4 ms·

The role of McKinsey and co has always been reputation laundering, not actual consulting. Companies bring in McKinsey and pay the big bucks so that when someth

The role of McKinsey and co has always been reputation laundering, not actual consulting. Companies bring in McKinsey and pay the big bucks so that when something goes wrong or in unpopular they can point the finger and McKinsey. McKinsey consultants are paid to say the things that corporate leadership doesn't want to say. The entire role of a consultant is the create theater to present the illusion that they are doing serious "business". Look how professional they are? If they get it wrong, then maybe nobody can get it right. Worst case we can shake our finger at them and frown, can you believe how they handled those layoffs? ... then call them back next month when it needs to be done again. Everything goes right? Well, what great leadership this corporation has. Either way McKinsey gains a good reputation around other corporate leaders in need of these services. AI is not replacing that particular service anytime soon.

FirmwareBurner 1y ago
>The role of McKinsey and co has always been reputation laundering, not actual consulting. Reminds me of why companies choose penetration testing services/audits from some specific well known companies, but also only want to pay for the bare minimum amount of testing. They want the reputation of the label that they passed an audit from X company, they don't actually care about their security. >McKinsey consultants are paid to say the things that corporate leadership doesn't want to say. More like they're paid to say the things corporate leadership doesn't want to hear from its own employees. They already know it, but they just pay McK to have external confirmation, to reinforce what they already know.
vetleen 1y ago
Came here to say this. Management already knows what needs to be done.
simianwords 1y ago
This seems like an often repeated myth but it doesn’t hold up to scrutiny. Isn’t it just much simpler to accept that they indeed provide value in making good judgements? Instead of this more contrived explanation. Many McKinsey go on to be executives in companies which means they had - at some point - the skills or judgement required to drive companies.
- JimDabell 1y ago
  The reason why so many people believe this is because they have directly experienced situations where these consultants come in, understand less than the people who work there, and do a below-average job. It’s the idea that these consultants are hired for their capabilities that doesn’t hold up to scrutiny.
  - simianwords 1y ago
    I understand where you are coming from. Here you have two misaligned incentives. You have people making coming from the outside, making decisions that would affect rank and file in a company. I think its natural for the rank and file to be biased towards believing in their own skills and dismissing outsiders. Why would shareholders, the board and the CEO waste so much money on paying consultancies when the only value is being able to pass blame? Isn't it simply easier to believe that consultancies indeed provide valuable judgements and the price paid is worth it?
    - notTooFarGone 1y ago
      Accountability sinks is the buzzword we are looking at here. It's to do something that is not easy to do in an organization due to major breaks in the current status quo. The risk of doing one thing and complaints hampering the progress there is often too high which is why you give authority to a third party who will just do it regardless of feedback. One time breaks are necessary sometimes but can also be misused a lot for things employees want to do anyway. It's up to leadership to identify what is necessary and not generally possible with the current crew.
      - simianwords 1y ago
        This doesn’t check out. The org hierarchy exists and accountability is placed at the right level in the hierarchy.
        fmajid 1y ago
Propelloni 1y ago
Hehe, agreed. In Germany there is a saying that goes somewhat like this: "A consultant is a person you give your watch so that you can ask them for the time."
- actionfromafar 1y ago
  ... and the other people in the organisation will now agree that the time is what your watch says.
mook 1y ago
Don't forget cross-industry collusion. It can be illegal to form organized cartels, but it's totally fine to listen to what your consultant says, even if they got it by talking to their other clients.
- pfannkuchen 1y ago
  This must still be legally considered collusion, right? Maybe it’s not totally fine but it’s so hard to prove that they go ahead and do it anyway?
condiment 1y ago
What a hot take! If you're in an organization where leadership 'points the finger' at McKinsey to cast blame for an unpopular decision, imagine what sorts of decisions they would have made without the consultants! Consultants are hired to improve decision quality. They do that through a combination of analysis, experience, and industry connections. The work product is rarely 'powerpoints'. The work product is the actual work, which entails people doing research, making decisions, executing on them, and measuring results. At any rate, I don't disagree with you that consultants aren't going anywhere. This post is an ad for an immature AI service that makes a bunch of claims about how they've solved for hallucinations and knowledge cutoffs in order to take down McKinsey. If they had solves for those problems, they'd be wasting their effort building a replacement for consulting firms.
- RansomStark 1y ago
  I'm sorry but how does a fresh out of college senior consultant gain such amazing experience? I've been unfortunate enough to work with 3/4 of the big four (senior enough to at the table, not senior enough to call bullshit). Sales pitch is all partners; older people, lots of industry experience in relevant areas, great pitch. But, come time to deliver and an early 20-something shows up. So either its all covering your ass, or its just recycling reports from a shelf, either way there's no experience involved
jaccola 1y ago
In my experience it is often subtly simpler than this. Rising to the top of a company is rarely the meritocracy we'd like to think, (or, at least, the merit required to rise is different than the merit required to lead a company successfully). Often people rise to the top who don't want to make decisions, don't have a vision and very much are used to leading by consensus. So there is not a masterful plan to avoid blame for the difficult thing they know they need to do, they just don't know what to do - they are incapable of making decisions.
bryanrasmussen 1y ago
>McKinsey consultants are paid to say the things that corporate leadership doesn't want to say. >AI is not replacing that particular service anytime soon. what are you talking about?! That is the prime service for AI to replace. What, you don't like our decision!? But the AI says we should fire you all, can't argue with AI folks, it's super smart. hell, they just need a ChatGPT template that makes screenshots that says what you want ChatGPT to say for you and they're good to go. They don't even really need to use the AI. McKinsey does not look good in a world of AI.
cm2187 1y ago
Scott Adams has a hilarious way to describe consultants thay says something similar: https://youtu.be/Ag9mo58sxbQ?t=2822 https://youtu.be/Ag9mo58sxbQ?t=2822
rickdeckard 1y ago
> AI is not replacing that particular service anytime soon. Fully agree, it's more likely that the outcome will be "We hired McKinsey, they now use some intelligent software to improve their analysis" Everything else will result in "What do you mean, we paid you money to lead and you handed the destiny of the whole company to some generic software?!"

