This was one of those big eye opening moments for me. Consultants are hired mercenaries in coporate warfare, they don't care about you, they don't care about your company or the rivalries or the squabbaling. You pay them a bunch of money to come run roughshod over your enemies by producing reams of analysis and Powerpoints, to fling the arrows of jargon, and lay siege to your enemies employees by endlessly trapping them in meetings and then they depart.
Consultants are brought in to secure your flank, to provide air cover and to act as disposable pawns in interoffice combat.
They are not brought in to solve problems, to find solutions, or because of their incredibly acumen. It's because they have no loyalty or love but money.
"Consultants are hired mercenaries in coporate warfare, they don't care about you, they don't care about your company or the rivalries or the squabbaling."
"They are not brought in to solve problems"
I've known people that worked for consultancies and the biggest value add they think they have brought is when the problem is the rivalries, politics, and squabbaling has led to inaction and they've needed outside support to come in who don't care about these things.
Perhaps we should hope for companies to have leadership teams where they are able to cut through this intransigence, but unfortunately all too often with old companies stuck in their ways this isn't the case.
They might see their role as brilliant mediators facilitating action by settling feuds using 2x2 matrices, but I think that's naive at best, disingenuous at worst.
They care about the agenda of the person they've been hired by. Usually a C-level agenda-setter or someone influential in the org, and often a McK "alum".
And speaking of action, they have zero stake in the actual implementation of what they proselytize.
All this isn't to say that they don't provide value. Exchange of money is usually is a reasonable signal of providing value, and these firms and its employees do reliably well in that area. However, the narratives around what value strategy consultants provide I find to be truthy, but not actually true.
I can vouch for this. I've done software consulting in corporates a few times throughout my career. Probably the highest value things I've done have been those times the team's organisational structure was a bit broken, and nobody in the company had the visibility, audacity and cover to call it out.
One team had no clear leadership, and there was an important milestone coming up that the team didn't seem to be orienting around. I started kicking up a fuss in meetings by constantly asking "Is this important for our April launch?". I know I upset at least one person, but with some help from management we ended up collectively getting the launch back on track.
At another company my perspective was relayed through my consulting company to the client's upper management, and that ended up being used to fire someone. It doesn't feel good - he was a nice guy. But he was genuinely useless. He spent about 90% of his attention brown nosing to upper management. Once or twice he even actively sabotaged the team in small ways so he could be seen stepping in and fixing the problem. I think they wanted to get rid of him anyway but they didn't have legal cover.
There's absolutely value for companies in having outside consultants sit amongst a team. But its a subtle kind of value. I thought I was brought in to write code. Hah!
I should clarify “value” is subjective. Value in this context doesn’t necessarily mean good, of value to society, aligned with your values, etc. Just that one party is willing to part with cash in exchange for something of value to them (presumably of value to them – unless they’re on drugs).
They’re providing value, just not to the company at large. But the specific person that hired them, and pays them with company fund, you can bet your ass they’re getting value.
I don't think they were saying they are mediators or settle feuds. I'm sure a bunch of people at the companies are pissed at the conclusions they come to. It's moreso though that precisely because they aren't tied to any feudal relationships within the organization they're able to be more impartial with their research and cut through bureaucracy.
Certainly though if all they're doing is parroting back conclusions backed by "research" that the exec who hired them wants to hear then they aren't providing much value, other than perhaps providing air cover when some decision, any decision, is better than no decision and gridlock.
Based on what? I’m close with a few higher levels at different strategy consulting firms, and most of their work at these firms we’ve talked about has been serious: how to respond to a firm you’ve heard of receiving backlash over a botched vaccine, balancing a pivot in their product line with their existing customer base, etc
Problems that will screw you royally (speaking of the firm here) if you get them wrong, so you bring in outside perspective that can pattern match your problem to real world examples (and get in the room with others who’ve navigated a similar problem) to make sure you take the best trajectory.
At worst, consulting is exactly what you say. Large firms, being so large, cover the gamut in their services (and so surely get some exposure to these more flippant projects). The bread and butter of consulting though is solving real problems.
From here, this perspective you have about consulting looks a lot like the mindset some people have around VC: “they just come in to pump companies and dump them in the public market / make an exit before the music stops and everyone realizes it’s bullshit”. Of course there’s some of that in VC, but by and large it’s legitimate and serious work, focused on legitimate outcomes, and done all around by genuine people looking to do a good job - all while creating real value for everyone involved.
Another value of consulting is getting advice from someone who has seen the same decisions play out elsewhere, including at competitors, and apply their secret information on your behalf. It is effectively non-public strategy information laundering.
I find that the people most critical of strategy consulting are often the ones with least experience in it—and tend to paint caricature and with a broad brush at that. Thank you for this more realistic comment.
AS someone who has both read the book and interacted with "big 4" names a few times this is going to be one of those "underrated" comments you sometimes see here.
