our own Koolaid. And they gave business planning staff a fancy spreadsheet model to play with--which helped keep said staff out of our hair.

Ultimately, the product was fairly successful although the company couldn't really overcome a bad strategic position.

I'm sure they have smart people, but they're not that exceptional imo. Otherwise mid-way through they'd have surely realized the impossibility of the situation, notified the city that the original objectives are unattainable and all presentations, documentation and suggestions clearly stated that their new goal is not to "stem jail violence" but lessen the "contrapositive" (out-of-control violence). I bet none of that happened, not because McK doesn't have smart people, but because they're often not really trying to "solve problems".

Often, I don't think you hire McKinsey to solve your problems - you hire them when your problems are already out of control and you need to deflect the blame. They give it their best shot, if they turn it around then they're heroes, if not, you can blame them and they still get paid.

Suppose they did come to that conclusion:

(1) Partners would gladly communicate that back—the payoff to keeping one gig on track is far less valuable than avoiding public scrutiny

(2) If they did ask to move the goalposts, I suspect the city would have been amenable

Doubling down to bet on moonshots is not McKinsey’s MO. What are managing consultants good for? Starbucks on two corners of the intersection, breakfast menu at your favorite fast food eatery, and many (MANY) restructuring plans (rightsizing initiatives, aka RIFs)

Serious question: does McKinsey have a track record of success and what we see in the news is a small number of failures; or are they just really good at selling the C-Suite?

Mayor de Blasio's deputy, part of the group that decided to hire McKinsey in the first place, is now a senior advisor there... Maybe hiring decisions like that have something to do with it?

> The mayor’s office denied that McKinsey was hired partly to provide political or legal cover, as did Shorris, who is now a senior adviser to McKinsey and teaches at Princeton University.

Excellent question, and I'll offer you a frustrating answer that splits the difference.

Because McKinsey works in so many areas, it has a huge portfolio of outcomes. There's not a lot of public visibility into what each exact outcome might be. So the firm (and others like it) are able to benefit from this opacity.

To wit: top consulting firms are able to present prospective clients with a recap of their best engagements and wins. Is that representative? Cherry picked? No one ever knows.

There is definitely a level of networking effects and downright cronyism.

However one thing that is less talked about is that external consultants are extremely useful to implement unpopular decisions or to 'settle' disputed decisions.

If investors appoint a new CEO and he needs to implement something unpopular like fire people, it is much easier to get the whole board behind the decision if an external consultancy "analizes" the issue and proposes measures (usually aligned with the CEO's direction).

The same thing happens with 'factions' of the board if some people are behind a proposal but are being blocked be another 'faction', an external consultancy can act as a arbiter (usually in the direction of those who hired them).

A useful consequence is that in terms of accountability you can always take cover behind the recommendation of the subject matter expert consultants.

All that said there are definitely a lot of bright people with insightful knowledge in that field. My point is that consultancy as a business also ends up serving a less glamorous purpose.

Even if you're not a fan of management consulting I think giving The Lords of Strategy by Walter Kiechel a read is worthwhile to understanding why they are such a big part of our world. It gives a good modern history of the profession and how they made such a profound impact on the business world.

I think ultimately what happened was most of what made them famous in the 60s, 70s, and 80s has largely become standard business practice. With the low hanging fruit gone they've moved onto laundering accountability and/or very expensive side-steps of corporate bureaucracy.

I know Bain consulting has an internal “benchmark”. It tracks the stock performance of the companies that they consult for and compare that to eg sp500.

They showed this during a recruiting event once.

> They showed this during a recruiting event once.

so it must be true !

Sarcasm apart, selling to young people the dreams is probably their 2nd most profitable activity (after selling to C-level)

Well. They were at least keeping track of it to be able to show it to youngsters :)

I’m happy I didn’t bite though. Friends of me did and I don’t envy the 80 hour weeks they worked.

I work for BCG. It’s like McKinsey but nerdier (and maybe with more scruples).

Most of the time, we’re explicitly hired to keep things quiet. We rarely advertise clients, much less engagement outcomes.

But be sure most revenues come from long lasting relationships. In some cases, decades old relationships. And unlike what some commenter said, revenues are growing double digits % YoY, despite BCG being over 50yo (McKinsey is almost 100yo)

So I guess MC delivers at least for those singing the check.

Thought this was BS but wow. And likely without M&A.

“From 2009 to 2019, BCG’s global sales grew from $2.75 billion to $8.5 billion, and its workforce expanded from 6,900 to 21,000 employees worldwide, tripling in size. “ https://www.bcg.com/en-us/press/12march2020-bcg-revenues-rea...

I'm no fan of McKinsey but the story told in this article seemed very incurious about some essential questions. Like, what was Restart, in terms of specific policy changes? What was the motivation or rationale behind it? Was it just about sorting inmates based on the HUB algorithm?

This happens a lot when I'm reading ProPublica. It's fascinating while I'm reading it, but at the end I'm left wondering what exactly just happened, and whether I got duped by sophisticated outrage porn. They look for dysfunction with tunnel vision to the detriment of coherence and context.

In 90% of cases, management consultants' job is to waste time and trick people into thinking something will change. Doing so allows management to avoid addressing the issues AND to lie and say they will/are. I've seen that happen twice in finance, once in software and 3 times in engineering.

McKinsey seem to have done that extremely well in this case. They allowed the jail to continue running, violence to continue, no extra funding was used and the federal regulator was assuaged. A new mayor avoided a costly, expensive, divisive, problem from a predecessor.

27.5m is cheap for that. That's why the mayor will hire them again next year.

> Among the issues that plagued the project: McKinsey, which had never before advised a jail or prison system, made data errors that further undercut the results it reported from Restart units.

