“We have a saying in Russia… How do you make a cow produce more milk while consuming less grain? You feed it less and milk it more often. That’s McKinsey in a nutshell.”
That’s how a dinner conversation started at a Cybersecurity Mastermind last year.
One of the guys at the table shared a story.
A friend of his had spent 25 years building a successful business across Russia. Eventually, he sold 51% of it to new investors for $50 million.
The investors wanted to “modernize” the company and hired a team from McKinsey to revamp operations.
The consulting firm did what consulting firms do: they focused on boosting margins by cutting costs.
- Close this warehouse.
- Change supplier terms.
- Lay off these employees.
At first, the numbers looked great. Margins increased. Profits went up.
Then, in just 18 months, the business imploded.
The investors panicked. They went back to the original owner and begged him to buy back his shares.
He did.
For $5 million.
Then he fired McKinsey, brought back common sense, and spent another 18 months rebuilding the business to 100% of its former strength.
When all was said and done, he got paid $45 million to step away from his company for a year and a half.
So yes, profit margins matter. But not at the expense of gutting your own business.
Cutting costs and optimising margins is important—but only if you don’t kill the engine that drives your growth.
This isn’t just a McKinsey problem.
I’ve seen business owners do this to themselves:
- They cut critical team members.
- They squeeze suppliers too hard.
- They try to “optimise” their way into profitability—at the expense of what made their business strong.
Are you fine-tuning your business like a well-nurtured herd, or are you stuck trying to milk a bull?
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P.S. I’m not the “systems guy”, process guy” or the “finance guy”. I’m the “start living your best life today” guy, where you grow a business that gives you freedom now and lets you exit on your own terms later.
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