At my previous place of employ they made some really terrible decisions which ended up costing a LOT of money later.
Their response was classic "the design was vetted by McKinsey"..
No.. you sent them what you wanted to do, they told you what you wanted/needed to hear and now you are deflecting your decisions.
I worked for a health insurance provider that paid BCG $1mil to confirm that we should be using agile in our org. It took BCG a month to do their "study."
We were already using agile in our org, but nice to know some incesteral relationship between directors/VPs were able to make a nice pay day.
> nice to know some incesteral relationship between directors/VPs were able to make a nice pay day.
you should read the book.. The industry is rife with this type of behaviour.
There are always stories about how "senior manager" X is basically a shadow employee. While they work for company "Y" their real job is to send business to the consulting mother ship.
It's not always so formal or sinister. I've seen consultants build relationships with younger managers and "rising stars" by buying them lunch and drinks, and even doing some free work that makes them look good. Then the consultant is an easy connection when there's some dollars to hire consultants.
I can't find the comment now, but there was a similar conspiracy about ex-Amazon Managers being paid to force their new employers to adopt AWS on one of the programming subreddits.
There is usually no forcing: they are typically hired because of their AWS knowledge - the business has already decided to go AWS, the new hire is doing what he's expected to do.
This really sounds like a conspiracy theory. That being said, McKinsey (and presumably BCG and Bain) very much embrace their employees leaving to join their clients. It creates a good "referral" network if you will. But more than that, I don't buy it.
The throwaways are likely shills (or charitably - ignorant employees that don't wish to dive into any claims about their employer?). There are actual cases involving big four and kickbacks/bonuses and corporate sabotage.
One example in the last few years: BCG and NCR Corporation.
"It is undisputed that Mr. Benjamin, as an officer of NCR, owed NCR a fiduciary duty that includes a duty of loyalty. The Counterclaims allege sufficient facts to show that Mr. Benjamin breached that duty by entering into a secret agreement with BCG to promote and expedite his candidacy for CEO. The Counterclaims further allege sufficient facts to show that BCG worked with Mr. Benjamin to negotiate a one-sided contract, and remove and replace employees who opposed adoption of the contract, and that BCG advocated for Mr. Benjamin’s promotion to CEO in hopes that he would award BCG with a discretionary bonus." [1]
It's fair to say my view would be biased. But probably not in the direction you would think.
I think we need to be more critical of what it means to see things "first hand". MBB are typically operating at the executive level and the motivations between executives decisions typically don't reach the "rank and file" of the organization (forgive the wording). In my response I mentioned that the cost of engaging McKinsey is so extremely high that there will need to be some type of rational justification for bringing them in (beyond just covering my ass).
That being said, I worked on a few projects where I wasn't sure whether the cost justifies the benefits but this was largely due to incompetence or overselling - never "pure graft".
Running agile in a small team is one thing, having a company do "agile at scale" is quite another (yes I realise the contradiction in terms). As someone who worked at McKinsey, on several large scale "agile" rollouts the bulk of the work was on re-organising the company (this is not an easy thing to do in companies with thousands of employees - hence bring in the consultants). The driver behind these projects was almost always cost cutting or increasing efficiency. The agile part was mostly window dressing.
No not at all; this org had existed for two years already, was already using agile for said two years, and successfully delivered a multitude of projects using agile.
The driver to me seems to clearly increase complexity for the sake of it in order to push for more billable hours.
This was pure graft.
Honest Q since you're a throwaway but is this how consultants typically act? Justify simple things to be more complex to lay people and charge them out the wazoo?
I think I'm slowly starting to understand why some of my friends are creating their own dev agencies. This racket is rife with stupid money.
That's interesting. I'm curious to know how the internal sponsor of the project sold it internally. It generally takes a lot of motivation to convince your superior (and finance team) to pay the millions McKinsey would charge per week.
At the micro level, I would agree that in some cases there was a tendency of some to make things more complex than necessary. The implicit intent here was generally to demonstrate some type of credential to lay people.
That being said, at least in my personal experience, most of the actual recommendations were backed by as much data as possible. In the projects I worked on, I don't think a single slide went by without hours of debate and critique by the partners. It was a given that any recommendation should be supported by data.
That being said, there are also lots of cases where there is no right/wrong answer - especially given the timeframe (typically 4-8 weeks). Companies basically pay consultants to come in, analyse as much data as feasible and just make some type of informed decision. In most cases the company is either unwilling to make that decision themselves or does not have the ability to do so (i.e. organisation is too complex to tackle this problem within so just get an outsider to cut across the company and get it sorted as best as possible).
> It generally takes a lot of motivation to convince your superior (and finance team) to pay the millions McKinsey would charge per week.
And an insurmountable barrier to then declare it was a waste of money.
ie once these initiatives start - they are inevitably declared successes because too much has been invested ( literally ).
