McKinsey-owned Saudi consultancy lead reportedly arrested and beaten

07 January 2019

As pressure continues to mount on the consulting world to justify its intensifying ties to the regime of Saudi Arabia, reports have emerged that the leader of a McKinsey & Company owned firm has been arrested and beaten as a critic of the monarchy. Hani Khoja has been held in detention since the autumn of 2017, just half a year after his firm, Elixir, was purchased by the global consulting giant.

In April 2017, it was confirmed that international strategy consultancy McKinsey & Company had acquired Elixir Creative Solutions, a Saudi Arabian consultancy with expertise in change management and implementation. After the purchase concluded, Elixir’s 140 employees remained based at its offices in Jeddah and the nation’s capital of Riyadh. Elixir continued to operate as a wholly-owned subsidiary of McKinsey, and its two co-founders Sami Alzuhaibi and Hani I. Khoja remained with the company to lead it as co-CEOs, as well as sitting on Elixir’s Board of Directors.

Now, though, Khoja is understood to be in state detention, having been arrested less than a year after the deal took place. Elixir is a leading consulting firm serving clients in Saudi Arabia, and has worked for more than a decade on implementing transformation programmes in Saudi Arabia with private, non-profit and public sector clients across industries – meaning that on multiple occasions it will have performed tasks directly on behalf of the Crown Prince Mohammed bin Salman. Indeed, one of the biggest pulls for McKinsey was Elixir’s work for the Saudi Ministry of Economy and Planning.Hani Khoja - Elixir

While it remains unclear as to what caused relations to sour between the Saudi regime and the co-leader of one of its keystone consulting suppliers, Khoja’s arrest is understood to have occurred during a crack-down by the autocratic government. According to the Wall Street Journal, two people familiar with the matter allege that he has been repeatedly beaten since then.

While Khoja’s arrest was initially on the grounds of supposed ‘corruption’ charges, the sources said he had been subjected to the abuse alongside women's rights activists who are also being held and tortured in captivity. As a result, a number of sources now assert that the situation is not as much about corruption as about the government's attempts to quash criticism of the Crown Prince and his much hyped modernisation programme, which critics have suggested is a PR exercise aimed at deflecting scrutiny for a number of human rights abuses in the Kingdom.

When the Wall Street Journal contacted McKinsey about the story, a spokesman told the publication that as of early 2018, the consultant was no longer a McKinsey employee. However, conflictingly, the statement added that Khoja continues to get paid under his contract, and at the same time suggested McKinsey doesn't know where he is. The company representative also told the Journal in an email, "We have sought information from the authorities. We are anxious to know more and are in regular touch with Mr. Khoja’s family."

Khoja's apparent detention, as well as other incidents in Saudi Arabia like the murder of opposition figure and journalist Jamal Khashoggi, has been heaping pressure on businesses to consider their position in the Kingdom. For now at least, though, the consulting world seems convinced that it has lent too much time and resources toward courting lucrative Saudi contracts to rock the boat now.  Despite growing international condemnation, this was reflected by the involvement of McKinsey, PwC, EY, Deloitte, the Boston Consulting Group, Bain & CompanyOliver Wyman and research company SWFI in the heavily criticised Future Investment Initiative, hosted in Saudi Arabia in October 2018. 

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Accenture's push into the creative sector is an identity crisis

18 April 2019

In its latest push into the creative sector, Accenture Interactive acquired New York and London-based ad agency Droga5 earlier this month, adding illustrious clients such as HBO, Amazon and The New York Times to its roster of clients. With the latest in a long line of similar purchases, Accenture Interactive further demonstrated its ambition of becoming the globe’s leading trusted advisor to chief marketing officers. Yet according to Ben Langdon, Chairman of Class35, Accenture’s strategy may be heading in the wrong direction.

A press release on Accenture’s website announcing the acquisition sits next to a quote stating that “brands aren’t built through advertising” – a huge contradiction from a consultancy firm hell-bent on becoming the ‘CMO agency of choice’. It’s not alone of course. The entire consulting industry wants a piece of the creative pie right now. In addition to Accenture Interactive, recent acquisitions by PwC Digital, IBM iX, and Deloitte Digital meant that in 2017, for the first time ever, four of the world’s ten largest creative agencies were consultancies.

