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Too bad they can't be sued for ruining countless businesses with mindless self-serving "advice" meant to do nothing more than get their contracts re-upped. The

by tharne 6y ago

Too bad they can't be sued for ruining countless businesses with mindless self-serving "advice" meant to do nothing more than get their contracts re-upped. The whole business is a scam built around sending in some 26 year-old with an Ivy League degree and $100 haircut to regurgitate snippets from articles in HBR.

alexpetralia 6y ago
I know it's fashionable to hate on MBAs, but I am not entirely convinced engineers are any better equipped with skills such as: requirements gathering, scoping, presenting, project management, competitive research, financial modeling, memo writing, and strategic planning. I don't believe these are truly vacuous activities, and - loathe as I am to say - MBAs may be the best trained to do this. (Disclosure: I do not have an MBA)
- the8472 6y ago
  This is about a specific consulting company, not MBAs in general.
- cowanon22 6y ago
  I agree with this - young engineers typically do not appreciate the importance of building the right thing vs building it well. However, the OPs point stands. McKinsey and these other companies just regurgitate what is printed in the trade press and charge you top dollars for it. You meet an experienced person once at project kickoff, and then most of your contacts are fresh grads with 2-5 years of experience. They really specialize in attending meetings and conference calls, but are all over the place (from excellent to awful) at actually implementing things.
- olsonjeffery 6y ago
  I'm fine stating that engineers from non-elite schools are just as well equipped for the tasks you describe, but that wasn't the GP's contention. The point is that McKinsey make bad recommendations that have demonstrably bad outcomes. Their fingerprints are all over numerous bad decisions in business and government in the past few decades[0]. These are the bare minimum, because there are quite likely many negative outcomes they have championed in their role as consultants that were never publicized or reported on. Totally separate from the above is their absolutely mercenary tendency to work with anyone who will pay them[1][2]. [0] - https://en.wikipedia.org/wiki/McKinsey_%26_Company#Controversies https://en.wikipedia.org/wiki/McKinsey_%26_Company#Controver... [1] - https://www.nytimes.com/2018/12/15/world/asia/mckinsey-china-russia.html https://www.nytimes.com/2018/12/15/world/asia/mckinsey-china... [2] - https://www.newyorker.com/news/news-desk/mckinseys-work-for-saudi-arabia-highlights-its-history-of-unsavory-entanglements https://www.newyorker.com/news/news-desk/mckinseys-work-for-...
  - ath92 6y ago
    McKinsey has 27,000 employees. That's the population of an entire town. I'm not saying that the things described in the links you posted here aren't bad, but I think it's important to remember with this many employees, there will always be someone doing something that you don't agree with.
    - olsonjeffery 6y ago
      To be clear: Is your assertion that, because these outcomes aren't a deliberate conspiracy, we have to let them happen because of... what, exactly? Whether it's an emergent feature of this style of consulting or a firm consisting of the worst human beings is besides the point. Elite management consulting firms (McKinsey, Deloitte, Bain, etc) exist to enable the worst impulses of leadership across the spectrum. The ends certainly justify scrutinizing the means.
    - _jal 6y ago
      This assertion is both true and irrelevant. Try: "Comcast customer service has a huge number of employees. I'm not saying there aren't jerks in there, but..." Devolving corporate responsibility (for the bad stuff) to individuals is of course the corporate preference. But at some point you run in to the "only the best people" problem - McKinsey hires them, trains them, assigns them and pays them, no matter how slippery McKinsey PR is, I keep seeing that name, McKinsey.
  - ChrisLomont 6y ago
    Cherry picking bad examples is not how to evaluate how often McKinsey "make bad recommendations that have demonstrably bad outcomes". Any company the size of McKinsey around as long as McKinsey will have success and failure stories. The proper way to evalaute is to take all things McKinsey did, normalize for background, and see how it performs compared to other methods of solving the same problems. Cherry picking to make a claim is the 2nd worst form of evidence, outranked only by outright lying.
    - GreeniFi 6y ago
- hehehaha 6y ago
  Getting an MBA right now is a clear signal that you have zero skills.
- MisterTea 6y ago
  Its a people problem. Actually solving problems takes a particular kind of mind. A degree is just a piece of paper which certifies the fact that you sat through lectures on subjects and you successfully regurgitated said lecture material on another piece of paper from memory. The issue with the MBA field is that it tends to attract power hungry narcissists/psychopaths who enjoy holding power over others. Engineers like to tinker with stuff and be left alone.
  - alisonkisk 6y ago
    Posting this comment on a website dedicated to self-promotion of engineers who want to get rich quickly is an interesting choice.
