CIA pays McKinsey 10 million in fees for reorganisation

11 August 2015

In a bid to improve the organisation of the CIA the foreign intelligence arm of the US has brought in the expertise of McKinsey & Company. The move comes with a hefty price tag, reportedly $10 million, and involves a broad range of strategy and management consultancy services. While the board stresses a third party perspective is needed, internal pundits are questioning the value of the money spent.

The CIA is about to enter into one of its most ambitious restructuring exercises in its history. In March Director John O. Brennan unveiled the blueprint, and the plan is set to have a massive impact on the organisation structure of the major directorates of espionage and analysis, which have been part of the agencies structure for decades. In its new model the agency will create a hybrid unit that combines analysts and operators in centres which are focused on specific regions, such as the Middle East, as well as on security issues including weapons proliferation. The new approach is modelled on the success of the CIA’s Counterterrorism Centre, which has enjoyed considerable influence since the attacks of September 11, 2001.

To realise the wide scale restructuring, the agency hired consultants from McKinsey & Company, an advisory firm renown for managing the corporate restructuring of large and complex organisations.


Costing the restructure
As part of the restructuring effort the CIA has asked a number of departments to give up a portion of their budget to cover the costs associated with the transformation. Departments have though found it challenging to release the funds, and against the backdrop of the $10 million in fees the consultants are set to charge, cynicism at the investment in the advice of McKinsey & Company has been expressed by legislators on Capitol Hill.

Not only those on the Hill are concerned about the cost of McKinsey’s services contract, staff at the agency have also expressed their surprise at the fact that the costs have not been disclosed earlier by Brennan in his announcement of changes at the agency. “What is the rationale?” asked an official familiar with the contract. “When you’re talking about millions and millions of dollars, there ought to be a reason why the money is being spent.” According to some, the services could just as easily be provided through in-house expertise.

While the value of the contract is a drop in the ocean of the CIAs budget, which tops $12 billion, the deal is also one of the most costly the agency has been involved with in the matter of rearrangement. A spokesmen for the agency, Dean Boyd, said however that they will be “implementing this plan within our existing budget and without seeking additional funds from Congress.” A spokesperson for McKinsey declined to comment about the deal.

John O Brennan - CIA

Outside perspective
With the expense seen by many as frivolous, the question of why the restructuring effort is being made with outside intelligence has been posed by a number of officials. According to advocates of McKinsey’s role, the introduction of a third party perspective is key to break through the culture of resistance to change experienced within the agency. The CIA has had a number of reorganisation in recent years, and many of those have not realised their planned potential, with a culture of conservatism and being a stick in the mud within old structures as reasons cited for the mixed track record.

“It’s probably a good thing to bring in outside perspective at a time when you’re doing something this challenging,” says a former senior US intelligence official. He adds, “there is a scepticism and cynicism toward spending money on anything except mission.” Another former employee says that “this place is famous for doing a rope-a-dope. By bringing in McKinsey, [Brennan’s] got an independent overseer not only to drive the process but report back the results.”


How data insights helped Network Rail improve the South-East route

11 April 2019

Amey Consulting has leveraged data insights to assist Network Rail with the improvement of its South-Eastern route. Using the Quartz tool, which monitors train movement, Network Rail will now be able to commit to data-enabled interventions to quickly improve underperforming train stations.

With rail services in the UK coming under strain from the demands of modern commuter life, while the infrastructure and service delivery of the nation’s railways has come in for sustained criticism in recent years, a period of regeneration is on the cards at last. Network Rail is the owner and infrastructure manager of most of the railway network in Great Britain, and has subsequently tapped the consulting industry on a regular basis to help find areas of improvement.

The group recently drafted in consultancy BearingPoint to conduct a thorough organisational evaluation and advise Network Rail (High Speed) on attaining a ‘fit for purpose’ organisational standard – for which the consultancy was nominated at the 2019 MCA Awards. Meanwhile, ArupArcadis and Aecom have been contracted to help Colas Rail and Babcock Rail implement a decade-long framework for Network Rail, aimed at supporting the delivery of the next generation of rail systems, with the contracts said to be worth as much as £5 billion

How data insights helped Network Rail improve the South-East route

As Network Rail further aims to improve its performance and customer service offering, another area it has sought help from the consulting sector for is its South-East route. The network of railways connects London with the southern parts of the country, as well as with Europe, making it the busiest in the country, with more than 500 million passenger journeys per year. This crucial expanse of rail was plagued with small minute delays, which were impacting millions of passengers every day, while reducing the efficiency and capacity of the overall network – something Amey Consulting was selected to help solve.

Amey Consulting soon determined that with the sub-threshold delays to services only lasting for 1 or 2 minutes, most were not the subject of detailed root cause analysis, and this made their corrections almost impossible – with dire consequences. Without addressing these delays, passenger satisfaction would fall, while the capacity and efficiency of the network would be reduced, stinging the income of Network Rail even before a host of delay-related fines would hit the company.

In order to help the client gain a better understanding of where, how, when and what these small delays occur, Amey Consulting looked to demonstrate the value of data-led consulting, with a significant reduction in delays within the first month of rolling out changes to key stations. The consultants embedded themselves in Network Rail’s team, helping them learn the key skills needed to support and apply data-driven solutions.

Agile transport

This involved the deployment of the Quartz tool. The system utilises to-the-second train movement data to present the performance of individual stations across the South-East route. It allows users to effortlessly understand station performance with a high level of detail, and use this information to identify losses caused by small-minute delays. The granular data allows for targeted actions to drive efficiency savings and performance improvements. More importantly, it allows users to understand the impact of small process changes on performance. 

Steve Dyke, an Executive Partner at Amey Consulting, said of the project, “We looked to identify the physical root cause on the infrastructure, building a case for change then managing that project implementation and tracking the benefit/value.  In doing so we are working to define a data performance improvement service to the operational and infrastructure owners.”

Just as important for the project as the technology, however, was teaching the Network Rail team how to leverage it after the consultants were gone. The Amey Consulting team worked to develop an agile working culture within Network Rail’s South-East division, helping staff to be confident in using data to improve the journeys of millions of people per year by attacking the problem from the ground up.

Dyke concluded, “This is less about the tools and about the approach to managing performance.  It meant using by-the-second analysis, data science, and then agile development to visualise and identify areas where improvements can be made.  We then worked with NR to change the way they approached the management of the infrastructure changes.  So rather than pass the information down the value chain, any of which could have been missed, we managed the change end-to-end.”

The project was so successful that Amey Consulting was also among those honoured at the recent MCA Awards. The firm scooped the Performance Improvement in the Public Sector prize for its work with Network Rail, at the 2019 ceremony in London.