YouSaid · the spoken record

Duff McDonald

lines on the record: 99
first: 2017-07-07
most recent: 2017-07-07
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Right. So, what two things happened from that? One is average CEO pay was not 10 million at the time, but it quickly converged on 10 million.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“I talked about that in the Golden Passport too as one of The greatest examples of unintended consequences ever. They tried to put a cap on CEO pay”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“And you have compensation committees made up of fellow CEOs who think that they are worth 50 million a year. So therefore, why shouldn't in this guy be? And I call it in the golden passport. We may have to cut this for the sensors. One of the most intricately designed circle jerks in business history.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“We're 25 to 1. In the double digits. And one study that they did found that Executive over some trailing period, five years or something, executive pay had risen more slowly than worker pay. And suddenly that study was in very high demand. corporate boards and that led to the Harvard business review publishing an annual study and there you get your perpetual motion machine being built”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Goldman, I think, would be second. Maybe not. It might be like GE or something, but McKinsey's number one. And they hire them because the case method. Is the perfect education and preparation for being a consultant. You're supposed to stand up in front of a group of people and talk about something that you don't really know a lot about and sound convincing.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Specific, we can have them learn on the client's dime. Right, so why wait till they retire? So McKenzie was one of the first companies to really hire out of HBS with in earnest. And ever since then has been in some there is no company that has hired more HBS grads than McKinsey.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Marvin Bauer, who was the longtime spiritual godfather and leader of McKinsey after James McKinsey died, was the one who had the insight early on consulting firms hired experienced professionals. So if you're an airline company and you want advice, they had like a retired airline CEO on the staff and you'd ask him because he knew what he was talking about. And Bauer, his contemporaries in the maybe 40s or so were like, wait a second, why don't these MBA schools are popping up all over the place? Why don't we hire them? They're cheaper, way cheaper. We can mold them into our own image and create this army of whatever they are.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“I say in the book, no CEO is an idiot for hiring them for all the reasons I just listed. Why wouldn't you? Sure. Somebody else's money. But yeah, shareholders. Unless it's one of those situations where you need the hiring of McKinsey to signal that you're serious about your reorganization or your cost cutting and you want the market to know that you really mean it because you're going to spend the money and then you know.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“No, you know, the companies that know what they're doing. Or sort of know what their plan is. Yeah, they don't need them as much. Except if you want to use them as in their most modern incarnation, which is the great rationalizers. They are the people you bring in to cut costs so that you can point your finger and say, I didn't want to do this. McKen”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“They have insight because they're talking to everybody else. So if you're the only one who's not talking to them, you're the only one who's not getting the benefit of that exposure bad advice. Right”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“If you want to have this, McKinsey works for everybody, right? So if you want the benefit of that knowledge, I'm sure they don't go around sharing one client's stuff with another client, right? That would be the death null.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“That's funny. If you are the CEO and you aren't sure what to do, you're not going to ask your number two, or at least you're not going to display your level of uncertainty. They are a great use of corporate money for personal decision-making help. If you are the CEO of a company who needs to get rid of your number two because you're feeling him getting a little close to you, they are a wonderfully effective way of having a knife stuck in their back that does not have your fingerprints on it. You can restructure that person out with McKinsey's advice. If you've made a decision, you need to get it by your board. McKinsey told us to do it.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a great question. I make that point in the book that there are 10 reasons to hire McKinsey. Only one of them is the advice that they give you.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, I talk about that in the book. That's probably the most disgusting piece of consulting I came across for McKee. Really? Yeah, for McKinsey.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“In the firm I talk about in the fallout from the crisis, McKinsey was advising almost every single institution that collapsed. So back to the secret part. We don't know what their advice was, but it certainly wasn't going in the direction of less not more.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“They hired MBAs, mostly Harvard MBAs, and had McKinsey consultants write fawning articles and books like The War for Talent and stuff about their off-balance sheet accounting, talking about how this new asset light company was the company of the future, and they were cheerleading all the way.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“And then jail. That's perfect. And while he was at Enron, he continued to use McKinsey to the tune of 10 million a year in fees.