- IMTDb 6y ago
  The problem are not MBA's. The problem is that the incentive of consulting companies are not aligned with the incentive of their clients. Take a big construction project. In the like of the Berlin airport. What do you think is more profitable for the consulting companies : a) A well thought project, done in budget and in time. Where the consulting company gets the whole contract + all the bonuses associated with it. b) A poorly managed project, that gets refinanced multiple times and that ends up being pushed back decades. It's actually B. Consulting companies love long projects, because this allows them to place consultant for extended periods of time. And any consultant working for a client is a profitable consultant event without bonuses. Consulting companies hate projects that end up shorter than expected, because any bonus they might get from that project ends up being spent on consultant that are waiting for their next assignment. The main KPI of any consulting company is "the %age of time you consultant are spending 'on assignment' vs 'on the bench'". And long projects where consultant are busy for years are the best way to bring that KPI to 100%, even when the underlying project is a complete mess. The only thing they get from shorter and better managed projects is a better image, which is easier and less expensive to get using marketing technique and PR.
  - alexpetralia 6y ago
    Yes, and I agree with all the child comments. The principal-agent cost with consulting firms is enormous. In the most uncharitable light, their business model is a wealth transfer insofar as their profit derives directly from maximizing this cost.
  - alisonkisk 6y ago
    Your complaints apply exactly as well to the internal employees.
  - rvwaveren 6y ago
    Your point about incentives is exactly the structural problem here. I've been a consultant years ago and on a human level we loved projects that ran well. You feel good about yourself and your team for helping the client quickly and efficiently. However, zooming out, it's the incentive system that's completely broken: there is no skin in the game. Consulting firms are too detached from the consequences of their advice. Nassim Nicholas Taleb wrote a nice book about this phenomenon: https://en.wikipedia.org/wiki/Skin_in_the_Game_(book) https://en.wikipedia.org/wiki/Skin_in_the_Game_(book)
- deleted 6y ago
  [deleted]
- TheOtherHobbes 6y ago
  I'm fairly sure it's much easier to teach engineers how to business than it is to teach MBAs how to engineer.
- alisonkisk 6y ago
  Maybe companies hire MBAs as a perk/morale-booster for the engineers, so they have someone to unite in their hate against and not fight with each other over their failures.
gnu8 6y ago
It’s Scientology for businesses.
- tgb 6y ago
  Scientology literally has a business consulting front. https://en.wikipedia.org/wiki/Sterling_Management https://en.wikipedia.org/wiki/Sterling_Management
xerxesaa 6y ago
This sounds rather dismissive. The company (and others like it) has been around for decades. Most of Fortune 500 has leaned on their advice multiple times, and their advice doesn't come cheap. So your implication is that these companies are being scammed into repeatedly wasting their money and are apparently not smart enough to figure this out. To me, that feels hard to believe. It's conceivable McK and other actually do offer some value. A 26 year-old may not have tons of real world experience, but working at McK would allow him/her to have exposure to a global team that has worked across many companies in the industry. Having an understanding of best practices across multiple companies in the industry is valuable. It's also valuable to come in with a fresh perspective that is not heavily influenced by working at the same company for decades.
andi999 6y ago
And some fast food chains sell crappy food. So what? Nobody is forced to hire a (bad) consulting firm. Also if management accepts and implements the bad advise of a consulting firm, that management is even worse, isn't it.
Terretta 6y ago
Once you realize the game is “management” in collusion on both (a) outsourcing the reading of the HBR articles so they don’t have to, and (b) what I call “decision insurance” (“but our consultants confirmed this made sense!”) so decision accountability is laundered, everything makes much more sense. In mega enterprises the CEO matters a lot, but the next 3 or 4 layers often exist primarily to filter and spin bad news, diffuse accountability, and occasionally get burned at the stake as a witch in league with evil spirits when nobody wants to acknowledge the cholera water making the whole village ill. Given that, the easiest witch to lay hands on is the consultant, which is why they bill hazardous duty pay levels.
- ntsplnkv2 6y ago
  > what I call “decision insurance” (“but our consultants confirmed this made sense!”) so decision accountability is laundered, everything makes much more sense. I hear this all the time but it sounds like an urban myth. I highly doubt someone is not getting fired because the consultants they hired fucked up. They're still responsible for the business. I think consultants can help more with the "we need to do X, Y, Z" with consultant's report backing it up.
