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> there are plenty of cheaper companies you can hire to do this Isn't McKinsey like the IBM of their field, though? Hiring someone cheap makes it harder to pas

> there are plenty of cheaper companies you can hire to do this Isn't McKinsey like the IBM of their field, though? Hiring someone cheap makes it harder to pass the buck if it doesn't work out. "Nobody ever got fired for buying McKinsey" and all that.

Closi 6y ago
I mean the pass the buck projects definitely exist, but they aren't as common as you might think in my experience. They can hire McKinsey for them if you want, it's just an expensive way to go. These projects are invariably ordered by companies that have toxic cultures anyway. Far more common is a project where the client half knows what they want, but their thinking isn't detailed enough to implement it. As an example that might happen in my field, let's say a company has three distribution centres, each with a general manager, and they report directly into a 'head of logistics'. The project is that they want to look at closing one distribution centre, they think they could probably get away with 2. The client might know what they want, but probably wont understand the impact on transport costs, the capacity that exists at the other two distribution centres, likely delapse costs, how much they are likely to get for sublease as they have a long lease, the cost of redundancy, system changes required because some specific activity happens in the central DC, impact on the cost of goods sold, what are the inventory benefits, when according to their financial plan will they need the 3rd facility again. They are also unlikely to have an implementation plan and a cost estimate for making the change. Even if the Head of Logistics can do all that, he has a full time job managing the network and working out all the impacts isn't a part-time job. It's also important to get right, so can be hard to delegate because the company probably doesn't have someone that has worked all this out before (e.g. do they know how to calculate inventory savings?). So that's how a company can kind of know what they want to do, but consultants can still add value.

Closi 6y ago

I mean the pass the buck projects definitely exist, but they aren't as common as you might think in my experience. They can hire McKinsey for them if you want, it's just an expensive way to go. These projects are invariably ordered by companies that have toxic cultures anyway. Far more common is a project where the client half knows what they want, but their thinking isn't detailed enough to implement it. As an example that might happen in my field, let's say a company has three distribution centres, each with a general manager, and they report directly into a 'head of logistics'. The project is that they want to look at closing one distribution centre, they think they could probably get away with 2. The client might know what they want, but probably wont understand the impact on transport costs, the capacity that exists at the other two distribution centres, likely delapse costs, how much they are likely to get for sublease as they have a long lease, the cost of redundancy, system changes required because some specific activity happens in the central DC, impact on the cost of goods sold, what are the inventory benefits, when according to their financial plan will they need the 3rd facility again. They are also unlikely to have an implementation plan and a cost estimate for making the change. Even if the Head of Logistics can do all that, he has a full time job managing the network and working out all the impacts isn't a part-time job. It's also important to get right, so can be hard to delegate because the company probably doesn't have someone that has worked all this out before (e.g. do they know how to calculate inventory savings?). So that's how a company can kind of know what they want to do, but consultants can still add value.