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I worked for BCG for a few years. Like McKinsey, sharp, hard-working people. But often insufficiently experienced to advise on strategy of increasingly complex

I worked for BCG for a few years. Like McKinsey, sharp, hard-working people. But often insufficiently experienced to advise on strategy of increasingly complex industries. Moreover, they lack the political and social capital to drive change, which is why so much of the project's success depends on the credibility of the hiring point person and the vision they already had prior to hiring the consulting firm. The industry is outdated as its "insights" are relatively common knowledge among F500 company executives. This may be why government is hiring them more often. Regardless the industry is on the decline. I wrote about this 7 years ago: https://www.curiousjuice.com/blog-0/bid/146227/When-not-to-hire-strategy-consultants-notes-from-ex-BCG-consultant https://www.curiousjuice.com/blog-0/bid/146227/When-not-to-h...

tuatoru 6y ago
> the industry is on the decline. I wrote about this 7 years ago Thanks. That would explain my perception that McKinsey has been trading on its reputation for the last 15 years at least. At this point I'd only consider Bain, of the big three - and that's because I don't know much about them. It's one of those system traps they liked to talk about: the industry is in decline, so the good people leave.
mav3rick 6y ago
My perception is that the consultant's advice is rarely put into action in the end. Is this correct ? People keep on hiring consultants as some sort of marketing of the process in their project.
- amoorthy 6y ago
  I think you're right but I don't know the stat behind how often the strategy gets implemented. As other have said, it has much to do with the hiring point person and if the consulting firm essentially endorses an idea s/he already had. Rarely does a consulting firm come up with a brand new strategy and convince the client to implement it.
xivzgrev 6y ago
As a former MC myself, I would add another point why people hire MC firms - Political cover. You have an urgent problem, your stakeholders want change now, but you can get people off your back if you hire McKinsey. Or, you know what you want to do already, but it’s a big change so you get McKinsey to sign off on it. If it doesn’t go well you have cover ie we made the best possible decision we could - we hired McKinsey!
- yborg 6y ago
  This. They also hire very smart people and they may well have the smartest people in the room at client meetings, so they have credibility. It's a good business model, kind of like hiring a flashy hairdresser that gives very expensive but often terrible haircuts - but when people are told that this famous stylist did it, they all just go 'ooooh...'
  - cafard 6y ago
    This may not be the best forum for my question, but do people actually hire flashy but awful (or inconsistent) hairdressers?
    - egberts1 6y ago
      Yes.
- kolbe 6y ago
  That is the standard little speech that I hear often repeated by McK employees. Like, "LOL, we don't do much, but we honestly try, but bureaucracy gets in the way." It's cute and funny on the surface, but I think it stops being funny when someone dives in deep and sees incentives that make a lot more sense than some nebulous concept of "political cover." > His top deputy, Anthony Shorris, and other aides decided to hire a consulting firm. They solicited proposals from firms on a pre-approved list from the previous administration. Despite its lack of corrections experience, McKinsey won the contract. > The mayor’s office denied that McKinsey was hired partly to provide political or legal cover, as did Shorris, who is now a senior adviser to McKinsey and teaches at Princeton University. Now that's a reason a deal like this actually makes sense! I give you $27m in taxpayer money, and when I leave, you give me $x in return. That's a deal that makes a lot more sense than paying 24 year old NYU grads to solve big problems with powerpoint and linear regressions.
BrianSenator 6y ago
> The industry is outdated as its "insights" are relatively common knowledge among F500 company executives. Do you have any examples?
- amoorthy 6y ago
  Product portfolio management was a big strategy BCG employed in the 80s and 90s. I think most companies now know how to assess products to invest in, harvest, or cull. A lot of basic statistical analysis, including regression of sales data, is no longer solely the domain of consultants. Similarly, cost level analysis (unit costs, profitability levers, margin analysis) is often done in-house via Financial Planning & Analysis teams. The easiest sign of this is that many ex-consultants work in F500 companies so they bring their prior knowledge in-house.
throwawaybcg223 6y ago
A lot has changed in the past few years in management consulting. BCG Digital is the fastest growing party of the org. You have MBAs working along side with Engineers, CS PhDs, system architects. We're hiring former CERN staff, MIT (not Sloan) grads. The Amazon apocalypse in retail made Global F2000 clients realize they needed to change how they treated tech. They wanted to buy, we found a way to sell it.
- amoorthy 6y ago
  Great to hear about these changes! My observation is that strategy plays out in years and requires customer/industry insights that usually comes only from a lot of experimentation and error. The very nature of consulting, where you flit from case to case (even if in the same industry), seldom seeing what failed and why, makes me think they are unlikely to have this kind of deep customer/industry insight.