  - Terretta 6y ago
    > hear this all the time, sounds like an urban myth I didn’t hear it. I’ve spent years as an L3 (CEO is L1) of one of the largest enterprises in the free world, interacting with other enterprises at that level, and collaborating with all the top consultancies’ teams that work at that level. My take is while not always the case, the higher level the committee approving the consulting spend (because even that choice/decision is diffused), the more frequently this is involved. At the end of the day, the CEO works for the Board, who are external and most definitely do not get paid enough to go to jail. Everyone involved needs decision insurance.
    - TheOtherHobbes 6y ago
      I suspect too few people understand this. The CEO works for the board. The CEO can be fired at will just like any other employee. They will get an incredibly generous pay-off, unless they have fucked up to a world-beating historic extent. (And sometimes even then.) But as soon as the CEO loses the confidence of the board, they're on their way out. And most boards are only really interested in the financials. They don't care about culture, reputation, product range, or any of those other things. That's detail stuff, and it doesn't interest them. This is a cozy arrangement because no one is personally responsible for anything the company does. The CEO and the board are covered by limited liability, and they won't be going to jail for common crimes - like poisoning water sources, or setting fire to forests. They may go to jail if they fuck with the financials. Extreme fraud can be a showstopper. But having a national monopoly on pushing highly addictive drugs isn't. That's a regrettable offence which deserves a medium-ish fine. And - you know - let's say no more about it. Consultants - like auditors - exist to add another level of deferred responsibility. They're not there to make decisions, they're there to provide legal air cover for decisions that have already been made which need someone else's signature. The meetings, reports, the hasmter-on-a-wheel super-keen grad cadres and the rest are just theatre.
esotericimpl 6y ago
I mean the entire point is to hire outside consultants to provide "proof" that what the executive team wants to do is what the organization should do. McKinsey is hired to provide cover for execs when they make terrible decisions. So they can step back and say well it wasn't my idea, McKinsey said so as well. It's just another example of terrible management failing upwards.
klmadfejno 6y ago
I'm a 20 something McK consultant with a $10 haircut. Maybe $20 with tip. Or $0 now, because it's done at home. I post this fairly frequently, but here we go again. Business is hard. Change is hard. Consultants get a lot of shit for saying things that someone lower in the org could have told them. That's not evidence of abuse, that's evidence that your org isn't working well. A lot of the time substantial portions of the findings come from interviewing and listening to lower ranking experts in the client. Bringing in consultants is, among other ways, a way to bring in people who can get shit done, moving bricks at lower levels of the org with the political mandate of the top. That's quite valuable, because otherwise a lot of orgs are just entrenched. A very large number of senior leaders don't know how to accomplish X, and don't know how to get the information about X from their own company. And again, that's not an insult, because business is hard. It's great and all for you to say "regurgitate snippets from articles in HBR" but I can't say that resembles any work I've done, ever. Opioid work was bad though, let's not avoid that. (edit for spelling)
- tclancy 6y ago
  The problem with this is we don't (and one presumes you don't either) know whether you're above or below average. My perspective, from running into people from Big Computer consultancies back in the '00s was that the business model was to hire recent college grads, pump them up with the sheen of the company brand and then let them learn on the job at smaller companies and "failing upward" until they are experienced enough to be loaned out at massive rates based on their long track record of . . . success. Whether any customer during that process benefited from the consultant's journey is mere coincidence.
  - tfehring 6y ago
    Honestly my impression is that management consultants don’t need to be above average to add value, they (or more accurately, the people who implement their recommendations) just need to be empowered to actually do stuff. The recruiting from top schools is primarily because the people hiring them want to think their problems are hard and unique (that’s why they need consultants!) and therefore necessitate the best and brightest.
NotPavlovsDog 6y ago
