The whole business is a scam built around sending in some 26 year-old with an Ivy League degree and $100 haircut to regurgitate snippets from articles in HBR.
I post this fairly frequently, but here we go again. Business is hard. Change is hard. Consultants get a lot of shit for saying things that someone lower in the org could have told them. That's not evidence of abuse, that's evidence that your org isn't working well. A lot of the time substantial portions of the findings come from interviewing and listening to lower ranking experts in the client. Bringing in consultants is, among other ways, a way to bring in people who can get shit done, moving bricks at lower levels of the org with the political mandate of the top. That's quite valuable, because otherwise a lot of orgs are just entrenched. A very large number of senior leaders don't know how to accomplish X, and don't know how to get the information about X from their own company. And again, that's not an insult, because business is hard. It's great and all for you to say "regurgitate snippets from articles in HBR" but I can't say that resembles any work I've done, ever.
Opioid work was bad though, let's not avoid that. (edit for spelling)
* quick witted aikido-move-of-a-sentence to accept OP's insult, thereby disarming it
* enormous paragraph made up of short, frank, vague sentences with an compelling rhythm of overarching claims that frame the 20-something haircut's ostensible work in a positive light. It's the wrong generation but I'm reading them in Ari Fleischer's no-nonsense, eternally dismissive voice.
* anticipating the accusation of happy talk, a final, single sentence to cover one of the many troubling associations McKinsey has had with shithole companies. Even spelled the industry wrong!
I'm not being sarcastic or snooty. This is the HN-post version of the pharma commercial pattern of showing heartwarming images of happy people on swings while the narrator enumerates horrific side-effects. Reliably distracting an audience from a topic is a skill, and that reliability is valuable to companies.
So to all those naive respondents who want to say that McKinsey is some kind of corporate leech that provides no value-- this very comment is proof that you have no idea what you're talking about.
And some at McKinsey, I assume, are just run of the mill consultents.
All I'm trying to convey is that my day to day is listening to client problems, looking at data, talking to employees, and presenting findings. It's neither a conspiracy, nor a scheme, nor a world of wealthy indulgence. I make a healthy wage, but its likely lower than I could get in tech. Like almost every company in the world, its a normal company.
This in a thread about McKinsey settling for over half a billion dollars over its role in causing the opioid crisis, which is just one of the many, many arrows in McKinsey’s “aiding and abetting horrible shit” quiver. This was literally a conspiracy and a scheme. On just the basis of “harm caused” alone, McKinsey is far from a normal company.
> The whole business is a scam built around sending in some 26 year-old with an Ivy League degree and $100 haircut to regurgitate snippets from articles in HBR.
It’s easy to sit here and talk shit about management consultants while forgetting that management consultants aren’t coming up with these ideas in a vacuum. Isn’t the common refrain of an MBA-hater that all consultants like McKinsey do is “parrot back something a lower level grunt already knows”? Someone at the company gave them every idea they’ve ever had, or so the argument goes.
They can’t both be totally useless mouth pieces while also being evil geniuses responsible for this stuff.
Anyway, the average company does all the stuff you don’t really think about like making pots, windows, staplers, hearing aids etc. It’s the extreme outliers that people talk about not the dozen small factories making decorative concrete flagstones, etc.
Look at it in tech: Some FB engineers are INCREDIBLY smart and good - but the, as you say, "diffuse harm" they do is still *harm*
FFS when I was at Lockheed and we got audited for SOX the execs were stealing stocks from the newer employees and giving those stocks to the execs
and the auditors, I think it was PWC, gave use a green passing grade and employees got fucked.
Some of the execs went on to Solyndra and we all know about how they stole 700 million from the USG...
(look at the SEC claims for Solyndra, where weeks before shutting their employees out without notice, they were giving out huge bonuses to execs and certain employees - e.g. they gave a $40,000 bonus to the IT manager that locked out all the accounts of employees)
Source: That IT guy worked for me at lockheed, the IT CIO was my boss at Lockheed - and I know their level of corruption....
Jesus. Hackernews is one hell of a website
And just as a small rebuttal: the small companies are usually owned by larger companies. So while they may not be "the company" people think of, they're still part of "that company." The connection is certainly just as direct as a McKinsey-client connection.
If you're ordering by importance, I 100% agree with "social media" being at the top of the list, and this almost cannot be emphasized enough.
I say almost because this article is about McKinsey and the role it played in the opioid crises. As an article it's also light on details, so I'm let down that I come to HN-- which is often great at filling in details-- and begin to read low-effort exchanges about the implications of someone's hair cut.
What do people know about McKinsey's relationship with Purdue in this case of pushing opioids into treatments where they didn't belong? I'd like to know more about that. And when I can blithely complain about the shit UX of a billion dollar company on HN and get a direct response from management, I'd expect information from PR nerds about McKinsey's role in the opioid crises and the ongoing lawsuits against them to flow to HN, too.
It isn't productive if we keep hop-scotching over the meat of every article to talk about some other hazard to society that isn't mentioned in the article. If that's going to be the flow then the next article that pops up about Google's monopolistic practices will instantly veer off into whatabout Visa/Mastercard's monopolistic practices, as it did before.
