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I’ve come across McKinsey and BCG a few times in my career. The author’s description is in line with what I observed on the other side of the table. Their teams

by JCM9 5y ago

I’ve come across McKinsey and BCG a few times in my career. The author’s description is in line with what I observed on the other side of the table. Their teams really had no clue what they were doing, but it gave otherwise clueless executives cover to say “the experts recommend…” which somehow was to make bad ideas something others should get behind. Armies of consultants would try to do “analysis” to justify their recommendations but the analysis was a total charade of numbers nobody checked and models full of inaccurate assumptions. It was a lot of complexity designed to make it look like someone knew what they were doing. Teams would send you crazy Excel templates at 5 PM, say this is needed by 7 please for the CEO, then they’d work through the night to prepare stacks of terrible PPT nonsense for a 9 AM meeting. In the end their recommendations nearly destroyed the company, which was a surprise to nobody that actually knew what was going on. The experience taught me a lot about business and business leadership. Many times I’d ask myself “what would McKinsey or BCG do here?” Then I’d go do the exact opposite. That’s proven a good course of action at many critical junctures.

Spooky23 5y ago
A big part of their purpose is to short circuit the bureaucracy within a company. Instead of filtering everything though the fiefdom owners, management has hired guns get shit done. They hire smart, personable people who can run with whatever. If the numbers or analysis is bullshit, it’s because the org gave them that data. That said, dealing with the BCGs and McKinseys of the world is a pain in the ass. Once you do it a few times, they are pretty easy to manipulate and manage up.
- pottertheotter 5y ago
  I think a bigger reason is “nobody ever got fired for hiring McKinsey.”
  - killingtime74 5y ago
    Didn’t that use to say IBM
    - p_l 5y ago
      And Cisco, and recently AWS/Azure
      - Guthur 5y ago
        Cisco is networking, and aws/azure are cloud services i don't think it's really the same as consulting. The horror story of some consultancy is akin to going to a palm reader. Whereas the example you have is more like going to buy a family car and getting upsold to a Ferrari. There is nothing wrong with the Ferrari you just should have known you only needed the Mazda. You still don't get what you wanted but one is selling you snake oil and the other is just good at sales.
        deleted 5y ago
        [deleted]
      - andi999 5y ago
        Using webex is hopefully an exception.
    - smcl 5y ago
      Originally yeah, but in time the saying became generalised for any big established company in a given space.
- Traster 5y ago
  I think almost the opposite is going on often. What's often happening is you have 1 manager building his fiefdom, and other managers trying to build theirs and there's only so much money to go around and only so many directions a company can go. So manager 1 hires in BCG so that he can use BCG's reputation to get his pet project funded by the executive team. BCG doesn't cut through the bureacracy, it's a tool of the bureaucrat to beat the other bureaucrats- which is why the conclusions match what the manager wants, not what is best. It's about the bureacracy, not about getting anything particular done.
  - bsenftner 5y ago
    This is the situation. Been there as a developer/MBA consultant.
  - kangaroozach 5y ago
    Well stated.
  - Spooky23 5y ago
    Well, yeah. You can spend 3 years getting a bunch of disinterested people to agree or spend $3M and get it done. The ability to get the $3M is exec endorsement of the alpha bureaucrat.
  - thowawaybcg1 5y ago
    Don't buy this anectode. BCG is too expensive to be hired by managers to convince executives. There are cheaper ways to do that. Most common scenario is that the executives want to prioritize between 100s of managers' pet-projects, then they hire us to swift through. End result is that a company (correctly) focus on a few high impact projects and a bunch of middle managers get hurt because their pet project get underfunded.
    - Traster 5y ago
      Yeah I don't mean manager as in "has a team of 5 people" I mean someone responsible for big teams, I'm just using manager as the generic, it could be a "head of" or "General Manager" or "Director" etc. Looking at teams that are a 2%+ of the size of the company.
- GoodJokes 5y ago
  which begs the question...why even have a fiefdom. In my experience management brings in consultants to repeat what workers have been telling them for years and then taking the credit.
deleted 5y ago
[deleted]
supernova87a 5y ago
Often these kinds of consultants get hired to provide justification to executives to do something they wanted help / grounds to do. So there's definitely some not-great incentives for the consultants to come to a certain conclusion... Also, it is not unheard of (hah) for the consulting companies to overpromise the analysis and work that can be done, understaff it, and work on unrealistic deadlines where the consultants can only but cram the worst kind of "analysis" (as you put it) into the time allotted. As I commented below also, if the person hiring the consultant doesn't know what he/she is doing or is under a lot of other constraints + pressure, and isn't a good judge of work, the conclusions that come out will likely be BS too. By the way, I wouldn't hire any such consulting company to do work on something they haven't done 20 times before and with reasonable examples of concrete + credible conclusions. Consultants are not well known for groundbreaking innovation on a per-hour basis.
deleted 5y ago
[deleted]
apples_oranges 5y ago
I think a big reason why BCG and McK and others are hired is so management can reduce responsibility by saying "but those experts recommended it". It's a charade, so much in business (and life?) is..
- deleted 5y ago
  [deleted]
gadders 5y ago
As the saying goes, "Consultants borrow your watch to tell you the time."
FabHK 5y ago
I think consultancies do serve several purposes: 1. Indeed looking at the situation with fresh eyes. The people inside a business might not have the slack to rethink things, and are used to the way things are (German has a nice word there, "betriebsblind" = inured to the working methods of a company and therefore blind to their shortcomings). 2. Institutionalised industrial espionage, under the banner of "best practices". 3. Improving communication inside a company. Consultants can talk to people on the floor that know what they're doing (but are often ignored), and translate it and transmit it back to upper management levels. (Note that this is a best case scenario - there are consultants that take pride in interacting with the C-suite only.) 4. Professional scapegoat, to justify and sign off on whatever management actually wants to do ("We don't want to fire you, but the consultants said we have to, in order to save the company.") I'd say some of these functions are actually benign, though some only to the executives that hire the consultants.