FirmwareBurner 1y ago

>The role of McKinsey and co has always been reputation laundering, not actual consulting. Reminds me of why companies choose penetration testing services/audits from some specific well known companies, but also only want to pay for the bare minimum amount of testing. They want the reputation of the label that they passed an audit from X company, they don't actually care about their security. >McKinsey consultants are paid to say the things that corporate leadership doesn't want to say. More like they're paid to say the things corporate leadership doesn't want to hear from its own employees. They already know it, but they just pay McK to have external confirmation, to reinforce what they already know.

vetleen 1y ago

Came here to say this. Management already knows what needs to be done.

simianwords 1y ago

This seems like an often repeated myth but it doesn’t hold up to scrutiny. Isn’t it just much simpler to accept that they indeed provide value in making good judgements? Instead of this more contrived explanation. Many McKinsey go on to be executives in companies which means they had - at some point - the skills or judgement required to drive companies.

JimDabell 1y ago
The reason why so many people believe this is because they have directly experienced situations where these consultants come in, understand less than the people who work there, and do a below-average job. It’s the idea that these consultants are hired for their capabilities that doesn’t hold up to scrutiny.
- simianwords 1y ago
  I understand where you are coming from. Here you have two misaligned incentives. You have people making coming from the outside, making decisions that would affect rank and file in a company. I think its natural for the rank and file to be biased towards believing in their own skills and dismissing outsiders. Why would shareholders, the board and the CEO waste so much money on paying consultancies when the only value is being able to pass blame? Isn't it simply easier to believe that consultancies indeed provide valuable judgements and the price paid is worth it?
  - notTooFarGone 1y ago
    Accountability sinks is the buzzword we are looking at here. It's to do something that is not easy to do in an organization due to major breaks in the current status quo. The risk of doing one thing and complaints hampering the progress there is often too high which is why you give authority to a third party who will just do it regardless of feedback. One time breaks are necessary sometimes but can also be misused a lot for things employees want to do anyway. It's up to leadership to identify what is necessary and not generally possible with the current crew.
    - simianwords 1y ago
      This doesn’t check out. The org hierarchy exists and accountability is placed at the right level in the hierarchy.
      - fmajid 1y ago

Propelloni 1y ago

Hehe, agreed. In Germany there is a saying that goes somewhat like this: "A consultant is a person you give your watch so that you can ask them for the time."

actionfromafar 1y ago
... and the other people in the organisation will now agree that the time is what your watch says.

mook 1y ago

Don't forget cross-industry collusion. It can be illegal to form organized cartels, but it's totally fine to listen to what your consultant says, even if they got it by talking to their other clients.

pfannkuchen 1y ago
This must still be legally considered collusion, right? Maybe it’s not totally fine but it’s so hard to prove that they go ahead and do it anyway?

condiment 1y ago

What a hot take! If you're in an organization where leadership 'points the finger' at McKinsey to cast blame for an unpopular decision, imagine what sorts of decisions they would have made without the consultants! Consultants are hired to improve decision quality. They do that through a combination of analysis, experience, and industry connections. The work product is rarely 'powerpoints'. The work product is the actual work, which entails people doing research, making decisions, executing on them, and measuring results. At any rate, I don't disagree with you that consultants aren't going anywhere. This post is an ad for an immature AI service that makes a bunch of claims about how they've solved for hallucinations and knowledge cutoffs in order to take down McKinsey. If they had solves for those problems, they'd be wasting their effort building a replacement for consulting firms.

RansomStark 1y ago
I'm sorry but how does a fresh out of college senior consultant gain such amazing experience? I've been unfortunate enough to work with 3/4 of the big four (senior enough to at the table, not senior enough to call bullshit). Sales pitch is all partners; older people, lots of industry experience in relevant areas, great pitch. But, come time to deliver and an early 20-something shows up. So either its all covering your ass, or its just recycling reports from a shelf, either way there's no experience involved

jaccola 1y ago

In my experience it is often subtly simpler than this. Rising to the top of a company is rarely the meritocracy we'd like to think, (or, at least, the merit required to rise is different than the merit required to lead a company successfully). Often people rise to the top who don't want to make decisions, don't have a vision and very much are used to leading by consensus. So there is not a masterful plan to avoid blame for the difficult thing they know they need to do, they just don't know what to do - they are incapable of making decisions.

bryanrasmussen 1y ago

>McKinsey consultants are paid to say the things that corporate leadership doesn't want to say. >AI is not replacing that particular service anytime soon. what are you talking about?! That is the prime service for AI to replace. What, you don't like our decision!? But the AI says we should fire you all, can't argue with AI folks, it's super smart. hell, they just need a ChatGPT template that makes screenshots that says what you want ChatGPT to say for you and they're good to go. They don't even really need to use the AI. McKinsey does not look good in a world of AI.

cm2187 1y ago

Scott Adams has a hilarious way to describe consultants thay says something similar: https://youtu.be/Ag9mo58sxbQ?t=2822 https://youtu.be/Ag9mo58sxbQ?t=2822

rickdeckard 1y ago

> AI is not replacing that particular service anytime soon. Fully agree, it's more likely that the outcome will be "We hired McKinsey, they now use some intelligent software to improve their analysis" Everything else will result in "What do you mean, we paid you money to lead and you handed the destiny of the whole company to some generic software?!"