[o09rdk]

So, I shared some of your impressions, but also some of what Vox is conveying.

Speaking from personal experience, the problem with large public institutions (maybe any institution?) hiring these consultancies is that there's enormous intrinsic pressure to accept their recommendations.

Say, public institution X spends exorbitant fees on consultancy Y. Now they're going to choose to ignore the recommendations?

If the recommendations are bogus, there will be hellfire about why the public institution is transferring huge quantities of funds to a private organization that is incompetent or sketchy. If the recommendations are not, then there will be hellfire about why the public institution is ignoring the recommendations.

As a result, a lot of times there's suspicion that these consultancies are just cover for administration or management making decisions that would be unpopular, controversial, or self-serving. At least in my experience, they're seen as a power grab for those already in positions of power. That is, the consultancy comes in, asks management/admin what they would like to see, and then they put it in the recommendations. Then admin can say "look, we didn't tell ourselves to [do incredibly controversial thing Z, like cut basic staff and give administration big raises], this fully independent third party said to do this."

As a result, I think hard questions about what you're getting from consultancies are actually apropos of the Vox article, and relevant to the perception that shady constituencies are somehow hijacking public services for their own benefit. When you pay large sums of money to a consultancy, whose methods are unclear, and have unclear scientific support, and assumes that, e.g., management of publicly traded for-profit companies and management of non-profit government organizations can be treated similarly, it leads to legitimate questions about whose motives are being served.

The WHO would have been better off imho convening a special strategy or reform committee made of inside and outside members than something like McKinsey.

[darawk]

I think a more fair characterization of that process might be: Controversial decisions require extra convincing to get done. If you know your organization is bloated and you need to downsize by 20%, you could just do it yourself, but then you run the risk of your organization revolting against you for it. If, on the other hand, you hire a consultancy, and they come to the same conclusion, that represents corroborative evidence for your view.

That is to say, another way of looking at this is that tough decisions require extraordinary evidence. If a neutral third party comes to the same conclusion, a cynical way to characterize that is it gives you "cover" to do what you wanted to do anyway. But an equally true way to characterize it is that if you weren't sure before, it allows you to be more confident that that was really the right decision.

If I were going to say, fire 20% of my staff, i'd want a neutral third party to come in and evaluate that decision before I just went off and did it too.

[jaclaz]

>If I were going to say, fire 20% of my staff, i'd want a neutral third party to come in and evaluate that decision before I just went off and did it too.

I think you have a queer idea of "neutral".

Do you call the consultancy firm telling them:

1) I don't know what to do, please tell me what I should do?

2) I know that I have 20% people that I should lay off, what do you think of this?

3) My personnel costs are too high, how can I solve this issue?

Expect as a result:

1) Some bogus advice about marketing and growth AND some apparently good, reasonable, data and very good looking graphics leading to a suggestion to reduce personnel by 10-30%.

2) Some apparently good, reasonable, data and very good looking graphics justifying a reduction of personnel by 20%.

3) Some apparently good, reasonable data and very good loking graphics suggesting to cut personnel by 30%.

[darawk]

You call them and ask them to consult with you about how to make your business or organization more efficient. If their recommendations concur with your already-held beliefs, you implement them. If they disagree with you, maybe you reconsider. That's what I would do, and it's what I assume these people are, for the most part, doing.

[jaclaz]

>You call them and ask them to consult with you about how to make your business or organization more efficient. If their recommendations concur with your already-held beliefs, you implement them. If they disagree with you, maybe you reconsider. That's what I would do, and it's what I assume these people are, for the most part, doing.

Sure, but the point is that you call them becase you believe you have not enough profits (or are losing money).

Now, there are generically speaking three ways to fix that issue:

1) increase the efficiency of the organization (really increasing it) which is something that sometimes is possible, sometimes isn't and anyway needs time and dedication by really expert people and produces - maybe - results in two/three years time or more, and often comes at an additional initial cost (investment in new technologies, machinery, etc.).

2) increase the income (i.e. produce and sell more) which again it is something that sometimes is possible, sometimes isn't and anyway needs time and dedication by really expert people and produces - maybe - results in two/three years time or more, and often comes at an additional initial cost (investment in new technologies, machinery, etc.).

3) a mild reorganization of the current processes AND reducing workforce by 20-30%, which takes little time and produces results immediately or almost immediately.

What they advice is usually #3, mainly because it is "easy" and "fast, and by the time you can see the possible overall long period adverse effects of the "cure" they have been already paid and are happily consulting some other firm.

Mind you it is not that many organization are perfectly efficient and actually very often workforce is larger than really needed, and as well a "spending review" can often solve part of the issue, so - when they propose the 20-30% cut on workforce, and remove each and every possible "fringe benefit", etc. they are not doing anything particularly "wrong", still they will be paid an (usually very high) amount of consulting fees to provide what amounts to some "obvious" measures and confirmation of your intuition/gut feelings.

I.e. all in all very often they are "an excuse" (the consulting firm has determined that ...) for whatever unpleasant you will be doing to your personnel.

[darawk]

You can call it an 'excuse', but you can also call it a corroborating opinion, like I said. If you're going to do something unpleasant, it can be good to get an outside opinion, so you don't do it if it's not actually necessary. Characterizing it as just an "excuse" or "cover" to do what you wanted to is unnecessarily cynical and reductionist. And even if it were true, so what?

[jaclaz]

You can of course classify or characterize it as you wish and like, still you will have spent an (usually awful) amount of money in consulting fees (from a company that isn't going too well) for a "corroborating opinion".

Your company, your money, your freedom to spend it as you prefer.

[sailfast]

Agreed, however the idea that because [expensive boutique firm] was consulted on X means that now the organization has no choice but to defer to their [insert maniacal conspiracy purpose here] recommendation doesn't pass the sniff test.

I agree that there is pressure because rates are high and there is a social penalty for being wrong at high expense in public organizations, but that does not mean that by being in the door suddenly the only responsible party is the consultancy because "who could ever say no to a Harvard MBA!"

I also agree with the article's thrust about transparency and accounting for such a global org to provide a good check on what is happening. I also agree that to manage successfully you have to have enough people on staff to adequately advise these efforts and help sort the good ideas from the bad. That said, the article didn't dive into WHO operations, just the fact that they hired consultants.

[ryanobjc]

Why doesn't it pass the sniff test?

Your second paragraph essentially parallels the well known "no one was fired for buying IBM" fallacy. How is buying advice from a Harvard MBA any different?

[ryanobjc]

Also important to remember that "hijacking public services for their own benefit" is hardly an abstract charge. There has been many examples of public goods being transformed into private goods for huge benefits to a select few. This is basically the history of Russia in the 90s.

It happened in Canada as well, privatization of public monopoly corporations did not return fair gains, and instead increased costs. Ditto in the US in various places, for example look at private prison with guaranteed profit-performance clauses (originally secured under the seemingly 'reasonable' concept that private companies wouldnt take a risk if there was no backstop/floor to financial performance).

All of these extremely shady transactions are seemingly greased by a whole army of well paid business consultants. At a certain level, if you aren't skeptical of their history, isn't you who are being naive?

[haecceity]

Ya they should spend more money and hire multiple consultants and have fight it out then implement some of their ideas.

[molszanski]

> enormous intrinsic pressure to accept their recommendations.

I have a different personal experience. Roughly ten consulting hires for big public orgs. Small stuff and a big one: a dozen of researches working for months to produce the best result.

It was shaped to produce the result they wanted to hear. Or simply ignored.

- Healthwise, should I drink Coke or Pepsi.

- Neither, they have too much sugar to be regularly consumed.

- I am asking which of two options I should stick to?