A Change of Guard... Back to the Consultants!

As Barack Obama assumes office at the White House in the coming week, he has inherited the responsibility of pulling out the American economy from its worst ever recession since 1929. And guess whom has Mr. Obama turned to for advice? Well, none other than McKinsey&Company. 

This Economist article  speaks about the several posts in the Obama administration that would be held by McKinsey alumni. Prominent among them are Ms. Nancy Killefer as the Chief Performance Officer (a newly created post) and Ms. Diana Farrell as the Joint Deputy Director of the National Economic Council. 

These appointments can be contrasted with those in the Bush administration such as Treasury Secretary Hank Paulson and White House Chief of Staff Josh Bolton who both came from Goldman Sachs. Evidently, the collapse at Wall Street has also resulted in the new administration distancing itself from people who carry the now-tainted reputation of the erstwhile envied investment banks. 

Interestingly, as the article mentions, this change in appointments is reflective of the overall macroeconomic scenario during the Bush and Obama administrations. The Bush administration needed people who would be instrumental in leading American dominance over the booming financial markets. But now that the financial meltdown has begun to suck the air out of almost every industry, the focus has shifted from efficient capital allocation to problem-solving. And this is where McKinsey alumni, with their immense experience in advising governments, can add value.  So, things could probably look positive for prospective consultants at the big consulting firms. But probably, it is still too early to tell.