Edit: clarification
To everyone in this thread who has this overwhelming righteousness indignation about mckinsey - have any of you ever asked your elected representative about their view of the government’s responsibility for the opiate crisis? Would you ever vote differently based on the answers they give? Did any of the state attorney generals who are going after private companies ever do anything to stop the (federal) government encouraging the increased use of pain medication?
This is a classic example of unintended consequences by the government - the companies were just responding to the incentives the government created.
The article points to McKinsey's task to "turbocharge" opioid sales, for a company that sold them for "improper use." So there are obviously a few outstanding questions attorneys general are currently asking about what people at McKinsey knew from "listening to client problems, looking at data, talking to employees, and presenting findings" on that campaign.
If you're simply saying that your day to day isn't that, point taken.
When a consultant gets hired for advise or to "get stuff done", and the result of this is massive profits with a secondary effect of death and destruction, then the consultant is (i.m.o.) morally responsible for that second part as well. And, it seems, legally as well (but let me guess nobody goes to jail).
The consultant may have been hired only for the first part, "get stuff done", and the pay may have not been much, but that has nothing to do with responsibility. The minute you understand the possible consequences of the things that you contribute to, you become partly responsible for it.
As the Stanley Milgram experiments show, most people will do horrible things to others when they can tell themselves that someone else is responsible. And, I may add, at the McKinsey level, consultants may even get hired to take on the authority role, to excuse financial crimes, or worse.
Turns out this isn't accurate. See https://theconversation.com/milgram-was-wrong-we-dont-obey-a...
But as my detective work in the Yale Archives has revealed, in the filmed version of the experiment 65% of participants disobeyed. Yet Milgram edited his film to show the opposite: that two-thirds will do as they’re told.
See https://behavioralscientist.org/how-would-people-behave-in-m... for some of that replication data.
Not as bad as 65% but still pretty bad!
1) McKinsey is basically fraudulent and pretends to do things of value
2) McKinsey is a very bad and unethical firm
3) McKinsey masterminds the business world to enable (1) and/or (2)
The main bit of the subthread is about (1), but this response is about (2). All I have to say is that, yes, consultants should be aware that there are consequences to their actions like any other. I don't think that's in question. I'm not sure the stanley milgram experiments are especially relevant but sure.
Remember this one?
https://www.nytimes.com/2014/06/30/technology/facebook-tinke...
> In an academic paper published in conjunction with two university researchers, the company reported that, for one week in January 2012, it had altered the number of positive and negative posts in the news feeds of 689,003 randomly selected users to see what effect the changes had on the tone of the posts the recipients then wrote.
> The researchers found that moods were contagious. The people who saw more positive posts responded by writing more positive posts. Similarly, seeing more negative content prompted the viewers to be more negative in their own posts.
FB was trying to refute that, and their study was more technically rigorous, but the outcome they were measuring doesn't actually refute the original claim at all IMO. People writing more happy posts on FB does not indicate they are actually happier, it could also be that they wish to broadcast more of their happy moments, or perhaps even just pretend to be happier, in response to the attitude of their feed.
Generally, most of us in software can choose where to work. If we don't make this choice according to morals (whatever they may be) then we are less moral than ppl who don't have a choice, and those who have a choice and do consider it.
Is that a bad thing? Depending on which morality you subscribe to I guess....
*Not everything, which is a tad extreme, but certainly 95%+. But sometimes shocking statements are needed to jolt people into the reality that their work has positive/negative repercussions in the real world. We hold an arms manufacturer responsible for designing weapons of mass destruction, there's no doubt in anyone's mind that there is culpability.
Engineers who build addictive products fall into the same boat. But, but, but paycheque! is not an excuse. Has never been before, isn't now, nor will it ever be in the future. As builders, we are defined by what we build.
I used to be in consultancy as a software dev, it's basically same job, higher cost. But these companies use consultants because they have tons of money but aren't sexy enough to attract internal employees that do the same thing.
Does not sexy mean they are not willing to spend the tons of money they have on internal employees?
Consultants are easy to fire. Depending on the company's policies, local laws, and the internal politics of the organization, a 'real' employee may be a lot harder to get rid of. Consultants are also time/task limited (in theory), while a 'real' employee is not (again, in theory).
I'm a (supply chain) consultant which is similar and have a full time contract and full worker protections with my employer. Projects are sold on a fixed price basis, so there isn't anybody to fire - clients are buying the work output or report, not the person or set hours. Some projects are time & materials, but if the project gets cancelled I'm still getting paid - I have a full time contract.
As an example of the value prop - I come with information that your company doesn't necessarily have. Let's say you need to expand your existing (15 year old) miniload ASRS and are locked in with the incumbent provider - I know up-to-date market rates for miniloads and racking, and will be better able to credibly negotiate it down to market rates (particularly as I have probably done a project with the vendor before). I will also be better able to tell you if there is a better solution to expanding the ASRS because, while this is a '1 in 10' year activity for the client, this is what I do every day. Maybe they would be better putting some shuttles in a separate ASRS fed by the miniload because the actual bottleneck is throughput/accessions instead of storage, and their stock profile is different to what it was 15 years ago? They are better than me at running their warehouses, but (hopefully!) I'm better at specifying automation.
