Office Hours: McKinsey’s Mistakes, Arizona State’s Online Initiative, and the Great Resignation

Scott answers a question about why Peloton hired McKinsey, a company embroiled in its own troubles. He then shares his take on Arizona State’s global education initiative that aims to enroll 100 million students by 2030, and offers his thoughts on how the great resignation will impact the talent pipeline. Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Scott Galloway?

  Support for the show comes from Northwest Registered Agent. Your business identity is everything that makes your business legitimate and professional. With Northwest Registered Agent, you don't just form a business, you start a complete foundation built for privacy, credibility, and growth. That includes registered agent service, a business address, operating agreement, domain, website, professional email, phone number, and built-in privacy. In other words, your home address, personal email, and phone number stay private. Don't pay hundreds or thousands of dollars for what you can get from Northwest for free. Visit northwestregisteredagent.com/profgfree and start using free resources to build something amazing. Get more with Northwest Registered Agent at northwestregisteredagent.com/profgfree.

• 0:49Speaker 01

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an Ultra. Because it's not just a superior light beer, it's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser-Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 1:26Scott Galloway?

  Welcome to the Prop G Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question, please visit officehours.profgmedia.com. Again, that's officehours.profgmedia.com. First question.

• 1:43Speaker 02

  Preston, I'm a big fan of a lot of the work that you've been doing over the past year on a lot of the content you've been producing. My question revolves around what I think has become one of your favorite companies, Peloton. Recently, they brought in McKinsey and Company and did so very publicly, which is not normally the case when that firm comes in. I'm just curious on what your thought is of making such a public matter, of bringing in a company that's normally very secretive about the work they do. And second, what your thought is on bringing in a company that also has been embroiled in a lot of its own scandal in the past year. Thanks and look forward to hearing it.

• 2:18Scott Galloway?

  Thanks, Carter from Chicago. So Peloton hired McKinsey in January to review its cost structure and potentially eliminate jobs as the pace of revenue and subscription growth has slowed significantly from pandemic highs. According to CNBC, revenue grew just 6% year-on-year in the quarter ending last September compared to a 250% increase in the same quarter in 2020. It's kind of odd to say that. There's a lot of companies that would be happy with 6% growth, but those companies have traded incredible multiples of revenue as Peloton was. It's all about expectations. Anyways, Peloton shares ended 2021 down about 76%. Think about that. I thought it was 80%. Anyways, down a lot. So for some of the context on McKinsey's troubles that you referenced, McKinsey settled

• 3:01Scott Galloway?

  lawsuits, I think for about a half a billion dollars last year over its role in the opioid crisis as an advisor to Purdue Pharma. Jesus Christ. The firm has also paid 15 million in the past years to the US Department of Justice over conflicts of interest and bankruptcy cases they were involved with. I think they were involved with Gaddafi. I mean, they're just sort of advising some of the, you know, the weirdest fucking people and helping companies make really bad decisions. But here's the thing, they help a lot of companies make a lot of decisions, and it's very easy to be cynical about McKinsey. I've spent the majority of my professional career running my brain to people and companies. A lot of companies publicly bring in McKinsey because what they're saying is, we want outsiders

• 3:44Scott Galloway?

  to come in and validate our decisions or specifically help us think through thoughtfully what our pivot should be and how we cut costs and also kind of outsource us some of the decision-making. I think that doing it publicly makes a lot of sense. McKinsey, BCG, Bain, these are all amazing businesses. They have grown much faster than the market. So the ability to come in and in a very thoughtful and rigorous way, try and answer questions with a data-driven approach, with a ton of benchmarking, looking at what other companies are doing, and then some emotional distance, the ability to say, I'm not emotionally involved here, I'm not politicized, I'm not trying to kiss the CEO's ass, although that can't happen in consulting firms.

• 4:28Scott Galloway?

  But I found, and I've worked with the CEOs of the CMOs of 34 of the 100 largest consumer companies in the last decade, a lot of times you're just validating what they already know, but they're just too goddamn close to it, or you're coming in and you're just sort of stating the obvious, but you're stating it and you don't know the politics around stuff. So you just say, yeah, you're, you know, your acquisition, hey, Unilever, your acquisition of Dollar Shave Club for a billion dollars, that was just stupid. You know, what are you thinking that all of a sudden overnight, you're going to start doing, you know, direct to consumer on shampoo? I mean, what was the point here? Or just benchmarking the shit out of the best Instagram feeds and trying to suss out what are the underpinnings?

• 5:13Scott Galloway?

  I think consulting is a, not only a great career, but I think organizations that bring in outsiders to ensure they're not being too insular is a, is a great idea, as evidenced by the fact that consulting firms continue to grow. Has McKinsey bought its own rap and maybe needs some help at a senior level, like board members who go, no, don't work with fucking Gaddafi, or, okay, what are the externalities here of working with a company that is sort of increasingly directly linked with 100,000 graves every year, specifically the opioid crisis? It feels as if they lack some fiduciaries, they just have some perspective on the board to go, you know, what are we thinking? We shouldn't take this business.