It's a lot more than that. It's about further enabling power structures at the client organization while diminishing employee and other "lower classes" negotiation and influence possibilities. In essence, it's a turbo-charged manager service, where you pay a flat fee to someone to represent your interest. The fee is high, but for it you buy more loyalty, a deadline to the relationship and avoid labor disputes, employee rights lawsuits, etc. "Your interest" as in whoever pays the check. This service is immensely valuable to stakeholders, otherwise they would not continuously pay for it. A career manager at a company will have much more complexity in interests and loyalties as opposed to a consultant hired by a single, at the end of it, actor (whoever controls the signing and payment process). Let's take a typical employee manager loyalty conundrum, pick one: loyal to the CEO, your boss, the shareholders at large, a specific shareholder group, the board? They often have different interests, and recruit or are looking to recruit agents for them. For the consultant? Whoever pays! I found the book "Confronting managerialism: How the business elite and their schools threw our lives out of balance" by Locke and Spencer quite useful to understand some of the realities at play (not specifically consulting, but the broader managerial and by application consulting manager roles). If leaders keep hiring consultants, there is value for them. This does not mean value for the organization. Most certainly, not for society at large, as the parent article can demonstrate.
- Terretta 6y ago
  As I read your comment I was thinking “this!” then I saw your book recommendation and chuckled, “Of course!” What an important book. Here’s a purchase link (non-affiliate but the URL that donates to your selected cause): https://smile.amazon.com/Confronting-Managerialism-Business-Economic-Controversies/dp/178032071X/ https://smile.amazon.com/Confronting-Managerialism-Business-...
  - NotPavlovsDog 6y ago
    Pleasantly surprised to meet someone else here that has read it! My management department at a major university has not! It is somewhat telling that this book mostly gets cited by practitioners of CMS, Critical Management Studies, with a citation index in the hundreds. Perhaps the explanation lies, as CMS luminary Alvesson puts it, in the basis of mainstream management research seeing itself as in the service of industry.
kumarvvr 6y ago
I heard somewhere that one of the reasons consultants are brought in, even if the business owners know what to do, is to shift the blame to them. As in, its their idea, we are following the experts. Not sure how right it is.
refurb 6y ago
This is a bad take on McK. The 26-year old isn’t in charge of projects, the 45-year old McK partner with a few decades of experience is. Also, McK is more about organizing change and getting buy in. That’s their value. Some Director could come up with a strategy but no one would follow it. Just like IBM, if a strategy fails, nobody gets fired for having hired McK. There is value in that.
- wayoutthere 6y ago
  > Just like IBM, if a strategy fails, nobody gets fired for having hired McK. There is value in that. This is it right here. A shocking percentage of corporate boardrooms are McKinsey alumni — by hiring McKinsey to develop or even just validate your strategy, you buy credibility from the people who sign the checks because they know and trust senior people at McKinsey. Consulting is a relationship business. The other purpose of consulting at the boardroom level is to enable companies to sidestep laws around collusion and insider trading — the SEC occasionally charges somebody, but it’s largely symbolic given how pervasive it is. It’s not unheard of for CEOs of companies that are direct competitors to have regular calls to discuss strategy, all while using consultants to create a paper trail that says the strategy was developed through rigorous analysis.
Fiahil 6y ago
I'm not from McKinsey, but from BCG Gamma (speaking from my own PoV, of course). One thing I've learned over time: expensive fees are a feature, not a bug. People will listen more to what you have to say about any topic if they're paying a few hundred $K for that. And the same goes when you need to deliver a new tool to your client. Being expensive means my IT tickets won't be shelved for a week or two because some guy didn't like my face. It's often the case where a 3 weeks process with a five-people-approval form gets shortened to a single zoom meeting plus an email, and I really like that :). That's the difference between a 8 weeks project being put in production two weeks early and already getting traction because the "business people" are more engaged ; and a 2 years project going nowhere because the team gets shuffled constantly and requirements keeps changing. PS: It only works if you can deliver what you promised, though
SMAAART 6y ago
ORLY? Sauce? I have worked in Management Consulting, not with MK, but I have worked with MK alumni and in engagements where MK was there before us. TL;DR: I respect their work, take the price tag away since it's meaningless. Running a business is hard, Management Consulting is also hard. Unbeknown to most people, Consulting companies also - often - execute, and there's something to be said about an outsider doing the heavy lifting, dirty work, and be the garbage person. If that comes with a fancy label, well.. there's a price for that too. Amen.
onetimemanytime 6y ago
>>Too bad they can't be sued for ruining countless businesses with mindless self-serving "advice" meant to do nothing more than get their contracts re-upped. A fool and his money...that's their problem TBH. Those that hire them aren't grandmas on Social Security or mom-and-pop stores, they are supposedly super sophisticated businesses.

