Hacker News Reader

Having watched way too much "House of Lies" where consultants often seem to be brought in to back-up the viewpoint of a given executive and make the case for whatever that person's agenda is...what would such consultants likely be doing in this case in "the real world?"

I admittedly haven't had the experience of working with any consultants, so I'm curious for opinions from those who have what happens when they come in during a "typical" engagement of this nature.

I spent a few years as a management consultant. Consultants are almost never hired to provide truly objective analysis. In most cases, they're hired to "back-up the viewpoint of a given executive". This is done by the executive to hedge the political risk required to go through with their action. They can point to McK when they defend their strategy to the board and then throw them under the bus if things don't pan out.

The rewards for the consultant are high fees and living a luxe lifestyle of staying at high end hotels, traveling first class, and dining at michelin starred restaurants (all of course on the client's dime). Plus of course guaranteed future work. Even if the project tanks and the executive is fired, they'll be sure to hire McK again at their next gig.

What most people don't realize is that consulting engagements are a careful collaboration between consultant and client. The findings are almost always driven by an iterative process where you go through review cycles with the buyer until you reach your "objective" conclusions, which by the very nature of how the work is performed, is totally subjective and biased. Doubly so for turnaround projects like this one. (not to mention that consultants are constantly trying to recycle previously performed analysis, regardless if it at all fits or applies in the target project).

Management consultant is the biggest circlejerk profession. Even moreso IMO than ibanking. Classic self-serving MBA type job. Management consultants are to entrepreneurs what food critics are to chefs.

Yap pretty much. Remember reading an expose with some examples of how consulting firms would hire fresh grads from Ivy Leagues, and then send them to big companies, for top dollar, (or to other countries like Saudi Arabia) to basically do what you describe -- support the viewpoint of the executive who hired them. Of course all done officially with power point slides, excel spreadsheets and pie charts.

At the top tier firms, the creation of slides, charts, etc is usually outsourced to a back office dedicated to the job. I'm not sure if this is still the case at McK, but this office used to be stationed in the developing world...

Consultants would draw and describe what they wanted, goto bed, and awake to slides, charts in their inbox.

Same thing with models. Most firms have "rockstar excel jockeys" (usually analysts/associates/etc.) that are pimped out to project teams to serve this singular role (making models, building business cases, etc.).

Management consulting, such a surreal profession...

Where did you land after consulting?

I went from Accenture's management consulting practice to Goldman Sachs. Sweet gig. Totally on point to what the parent says.

Without being too cynical, there's a lot of truth in that. The one time I worked closely with management consultants, a few were sharp, one or two not so much. At the end, they came to similar conclusions that we had already come to anyway but they sold that analysis to the executives.

>Management consultants are to entrepreneurs what food critics are to chefs.

Eh. Good food critics cut through a lot of trendiness. Of course, a lot of food critics aren't good.

This is also a large part of why the "Ivy League" is perpetuated. Not because the graduates or the education is special, but because it provides a "stamp" that its alumni can give out to clients to give authority to client decisions and absorb heat from cover clients' mistakes.

Couldn't agree with you more on all major points. Let's try the closing analogy one more time, though.

Consultants:entrepreneurs = husbands:Kardashian sisters.

I wonder why if this is the case that someone hasn’t tried to create a “discount” management consulting service which aims to give management cover, but without all the first class travel and high living. It can’t cost that much to put together a flashy powerpoint presentation.

The high cost is part of the service. "We spared no expense planning this failed initiative and hired the best consultants. What more could we have done?"

Prestige is part of what you're paying for, though.

That is not part, it is ALL that you are paying for.

What is the difference between McK and Deloitte? One has Harvard grads the other has Cornell grads. The analysis is the same, but one is just wrapped up in a prettier package and more prestige.

Are there not managers looking for cover that don’t care about prestige? I can understand the need for cover when making controversial decisions, but not why it needs to be expensive.

The same reason there aren't "discount" Rolls-Royces:

https://en.wikipedia.org/wiki/Veblen_good

It depends on who is trying to resurrect it: Marissa Meyer or Steve Jobs. Imagine a reality show: Jobs or Musk in 2010 were tasked to turn Yahoo around, and the rules were that they would only have access to Yahoo's internal resources and cash. I would bet with my money buying Yahoo stock that they would reverse the curves.

Steve Jobs and Elon Musk each had/have a different focus and drive to achieve different goals that probably have little overlap with Yahoo. They might see their best course of action as immediately resigning after taking a survey of the company, and going on to start a different company.