• 5:58Scott Galloway?

  Investment banks have operating committees that have to approve every IPO. So, and, you know, I don't get a lot of the decisions. Like, I do not understand the decision an investment bank would make to take Robinhood public. I think Robinhood is bad for the markets, bad for young men, bad for the planet, but if some very high-profile investment banks made the decision to take them public. Anyways, anyways, public statements about consultants, I don't, you know, I think that makes sense. And in this case, it's just as, we're serious, we're bringing in third-party validation. It's all about brand. McKinsey is kind of seen as a gold standard here. Just as entrepreneurs brag about Goldman taking their company public, big CEOs will pay a premium. And if it's a tiebreaker, unless Bain or BCG have real specialty or real human

• 6:43Scott Galloway?

  capital around a specific sector, people usually opt for McKinsey. But I'm a big fan of consulting as a career. I think it makes sense for companies to hire consultants. I'm talking my own book because I've kind of had two consulting firms, Profit and L2. And I think McKinsey, for all the shit they've given, is a fantastic place to start your career. Incredibly interesting, smart, thoughtful people. You want to play tennis with the best players in the world because you raise your own game. So in sum, I'm kind of bullish on consulting. And despite the problems, I'm bullish on McKinsey and I think it makes sense for a company like Peloton to bring them in. Probably not the answer you are looking for. Question number two, Dalton from Baltimore.

• 7:25Speaker 03

  Hey Scott, this is Dalton from Baltimore and I got a question for the dog. Ironically, coinciding with your January 20th Prof G podcast discussing fixing the US higher education system, The Wall Street Journal on the same day released an article saying that Arizona State University is looking to enroll 100 million more students by 2030. It describes this initiative as a free global education initiative that will translate into 40 languages and put online material for five business courses. It goes on to say that the program will use machine learning and artificial intelligence

• 8:07Speaker 03

  to teach and grade, and the courses will confer academic credit as well as lead to a global management and entrepreneurship certificate. I'm curious about your thoughts about this, if you think it's more of just a headline or if it actually has some potential weight behind it? And if you think other academic institutions or even businesses might follow suit? Or if you think they'll play more of a wait and see approach? Thanks.

• 8:34Scott Galloway?

  Dalton from Baltimore, thanks for the question. This is super interesting. And typically what you hear, you'll get pushed back from faculty around how college is about the experience and they need to be more thoughtful, the accreditation institutions, which are the enforcers of the cartel known as higher ed. Are totally focused on their PBS metrics where they look at curriculum and faculty. And basically, they want to find their friends who are PhDs from Stanford or Carnegie Mellon, and they want to find this full breadth of curriculum, including things like leadership and ethics, which I think is ridiculous that we think we can teach these things. I can't get my 11-year-old to behave ethically, but I'm going to teach you at 27 how to be ethical around business anyways.

• 9:17Scott Galloway?

  We stack it with a bunch of bullshit so we can charge you a quarter of a million dollars over four years. Instead, there's a large population of people who we should be charging $40,000 so you can have a degree in cybersecurity. The traditional BA is not for everyone. I think it's a wonderful experience. I will be heartbroken if my kids don't decide to do it, but 2/3 of our young people do not end up with a traditional BA. And what's happened is we've decided, or the education industrial complex, or as I call it, Big Ed, has decided to try and create this gestalt that you failed as a parent unless you send your kids to a four-year college. They have been totally not innovative. You know, what if Porsche just had the 9/11 and never introduced the Cayenne?

• 9:59Scott Galloway?

  What if Tide just had big boxes of detergent, didn't have Tide Pods? You know, there's just been such a striking lack of innovation. The only thing that's super impressive about universities where they've innovated is they've figured out a way to increase prices 1,400% in the last 30 years, even though inflation's only up 287% through a rejectionist luxury position. And that's brilliant, but unfortunately, the result is a transfer of wealth of a trillion and a half dollars to middle-class households, to university endowments and faculty, or tenured faculty and administrators. What Michael Crow and ASU are doing is absolutely visionary, and that is moving away from this bullshit rejectionist culture and the embrace of big and small tech.

• 10:42Scott Galloway?

