5 ms·

I know what a consultant is, and I know what a manager is... But I'm not sure I know what a "management consultant" is.. You sound like a contractor who shows u

by dicroce 11y ago

I know what a consultant is, and I know what a manager is... But I'm not sure I know what a "management consultant" is.. You sound like a contractor who shows up and tells managers better ways to do their jobs? If that is true, why don't they ask you why they should trust your opinion over their own?

rayiner 11y ago
Say you're a successful startup founder. You're technical, good at raising money, and good at getting your team to deliver a high-quality product on time. Fast-forward 10 years, and now you're a pretty big company. You want to start manufacturing your product yourself instead of sending that work out to someone else. Do you know anything about managing a manufacturing operation? Say you want to acquire a company. Do you know anything about integrating it?
- hessenwolf 11y ago
  Do the 20-something-year-old MBAs know either? Gosh, no. But they can whip up a MECE and crunch some numbers in their heads which look totally plausible. I think it provides some value, but I am not a huge fan. In my experience, the devil is in the details and the failures come during the implementation, and the management consultancies in the Marvin Bower tradition explicitly side-step implementation.
  - rayiner 11y ago
    The 20-something MBA is just a conduit for the knowledge and experience of the firm and its partners. Their job is to take the established rules and apply them to the customer's specific problem. That is also a practical reason why consulting firms hire from Harvard and care about SAT scores. Getting a 1600 SAT doesn't mean you're a good manager. It's probably a good indication you're good applying abstractions to concrete situations.
    - hessenwolf 11y ago
      A good argument, to be fair.
  - exelius 11y ago
    No, the 20-something-year-old MBA doesn't know. But the 50 year old partner who the MBA works for is likely a world-class expert who has done this a dozen times. And if he's not, he usually knows someone who is that can be brought in to advise - at a price, of course. The partner is usually the one who sold the work and has the trust relationship with the client. So it fucks with the partner's money if the MBA delivers shit work. Management consulting is an apprenticeship business, so the partner is incentivized to make sure the MBA learns how to do things quickly so he can be billed out at higher rates, develop his own relationships with clients, etc. Do that for long enough and you can be a partner pulling in $10 million a year too. Most big management consulting firms these days also do both management consulting and system integration. The margin on management consulting work is sick, but the projects aren't that big (a few million dollars over a couple months). The margin on implementation projects is much lower, but the projects themselves can be enormous (think hundreds of millions over several years). So you're fucking your implementation guys if you deliver an unimplementable plan. And in a partnership model, if the implementation project fails, the partner who did the management consulting piece of the work still takes a hit.
lordnacho 11y ago
Sometimes internal opinions are clouded by internal politics, so it's nice to have a guy come by who isn't in that game. Other times tough choices need to be made, and it's easier to fire 10K people with a powerpoint deck from a reputable firm.
kyllo 11y ago
You don't tell them better ways to do their jobs, you tell them what they want to hear and provide political cover for them to do what they wanted to do anyway. If you're a CEO and you want to make a change, consultants will sell you data and benchmarks and best practices to back you up when you need to sell it to the rest of the execs and the board.
- dicroce 11y ago
  wow.. thats.... genius.
johan_larson 11y ago
Management consultants typically don't have specialized expertise. They are generalists with good pedigrees, which makes them trustworthy in the eyes of their clients. Management consultants often get called in to vet risky projects management is considering. The idea is that if a trusted outsider OKed the project, and it fails, then management at least didn't act irresponsibly in undertaking it. There's a surprising amount of ass-covering in this world. The other scenario is when a decision needs to be made that will inevitably hurt someone in the company, so it's hard to find an impartial insider. This is why management consultants get pulled in for re-orgs, for example.
- exelius 11y ago
  It's not true that management consultants don't have specialized expertise. You start out that way when you join, but develop specialized expertise as you go through your career. I actually joined consulting from industry, so I was brought in specifically because of my knowledge of technology and development. You might be thinking of strategy consultants, which are a rapidly-disappearing subset of management consultants. They often deal with very high-level problems such as "our company's market position is disappearing; what adjacent markets can we move into?" You then get an answer that may not be the one you were looking for, such as "you should look to sell the company while your value is high". But this is often backed up with a dizzying amount of thorough analysis, so it's not just some random guy telling you something.
exelius 11y ago
Basically, yes. But management consultants are often brought in to look at a group or a process, break it down with a defendable methodology / framework, and recommend improvements based on the client's goals. Most management consultants also bring in systems integrators to implement the recommended changes. The margins on systems integration projects aren't nearly as high, but the volume of work is usually higher (a management consulting project is usually under $2 million, while systems integration contracts can go into the hundreds of millions of dollars). Much of what I've been doing recently has been helping development organizations at large companies convert to "modern" management practices. Things like bringing your ops folks into the dev team as DevOps, how to structure teams to manage automated testing, planning how dev environments (i.e. CI environments) should be structured and used so that continuous delivery is an option down the road, etc. I happen to focus on software development and technical operations because that's my background, but there are people doing this for manufacturing, shipping, call centers, etc. There is sort of an "ideal way" (aka "best practices") for most companies to do most things. HN might cry "No there's not!" but this is actually true because most of our clients are too big to really be innovative. It can be hard for an insider to see what's working and what isn't. Also, because I move from client to client relatively often, I get to see how a lot of different companies do things, so I can bring perspective that someone who only works at one company all the time can't. And usually, it doesn't matter if the manager trusts my opinion or not. Either myself or someone else from my firm has developed a trust relationship with someone higher up in the company (usually a VP who has a discretionary project budget) who has brought us in to help. The core of the business is trust: that's why you have to be a likable person capable of building lasting human relationships. It's in both parties' interests to maintain these relationships; the consultant uses them to sell work, and the client uses them to solve problems. It's a win-win.