So that's the value proposition of consulting - you can get access to very specific expertise that you don't need for long. Most companies don't need a full time expert on specifying warehouse automation!
Not great links but you get the gyst...
https://www.afr.com/politics/federal/revealed-mckinsey-partn...
Consultants sell their time, so of course their time is marked up.
Most of the huge profits don't go to people like you, but there are huge profits.
The opioid crisis has caused untold suffering and death. The amount of money they were fined is a joke that couldn't make a tiny dent in what fixing this.
It's small enough that it it's unlikely to stop them being involved in something similar in future.
But it is a crime the company is responsible for that caused many people to die and become addicted to opioids.
You think Kim Jong Un walks among the people he starves to death on a daily basis in North Korea? No. He's too high up. He's in his palace in the capital and he doesn't even see the real state of his country. He just hears about it in reports and goes to do his day to day job like any other person in a company disconnected from the consequences of their actions.
Does this mean Kim Jong Un is not guilty? No. Not. at. all.
Does this mean McKinsey's is not guilty?
Does this mean you're not guilty?
Your statement ends up reading sort of like "Is every Nazi guilty of the holocaust?" Technically maybe not, doesn't change the fact that of the matter that overall all Nazis are guilty.
You can't run away from this with some garbage statement of "Not a very useful perspective." This incident literally killed an amount of people that is equivalent to a genocide.
Imagine if you were a Nazi and you said that. If you were just a mere guard at one of these concentration camps could you say what you just said to me to a victim who lived through the atrocity? Think about what you should say to the parents of a man/woman who died from an opioid overdose. Literally, I think you're unaware of the magnitude of the crime that was committed here.
Watch these videos:
They accurately place the blame on themselves.
Do some searching there's tons of articles/video interviews on addicts who got addicted because of pain killers. Here's one: https://www.healthline.com/health/doctor-addicted-opioids
I read your comment as "I am so emotionally invested in this caricature that I cannot tolerate hearing it humanized. The caricature must stand, or I lose something."
I know very little about McKinsey, but I don't think that the haircut of their consultants tells me very much.
You spelled consultants wrong :P
(Boring clarification: riffing off of your "spelled industry wrong!" bit. Not an actual attack.)
I definitely need to learn lucidity or awareness or whatever it is that you springboard off of to be able to read something like this and mentally *hangonaminute* though... I completely went along agreeing with everything, and while I still do after having paused and considered, this isn't the first time I've needed another comment to help with the initial "you're completely not noticing this subtlety here".
I assume that was intentional.
Honestly I got more of a '1 life is a tragedy, 1million lives is a statistic' vibe from GP
not only shithole companies. At the total service of shithole governments:
"McKinsey Bans Moscow Staff From Attending Pro-Navalny Protest
...
In line with policy, McKinsey employees must not support any political activity either publicly or privately. This ban does include posts in social media featuring your political views or your attitude to any action with a political flavour. This line of conduct is mandatory. "
https://www.themoscowtimes.com/2021/01/23/mckinsey-bans-mosc...
Grounds:
- it goes directly against several key employees rights policies which we are reminded of by the firm itself several times a year
- its formulation is very different from the firm's language in across-the-board communications
The firm didn't deny it. It issued retraction. So, it is genuine. And the firm wants the Russian regime to know that it is genuine. All that absolutely not surprising given the Russian environment.
>- it goes directly against several key employees rights policies which we are reminded of by the firm itself several times a year
nor policy nor "employees rights" (who is going to enforce them? Russian gov-t?) are worth losing GazProm and Norilsknickel as clients and becoming political enemy of Putin. People in Russia are arrested today for just retweet of a thread mentioning the date of protests (like that RBC editor).
OMG this is the bes sentence I have read in months! Thanks
---
I worked with a guy who was a previous McKinsey exec and now is the "uber of Dubai" founder and a billionaire and he is slimy AF.
I have worked with multiple companies such as McKinsey PWC and others and their consulting practices are all bullshit.
Now, thats not to say that any large company does not need some financial oversight/consulting/auditing - but still these consultancies are fucking vultures and are more likely to help you "cook your books" than correct your books...
s/consultents/consultants/
It seems more likely that it’s a politically expedient way to get cover for a decision (in other words CYA insurance). If the plan fails, blame the consultants. If it works, take credit for having brought them in. It also puts more pressure on exec to make a decision (we just spent $10M on this strategy plan, are we really going to it on it?). It’s genius, if it didn’t highlight the utter dysfunction of a firm.
McKinsey scandals also aren’t confined to Opiod work. It’s also been involved with Enron, corruption in Africa, peddling of mortgage backed securities during ‘07-‘08 crisis and I’m sure many more that they’ve done a great job at hiding from the public.
https://en.wikipedia.org/wiki/McKinsey_%26_Company#Controver...