tuatoru 6y ago

> the industry is on the decline. I wrote about this 7 years ago Thanks. That would explain my perception that McKinsey has been trading on its reputation for the last 15 years at least. At this point I'd only consider Bain, of the big three - and that's because I don't know much about them. It's one of those system traps they liked to talk about: the industry is in decline, so the good people leave.

mav3rick 6y ago

My perception is that the consultant's advice is rarely put into action in the end. Is this correct ? People keep on hiring consultants as some sort of marketing of the process in their project.

amoorthy 6y ago
I think you're right but I don't know the stat behind how often the strategy gets implemented. As other have said, it has much to do with the hiring point person and if the consulting firm essentially endorses an idea s/he already had. Rarely does a consulting firm come up with a brand new strategy and convince the client to implement it.

xivzgrev 6y ago

As a former MC myself, I would add another point why people hire MC firms - Political cover. You have an urgent problem, your stakeholders want change now, but you can get people off your back if you hire McKinsey. Or, you know what you want to do already, but it’s a big change so you get McKinsey to sign off on it. If it doesn’t go well you have cover ie we made the best possible decision we could - we hired McKinsey!

yborg 6y ago
This. They also hire very smart people and they may well have the smartest people in the room at client meetings, so they have credibility. It's a good business model, kind of like hiring a flashy hairdresser that gives very expensive but often terrible haircuts - but when people are told that this famous stylist did it, they all just go 'ooooh...'
- cafard 6y ago
  This may not be the best forum for my question, but do people actually hire flashy but awful (or inconsistent) hairdressers?
  - egberts1 6y ago
    Yes.
kolbe 6y ago
That is the standard little speech that I hear often repeated by McK employees. Like, "LOL, we don't do much, but we honestly try, but bureaucracy gets in the way." It's cute and funny on the surface, but I think it stops being funny when someone dives in deep and sees incentives that make a lot more sense than some nebulous concept of "political cover." > His top deputy, Anthony Shorris, and other aides decided to hire a consulting firm. They solicited proposals from firms on a pre-approved list from the previous administration. Despite its lack of corrections experience, McKinsey won the contract. > The mayor’s office denied that McKinsey was hired partly to provide political or legal cover, as did Shorris, who is now a senior adviser to McKinsey and teaches at Princeton University. Now that's a reason a deal like this actually makes sense! I give you $27m in taxpayer money, and when I leave, you give me $x in return. That's a deal that makes a lot more sense than paying 24 year old NYU grads to solve big problems with powerpoint and linear regressions.

BrianSenator 6y ago

> The industry is outdated as its "insights" are relatively common knowledge among F500 company executives. Do you have any examples?

amoorthy 6y ago
Product portfolio management was a big strategy BCG employed in the 80s and 90s. I think most companies now know how to assess products to invest in, harvest, or cull. A lot of basic statistical analysis, including regression of sales data, is no longer solely the domain of consultants. Similarly, cost level analysis (unit costs, profitability levers, margin analysis) is often done in-house via Financial Planning & Analysis teams. The easiest sign of this is that many ex-consultants work in F500 companies so they bring their prior knowledge in-house.

throwawaybcg223 6y ago

A lot has changed in the past few years in management consulting. BCG Digital is the fastest growing party of the org. You have MBAs working along side with Engineers, CS PhDs, system architects. We're hiring former CERN staff, MIT (not Sloan) grads. The Amazon apocalypse in retail made Global F2000 clients realize they needed to change how they treated tech. They wanted to buy, we found a way to sell it.

amoorthy 6y ago
Great to hear about these changes! My observation is that strategy plays out in years and requires customer/industry insights that usually comes only from a lot of experimentation and error. The very nature of consulting, where you flit from case to case (even if in the same industry), seldom seeing what failed and why, makes me think they are unlikely to have this kind of deep customer/industry insight.