  Now, whether some of this notion of using the terms AI over and over, whether that's a bit of like clickbait or trying to seem more innovative, whatever, that's fine. I am all for it. I am in. I am down. Anybody who wants to get improve themselves should imagine they live in a place called America where we embrace that, not this bullshit enforcement of an emergent caste system in America called higher ed where we only let in the children of rich people or the freakishly remarkable. We need to go back to where we were in the 80s where we let in good kids. You know, they have to have some credentials or they have to have some record of achievement. And even if they don't, give them two more years

• 11:21Scott Galloway?

  to marinate at a junior college, or maybe offer them a degree in health tech, or cybersecurity, or construction management, whatever it might be. We have to be more innovative here. We have to lower the cost. We have to build more on-ramps into the middle class. That's more vocational funding. In Germany, about 50% of people have some sort of vocational certification. It's less than 10 in the US. And a movement towards figuring out more innovation, more micro-certification, more unbundling, more embrace of big and small tech to bring down the cost and dramatically increase freshman seats. I love this. Jesus Christ, what are they saying? What are they saying? 20 million people? There are 100

• 12:04Scott Galloway?

  million people by 2030? Right on, my brothers at ASU. For a little more context on the program, which is set to launch in April, enrollment in the first round of classes will be limited to college graduates, but the university says will include undergraduates in the near future. Credits earned in the program will be transferable to most schools and can be used to pursue a degree at ASU. I've been thinking a lot about what it means to be, I don't know, a better man, if you will. And there's pity. You pity somebody, you feel really sorry for them. Well, the people want our pity. I don't, I know I wouldn't want somebody to pity me. There's, the next level's empathy. I can relate to your pain.

• 12:47Scott Galloway?

  I think that's important. But the next level beyond that is compassion. And that is, I not only can relate to your issues, but I'm gonna fucking do something about it. That's compassion. I'm gonna move from virtue signaling and highlighting the problem to actually doing something about it. And along those lines,

• 13:06Scott Galloway?

  I don't think I've announced this. Anyways, I've given away approximately $15 million of my own money, which is a lot of money for me. I'm wealthy, but I'm not a billionaire, to all public institutions such as the University of Georgia, where I got to know the dean of the business school there and their law program, which helps learn and people, to the University of Illinois, that is very committed to expanding their roles. And also, also, I just gave money to ASU to fund a credential program in supply chain. Why? Because that will be great jobs. And I like the cut of these guys, Jib, saying, let's get out of this bullshit. We're not, we're

• 13:45Scott Galloway?

  not fucking Birkin bags. We are public servants. So I am down with this. Let's reshape public education and let's all as individuals, and I'm not good at this, but I'm getting better at it, move from pity onto empathy and then more than anything, move to compassion. Let's do something about these issues. Your time, your treasure, your talent, move to compassion. We have one quick break before our final question. Stay with us.

• 14:15Scott Galloway?

  Support for the show comes from Superhuman. The pace of modern work can be relentless. You're getting a constant influx of messages from a ton of different apps. You haven't closed all your browser tabs in a year. Everything seems urgent and staying on top of it all feels like an impossible task. Superhuman Go is an AI chat that's always there when you need it, already aware of what you're doing and doesn't ask you to start from zero. Superhuman Go, from the makers of Grammarly, help you be the best version of yourself at work. It handles the repetitive stuff so you can focus on the work that only you can do. Whether you need to summarize an endless email thread or prep for a meeting that's happening in five minutes, Superhuman Go works inside the tools and sites you already use, your browser, inbox, docs, and your project tools. And its AI

• 14:57Scott Galloway?

  chat is available on the side of your browser and it's always ready. No new tabs, no switching apps, no losing your place. This is AI that works with you, not on top of you, so that you have the time and brain space to solve the problems that matter. Check it out. Find out more at superhuman.com.

• 15:18Scott Galloway?

  Support for the show comes from Vanta. As AI adoption grows, so does your company's security risks and requirements. New frameworks, audits, and vendors keep piling on, but your team isn't getting any bigger. Most compliance tools promise automation, but you're really stuck doing all the work by hand, chasing screenshots, validating controls, and playing catch-up when audit season comes around again. Vanta works differently. The Ragentic Trust platform is built to scale with you, not slow you down. With over 1,400 automated tests across 400-plus integrations, Vanta collects evidence and monitors your controls year-round, cutting your audit prep by 82%. Plus, you can access the Vanta agent everywhere you work, whether your team is in Vanta every day or living in tools including Claude or Cursor. Want proof?

• 16:03Scott Galloway?

  Over 16,000 fast-growing companies like Ramp, Ryder, and Harvey save time and resources while scaling fast with Vanta. Learn more at vanta.com/profg and get $1,000 off. That's spelled V-A-N-T-A dot com slash prof G for $1,000 off.

• 16:25Scott Galloway?

  Welcome back. Question number three.

• 16:28Speaker 05

  Hi, Prof G. This is Catherine Wick in Pittsburgh. I'm an architect, and part of keeping my profession going is making sure there's a strong pipeline of students entering the field. There's a tangible shortage of folks in the critical 10- to 15-year experience band as a result of the Great Recession, and I'm concerned about what the future holds in a post-corona world. NPR ran a story this morning saying that college enrollment numbers are down around 1 million this year in the US, the lowest number in 50 years. Pair that with the overwhelming number of stories I've read and heard about the Great Resignation, and where do you think this is all heading? Are these two things even related? Which sectors are set to benefit and which are going to suffer as a result of these two phenomena?