by tharne 6y ago

alexpetralia 6y ago

I know it's fashionable to hate on MBAs, but I am not entirely convinced engineers are any better equipped with skills such as: requirements gathering, scoping, presenting, project management, competitive research, financial modeling, memo writing, and strategic planning. I don't believe these are truly vacuous activities, and - loathe as I am to say - MBAs may be the best trained to do this. (Disclosure: I do not have an MBA)

the8472 6y ago
This is about a specific consulting company, not MBAs in general.
cowanon22 6y ago
I agree with this - young engineers typically do not appreciate the importance of building the right thing vs building it well. However, the OPs point stands. McKinsey and these other companies just regurgitate what is printed in the trade press and charge you top dollars for it. You meet an experienced person once at project kickoff, and then most of your contacts are fresh grads with 2-5 years of experience. They really specialize in attending meetings and conference calls, but are all over the place (from excellent to awful) at actually implementing things.
olsonjeffery 6y ago
I'm fine stating that engineers from non-elite schools are just as well equipped for the tasks you describe, but that wasn't the GP's contention. The point is that McKinsey make bad recommendations that have demonstrably bad outcomes. Their fingerprints are all over numerous bad decisions in business and government in the past few decades[0]. These are the bare minimum, because there are quite likely many negative outcomes they have championed in their role as consultants that were never publicized or reported on. Totally separate from the above is their absolutely mercenary tendency to work with anyone who will pay them[1][2]. [0] - https://en.wikipedia.org/wiki/McKinsey_%26_Company#Controversies https://en.wikipedia.org/wiki/McKinsey_%26_Company#Controver... [1] - https://www.nytimes.com/2018/12/15/world/asia/mckinsey-china-russia.html https://www.nytimes.com/2018/12/15/world/asia/mckinsey-china... [2] - https://www.newyorker.com/news/news-desk/mckinseys-work-for-saudi-arabia-highlights-its-history-of-unsavory-entanglements https://www.newyorker.com/news/news-desk/mckinseys-work-for-...
- ath92 6y ago
  McKinsey has 27,000 employees. That's the population of an entire town. I'm not saying that the things described in the links you posted here aren't bad, but I think it's important to remember with this many employees, there will always be someone doing something that you don't agree with.
  - olsonjeffery 6y ago
    To be clear: Is your assertion that, because these outcomes aren't a deliberate conspiracy, we have to let them happen because of... what, exactly? Whether it's an emergent feature of this style of consulting or a firm consisting of the worst human beings is besides the point. Elite management consulting firms (McKinsey, Deloitte, Bain, etc) exist to enable the worst impulses of leadership across the spectrum. The ends certainly justify scrutinizing the means.
  - _jal 6y ago
    This assertion is both true and irrelevant. Try: "Comcast customer service has a huge number of employees. I'm not saying there aren't jerks in there, but..." Devolving corporate responsibility (for the bad stuff) to individuals is of course the corporate preference. But at some point you run in to the "only the best people" problem - McKinsey hires them, trains them, assigns them and pays them, no matter how slippery McKinsey PR is, I keep seeing that name, McKinsey.
- ChrisLomont 6y ago
  Cherry picking bad examples is not how to evaluate how often McKinsey "make bad recommendations that have demonstrably bad outcomes". Any company the size of McKinsey around as long as McKinsey will have success and failure stories. The proper way to evalaute is to take all things McKinsey did, normalize for background, and see how it performs compared to other methods of solving the same problems. Cherry picking to make a claim is the 2nd worst form of evidence, outranked only by outright lying.
  - GreeniFi 6y ago
hehehaha 6y ago
Getting an MBA right now is a clear signal that you have zero skills.
MisterTea 6y ago
Its a people problem. Actually solving problems takes a particular kind of mind. A degree is just a piece of paper which certifies the fact that you sat through lectures on subjects and you successfully regurgitated said lecture material on another piece of paper from memory. The issue with the MBA field is that it tends to attract power hungry narcissists/psychopaths who enjoy holding power over others. Engineers like to tinker with stuff and be left alone.
- alisonkisk 6y ago
  Posting this comment on a website dedicated to self-promotion of engineers who want to get rich quickly is an interesting choice.
IMTDb 6y ago
The problem are not MBA's. The problem is that the incentive of consulting companies are not aligned with the incentive of their clients. Take a big construction project. In the like of the Berlin airport. What do you think is more profitable for the consulting companies : a) A well thought project, done in budget and in time. Where the consulting company gets the whole contract + all the bonuses associated with it. b) A poorly managed project, that gets refinanced multiple times and that ends up being pushed back decades. It's actually B. Consulting companies love long projects, because this allows them to place consultant for extended periods of time. And any consultant working for a client is a profitable consultant event without bonuses. Consulting companies hate projects that end up shorter than expected, because any bonus they might get from that project ends up being spent on consultant that are waiting for their next assignment. The main KPI of any consulting company is "the %age of time you consultant are spending 'on assignment' vs 'on the bench'". And long projects where consultant are busy for years are the best way to bring that KPI to 100%, even when the underlying project is a complete mess. The only thing they get from shorter and better managed projects is a better image, which is easier and less expensive to get using marketing technique and PR.
- alexpetralia 6y ago
  Yes, and I agree with all the child comments. The principal-agent cost with consulting firms is enormous. In the most uncharitable light, their business model is a wealth transfer insofar as their profit derives directly from maximizing this cost.
- alisonkisk 6y ago
  Your complaints apply exactly as well to the internal employees.
- rvwaveren 6y ago
  Your point about incentives is exactly the structural problem here. I've been a consultant years ago and on a human level we loved projects that ran well. You feel good about yourself and your team for helping the client quickly and efficiently. However, zooming out, it's the incentive system that's completely broken: there is no skin in the game. Consulting firms are too detached from the consequences of their advice. Nassim Nicholas Taleb wrote a nice book about this phenomenon: https://en.wikipedia.org/wiki/Skin_in_the_Game_(book) https://en.wikipedia.org/wiki/Skin_in_the_Game_(book)
deleted 6y ago
[deleted]
TheOtherHobbes 6y ago
I'm fairly sure it's much easier to teach engineers how to business than it is to teach MBAs how to engineer.
alisonkisk 6y ago
Maybe companies hire MBAs as a perk/morale-booster for the engineers, so they have someone to unite in their hate against and not fight with each other over their failures.