In the interest of balance, here is what McKinsey has to say about social responsibility in its "about us" section of its corporate website: Our purpose as a firm is to help create positive, enduring change in the world.
That's certainly one of the reasons you would bring in consultants.
I think critics of consultants are, in general, too quick to dismiss the monetary value of political lubrication. If it's going to get your management hierarchy to admit there's a problem at all, or if it's going to get your management hierarchy out of a deadlock, that's worth something. If your organization is able to actually focus on the problems despite the politics, you are probably not a a typical McKinsey/Bain/BCG/etc. customer.
With maybe one exception, none of the consultants I know ever fit the mold of a fresh-out-of-college generalist who thinks their frameworks and raw intellect will help them come up with better answers than a specialist could. They mostly all understood that their jobs were to escort boring, good enough ideas through the boardroom politics. And that was often something they were good at, and they were often acutely aware that some people in those companies already had the answers but the organization was too dysfunctional to recognize the fact.
That's the core of the problem anyway. But naturally they'll sell you a lot of other promises and products, and those are where I think management consultants are the wrong answer. Just hire real specialists.
The other problem I have with management consultants is that I feel they, both the companies and many of the individuals, are too amoral to be healthy for society, but that's not about their competence.
I think that's what the GP was poking at.
You aren't wildly wrong on the job as a whole, though reasonably often it's more to escort boring bad ideas through the politics for someones benefit. And on the "amoral" front, they know what side their bread is buttered on.
This is not past tense.
In South Africa there is a commission (a political farce if anyone cares) to investigate state capture and McKinsey[0] keeps showing up on records and testimonies.
[0](https://www.google.com/amp/s/www.nytimes.com/2018/06/26/worl...)
If we had real competition, there would be more money to be made knocking the giants down than trying to keep them in their walker.
But still. Hmm.
In many cases, there was not any question that your job was to justify a decision that had already been made, or attack another group within the company on behalf of whoever was writing you a check. I was literally told on a number of occasions that regardless of what the SOW said, our job was to make whoever was writing the check look good.
I have not doubt that is true in some cases. However, it might be a a bit too cynical to see it that way in all cases.
I have a developer on my team that is the most senior guy on the team. He is a grey beard on a team full of junior developers fresh out of startup code bootcamp. Sometimes he is thinking about big technical challenges and he just wants someone to talk to that can give him some feedback.
One of the things I miss about working in open offices is being able to turn around and fire ideas off of a colleague. Even if I know I am right, even if I have the ability to unilaterally make a decision, often times I just want a second opinion. I've even heard people here suggesting a paid service so you could get a short amount of principal engineer time to bounce ideas off of.
I mean, isn't that more or less what McKinsey is, except for business people? When I think of it that way ... it doesn't feel as cynical anymore. If I'm a CEO (or any level of exec) and I don't have peers that can provide me valuable second opinions and I have the budget - why not pay someone for that second opinion?
This guy consults
Paying the money back (as was agreed, and even then my understanding is that not all of it will be repaid, no interest was offered and no criminal charges have been proffered) will never cover for the gutting of essential skills in key state owned enterprises under the cover of a McK “restructuring”.
South Africa is in a perfect storm right now and big consultancies and accounting firms all had their fingers in the cookie jar. They all had a part to play. It makes me sick to think what these consultants might achieve in less democratic states as it’s evident their reach is global and they are legion.
In my university days many bright eyed youth wanted to work for these companies. I hope people are waking up!
Edit: For anyone interested “Zondo Comission McKinsey” or “McKinsey South Africa Guptas” should get you quite far.
Edit2: I’ve just given a brief summary. It’s enlightening to dig into the role of Bain, McKinsey and KPMG especially, their relation to Gupta enterprises (common cause) and their enabling of deals, cutting really good people at key state institutions like SARS (Revenue Service), Eskom (electricity), Transnet (commercial rail). And that’s only what’s in the public domain. The scale of the rot is enormous. Their executives spin corporate speak at our commissions of inquiry (Nugent and Zondo) and do not take any accountability!
The folks with one to three decades more time at bat who are hiring you most likely do find learning and change literally painful. Not because of age, but because of “number of trials” at the change experiment, where often someone gets burned.
Reading, learning, thinking differently, hurts the ego, as it makes clear you were less informed before, and puts you on unknown ground where you don’t know if you’re failing or not. This is hard for a lot of people, ironically especially hard for folks who started out as high performers in spaces with “known knowns” knowledge available (aka, school and textbooks, where learning isn’t an ego problem, it’s expected that you didn’t know).
You haven’t yet developed the instinct to yank your hand off the stove, and you don’t have to stick around long to see if your hand gets burned anyway, so you’re valuable to these folks.
Is this pointing to the same idea behind "the chains of habit are too light to be felt until they are too heavy to be broken"? I concede I may not be as quick to learn as I was when I was in my late teens/early 20s, but I hope that I'll still be able to learn new things and able to recognize the error in my judgement well into my old age - despite having been a classically high performer in school (although grad school did pummel me down).