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“They never claim credit for it, right? Because no CEO wants to hire them, say, tell me to do acquisition A or B. And then they do A and McKinsey's over there saying that was our idea, then that doesn't happen. But the trade-off is that McKinsey says we will take no credit, but we will also take no blame.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. Yeah. So these guys are behind the scenes consultants who I make a point in the book that they what they do is they sell credit to their clients for their ideas, right? So McKinsey? Say that again?”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I got mocked from a couple quarters for that saying it's no secret to which I responded we're trying to sell books.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's the point. It's like, I'm not saying everyone out of there is evil and everyone out of there doesn't know what they're doing. They're clearly very good at teaching people the things they need to do to get to the top. But as Henry Mittsberg at McGill says, getting to the top is what matters to the student and the school when it's selling itself to prospective MBA students. What matters to the rest of us is what they do once they're there. And in that group, Diamond clearly is a standout.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and that was when in October of years, it was like, but it was still in Lehman frenzy. Right. A lot of people ran a lot of hate down on the guy as their favorite boogeyman from the financial crisis, but as a manager. And as a, you know, just from what I know, I'm as a person and stuff, like, I couldn't be more impressed. A couple of people wrote online that how do I square a positive biography of Jamie Diamond with a searing critique of Harvard Business School. And it's simple. Hey, not every...”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Or buy when the streets are running with blood or whatever it is. It's, you know, that was a stated intention long before they did so.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“And also, you know, and their next derivative snafu, the London whale, was after, and I think it might be out of a little naivete on my part, but what Jamie said and what Sandy Weil had said before him is their focus on the fortress balance sheet. To be able to”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“And we're a step behind. Some of the other players like Merrill and so yeah there was luck there but at the same time I had numerous people tell me from inside the company that Jamie and the people who work with him had sort of suddenly feeling on alert a little before Everyone else”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, one of the things that I criticize the case method of teaching at HBS for is that they allow corporate executives to claim foresight when it was just circumstance and luck. I think in last man standing, I talk about the fact that they were just, they were trying to get the pieces of the conveyor belt all moving at the right time.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Readers of the book will see that I was impressed with him. He's one of the most charismatic CEOs I've ever met. He clearly endears people to him and loyalty is one of his strong suits. I think his management of JP Morgan chased pretty much stands for itself. I know that you haven't always, you know, you've been a critic in the past, but as far as just if your job is managed. Not so much a”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“I think I say in the book that it may be the most powerful alumni network that ever has been, right? They have significant representation among the world's wealthiest and among leadership in the corporate world. Overseas, they are in more government positions because people tend to send their kids to the states to get that stamp of credibility.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“I can answer that question with a quote that's in the book. I can't remember who said it, so I apologize to its source now. But they said, if you want your grandparents to be impressed, go to Harvard Business School. If you want your grandkids to be impressed, go to Stanford.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Of the Yeah, and Hank Paulson, you know, credited with stabilizing a clearly precarious situation, but that was not his only motivation at the time. He was motivated to save Goldman Sachs. He was motivated to, there were sweetheart deals with all over the place. Again, was it their fault? We can't really blame anyone, but they certainly weren't without fault.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“So, John Thane, John Paulson. So you have it like in no way was I like, it's their fault, but it's like, wait a second, when we're making a list of people to figure out how to not do this again, I don't think you have earned the right to at the head of that line. You were at the head of it leading into this thing.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and in the book, what I took issue with was Dean J. Light in the immediate aftermath of the crisis saying we don't want to spend time looking to fix blame. That's not interesting, but we must be part of the solution. And if you look at the list of HBS grads who are in positions of authority in the lead up to the crisis, you have George W. Bush. You have Christopher Cox. You have Hank Paulson. You have Jamie Diamond. You have...”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so I wouldn't want to a couple of reviewers have said that I blame the recent financial crisis on them I did not. I don't”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“From the get go, and they confuse all sorts of other inputs for their essential correctness and rightness and then make decisions based on that. And it's like they've confused the ability to make money with wisdom.