Evidence of meeting #59 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was work.
A video is available from Parliament.
4:40 p.m.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
Someone is not telling the truth, because the report that came out on Friday indicates that either someone in one of the two ministers' offices that are responsible to this committee or someone at McKinsey is not telling the truth, and we'll get to the bottom of it.
Thank you very much, Mr. Palter.
4:40 p.m.
Conservative
The Chair Conservative Kelly McCauley
Thank you. That is your time.
Mr. Jowhari, go ahead for six minutes, please.
4:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you, Mr. Palter. Welcome to our committee.
I'm going to ask a lot of rapid questions, and I'm hoping we can get responses within the same timeline.
Can you kindly talk about your role as a managing director since 2022? What does your role encompass?
4:40 p.m.
Senior Partner, McKinsey & Company
My role as a managing partner of McKinsey is to oversee our operations. That includes client service, managing our people, managing our operations, managing our compliance, managing our risk and managing adherence to policies and procedures.
4:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you.
Can you talk about the sectors, industries or practices that McKinsey Canada has?
4:40 p.m.
Senior Partner, McKinsey & Company
As I indicated in my opening remarks, Mr. Chair, McKinsey works across every sector in Canada. We have clients in oil and gas, banking, insurance, retail and consumer. We work on a variety of issues: strategy, organization operations, digital, risk management and the like.
4:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
You also answered the second question I had.
Is it fair to say that the public sector is one of the practice lines or one of the verticals that McKinsey is working on?
4:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you.
What kind of service lines does McKinsey provide?
4:40 p.m.
Senior Partner, McKinsey & Company
The bulk of McKinsey's work for the Canadian public sector falls into the area of digital transformation and agile transformation.
4:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Of the number of practitioners or specialty partners you have within Canada, how many would you say are allocated or assigned to the public sector?
4:40 p.m.
Senior Partner, McKinsey & Company
That's a slightly challenging question to answer, because it's not quite our model.
The public sector practice for McKinsey Canada, truthfully, is a relatively small part of our practice. If you think about the 1,100-plus people who work for McKinsey Canada, it's a relatively small number of the people we have.
4:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Can you tell me what the overall revenue of the Canadian practice is?
4:40 p.m.
Senior Partner, McKinsey & Company
That is a confidential item. We're a private organization, and that's confidential information.
4:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Can you tell me what the public sector revenue is as a percentage of the total revenue?
4:40 p.m.
Senior Partner, McKinsey & Company
As I indicated in my remarks, our public sector work is a relatively small part of what we do. It's roughly 5% to 7% of our operations here in Canada.
4:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
You talked about what McKinsey is known for, aside from strategy. Specifically within the public sector, you said you're known for digital transformation as well as some of the potential outsourcing. Can you share that with us?
4:40 p.m.
Senior Partner, McKinsey & Company
Yes. I'd like to offer an example. I alluded to work we do in digital transformation. For example, we did some work with the navy. We helped them take a manual process whereby the navy had to find sailors across the country for rapid deployment onto a ship at a particular port, which was a very manual labour-intensive process, and we helped digitize it and streamline it. In parallel, we also helped the navy build their digital skills so that they had digital-savvy employees who could take that and apply it to other processes in the navy.
4:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you.
We've heard a lot that McKinsey's engagement with the government was around benchmarking. Can you quickly decouple benchmarking and what type of activities you do?
4:45 p.m.
Senior Partner, McKinsey & Company
Yes. Under the national master standing offer, which is competitively awarded and awarded because an advisory firm has proprietary datasets, we, along with probably 25 or 30 other service providers to the government, have been awarded national master standing offers because of the dataset that we have.
We have, for example, a unique dataset that has 2.8 million individual points that allow us to provide a statistical analysis of culture, and that has been used by the federal government to help address some of the culture issues.
4:45 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you.
You talked about a master agreement. In your opening remarks, you talked about how you could basically break down your contracts into open contracts, master agreements and sole-sourced, and you said that a small portion are sole-sourced. Of the contracts you received or participated in and you've been granted, can you give us a sense of how many were open contracts, how many were master agreements and how many were sole-sourced?
4:45 p.m.
Senior Partner, McKinsey & Company
To the best of my knowledge, roughly 70% of our contracts were awarded through competitive RFPs with multiple bidders. I would say that roughly 29% were awarded through the national master service offer, and then less than 1% through sole source. These are contracts with the federal government.
4:45 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you.
With about 30 seconds to go, how would you define your relationship with the government? Do you think there was any favouritism as it relates to granting contracts to McKinsey when 70% is open, 29% is master agreements and 1% is sole source?
4:45 p.m.
Senior Partner, McKinsey & Company
I think our relationship with the federal government, first of all, complies with the policies and procedures. Second of all, I think the federal government is getting value. Third, I know it's a competitive process because, by our own record-keeping, we win only 40% of the things that we bid on.
4:45 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
I want to thank McKinsey for providing all the redacted documents that we asked for. Thank you.