• 17:12Speaker 05

  Architects are heavily reliant on the sectors we serve, and when those sectors are down, we struggle. Thanks so much, and I appreciate the wisdom. I first heard you on Preet Bharara's podcast, where I thought you gave a remarkably insightful interview, and now I'm a devout Prof G Pod listener. All the best and stay safe.

• 17:29Scott Galloway?

  Catherine from Pittsburgh, thanks for the thoughtful question. By the way, you should be working for NPR specifically. You should be on radio. You have such a... You have such a lovely voice. From the fall of 2019 to the fall of 2021, undergraduate enrollment at colleges and universities dropped nearly 7%, the largest two-year decrease in 50 years. Community colleges have seen a 13% drop through the course of the pandemic. As for the great resignation, or what my podcast co-host Kara Swisher calls it, and I think it's a better term, the great reassessment, a study from the Harvard Business Review found that employees between 30 and 45 years of age have had the greatest increase in resignation rates, with the average increase of more than 20% between 2020 and 2021.

• 18:13Scott Galloway?

  Last September, Inc. reported that 40% of computer and IT industry employees had already quit or had plans to quit by 2022. At financial firms, that number was 24%, and in the healthcare industry, it was 18%. I, you know, I wish it'd be fun. It'd be fun to say, well, it's this and it's this. I think this is multi-dimensional, and there's a ton of nuance here. And the honest answer is, I have some ideas, but I don't know. One, obviously, the pandemic was an accelerant for existing trends and could be, you could argue, is the catalyst for this big change. I mean, when you see the earth shifting below you, and you know there's an earthquake, and it was because a volcano erupted, okay, that volcano is the pandemic.

• 18:54Scott Galloway?

  Now, were the plates due to shift for other reasons, probably, but the pandemic has done a few things. One, it's dramatically increased the ability to work remotely, which means people can move to lower-cost areas, which means they have more opportunities, perhaps only to make a living by renting their human capital out remotely, but also to lower their cost of living, giving them more options. In some ways, that's a really good thing. I think that something like this creates pause. It's like, okay, do I really want to continue to be working the desk at the Marriott, where people are rude to me, and I have to put up with the bullshit of asking them to put their mask on? I don't like the school my kids are in. I'm making that much money. I can go work

• 19:39Scott Galloway?

  doing something else in a lower cost town. Also, there's more opportunity in a really strong economy, either to start your own business or to turn on an app and become a DoorDash or an Uber driver. And those wages have come up. But I think it's a variety of factors. The fact that not as many people are going to architecture. I don't know this, but what little I do know about architects is that they're underpaid, that it's kind of, to be blunt, it's a shitty industry. It's almost like artists. You go into architecture because it's a passion project. And I know some very talented people who study architecture so they can go make $38,000 a year working for a quote unquote name brand firm. I think it's a very difficult industry. And I wonder if it'll be good for the industry to have

• 20:24Scott Galloway?

  a dearth of architects such that they have more pricing power and aren't as many of them willing to do great work at mediocre wages. So I think there might be a silver lining here. And that is you might have more currency in the marketplace as a firm that, or as an architect. But I think it is really multi-dimensional what's going on here, which again, is a long-winded way of saying, I don't know. But thank you for the thoughtful question and nice voice, Catherine from Pittsburgh. That's all for this episode. Again, if you'd like to submit a question, please submit a voice recording by visiting officehours.prophgmedia.com.

• 21:08Scott Galloway?

  Our producers are Caroline Shagrin and Drew Burrows. Claire Miller is our assistant producer. If you like what you heard, please follow, download, and subscribe. Thank you for listening to the Prof G Pod from the Box Media Podcast Network. We will catch you on Thursday.

• 21:21Speaker 06

  We just moved into our new house and I didn't realize just how close we were to the neighbors. That's when my friend told me about blinds.com.

• 21:30Speaker 07

  Blinds.com isn't a medication, but it can improve how you feel about your home. Customers who shop at blinds.com experience excellent customer service from consultation to installation. Side effects include increased privacy and better sleep. Talk to your partner today and see if blinds.com is right for you. Visit blinds.com to order your free samples.

• 21:51Speaker 08

  They're running a Cover 2 defense. But you're running to get game day deals on Uber Eats. Keep everyone at tonight's watch party fed with deals from your go-to restaurants. Or, stock up with deals on your favorite snacks and groceries. Whatever the occasion, get game day deals on Uber Eats all season long. It's not football without food. Uber Eats. Order now. Terms apply. Product availability varies by region. See app for details.