by JCM9 5y ago

Spooky23 5y ago

A big part of their purpose is to short circuit the bureaucracy within a company. Instead of filtering everything though the fiefdom owners, management has hired guns get shit done. They hire smart, personable people who can run with whatever. If the numbers or analysis is bullshit, it’s because the org gave them that data. That said, dealing with the BCGs and McKinseys of the world is a pain in the ass. Once you do it a few times, they are pretty easy to manipulate and manage up.

pottertheotter 5y ago
I think a bigger reason is “nobody ever got fired for hiring McKinsey.”
- killingtime74 5y ago
  Didn’t that use to say IBM
  - p_l 5y ago
    And Cisco, and recently AWS/Azure
    - Guthur 5y ago
      Cisco is networking, and aws/azure are cloud services i don't think it's really the same as consulting. The horror story of some consultancy is akin to going to a palm reader. Whereas the example you have is more like going to buy a family car and getting upsold to a Ferrari. There is nothing wrong with the Ferrari you just should have known you only needed the Mazda. You still don't get what you wanted but one is selling you snake oil and the other is just good at sales.
      - deleted 5y ago
        [deleted]
    - andi999 5y ago
      Using webex is hopefully an exception.
  - smcl 5y ago
    Originally yeah, but in time the saying became generalised for any big established company in a given space.
Traster 5y ago
I think almost the opposite is going on often. What's often happening is you have 1 manager building his fiefdom, and other managers trying to build theirs and there's only so much money to go around and only so many directions a company can go. So manager 1 hires in BCG so that he can use BCG's reputation to get his pet project funded by the executive team. BCG doesn't cut through the bureacracy, it's a tool of the bureaucrat to beat the other bureaucrats- which is why the conclusions match what the manager wants, not what is best. It's about the bureacracy, not about getting anything particular done.
- bsenftner 5y ago
  This is the situation. Been there as a developer/MBA consultant.
- kangaroozach 5y ago
  Well stated.
- Spooky23 5y ago
  Well, yeah. You can spend 3 years getting a bunch of disinterested people to agree or spend $3M and get it done. The ability to get the $3M is exec endorsement of the alpha bureaucrat.
- thowawaybcg1 5y ago
  Don't buy this anectode. BCG is too expensive to be hired by managers to convince executives. There are cheaper ways to do that. Most common scenario is that the executives want to prioritize between 100s of managers' pet-projects, then they hire us to swift through. End result is that a company (correctly) focus on a few high impact projects and a bunch of middle managers get hurt because their pet project get underfunded.
  - Traster 5y ago
    Yeah I don't mean manager as in "has a team of 5 people" I mean someone responsible for big teams, I'm just using manager as the generic, it could be a "head of" or "General Manager" or "Director" etc. Looking at teams that are a 2%+ of the size of the company.
GoodJokes 5y ago
which begs the question...why even have a fiefdom. In my experience management brings in consultants to repeat what workers have been telling them for years and then taking the credit.

deleted 5y ago

[deleted]

supernova87a 5y ago

Often these kinds of consultants get hired to provide justification to executives to do something they wanted help / grounds to do. So there's definitely some not-great incentives for the consultants to come to a certain conclusion... Also, it is not unheard of (hah) for the consulting companies to overpromise the analysis and work that can be done, understaff it, and work on unrealistic deadlines where the consultants can only but cram the worst kind of "analysis" (as you put it) into the time allotted. As I commented below also, if the person hiring the consultant doesn't know what he/she is doing or is under a lot of other constraints + pressure, and isn't a good judge of work, the conclusions that come out will likely be BS too. By the way, I wouldn't hire any such consulting company to do work on something they haven't done 20 times before and with reasonable examples of concrete + credible conclusions. Consultants are not well known for groundbreaking innovation on a per-hour basis.

deleted 5y ago

[deleted]

apples_oranges 5y ago

I think a big reason why BCG and McK and others are hired is so management can reduce responsibility by saying "but those experts recommended it". It's a charade, so much in business (and life?) is..

deleted 5y ago
[deleted]

gadders 5y ago

As the saying goes, "Consultants borrow your watch to tell you the time."

FabHK 5y ago

I think consultancies do serve several purposes: 1. Indeed looking at the situation with fresh eyes. The people inside a business might not have the slack to rethink things, and are used to the way things are (German has a nice word there, "betriebsblind" = inured to the working methods of a company and therefore blind to their shortcomings). 2. Institutionalised industrial espionage, under the banner of "best practices". 3. Improving communication inside a company. Consultants can talk to people on the floor that know what they're doing (but are often ignored), and translate it and transmit it back to upper management levels. (Note that this is a best case scenario - there are consultants that take pride in interacting with the C-suite only.) 4. Professional scapegoat, to justify and sign off on whatever management actually wants to do ("We don't want to fire you, but the consultants said we have to, in order to save the company.") I'd say some of these functions are actually benign, though some only to the executives that hire the consultants.