So just what it is that Accenture wants to achieve from this? For one thing, it’s clearly trying to be a digital transformation business. A one-stop creative shop rivalling more traditional models, it wants to lure CMOs in with the promise of lower ad spend and a “more impactful customer experience”. At the same time, though, it’s still in thrall to those same slinky, shiny branding and advertising agencies it’s attempting to disrupt. The Droga5 acquisition and that of Karmarama a few years before are both testament to this.

There’s a fundamental problem with this, though. Digital transformation businesses don’t sell to CMOs. These people have enough on their plates trying to transform their own marketing skills in order to keep up with an ever-changing market – they just don’t have the time or the energy to concern themselves with digitally transforming a whole business. If Accenture’s purpose is digital transformation, then going after creative agencies is barking up the wrong tree.Is Accenture's push into the creative sector an identity crisis?

Worlds apart

Perhaps more importantly, these two industries are worlds apart in terms of the way they think. Creative agencies are all about ideas, campaigns and consumers. Digital businesses, on the other hand, are customer-driven – they think in terms such as lifetime value, measurement, and efficiency. Customer-led thinking is an entirely different beast to consumer-led thinking.

The reality is that the arrival of digital and an all-encompassing obsession with technology, measurement and social has led to the death of agencies in a reductive, zero-sum, efficiency-focused battle with brands. Indeed, agencies have become so obsessed with the latest tech fads, they’re beginning to forget how brands work. Worse still, they’re beginning to forget how brands are built. And, by forgetting, they’re destroying their own values.

Killing creativity

All things considered, it really feels to me as though Accenture is a chip leader in a game it doesn’t understand. Expensive acquisitions like these show that they’ve got the big money, but they don’t appear to have any idea what they’re doing with it. Take talent, for example. The best talent in the creative industry right now is out in the market; it’s not tied to any one agency. Both agencies might well be at the top of their game, but why would a consulting firm waste so much money on buying them when they could hire high-quality creative talent on a contingent basis instead?

As their presence in the top 10 creative agencies shows, there is a growing trend in which Accenture, like many of the other big players, are buying up agencies as if they were nothing more than keywords. What they’re really buying, though, is a collection of credentials, clients and IP. Unfortunately, the talent that created those credentials aren’t going to stay at the business, the clients that hired the agency in the first place won’t be interested in buying what is basically just another part of Accenture, and the IP never really existed to begin with.

Droga5, for example, was one of the few agencies that did great brand work the old-fashioned way – undoubtedly something that made it attractive to Accenture in the first place. The irony, though, is that by leading it further away from the way of working that made it so special, the consulting giant will kill its creativity.

“Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record…. But, in flashing its cash, it is spending millions on acquiring nothing of any value.”

If pressed, the recently acquired agency staff at Accenture will tell you just how dysfunctional the new arrangement is. They’re largely unfulfilled. Rarely do they feel their work has any sort of meaning or purpose. What’s more, the different disciplines have found little or no common ground, and find it hard to work together as a cohesive whole. It’s not surprising, then, to see talented people leaving in droves.

Beyond the window dressing 

It’s clear, then, that consulting firms and creative agencies are no easy bedfellows. But in his company’s defence, Accenture Interactive’s Senior Managing Director for North America, Glen Hartman, described its culture as being “far, far away from what a stereotypical consulting firm would look like. Our office and studios look a lot like Droga5’s.”

In demonstrating a belief that office design equates to workplace culture, this statement serves as an illustration of how confused Accenture is right now. It wants to justify its new strategy so badly, it’s started dressing like a creative agency. But if you look beyond the window dressing and see that you and your partners are speaking a different language with a different purpose, selling to different people in a different market, there’s no getting away from the fact that you’re different.

Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record, and it wants to dazzle others with its new direction. But, in flashing its cash, it is spending millions on acquiring nothing of any value.

Related: Space between consulting firms and creative agencies is converging.