by dicroce 11y ago

rayiner 11y ago

Say you're a successful startup founder. You're technical, good at raising money, and good at getting your team to deliver a high-quality product on time. Fast-forward 10 years, and now you're a pretty big company. You want to start manufacturing your product yourself instead of sending that work out to someone else. Do you know anything about managing a manufacturing operation? Say you want to acquire a company. Do you know anything about integrating it?

hessenwolf 11y ago
Do the 20-something-year-old MBAs know either? Gosh, no. But they can whip up a MECE and crunch some numbers in their heads which look totally plausible. I think it provides some value, but I am not a huge fan. In my experience, the devil is in the details and the failures come during the implementation, and the management consultancies in the Marvin Bower tradition explicitly side-step implementation.
- rayiner 11y ago
  The 20-something MBA is just a conduit for the knowledge and experience of the firm and its partners. Their job is to take the established rules and apply them to the customer's specific problem. That is also a practical reason why consulting firms hire from Harvard and care about SAT scores. Getting a 1600 SAT doesn't mean you're a good manager. It's probably a good indication you're good applying abstractions to concrete situations.
  - hessenwolf 11y ago
    A good argument, to be fair.
- exelius 11y ago
  No, the 20-something-year-old MBA doesn't know. But the 50 year old partner who the MBA works for is likely a world-class expert who has done this a dozen times. And if he's not, he usually knows someone who is that can be brought in to advise - at a price, of course. The partner is usually the one who sold the work and has the trust relationship with the client. So it fucks with the partner's money if the MBA delivers shit work. Management consulting is an apprenticeship business, so the partner is incentivized to make sure the MBA learns how to do things quickly so he can be billed out at higher rates, develop his own relationships with clients, etc. Do that for long enough and you can be a partner pulling in $10 million a year too. Most big management consulting firms these days also do both management consulting and system integration. The margin on management consulting work is sick, but the projects aren't that big (a few million dollars over a couple months). The margin on implementation projects is much lower, but the projects themselves can be enormous (think hundreds of millions over several years). So you're fucking your implementation guys if you deliver an unimplementable plan. And in a partnership model, if the implementation project fails, the partner who did the management consulting piece of the work still takes a hit.

lordnacho 11y ago

Sometimes internal opinions are clouded by internal politics, so it's nice to have a guy come by who isn't in that game. Other times tough choices need to be made, and it's easier to fire 10K people with a powerpoint deck from a reputable firm.

kyllo 11y ago

You don't tell them better ways to do their jobs, you tell them what they want to hear and provide political cover for them to do what they wanted to do anyway. If you're a CEO and you want to make a change, consultants will sell you data and benchmarks and best practices to back you up when you need to sell it to the rest of the execs and the board.

dicroce 11y ago
wow.. thats.... genius.

johan_larson 11y ago

Management consultants typically don't have specialized expertise. They are generalists with good pedigrees, which makes them trustworthy in the eyes of their clients. Management consultants often get called in to vet risky projects management is considering. The idea is that if a trusted outsider OKed the project, and it fails, then management at least didn't act irresponsibly in undertaking it. There's a surprising amount of ass-covering in this world. The other scenario is when a decision needs to be made that will inevitably hurt someone in the company, so it's hard to find an impartial insider. This is why management consultants get pulled in for re-orgs, for example.

exelius 11y ago
It's not true that management consultants don't have specialized expertise. You start out that way when you join, but develop specialized expertise as you go through your career. I actually joined consulting from industry, so I was brought in specifically because of my knowledge of technology and development. You might be thinking of strategy consultants, which are a rapidly-disappearing subset of management consultants. They often deal with very high-level problems such as "our company's market position is disappearing; what adjacent markets can we move into?" You then get an answer that may not be the one you were looking for, such as "you should look to sell the company while your value is high". But this is often backed up with a dizzying amount of thorough analysis, so it's not just some random guy telling you something.

exelius 11y ago

Basically, yes. But management consultants are often brought in to look at a group or a process, break it down with a defendable methodology / framework, and recommend improvements based on the client's goals. Most management consultants also bring in systems integrators to implement the recommended changes. The margins on systems integration projects aren't nearly as high, but the volume of work is usually higher (a management consulting project is usually under $2 million, while systems integration contracts can go into the hundreds of millions of dollars). Much of what I've been doing recently has been helping development organizations at large companies convert to "modern" management practices. Things like bringing your ops folks into the dev team as DevOps, how to structure teams to manage automated testing, planning how dev environments (i.e. CI environments) should be structured and used so that continuous delivery is an option down the road, etc. I happen to focus on software development and technical operations because that's my background, but there are people doing this for manufacturing, shipping, call centers, etc. There is sort of an "ideal way" (aka "best practices") for most companies to do most things. HN might cry "No there's not!" but this is actually true because most of our clients are too big to really be innovative. It can be hard for an insider to see what's working and what isn't. Also, because I move from client to client relatively often, I get to see how a lot of different companies do things, so I can bring perspective that someone who only works at one company all the time can't. And usually, it doesn't matter if the manager trusts my opinion or not. Either myself or someone else from my firm has developed a trust relationship with someone higher up in the company (usually a VP who has a discretionary project budget) who has brought us in to help. The core of the business is trust: that's why you have to be a likable person capable of building lasting human relationships. It's in both parties' interests to maintain these relationships; the consultant uses them to sell work, and the client uses them to solve problems. It's a win-win.