Truth is, McK and the like, are there just to give mediocre leaders an extremely expensive psychological crutch needed when human beings face uncertainties.
Now that these consulting agencies are the behemoth they are, it's mainly corrupt leaders that are being "pursuaded" to use their services.
Oh and ppl like you are just cheap "brains" to give the optics of credentials for this sordid affair.
Software consultants OTH are usually sub-contractors and not consultants per se.
Regarding who has the bullshit job, well, probably both the mediocre/corrupt leaders, and the consultant.
Contrary to popular belief, a good deal of McK work is not just regurgitating a pre-ordained solution. Most of my work involves creating original solutions tbh. But sure, you probably know my job better than me.
100% whataboutism, and I'm not defending the OP or McK, but I wonder what you think of the PhD "brains" hired at Google that end up being in charge of implementing a menu in Google Carplay.
What are they?
I don't get what's the point of your question?
I'm saying the OP has a bullshit job which he fails to acknowledge. I'm also saying is that McK only reason for hiring ppl like OP is virtue signalling and nothing else. And finally that McK is mostly harmful to society.
I never talked about why google hires PhDs. :Shrug:
So I guess difference is Google has many types of work whereas at McKinsey it is slick MBAs facing fools looking to part with their money.
So really, I don't see the difference.
Loaned out doesn't feel applicable here though. There are some consultancies that are primarily just staff augmentation. Like, here are some expensive workers for you to use for a while. That's not really what McK does. McK is doubtlessly very expensive. "pumping people up on the job" sounds like a bad faith way to describe training and investing in your employees.
I don't have a way to "prove" that the average net impact of McK consulting is positive, and for sure sometimes it won't be right. My only point is that most if not all of the clients I work with are blunt about not knowing how to do X on their own, and when we're done with the project they say they know how to do X. We do fixed price contracts, not per hour, and are incentivized to keep the scope fixed. Our prices are generally higher than competitors, but we still win bids. I don't need to believe McK is the greatest company in the world, but I strongly disagree that we're not making a good faith effort to help clients do things.
>"pumping people up on the job" sounds like a bad faith way to describe training and investing in your employees.
That's just it: the customers are investing in your employees by letting them learn on their job but never reap the benefit of the experience. It's not a long-term recipe for success.
There’s tremendous value in the repeated problem exposures the consultant received, combined with the rigorous framework thinking.
Much like McDonalds means every burger everywhere no matter who owns and runs that franchise is predictably decent, the principles of The McKinsey Way and frameworks like 7S and MECE mean every wet-behind-the-ears graduate is going to produce work of sufficient logic, data, and quality to plausibly support the position McK was hired to support.
Everywhere I look it’s just strategies to increase sales ,lay-off lower level employees and boost executive and shareholder profit .
https://www.mckinsey.com/business-functions/mckinsey-analyti...
I guess this group is a decent example of our public things, doing data science stuff to help human trafficking victims and what not. I don't have any experience with this group in particular and cannot speak to it. For my personal work space all I can say is that ~90% of my work felt morally neutral, and 10% felt morally positive.
One project was for a similar neutral task in an industry I think is detrimental to society so I declined to do it. That's also a thing which is encouraged and I think is nice. YMMV
That's asking for a lot of trust in an organization with a public history of doing damage to societies, like with the opioid thing or the Canadian bread price fixing agreement.
> They proposed cuts in spending on food for migrants, as well as on medical care and supervision of detainees, according to interviews with people who worked on the project for both ICE and McKinsey and 1,500 pages of documents obtained from the agency after ProPublica filed a lawsuit under the Freedom of Information Act.[1]
[1]https://www.nytimes.com/2019/12/03/us/mckinsey-ICE-immigrati...
The CEO of Enron was a former McKinsey consultant and helped them transition from an Oil and Gas company. Arthur Anderson was just the firm left holding the bag at the end. [2]
[2] https://en.m.wikipedia.org/wiki/Jeffrey_Skilling
McKinsey helping dictators. [3]
[3] https://www.nytimes.com/2018/12/15/world/asia/mckinsey-china...
> On October 20th, the Times reported that the government of the Saudi crown prince, Mohammed bin Salman, had employed operatives to harass dissidents, including the Saudi journalist Jamal Khashoggi, who was allegedly murdered inside the Saudi consulate in Istanbul, on October 2nd. The article included the revelation that McKinsey had prepared a nine-page report measuring the public perception of certain Saudi economic policies, and cited three individuals who were driving much of the largely negative coverage on Twitter: a Saudi Arabia-based writer named Khalid al-Alkami, a dissident living in Canada named Omar Abdulaziz, and an anonymous writer. After the report was created, Al-Alkami was arrested, and Abdulaziz’s brothers living in Saudi Arabia were put in prison. The anonymous Twitter channel was shut down.[4]
[4] https://www.newyorker.com/news/news-desk/mckinseys-work-for-...
Enron and china I'm not really familiar with. The Saudi one is, in my opinion, not a an accurate portrayal. My understanding is McKinsey did not create a report for the Saudi gov't on it and that it was someone who chose a deeply unfortunate example to demo some social network analysis stuff, internally, and not intended to be shared.
