The New Statesman Profile - McKinsey Man

William Hague and Archie Norman are graduates. They know all about networks but will that help the T

Management theory can suffer a bad name. Some Tories are ruing their party's apparent headlong dash into the very worst of business gurudom. There are those hateful weekends in Eastbourne, those dreaded sessions to communicate with those lurking, brooding inner selves. But what frustrates most of all is the apparent failure of William Hague to translate the undoubted excellence of his credentials into raw political capital. Hague's career pedigree is impeccable: comprehensive school, a first from Oxford, top-notch MBA, blue-chip firm (Shell) and, in starring role, a spell with business's super-group, McKinsey and Co. McKinsey, self-styled "most influential consulting firm in the world" and recent publisher of a study on British productivity, brings zest to all it touches. All the Tories need to do is wait. The magic will work for them.

It won't. Hague's tango with the gurus is, currently, his greatest personal weakness. McKinsey, for all its excellence, is probably as poor a background for mass electoral politics as a lifelong fellowship at All Souls, or, sad to say, a career at the Bank of England from graduate trainee to governor.

To see why, we should let a rare shaft of light illuminate McKinsey, the hidden moving spirits of international business. They are statesmen, but not as we know them. The firm has the usual trappings of the burgeoning multinational: gilded offices, staff with crisp looks, a long-thriving business supplying expertise for which clients can pay thousands of pounds per day, per specialist. They re-tool, re-strategise, re-orientate. But this is not any management consultancy: it is a network that has gone far to catch the very best of the younger, most dedicated, most mobile folk in every leading nation across the business universe. They come from Oxbridge, Harvard, Princeton, Chicago; anywhere, as the firm says, where there are "talent pools".

McKinsey faces light up when the firm is described as the new colonial civil service staffed by those with the very bluest of new global bloodlines: a new nobility for a new world.

Their achievements are indeed awesome. They bestride boardrooms from the Yucatan to Mandalay. The extended family is powerful: former staff, or alumni, as they are known, include Adair Turner of the CBI and Howard Davies, former deputy governor of the Bank of England and now head of the Financial Services Authority, the nation's financial regulator. Even McKinsey's own often self-effacing on-line service can't resist quoting Forbes: McKinsey, it proclaims, is "a legend with considerable substance".

The uniquely-bound twin networks - current employees and loyal ex-employees - make this plausible indeed. For those not destined for partnership, the firm brings not the black bin liners and Lord of the Flies savagery well documented in investment banking: here instead for the less fortunate comes the discreet tap on the shoulder, the quiet word, the gradual propulsion towards the exits. The firm admits that 20 per cent of its associates, the standard entry rung, either leave voluntarily or vanish in this way; as the pyramid's walls wend upwards, the proportion of the disappeared swells to 40, 60, finally 90 per cent. But they stay part of the family. Thus reaffirmed, many of the emigres - enforced or not - shrug off any hankerings and take their place regardless among the world's business elites. Former hands now head 10 per cent of the world's largest firms. They become company directors, head advertising agencies and charities. Others, as we know, occupy the most auspicious of British public positions, and still speak glowingly of the firm. Adair Turner "thoroughly enjoyed it". The Tory deputy chairman, Archie Norman, described his time as "a tremendous education". The bonds die hard. Every few months McKinsey people are reaffirmed in who they are by the reunion, where some fun is had, a few stories exchanged, the personal directory reinvigorated. Their world is ordered, self-contained; they are amiable - though a little too much for some, as if by numbers, by formula, by flow diagram. As the House of Lords nears its end, the McKinsey castes are the new aristocrats: discreet and mannered mandarins of business civilisation.

They eat at Conran, not La Gavroche, wear Austin Reed, not Savile Row; clients permitting, they go home early on a Friday. In the main they work backbreaking schedules, between 60 and 100 hours a week and then, by repute, spend thousands to travel on holiday where, once again, they work backbreaking schedules, moving from 6am jogging to a morning's para-skiing and an afternoon's flying lesson. Then back to work, preferably for a Sunday 9am confab. The firm, like Palmerston's Britain, prospers steadily.