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that one of the things that they have consistently failed to do is to teach their students that hierarchy and success does not equal and does not mean that you are wise. And part of that has to do with the fact that you can't pitch yourself as a graduate school of Harvard where your mission is to make boatloads of money. So what they sell themselves as is educating enlightened leaders and these enlightened leaders are convinced of their own destiny as leaders.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. So, in that regard, they are, I think the FT came out with a survey, its latest survey of the 5,000 largest companies in the world or the thousand or something. MBAs were not dominant as a percentage of CEOs, but of those CEOs that were MBAs, Harvard was totally dominant. They had more than twice as many as the closest one, which I think was Stanford or Nietzsche. So they have a long history of accelerating people's climb to the top of whatever greasy pole they're climbing.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Before I looked into it, I would have, I think if you'd asked me, I would have guessed that HBS was dominant in both business and government leadership positions. One of the things that's really interesting about them as opposed to, say, Harvard Law School or other places is there are precious few Harvard MBAs that ever have a career in government. You know, they go in at the top like Hank Paulson. Or something like that. But if you look at the top 1,000 people in the federal government, you probably find five Harvard MBAs. Yeah. So they are not part of the governing elite, except if you think that business that corporations are essentially ruling this country.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a very different structure. So the first time I did that, it nearly broke my mind. I was like, I don't even know. How to take this word file and start cutting and the sort of just manual challenge was sort of terrifying. And so I do do research at first organization than writing. But by the time you're writing is when you know the most about this subject, so you do go back and look into things that you stumble on at that point in the process.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm more of the former where I sort of try to front load the research. I found through the three books that the hardest part of writing a book, at least for me, is the middle part. Organizing what you know and getting ready to write because reporting, if you enjoy it and have whatever capability, it's not that hard. You're just talking to people. And you're doing a thousand”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“And the shocker is that McKinsey came around and then you get to the third book, Harvard Business School, and that came about just because McKinsey and Harvard have been connected.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“They did they did not at first we used the age old this book is happening anyway thing that we use in magazine journalism you can either”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and in the other direction. So, you know, it's following just sort of my interest. But if you look at the three books, they all sort of follow each other. Jamie Diamond was the first one because I'd had a cover story in New York magazine after the fall of Bear Stearns, which we sold as a book. McKinsey followed that because Jamie himself, whose notoriously anti-consultant, it didn't resonate enough with me at the time that I thought, oh, that's my next book, but enough that it was in the book about Jamie. And my editor said, what about what he said about McKinsey? What do you think? And I looked into it and I was like, I can't believe no one's written a book. I was about to say.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“I basically tend to follow my interest wherever it lands. Maybe I shouldn't say that my. By choice of topic is somewhat random, but after a point in my career got to a point where I could, you know, I knew enough editors that I could get assignments with good story ideas. So it was just about a good story.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Casually, even? Not on the side. Like I was a capable writer, but I don't think I ever once said I want to be a writer. And so back to your question, how did I get into business journalism? It's because to get into journalism,”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. So thank you, publishing industry, for not hiring me and merely hiring me later. And then a friend suggested journalism and I looked into...”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“And while impressed with the quality of the talent and the, you know, they know what they're doing there. It wasn't for me. And I actually tried to get a job in book publishing first and couldn't get hired”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“That's pretty much Exactly. Although I kind of stumped my classmates, I only got one job offer from the Sachs. And apparently, if you get one from Goldman, you're supposed to have gotten one from everybody else, too. But I worked there for two years in corporate finance.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“So he told me to go to a business school. So I did. And I did well enough there and got a job at Goldman Sachs out of undergrad work.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source
“It's funny you should ask. I went to Wharton as an undergraduate a little unwittingly. I was from Toronto and I did not have a sense of Wall Street at the time. I was interested in being a businessman, which is what I told my guidance counselor.”
2017-07-07 · Masters in Business · Duff McDonald: How To Fix the Broken Elite Institutions · IDENTIFIED FROM THE TRANSCRIPT · source