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I have worked with consultants from BCG, McKinsey and Bain, sometimes while at the same company. On balance they’re charming, intelligent people. In a magical w

I have worked with consultants from BCG, McKinsey and Bain, sometimes while at the same company. On balance they’re charming, intelligent people. In a magical world where I was a COO,CFO I would bar employing them immediately. In a typical F500 setting strategy consultants aren’t on-hand to make anything better or improve anything meaningfully - in general consultants are on hand to validate a C or C-1’s personal belief and drive its execution. Why? First, this is what keeps these companies around. You don’t keep a client by telling them they’re wrong or ignorant. Two, buying the big three name is essentially idea laundering. “It’s not a land grab, Bain said said we had to do it.” “McKinsey told us we had to hollow out that one plant town to survive!” They’re also an emotional refuge and a great backchannel. The BCG principal talks to the CEO weekly, you might not, good to be on their good side. Look, I’m sure in certain niche, high-skill consultants (industrial process engineering?) are valuable. By random dart method they’ve probably driven a fair amount of value, but on average you should never let them in the door.

beezlebroxxxxxx 4y ago
In certain niche areas "consulting" is just another way of saying "I've gone freelance". Management consulting (aka the people that will say "I'm a consultant!") is a different set of tires and almost always used for 'idea laundering' and plausible deniability as you said. A lot of them are fresh grads from renowned universities, "skilled" in powerpoint, and that's about it. The big firms hire them in droves to give their advice the appearance of "intellectual superiority". It's a well known source of jokes amongst management consultants.
everdrive 4y ago
>First, this is what keeps these companies around. You don’t keep a client by telling them they’re wrong or ignorant. Two, buying the big three name is essentially idea laundering I completely agree with you, but if everyone knows this, then why does this ploy work?
- hammock 4y ago
  “Yada yada yada if their job depends on it”
- red-iron-pine 4y ago
  Because long term strategic decisions require taking risks, and that means potentially missing out bonuses if it fails, and possibly getting fired. Bringing in consultants essentially gives you the ability to say "we vetted it, and it sounds like a low-risk approach". This means you can sell it to the board, to other exec's, sell it to the rank and file, etc. And if it fails, you can blame it on KPMG or Bain or whoever. "Bain said it was cool" is a perfectly valid excuse. Spending $300k to CYA and protect your $600k bonus is a terrible choice for the company but a fantastically rational choice for an individual executive.
  - pc86 4y ago
    > Spending $300k to CYA and protect your $600k bonus is a terrible choice for the company but a fantastically rational choice for an individual executive. Especially when the $300k isn't your money and might not even be coming out of your department's budget.
- sklargh 4y ago
  I suspect because many executives want it to work. A benefit of arriving at very senior leadership is reduced personal risk for high-consequence failure. Consultants are part of that upside. One can even avoid unpleasant disagreements with peers simply by hiring an equivalently prestigious firm and positioning the consultants to fight it out.
eric-burel 4y ago
You can replace F500 by French government, it also works https://www.lemonde.fr/en/politics/article/2022/11/25/french-prosecutors-investigate-mckinsey-s-role-into-macron-s-presidential-campaigns_6005636_5.html https://www.lemonde.fr/en/politics/article/2022/11/25/french...
- ta988 4y ago
  And when you start looking at former politicians that get hired by the same consultant companies that they did let in on gov contracts...
gadders 4y ago
"A consultant is someone who borrows your watch to tell you the time."
tootie 4y ago
I've worked in more niche consulting where we brought in specific expertise and occasionally we crossed paths with McKinsey. It's true that they're not dumb and they're not out and out frauds, but it's really hard to see what kind of value they are even trying to bring. One of the biggest projects I ever worked on, we came in at the tail end of McKinsey consultation to do implementation on their strategy. We just redid their whole strategy and reset the execution process they had set even though our remit was just implementation. They had written down all this smart sounding stuff, but it was unworkable and really not fit to purpose. And on the biggest existential question on the viability of their entire venture, I think they completely whiffed. Likely just told them what they wanted to hear so the project would move forward. Last I read, it has been an absolutely enormous write down for a company previously known for being invincible.

beezlebroxxxxxx 4y ago

In certain niche areas "consulting" is just another way of saying "I've gone freelance". Management consulting (aka the people that will say "I'm a consultant!") is a different set of tires and almost always used for 'idea laundering' and plausible deniability as you said. A lot of them are fresh grads from renowned universities, "skilled" in powerpoint, and that's about it. The big firms hire them in droves to give their advice the appearance of "intellectual superiority". It's a well known source of jokes amongst management consultants.

everdrive 4y ago

>First, this is what keeps these companies around. You don’t keep a client by telling them they’re wrong or ignorant. Two, buying the big three name is essentially idea laundering I completely agree with you, but if everyone knows this, then why does this ploy work?

hammock 4y ago
“Yada yada yada if their job depends on it”
red-iron-pine 4y ago
Because long term strategic decisions require taking risks, and that means potentially missing out bonuses if it fails, and possibly getting fired. Bringing in consultants essentially gives you the ability to say "we vetted it, and it sounds like a low-risk approach". This means you can sell it to the board, to other exec's, sell it to the rank and file, etc. And if it fails, you can blame it on KPMG or Bain or whoever. "Bain said it was cool" is a perfectly valid excuse. Spending $300k to CYA and protect your $600k bonus is a terrible choice for the company but a fantastically rational choice for an individual executive.
- pc86 4y ago
  > Spending $300k to CYA and protect your $600k bonus is a terrible choice for the company but a fantastically rational choice for an individual executive. Especially when the $300k isn't your money and might not even be coming out of your department's budget.
sklargh 4y ago
I suspect because many executives want it to work. A benefit of arriving at very senior leadership is reduced personal risk for high-consequence failure. Consultants are part of that upside. One can even avoid unpleasant disagreements with peers simply by hiring an equivalently prestigious firm and positioning the consultants to fight it out.

eric-burel 4y ago

You can replace F500 by French government, it also works https://www.lemonde.fr/en/politics/article/2022/11/25/french-prosecutors-investigate-mckinsey-s-role-into-macron-s-presidential-campaigns_6005636_5.html https://www.lemonde.fr/en/politics/article/2022/11/25/french...

ta988 4y ago
And when you start looking at former politicians that get hired by the same consultant companies that they did let in on gov contracts...

gadders 4y ago

"A consultant is someone who borrows your watch to tell you the time."

tootie 4y ago

I've worked in more niche consulting where we brought in specific expertise and occasionally we crossed paths with McKinsey. It's true that they're not dumb and they're not out and out frauds, but it's really hard to see what kind of value they are even trying to bring. One of the biggest projects I ever worked on, we came in at the tail end of McKinsey consultation to do implementation on their strategy. We just redid their whole strategy and reset the execution process they had set even though our remit was just implementation. They had written down all this smart sounding stuff, but it was unworkable and really not fit to purpose. And on the biggest existential question on the viability of their entire venture, I think they completely whiffed. Likely just told them what they wanted to hear so the project would move forward. Last I read, it has been an absolutely enormous write down for a company previously known for being invincible.