PR for dummies: Why McKinsey spin doctors get a ‘fail’ for their statement to SA

EDINBURGH — McKinsey spin doctors have failed to convince South African taxpayers that the global consultancy is an innocent in the Gupta-Zuma game of state capture. Like many public relations practitioners ensconced in plush corporate officers, McKinsey corporate communications consultants don’t seem to understand that there has been a massive shift beneath their feet. The world is no longer what it was when they honed their public relations skills at colleges and universities. The social media has eroded the mainstream media as intermediary between the powerful and communities, in so doing eliminating a platform for public relations messages that can be carefully controlled. Media statements in which spin doctors aim to frame messages and tell us what to think by planting words to subtly brainwash us don’t seem to be working anymore as the previously voiceless find their voices through Twitter and other channels. As journalists understand this, they are increasingly picking apart statements that were previously served up as another side of the story – because it is what their audiences expect. This article, by Pauli van Wyk of Daily Maverick, is a case in point. It is a message to McKinsey to rethink their strategy from massaging the messaging to taking some decisive and tough steps to clean up its reputation in earnest. – Jackie Cameron

By Pauli van Wyk*

McKinsey’s “investigation” found nothing more to say about its dealings with Eskom and the Gupta-linked company Trillian than what the firm has already admitted to. Or what South Africans pieced together months ago thanks to whistle-blowers, civil society and journalists. In fact, neither the word “fees” nor the figure “R9.4-billion” in projected work for Eskom were mentioned in the global consulting giant’s lengthy statement on Tuesday. And yet, McKinsey said – they’ll pay back the money.

The most curious choice of words McKinsey used in its purported mea culpa is how the firm worked “alongside” Trillian to devise a turnaround strategy for Eskom since late 2015. “Alongside” has been used six times in McKinsey’s five-page statement.

An Eskom sign stands outside the company’s headquarters at Megawatt Park in Sandton, near Johannesburg. Photographer: Waldo Swiegers/Bloomberg

“In our eagerness to be responsive to the challenges Eskom faced, we mobilised our teams too quickly and began working alongside employees from Trillian in late 2015, before we later rejected a partnership with them in March 2016,” the statement said.

It is an astounding assertion. McKinsey wants us to believe the multinational with a R109-billion-a-year reputation was so inspired by their mission to drag Eskom into the light that it jumped in bed with a company everyone else by then thought was dodgy – without a contract and without the slightest idea of its ownership.

And in bed with Trillian McKinsey did jump, despite their best protestations.

A spreadsheet drafted in December 2015 by representatives of McKinsey and Trillian shows the companies anticipated extracting R9.4-billion in consulting fees from Eskom over the next four years. Together, they divvied up the spoils, including from the contentious nuclear build programme. Eskom steering committee minutes of the McKinsey project also note how the firm took ownership of developing skills at Trillian’s behest. One set of these minutes, dated 9 February 2016, even described Trillian as McKinsey’s BEE partner. Not one McKinsey official objected to this label at the time. All of this happened while McKinsey dithered on their due diligence on Trillian.

The amount of R9.4-billion is eye-watering, in the words of Corruption Watch’s David Lewis, who is set to lay criminal charges against McKinsey with the United States Department of Justice. And he is not alone in this assertion. A peer review by Oliver Wyman Marsh at the behest of Eskom found the fees charged by McKinsey were exorbitant and most probably did not match the work the company, “alongside” Trillian, conducted.

You will not read one word of this in McKinsey’s statement.

Another fact you will struggle to find is what senior partner Vikas Sagar actually did wrong and why he has “decided to leave our firm”.

Sagar wrote a letter to Eskom’s suspended CFO Anoj Singh dated 9 February 2016 labelling Trillian as a subcontractor of McKinsey. The letter was “inaccurately drafted and insufficiently reviewed”, McKinsey’s statement said.

It continued: “We found no evidence of bad faith in the drafting of this letter.”

Former McKinsey employee Vikas Sagar

So, dear McKinsey, remind us again why Sagar is leaving?

Ditto for unnamed “others” that “have been sanctioned or have left the firm”. Who are these “others”, what “sanction” are we talking about and what did they do to deserve being “sanctioned”?

But perhaps the most astounding fact is that McKinsey seemingly wants us to believe that them working “alongside” Trillian had not, on the face of it, legitimised Eskom’s payment of more than R500-million to Trillian. Under the US Foreign Corrupt Practices Act, McKinsey has a duty to ensure that its dealings do not result in or enable questionable money flows. If Corruption Watch has its way, McKinsey might have to answer these questions in court.

McKinsey seems to have fallen into the KPMG trap: They were not frank with South Africans and tried to placate us with a flimsy apology that will not stand the test of interrogation. DM