1) Identify all mistakes made by the previous management and come up with a plan to correct them.
2) Get buy-in for your plan and execute it.
It might appear that 1) is harder than 2). But it turns out that the company's interests are not always aligned with each and every individual in the company, and implementing change always results in winners and losers. Getting the buy in from losers can understandably be quite hard. And then you also have the winners who sympathize with the losers and don't realize that they will also lose their jobs if the plan is not implemented.
When you're running a startup, a CEO can single-handedly turn things around. In a larger corporation, a CEO is going to rely on a chain of command to get things done. When you factor in the misaligned incentives or loyalty for people who are at risk of losing their jobs, it's easy to see how information channels can stop working and neither 1) nor 2) can be accomplished successfully.
I agree that brining in a 3rd party like McKinsey feels like a lazy shortcut to addressing the fundamental organizational challenges, but the more I see, the more I am starting to understand the upside of that option.
Nope. I don't agree with this at all. I'm saying, 100% clarity, that business is really hard. Working with a large organization is really hard. Many cultures are very rigid.
People are quick to comment about the intricacies of team dynamics, but hand wave the larger org stuff. There's a tough doublethink whereby I might say its not that hard to play the role of an upper level executive, because you can mostly just ride the tide and be fine, but effectively identifying a problem, a solution, and implementing it in a large org? Extremely tough.
Try “five whys” and see where you end up.
At the end of the day, someone is your boss and pays you, and you are gonna do what they want
That said, they presumably gave executive management some warm and fuzzies that we weren't smoking weed. Sure, they could have just taken our word for what we were telling them, but having a second pair of eyes is actually not a terrible thing. (And it's part of what I did for clients in a subsequent job.) They also gave our business planning people some complicated financial modeling spreadsheet which kept them busy and mostly out of our hair.)
In what ways do you see McKinsey’s actions with Purdue Pharma as being bad? In what ways were they typical of McKinsey’s behavior with other clients? In what ways do you see the actions with Purdue as being exceptional for McK? What factors allowed the company to act as it did? Have those factors been addressed? How do the events with Purdue show what has and hasn’t changed since McKinsey’s deep involvement with Enron?
I think it's mostly self evident.
> In what ways were they typical of McKinsey’s behavior with other clients? In what ways do you see the actions with Purdue as being exceptional for McK? What factors allowed the company to act as it did? Have those factors been addressed?
McK is large and very decentralized, and there's a culture of not talking about work to avoid creating conflicts of interest, so it's easy for one partner to end up doing their own thing in a way that the majority would not agree with. The Opioid work had a spin on it with the rebates that I recall had a mind towards preventing them, but I cannot remember the details so I won't pretend that's supposed to be compelling at all.
The work with Opioids, and I would also call out ICE, were high profile struggles internally that have been addressed numerous times by top level leadership on global calls, in a way that I thought was emotionally empathetic to the situation. Voicing dissenting opinions is encouraged, and I think people were free to voice grievances. They have since created a committee whereby other unrelated partners need to review proposals for ethics before it gets approved.
If you work for facebook, you build facebook. If you work for mckinsey, you may work on improving access to renewable energy, automaker margins, oil and gas marketing, or pro bono human rights work. Most people will fall into one of the neutral categories. To what degree are you accountable for a few guys doing something completely different that have no particular connection to you? I don't know. It's a weird dynamic but I would say "a bit, but less than a more traditional centralized company". I feel convinced that top level leadership is taking reasonable steps to address ethical issues and the the broad general population of the firm wants to encourage this. I don't know if it's possible to fully prevent bad decisions in the long term. From an external perspective, there's always going to be just one McKinsey, and that's tough to reconcile.
I can't say I know anything about Enron.
I personally will not use a big consulting company until we do a better job of forcing consultants to have more skin in the outcome. It’s really nice to come in, have a flashy presentation and then walk out and collect your money. The only “getting shit done” I’ve seen McKinsey do is lining their own pockets.
I don't think consulting is useless or scammy, but come on, you're not rock stars. Consultants advise a business on how to get revenue, and the business implements changes that generate revenue. This leads to the headline we have before us. There's not much more to consulting. Note: my family are consultants.
Steve said it best.
99% of the consultants who come in are human Powerpoint/Email factories who just happen to have the skill/trait of being extremely insistent. They push exactly what their client wants to hear and are not doing groundbreaking worldchanging work.
In fact in almost every case I worked on, most of the team had literally NEVER done any work in the clients field before, and never performed in the functional role they were being assigned to outside of maybe the partner or project leader assigned to the case who likely had a PHD/MD of some kind in the related field.
As others said, they are there as an insurance policy to throw blame.
And for the kind of transformational work that folks like McKinsey would come in to assess, there’s a huge organizational component that’s actually more complex than the technical components. Building a new technology tool is great, but designing the process the tool implements and rolling it out to non-technical users is the job our buyers hire us to do. We would hire offshore engineers if the engineering work were the majority of the work we do — but the coordination overhead is too high.