This makes no sense, right? Who would ever choose to spend this money. Even if you are as cynical as possible about the intelligence of NYC public servants, they would never choose to spend money in this way.

Whenever I see something like this, I ask "where did the $27.5m go?" It didn't just enter a void called McKinsey; it was bonused out to people and given to subcontractors. And IME, whenever it makes no sense where public money went when judged through the lens of the good of the people, it ends up making a lot of sense when judged through the lens of paying off special interests and political allies.

Someone pointed out elsewhere in the thread: the guy who hired McKinsey now got a cushy senior advisor job at McKinsey that doesn't even impact his full time teaching duties.

As a consultant with a reputation for actually getting real results and delighting my clients, firms like McKinsey whose reputation is built on fake hype make me sick.

Why would you hire a bunch of generalists who are probably less informed in your sector than your own staff and lack any track record of building great companies? What a waste! Go hire someone who's proven themselves instead. Maybe a champion from your competitor, a hero from the open source community, a promising young startup who's running circles around you.

Some quotes from the article:

- Despite its lack of corrections experience, McKinsey won the contract.

- As they formulated a reform plan, the consultants did not solicit the views of inmates, clinic staff or others with direct insights into drivers of violence.

- The city’s bill from McKinsey would include $5.5 million for data analytics... These tools, however, proved I'll-suited

- Officials discovered coding errors in spreadsheets used to collect violence data from Restart units. The flaws were significant.

If you're going to hire a big firm like this because you think they bring reputation and prestige, at least tie a portion of their remuneration to performance outcomes.

What I keep hearing these firms are brought in for purely political reasons,

when management wants something done but has to offload the responsibility to some external brand,

so in case things go south they can shift the blame. Seems to work in this case.

For another $27.5 M McKinsey will tell them why violence soared. An intern and one first year hire will work full time--for a whole month on that.

At risk of being a bit trite and derivative... [Management] "Consulting Firm" are the key words here.

My hope is that enough of these exposes and the prestige of working at McKinsey will be akin to having worked at Enron or a WorldCom i.e. it becomes a scarlet letter instead of an elite marker.

The thing that baffles me is not that the majority of McKinsey consultants would go along with it but there are almost zero whistleblowers. I guess it shows the power of McKinsey's narrative and the strength of the McKinsey alumni (read: mafia) to blacklist the whistleblower.

OP: this should be updated to say (2019), since this article is almost a year old

MC’s no.1 source of work is it’s global network of former-MC alumni

This article from The Economist, aligns with my experience:

TLDR: Thinking ants working hard to sprinkle consultorial fairy-dust.

https://archive.is/Lj9Wv#selection-757.83-757.107

Why would anyone hire a company like McKinsey to solve problems that they have no experience with? The people running the jail seem like a better starting point than a team who has never run or even seen a jail.

We really need to have a collective discussion on what "justice" really is.

Most people don't care about prison reform because it's a place for bad people who did bad things, and they don't deserve good things.

While that attitude is fucked up on the morality of it alone, it also ends up being pro-crime, as it promotes a system that is designed to create more criminals.

"We"? I think a lot of the Scandiwegian countries already decided that rehabilitation is the best course. You may agree/disagree with that, I'm just pointing out that the discussion has been had (and is essentially over) in quite a few places.

EDIT: Also, I absolutely agree, fwiw. If the discussion hasn't been had in your country, please do push for it.

Sorry, I pulled an americanism and had the US primarily in mind :-). Scandiwegia is a lovely exception and should be rightfully proud of that.

No worries :).

Wtf is Scandiwegia?

https://en.wiktionary.org/wiki/Scandiwegian

First time I've heard of it as well. I like it.

Last I checked Norwegia is part of Scandinavia (??)

(I mean Norway)

Well it’s not surprising. Prison is basically a school for criminals on how to become even better at being criminals. Our Scandinavian politicians are almost solely focused on the number off how likely a person is to commit a crime after a prison sentence has been fulfilled, and our stats say that criminals become worse, so they shorten the prison sentence more and more.

The prison system is broken because hanging around with morally broken people is not good for anyone.

Let me point out that prison sentences for minor drug offenses are quite rare so we don’t have much of that particular problem.

The War on Drugs was literally designed to create more criminals -- and only in that has it been successful.

No, it was designed to reduce crime and drug availability. Nobody would design a program with the goal of creating more crime.

There's plenty of evidence out there that refutes your assumption (happy to provide it if you're interested).

It's not that they wanted more crime -- they wanted criminalized behavior to wield as a weapon against people of color (and hippies, in Nixon's case).

If it was ever about reducing harm from drugs there's plenty of better ways to do that, don't you think?

It's extremely hard to understand how things are on the inside without direct experience. This makes it difficult to even discuss the topic, even if you find people have the empathy for it. There are also too many vested commercial interests in keeping the status quo.

That prisons are or should be about justice in the first place seems worthy of skepticism. It seems to me prisons have many possible uses. Rehabilitation is a popular one, as is justice/retribution/revenge/punishment/deterrent (these all seem like different perspectives on the same concept.) These two broad motivations for prisons, rehabilitation or retribution, often dominate discussions about prisons, but what of the simple utility in keeping dangerous people away from those they might want to harm? A prison need not be inherently punishing to achieve this end, nor does it necessarily need to be rehabilitating (though rehabilitation would help keep costs low in the long run.)

Revenge should explicitly not be part of the system. Deterrence and public safety should be the key drivers.

"Rehabilitation" has a nice ring to it, but the only institutional approach for that is education. It would be cheaper to pay for an apartment/tuition/food than to house someone in a prison: https://www.marketplace.org/2017/05/19/how-much-does-it-cost...

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