gnu8 6y ago

It’s Scientology for businesses.

tgb 6y ago
Scientology literally has a business consulting front. https://en.wikipedia.org/wiki/Sterling_Management https://en.wikipedia.org/wiki/Sterling_Management

xerxesaa 6y ago

This sounds rather dismissive. The company (and others like it) has been around for decades. Most of Fortune 500 has leaned on their advice multiple times, and their advice doesn't come cheap. So your implication is that these companies are being scammed into repeatedly wasting their money and are apparently not smart enough to figure this out. To me, that feels hard to believe. It's conceivable McK and other actually do offer some value. A 26 year-old may not have tons of real world experience, but working at McK would allow him/her to have exposure to a global team that has worked across many companies in the industry. Having an understanding of best practices across multiple companies in the industry is valuable. It's also valuable to come in with a fresh perspective that is not heavily influenced by working at the same company for decades.

andi999 6y ago

And some fast food chains sell crappy food. So what? Nobody is forced to hire a (bad) consulting firm. Also if management accepts and implements the bad advise of a consulting firm, that management is even worse, isn't it.

Terretta 6y ago

Once you realize the game is “management” in collusion on both (a) outsourcing the reading of the HBR articles so they don’t have to, and (b) what I call “decision insurance” (“but our consultants confirmed this made sense!”) so decision accountability is laundered, everything makes much more sense. In mega enterprises the CEO matters a lot, but the next 3 or 4 layers often exist primarily to filter and spin bad news, diffuse accountability, and occasionally get burned at the stake as a witch in league with evil spirits when nobody wants to acknowledge the cholera water making the whole village ill. Given that, the easiest witch to lay hands on is the consultant, which is why they bill hazardous duty pay levels.