I don't believe that if you just throw enough smart managers at the top of a hierarchy, then eventually it will spit out gold. If anything, that can be problematic.

Yahoo, in its current large size, simply may not have the latitude to pivot to the degree required as a publicly traded company, since anything any CEO attempts will draw the ire of activist shareholders. Any major change becomes a large political endeavor.

Yahoo had one viable product: Yahoo mail. Instead of botching it, in 2010 they had a chance to make the best Android/iOS email/IM client by throwing a lot of weight behind it. The founders of WhatsApp were from Yahoo after all.

Why Musk? His companies aren't profitable.

Musk is bold and not afraid to invest aggressively. but he goes for easy pickings that are encumbered in conflicting laws, which he mostly ignore. He would curl up and cry at yahoo.

> Jobs or Musk in 2010 were tasked to turn Yahoo around

Assuming either of them was actually given the mandate to do so by the board of directors, etc, I imagine they'd fire like 50-80% of the staff, get rid of anything that's not profitable, and produce one highly refined product at a time, something that hasn't been done well before.

Source: Am both a Jobs and Musk fanboy and have done an unhealthy amount of reading about their histories and decision-making. I particular like this video of Jobs at NeXT: https://www.youtube.com/watch?v=HNfRgSlhIW0

That was a really good video and I say that as someone who is no fan of Jobs.

Did NEXT manage to execute the plan and sell 50k workstations in 1991?

Seems not - from Wikipedia "The NeXT computers experienced relatively limited sales, with estimates of about 50,000 units shipped in total" "NeXT withdrew from the hardware business in 1993 "

So I'm guessing more like 20k.

Along these lines, here's an interesting quote about Steve Jobs' focus from a documentary photographer who had access to NeXT:

"...it seems to me that, in general terms for Steve, he was so passionate about the goal and trying to invent something impossible that everyone had to be on this mission to Mars, and if you weren’t on the mission you didn’t need to be here. It was really a focused approach, so it wasn’t about me or you or hard feelings or anyone. It was about the thing and making the thing better."

"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact." -- Warren Buffett

I really doubt either Steve Jobs or Elon Musk could turn Yahoo around. With Jobs's Apple turnaround, he had the advantage of sharing (creating, really) Apple's cultural DNA; he didn't need to "turn around" a company, he needed to cut the fat and refocus it so it could do what it was doing a lot better. Elon Musk has never run a turnaround; his companies have certainly encountered difficulties, but it's easier to take a new organization with a strong mission and make it work than to take an old, sclerotic organization in a market that doesn't exist anymore and somehow make it relevant again.

> What is Yahoo's area of expertise that they make money at and can do better that Google, Microsoft, Facebook or Amazon?

Fantasy sports.

In much the same way Sega pivoted, Yahoo could.

Sega?

Edit: is there a story I don't know about? I know a reasonable amount about gaming but I guess I'm drawing a blank on a successful Sega pivot. I remember some cool ads when I was a kid, I suppose.

Sega once participated in the video game industry roughly how Nintendo does today, by producing a home console and making first-party titles for it with their established properties like Sonic the Hedgehog. Sega's consoles definitely have fans, but the company was losing money and Sega did not produce another console after the Dreamcast. Today, they do perfectly fine for themselves by making games as a third-party developer and operating other assorted media ventures like merchandising for anime. They're also a major producer of arcade games.

Sega has been around quite a while but probably referring to when it discontinued console development and shifted gears to creating games for third-party platforms.

Sega used to make consoles; now they exclusively make games.

Not the person you are replying to, but I think they are referencing how SEGA ditched home consoles and is now all software and arcades. From what I have heard they are doing extremely well with arcade machines, especially in Japan. I know they make the popular UFO crane game machines.

they are at the step of brining in Mckinsley consultants, never a terribly good sign

So Mckinsley consultants are the nursing home cats of the corporate world?

http://nypost.com/2010/01/31/nursing-home-cat-can-predict-im...

Yahoo is textbook example of failure of online "advertising revenue" only company. Most such companies failed in last dot bomb. Only Yahoo survived because it was the largest with decent cash reserves. I am sure another dot bomb like event will take out today's darlings too.

Your first sentence reminds me of this speech by Danny DeVito aka "Larry the Liquidator" in "Other People's Money": https://www.youtube.com/watch?v=62kxPyNZF3Q

i completely agree - its not Marissa fault either - steve jobs couldnt have turned that company around. they probably make a lot of money of fantasy sports though - that would be a lucrative brand to acquire; presumably tumblr is worth money also