So the consultants always leave with success declared, whether it works out in the long run I suspect the consultants will hardly ever know - just moving on from one declared success to another.
You are danger close to seem like you are defending agile. I am all in on blaming kickback consulting. But we can't blame agile's failure on consulting companies.
There was a genuine and optimistic belief in agile among programmers and management. They tried and failed refusing to admit the mistake and doubling down on all the BS.
It works perfectly fine to hire consults to do welding courses for the employees. If agile was a good idea "agile consultants" would do fine to.
Another rôle they play is a kind of out-in-the-open corporate espionage. You pay them to come in and tell you what the "best practices" are in your industry (i.e. effective new things your competitors have been doing since the last time they came to visit you—and they'll learn some new ones from you to tell your competitors, next time)
Oh, so they increase productivity across the industry, thus leading to wage rises for employees, increased margins for company profits and a higher GDP for the country.... right?
(Off to dig my tongue out of the deep hole in my cheek.)
Didn't necessarily say it was bad. It's a bit like the Japanese R&D-pooling system post-WWII, in some ways, and AFAIK that worked great. Just unofficial, and with a profit margin.
[EDIT] Well, and also it's not kept within the host country, but exports those ideas & methods globally.
I had an Econ prof who described his consulting business as:
1. Coming into the company and gathering information from the low-level staff.
2. Presenting the information to management.
3. Collecting $1000/hr or more for his trouble.
Basically information washing to get execs to accept information that they would normally ignore. I wonder how much of this kind of thing goes on in industry.
Where I saw that work it was effectively routing around the middle layer: the guy bucking for a promotion based on some project isn’t going to let any report mention that the users hate it, but they’ll certainly tell the consultants that.
It worked but was a very expensive way to about fixing social problems.
This highly-paid factory efficiency expert was enthusiastically explaining how he works. "You just listen to the workers. They know where the inefficiencies are"
I've worked with senior managers who have zero regard for the knowledge of the people doing the work. It might be those workers don't have some over-arching conceptual framework for how the company works, but they do have intimate and sometimes deep knowledge of what they do all day. And not taking advantage of that is a huge blind spot.
I have worked as a consultant, but not for the one of the big 4. We understood that we were often being used to develop an 'independent' perspective that would support a decision that had essentially already been made or disprove a rival decision.
We also were fully aware of the old joke that a consultant is someone who borrows your watch and then tells you the time. We sometimes deployed this ourselves with customers, and extended it to say that unlike our rivals, we would actually point out how late you were and how to get back on track.
[Edit] We sometimes found ourselves supporting one of the big 4 companies (as domain experts). We were often amazed by the quality of the A team that they would deploy to win the work, compared with the B or C team that would then actually execute it (often bright but junior staff).
That's exactly my experience in Europe. We want to fire 50 people/close a factory/whatever without blowback...let's hire McK to tell us to do exactly that.
I've also had some experience working for a smallish company with very big clients and they sometimes insisted on having an IT-Consulting company like Capgemini as a middleman. That's the biggest nightmare because they were always a net-negative from my POV...integrating them was just extra work and they provided no value except for their brand name to make the client feel at ease.
I'd say companies like this are a scam, but they're only half a scam -- half the customers know exactly what they're getting.
The other half haven't figured it out and think they're getting top-tier stuff and end up with life destroying garbage like your employee performance system or a citywide trash crisis? [1]
Do you need to spend millions to justify an inevitable decision but blame the hired guns for it? Hire McKinsey.
Do you need to spend millions for severely overworked junior grade consultants and offshored "experts" to provide you with objectively terrible advice and create an opioid epidemic? Also hire McKinsey! [2]
I have worked in a third-grade infrastructure company in India. Everyone in top management (including founder) was corrupt. Their business practices were always about bribing, siphoning off investors money, inflating assets, money laundering and so on. When it was trying to go public, it hired one of 'big 4' to do the auditing and other due diligence. Once it went public, that agency was fired (2 years after going public). With in 6 years, that company became bankrupt.
Everyone knew that one of 'big 4' was hired to make the prospects of going public legit and credible. That consulting firm made things look right in exchange of big bucks.
This has been my experience when the company I work for engages with an external consultant. Managers look for validation from an external source so that:
- when things go well, they can take the credit, or
- when things go bad, they can blame the consulting company.
This. Big 4 consultants are also needed by law or by convention in a lot of places for auditing and such tasks. If it's for actual consultancy services, the decision has already been made. Having a Big 4 company "sign" and provide authority on a decision a manager has already made, just makes it an easier sell to his/her higher ups.
Furthermore, they're trying to convince someone else (usually a boss) of a theory/idea/strategy that they might have but don't have the resources/rapport/etc. to demonstrate it's effectiveness.
Consultants are brought in to secure your flank, to provide air cover and to act as disposable pawns in interoffice combat.
They are not brought in to solve problems, to find solutions, or because of their incredibly acumen. It's because they have no loyalty or love but money.