Outliers like the Opioid stuff aside, I do think most day to day typical things that consultants do is valuable work for companies. Say you're launching a new product and want to figure out cost based / value based pricing - it's either a single person in the company that does that that might not have a lot of experience in that area or a consultant from a consulting company that has a good track record at doing value based pricing specifically. I know who I'm going to pick.
There's no big picture. I can't say my work "enables" others to do other work that I may disagree with. On the whole of it by my personal set of values, I enjoy being able to make the contributions I do and would be wary of loosing that. So long as the tone at the top of the org is condemning of things I consider bad (and it is), I think it deserves a level of understanding for how difficult it is to run a network of thousands of partners and avoid things like this. I'm optimistic that the newly enforced sets of checks and balances will prevent such at least some of these kinds of studies from happening again. For now at least, it feels less like "McKinsey" did the bad thing and more like "a group of people who work here" did. Others will disagree, and I get it. I know a couple folks who left on ethical grounds and they retained the support of all their colleagues.
Or, to put it another way: You hire a consultant so you can avoid responsibility for your decisions.
"I didn't just fire thousands of people, possibly putting some out on the streets. Nope. We're just right-sizing the company based on the advice of this well-respected consultant with a nice haircut."
Hire a consultant and get a fall guy and the ability to shirk responsibility for the detrimental impact your decisions have on your workforce.
Mostly fuelled by management consultancy firms' marketing and sales teams, of course.
Why is management consulting a billion dollar industry? Are there that many clueless executives running F500 companies (pretty much all of them).
Or perhaps your understanding of management consulting isn't quite right.
Because most rich people are idiots but they have direct access to money printers via hundreds of legal money laundering schemes going on in the background so they can afford to waste as much of it as they want on whatever they want and still be profitable.
While I disagreed with him on this point, here's another angle on how low hanging the fruit was: My manager _explicitly_ told us to never use statistics, because we'd be wasting our time with effects which weren't large enough to be obvious.
Sorry that’s all you have to say about your employer quite literally supercharging the opioids pandemic causing unimaginable pain and destruction across America? “It was bad though.”
Let me tell you some hard truths. If you’re 20 something you don’t know Jack shit about running a business and the only reason you’re there is because the C Suite wants to “de-risk” their decision making, or the board member heard about McK during golfing with his buddies.
If Senior Leaders can’t do X, they should, you know, get training. Go to online schools, get executive MBA training. Why don’t they do that? Because that’s not really the real reason you’re there.
McK and other consultancies have been a cancer on corporate America, creating chaos in the name of “digital transformation” or whatever buzzword is new. They capitalize on most companies’ fear of being left behind and get inserted into corporations where they make the jobs of regular employees (you know, the people who you went to school with but decided not to go to McK but get a real job and who are familiar with the same types of things that you are) incredibly difficult with inane processes from “the manual”.
There's no expectation that I know how to "run a business". That's not how it works.
Doing good economic work for bad people is a (gigantic) ethical flaw, but not a problem with the economic quality of the work and skillset.
1. McKinseys advice is for the most part useless , often their advice is just politically motivated within the clients offices 2. They have zero morals, they will advice how to optimize the gas chambers (probably not too off the mark, they probably are advising something related to uighurs somewhere, maybe how apple can hide traces of genocide fueled chips from their product lineup) if they can make a couple mills. 3. The despots/murderers recruiting them are still going to go ahead with their addiction rings/gas chambers irrespective of what McKinsey tells them. The argument isn't that McKinsey made the opioid problem worse. Maybe they did but they probably will conveniently agree with us that they were not really consequential. Still doesn't mean everyone from McKinsey shouldn't be considered a dick though.
I wonder how many at HN make their living on digital transformation.
In mega enterprises the CEO matters a lot, but the next 3 or 4 layers often exist primarily to filter and spin bad news, diffuse accountability, and occasionally get burned at the stake as a witch in league with evil spirits when nobody wants to acknowledge the cholera water making the whole village ill.
Given that, the easiest witch to lay hands on is the consultant, which is why they bill hazardous duty pay levels.
I hear this all the time but it sounds like an urban myth.
I highly doubt someone is not getting fired because the consultants they hired fucked up. They're still responsible for the business. I think consultants can help more with the "we need to do X, Y, Z" with consultant's report backing it up.
I didn’t hear it. I’ve spent years as an L3 (CEO is L1) of one of the largest enterprises in the free world, interacting with other enterprises at that level, and collaborating with all the top consultancies’ teams that work at that level.
My take is while not always the case, the higher level the committee approving the consulting spend (because even that choice/decision is diffused), the more frequently this is involved.
At the end of the day, the CEO works for the Board, who are external and most definitely do not get paid enough to go to jail. Everyone involved needs decision insurance.
The CEO works for the board. The CEO can be fired at will just like any other employee.
They will get an incredibly generous pay-off, unless they have fucked up to a world-beating historic extent. (And sometimes even then.)
But as soon as the CEO loses the confidence of the board, they're on their way out.
And most boards are only really interested in the financials. They don't care about culture, reputation, product range, or any of those other things. That's detail stuff, and it doesn't interest them.