ntsplnkv2 6y ago
> what I call “decision insurance” (“but our consultants confirmed this made sense!”) so decision accountability is laundered, everything makes much more sense. I hear this all the time but it sounds like an urban myth. I highly doubt someone is not getting fired because the consultants they hired fucked up. They're still responsible for the business. I think consultants can help more with the "we need to do X, Y, Z" with consultant's report backing it up.
- Terretta 6y ago
  > hear this all the time, sounds like an urban myth I didn’t hear it. I’ve spent years as an L3 (CEO is L1) of one of the largest enterprises in the free world, interacting with other enterprises at that level, and collaborating with all the top consultancies’ teams that work at that level. My take is while not always the case, the higher level the committee approving the consulting spend (because even that choice/decision is diffused), the more frequently this is involved. At the end of the day, the CEO works for the Board, who are external and most definitely do not get paid enough to go to jail. Everyone involved needs decision insurance.
  - TheOtherHobbes 6y ago
    I suspect too few people understand this. The CEO works for the board. The CEO can be fired at will just like any other employee. They will get an incredibly generous pay-off, unless they have fucked up to a world-beating historic extent. (And sometimes even then.) But as soon as the CEO loses the confidence of the board, they're on their way out. And most boards are only really interested in the financials. They don't care about culture, reputation, product range, or any of those other things. That's detail stuff, and it doesn't interest them. This is a cozy arrangement because no one is personally responsible for anything the company does. The CEO and the board are covered by limited liability, and they won't be going to jail for common crimes - like poisoning water sources, or setting fire to forests. They may go to jail if they fuck with the financials. Extreme fraud can be a showstopper. But having a national monopoly on pushing highly addictive drugs isn't. That's a regrettable offence which deserves a medium-ish fine. And - you know - let's say no more about it. Consultants - like auditors - exist to add another level of deferred responsibility. They're not there to make decisions, they're there to provide legal air cover for decisions that have already been made which need someone else's signature. The meetings, reports, the hasmter-on-a-wheel super-keen grad cadres and the rest are just theatre.

esotericimpl 6y ago

I mean the entire point is to hire outside consultants to provide "proof" that what the executive team wants to do is what the organization should do. McKinsey is hired to provide cover for execs when they make terrible decisions. So they can step back and say well it wasn't my idea, McKinsey said so as well. It's just another example of terrible management failing upwards.

klmadfejno 6y ago

I'm a 20 something McK consultant with a $10 haircut. Maybe $20 with tip. Or $0 now, because it's done at home. I post this fairly frequently, but here we go again. Business is hard. Change is hard. Consultants get a lot of shit for saying things that someone lower in the org could have told them. That's not evidence of abuse, that's evidence that your org isn't working well. A lot of the time substantial portions of the findings come from interviewing and listening to lower ranking experts in the client. Bringing in consultants is, among other ways, a way to bring in people who can get shit done, moving bricks at lower levels of the org with the political mandate of the top. That's quite valuable, because otherwise a lot of orgs are just entrenched. A very large number of senior leaders don't know how to accomplish X, and don't know how to get the information about X from their own company. And again, that's not an insult, because business is hard. It's great and all for you to say "regurgitate snippets from articles in HBR" but I can't say that resembles any work I've done, ever. Opioid work was bad though, let's not avoid that. (edit for spelling)

tclancy 6y ago
The problem with this is we don't (and one presumes you don't either) know whether you're above or below average. My perspective, from running into people from Big Computer consultancies back in the '00s was that the business model was to hire recent college grads, pump them up with the sheen of the company brand and then let them learn on the job at smaller companies and "failing upward" until they are experienced enough to be loaned out at massive rates based on their long track record of . . . success. Whether any customer during that process benefited from the consultant's journey is mere coincidence.
- tfehring 6y ago
  Honestly my impression is that management consultants don’t need to be above average to add value, they (or more accurately, the people who implement their recommendations) just need to be empowered to actually do stuff. The recruiting from top schools is primarily because the people hiring them want to think their problems are hard and unique (that’s why they need consultants!) and therefore necessitate the best and brightest.