But are they any good? Well, possibly. Will they help the Tories? Almost certainly not. McKinsey is, alas, no civil service, no dedicated public charity at all: few government departments could afford more than a fragment of services for the firm's - quite fabulous - fees. Under the refinement, a well-oiled machine rolls: "there aren't many stupid people here" one insider says; it is "a very relentless environment". Once hired, they are deployed instantly back into the heart of capitalism, straight into a morning strategy meeting in Paris, flying deftly for an afternoon's brainstorming in Boston. The people that do these things are sensible, wholesome old dependables: folks who arrive at your office, make friends, leave no one out, produce the report, make you feel great - and, in David Niven's phrase, collect cheque, go home.

Occasionally the wheels do fall off. The firm, disconcertingly for all concerned, boldly forecast continued fast growth for Brazil early this year. Client studies go wrong. Theories dispensed can often have the look of those breaking new intellectual territory, but the insight can also verge on the absurdly obvious (one recent breakthrough was "The Triple Horizon Approach", in which go-ahead firms would both stick to core activities and try a few new things as well). But for the most part, all is well. The universe is calm. The clients are happy. The fees roll in.

And then there are the Tories.

The Tories should forget McKinsey ever existed. For them reality is a party that, beyond even the elephantine horrors of its recent past, is now, to any casual inquirer, a place where the phones are not answered, no one seems to know where anyone is, where the overriding impression is a little like a small new marketing firm where at least one of the partners is bankrupting the business on expenses alone, where no one comes back from lunch, the bank manager is hovering ever closer and the more savvy senior staff are preparing their escape capsules for immediate flight. Then there are those haunting pictures of frontbenchers without jackets or even, on occasions, ties, wishing doubtless to appear approachable, like the friends next door, but instead resembling those they marginalised so mercilessly in power.

Stare into Francis Maude's pained features the next time he takes a free kick on the economy: sitting uneasily in shirt-sleeves, every furrow and grimace shows how unhappy he is. Before the election he was an ascendant investment banker. Now here he is, with these people, having to learn that, while business may be partly about rationalism, high politics is far more, as Francois Mitterand put it, a matter of despair with human existence.

He is the victim of Tory desperation: a rushed imbibing of the very worst of management medicine, a kind of bin-end cousin of the ethic of Jermyn Street. As Baron Frankenstein found, the experiments do seem to be going really quite horribly badly.

In this set-up a McKinsey ethic of collegial paradise is as apposite as a Nobel prize for flower-arranging in The Day of the Triffids. The shirt-sleeves are indeed a ludicrous attempt to suggest neighbourly mateyness; the Tories would command greater respect if each shadow minister appeared in full dress military uniform. As for the higher arts of management excellence, even McKinsey's finest willingly volunteer that their culture of harmonised perfection does not extend far beyond the boardroom. More ominously, some of the things Hague learnt may even do him harm, most of all a trust in the motives of those around him. Nothing will work where he is now, they say; nothing will happen when it is promised.

Other, earthier skills are needed. Archie Norman himself now expresses caution about McKinsey's relevance to party politics. Britain's opposition desperately needs a restoration of real politics, based not on celestial international pro-activity, but grittier issues such as weeding out the duds, crushing the militants, banging heads, getting through to next week. It needs a return of the jackets and suits, and of the sharp street sense that is the X-ingredient in political life.

While Hague bleeds, however, the McKinsey tribe will calmly continue with their own "project", stretching beyond the dreams even of the most fervent British political zealot: an ongoing expansion, spreading the gospel, strengthening the network, reprocessing the next strategic plan, the next merger, the next rebranding. As for Hague, he's out there, on his own, in no-man's land. McKinsey's diaspora indeed contains many chief executives, company directors, corporate presidents. But there has never been a head of state, never even a head of government. If Hague makes it, he will make not just political, but business history. And if he doesn't - well there's always that next reunion, to catch up on happier times.

This article first appeared in the 13 November 1998 issue of the New Statesman, Why gays become politicians