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When the going gets tough, firms call in consultants. When Bain or McKinsey arrive, they tell you to make a change. Is your firm centralized? Decentralize it! I

When the going gets tough, firms call in consultants. When Bain or McKinsey arrive, they tell you to make a change. Is your firm centralized? Decentralize it! Is your firm decentralized? Centralize it. Donahoe's "master fix" and subsequent exit should give pause to industry thinking of hiring consultants to run their companies in the long-run; for as the saying goes: the apple doesn't fall far from the tree.

ChuckMcM 12y ago
Hilarious and on point, but to their credit consultants look at what you are currently doing which isn't working, and suggest you do the other thing on the theory that worst case that won't work either but at least you will have tried something new. I generally think that it is a symptom that the management isn't able to manage the business. Not everyone has the skill set to mix a tech and commerce company into a living / breathing entity.
- x0x0 12y ago
  Or perhaps for some reason management needs an external blame sink for doing something they wanted to do...
- mathattack 12y ago
  The "higher brand" consultancies also live by their stamp of approval. A CEO who wants to do a risky strategy will hire the biggest brand name possible to provide cover. "Nobody got fired for hiring McKinsey for advice" is similar to "Nobody got fired for buying IBM hardware". And in this case, the CEO can say, "Well, I hired the best to help me think it up" when it goes wrong.
  - Chronic29 12y ago
    Yep. If you're going to do layoffs at your startup or corporation, call a consultant, get their analysis (which is actually unnecessary), fire people, and bam, point the finger at the consultants if any backlash comes your way
foobarqux 12y ago
In this case it is more likely that the consultants were brought in to "independently" provide justification for something that had already been decided.
danhak 12y ago
This move has nothing to do with consultants and everything to do with activist shareholder Carl Icahn.
trhway 12y ago
This is what they repeatedly did to collective farms mid 20th century in USSR. Nothing helped. One can only wonder why :)
mathattack 12y ago
Wasn't the prior CEO (Meg Whitman) also Bain? In his defense, he was there for almost 10 years, no?
- WoodenChair 12y ago
  Yes the GP comment is totally off base as far as its attacking Donahoe is concerned (if that was even the intention). He's a very long time eBay exec, and Meg Whitman was nearly with eBay from the beginning. From all outward appearances Donahoe and his colleagues only made this decision after a lot of careful consideration.

ChuckMcM 12y ago

Hilarious and on point, but to their credit consultants look at what you are currently doing which isn't working, and suggest you do the other thing on the theory that worst case that won't work either but at least you will have tried something new. I generally think that it is a symptom that the management isn't able to manage the business. Not everyone has the skill set to mix a tech and commerce company into a living / breathing entity.

x0x0 12y ago
Or perhaps for some reason management needs an external blame sink for doing something they wanted to do...
mathattack 12y ago
The "higher brand" consultancies also live by their stamp of approval. A CEO who wants to do a risky strategy will hire the biggest brand name possible to provide cover. "Nobody got fired for hiring McKinsey for advice" is similar to "Nobody got fired for buying IBM hardware". And in this case, the CEO can say, "Well, I hired the best to help me think it up" when it goes wrong.
- Chronic29 12y ago
  Yep. If you're going to do layoffs at your startup or corporation, call a consultant, get their analysis (which is actually unnecessary), fire people, and bam, point the finger at the consultants if any backlash comes your way

foobarqux 12y ago

In this case it is more likely that the consultants were brought in to "independently" provide justification for something that had already been decided.

danhak 12y ago

This move has nothing to do with consultants and everything to do with activist shareholder Carl Icahn.

trhway 12y ago

This is what they repeatedly did to collective farms mid 20th century in USSR. Nothing helped. One can only wonder why :)

mathattack 12y ago

Wasn't the prior CEO (Meg Whitman) also Bain? In his defense, he was there for almost 10 years, no?

WoodenChair 12y ago
Yes the GP comment is totally off base as far as its attacking Donahoe is concerned (if that was even the intention). He's a very long time eBay exec, and Meg Whitman was nearly with eBay from the beginning. From all outward appearances Donahoe and his colleagues only made this decision after a lot of careful consideration.