NotPavlovsDog 6y ago

It's a lot more than that. It's about further enabling power structures at the client organization while diminishing employee and other "lower classes" negotiation and influence possibilities. In essence, it's a turbo-charged manager service, where you pay a flat fee to someone to represent your interest. The fee is high, but for it you buy more loyalty, a deadline to the relationship and avoid labor disputes, employee rights lawsuits, etc. "Your interest" as in whoever pays the check. This service is immensely valuable to stakeholders, otherwise they would not continuously pay for it. A career manager at a company will have much more complexity in interests and loyalties as opposed to a consultant hired by a single, at the end of it, actor (whoever controls the signing and payment process). Let's take a typical employee manager loyalty conundrum, pick one: loyal to the CEO, your boss, the shareholders at large, a specific shareholder group, the board? They often have different interests, and recruit or are looking to recruit agents for them. For the consultant? Whoever pays! I found the book "Confronting managerialism: How the business elite and their schools threw our lives out of balance" by Locke and Spencer quite useful to understand some of the realities at play (not specifically consulting, but the broader managerial and by application consulting manager roles). If leaders keep hiring consultants, there is value for them. This does not mean value for the organization. Most certainly, not for society at large, as the parent article can demonstrate.

Terretta 6y ago
As I read your comment I was thinking “this!” then I saw your book recommendation and chuckled, “Of course!” What an important book. Here’s a purchase link (non-affiliate but the URL that donates to your selected cause): https://smile.amazon.com/Confronting-Managerialism-Business-Economic-Controversies/dp/178032071X/ https://smile.amazon.com/Confronting-Managerialism-Business-...
- NotPavlovsDog 6y ago
  Pleasantly surprised to meet someone else here that has read it! My management department at a major university has not! It is somewhat telling that this book mostly gets cited by practitioners of CMS, Critical Management Studies, with a citation index in the hundreds. Perhaps the explanation lies, as CMS luminary Alvesson puts it, in the basis of mainstream management research seeing itself as in the service of industry.

kumarvvr 6y ago

I heard somewhere that one of the reasons consultants are brought in, even if the business owners know what to do, is to shift the blame to them. As in, its their idea, we are following the experts. Not sure how right it is.

refurb 6y ago

This is a bad take on McK. The 26-year old isn’t in charge of projects, the 45-year old McK partner with a few decades of experience is. Also, McK is more about organizing change and getting buy in. That’s their value. Some Director could come up with a strategy but no one would follow it. Just like IBM, if a strategy fails, nobody gets fired for having hired McK. There is value in that.

wayoutthere 6y ago
> Just like IBM, if a strategy fails, nobody gets fired for having hired McK. There is value in that. This is it right here. A shocking percentage of corporate boardrooms are McKinsey alumni — by hiring McKinsey to develop or even just validate your strategy, you buy credibility from the people who sign the checks because they know and trust senior people at McKinsey. Consulting is a relationship business. The other purpose of consulting at the boardroom level is to enable companies to sidestep laws around collusion and insider trading — the SEC occasionally charges somebody, but it’s largely symbolic given how pervasive it is. It’s not unheard of for CEOs of companies that are direct competitors to have regular calls to discuss strategy, all while using consultants to create a paper trail that says the strategy was developed through rigorous analysis.

Fiahil 6y ago

I'm not from McKinsey, but from BCG Gamma (speaking from my own PoV, of course). One thing I've learned over time: expensive fees are a feature, not a bug. People will listen more to what you have to say about any topic if they're paying a few hundred $K for that. And the same goes when you need to deliver a new tool to your client. Being expensive means my IT tickets won't be shelved for a week or two because some guy didn't like my face. It's often the case where a 3 weeks process with a five-people-approval form gets shortened to a single zoom meeting plus an email, and I really like that :). That's the difference between a 8 weeks project being put in production two weeks early and already getting traction because the "business people" are more engaged ; and a 2 years project going nowhere because the team gets shuffled constantly and requirements keeps changing. PS: It only works if you can deliver what you promised, though

SMAAART 6y ago

ORLY? Sauce? I have worked in Management Consulting, not with MK, but I have worked with MK alumni and in engagements where MK was there before us. TL;DR: I respect their work, take the price tag away since it's meaningless. Running a business is hard, Management Consulting is also hard. Unbeknown to most people, Consulting companies also - often - execute, and there's something to be said about an outsider doing the heavy lifting, dirty work, and be the garbage person. If that comes with a fancy label, well.. there's a price for that too. Amen.

onetimemanytime 6y ago

>>Too bad they can't be sued for ruining countless businesses with mindless self-serving "advice" meant to do nothing more than get their contracts re-upped. A fool and his money...that's their problem TBH. Those that hire them aren't grandmas on Social Security or mom-and-pop stores, they are supposedly super sophisticated businesses.