This is a cozy arrangement because no one is personally responsible for anything the company does. The CEO and the board are covered by limited liability, and they won't be going to jail for common crimes - like poisoning water sources, or setting fire to forests.
They may go to jail if they fuck with the financials. Extreme fraud can be a showstopper.
But having a national monopoly on pushing highly addictive drugs isn't. That's a regrettable offence which deserves a medium-ish fine. And - you know - let's say no more about it.
Consultants - like auditors - exist to add another level of deferred responsibility. They're not there to make decisions, they're there to provide legal air cover for decisions that have already been made which need someone else's signature.
The meetings, reports, the hasmter-on-a-wheel super-keen grad cadres and the rest are just theatre.
https://www.npr.org/sections/money/2017/07/19/538141248/epis...
> They weren't idealists or social activists--just two shareholders who thought the CEO was being grossly overpaid. And they figured that salary was paid with money taken out out of their pockets. So they tried to force a pay cut.
> My take is while not always the case, the higher level the committee approving the consulting spend (because even that choice/decision is diffused), the more frequently this is involved.
It sounds this has more to do with the clout of the individual than it does "oh well mckinsey said this."
Redirecting blame is a lot easier when you have an external party. More interestingly though is it forces a conversation/decision on a particular problem, since you’ve already spent exorbitant sum of money on the consulting fees.
It took me a while before I understand the political side of how this works. For a while, the biggest question in my head was what the CEO gets out of the whole transaction -- the manager intuitively gets power vis-a-vis proximity, but what does /their/ manager get out of it?
I think this confusion wears off the first time you see a sacrifice in management made. That's when you start being able to see how the value chain which is attached to that confidence default occur. Then it becomes completely rational that decision insurance is priced into both the manager's internal calculus and that of the corporation.
The problem with running a company this way is that "your margin" eventually becomes "my opportunity" and that transition gets especially jerky in a frothy market like the one we have now. Do you really need the layers of middle management there, at all? If someone raised a boatload of cheap capital and rebuilt the high margin bigmoat stuff from scratch, would they out-execute you?
(Disclosure: I do not have an MBA)
Their fingerprints are all over numerous bad decisions in business and government in the past few decades[0]. These are the bare minimum, because there are quite likely many negative outcomes they have championed in their role as consultants that were never publicized or reported on.
Totally separate from the above is their absolutely mercenary tendency to work with anyone who will pay them[1][2].
[0] - https://en.wikipedia.org/wiki/McKinsey_%26_Company#Controver... [1] - https://www.nytimes.com/2018/12/15/world/asia/mckinsey-china... [2] - https://www.newyorker.com/news/news-desk/mckinseys-work-for-...
Elite management consulting firms (McKinsey, Deloitte, Bain, etc) exist to enable the worst impulses of leadership across the spectrum. The ends certainly justify scrutinizing the means.
"Comcast customer service has a huge number of employees. I'm not saying there aren't jerks in there, but..."
Devolving corporate responsibility (for the bad stuff) to individuals is of course the corporate preference. But at some point you run in to the "only the best people" problem - McKinsey hires them, trains them, assigns them and pays them, no matter how slippery McKinsey PR is, I keep seeing that name, McKinsey.
Any company the size of McKinsey around as long as McKinsey will have success and failure stories.
The proper way to evalaute is to take all things McKinsey did, normalize for background, and see how it performs compared to other methods of solving the same problems.
Cherry picking to make a claim is the 2nd worst form of evidence, outranked only by outright lying.
Firms like McKinsey, for reasons of trade secrets, confidentiality wrt their client book, discretion because of the nature of their work, etc don't have data available about the completeness of their outcomes. In fact, their white papers focus exclusively on successes. What about instances where their contribution has a not-zero impact (we could even include and offset the cost of their consultations against the total impact of advise offered, assuming it's followed)? Do you have a proposal for how to conduct such an analysis?
Furthermore, I would offer that much of the nature of their impacts isn't something we can know with mathematical precision and exists in the realms of the social sciences (a broad domain known to have major skew problems when measurements are taken, if at all).
So we are left with optics and moral/ethical assessments of the work they have done. Taking this into account, I am content with this approach and the conclusions I have arrived at.
But you're ok with cherry picking events to suit a narrative when advocating for change? Did you even try to find examples where they were successful in your eyes, or did you simply pick the examples that suit your claims?
>Do you have a proposal for how to conduct such an analysis?
Simply looking at how many customers are repeat customers shows that they're at least doing something their customers are willing to pay for. That's easily a vastly better metric then simply cherry picking examples on one side of an argument.
I'd suspect that current customers are vastly more aware of what value they provide than you'd pick up from news stories, especially if, as you contend, there's no way to know these details from outside views.
They've been around 95 years, 27k employees, 10B in annual revenue, a client list that is incredibly diverse, among every sector of society, among all political parties, and including a huge number of worldwide governments and companies. That alone should make you realize perhaps there is value in what they do, that thousands of customers think so, and that trying to paint them as "McKinsey make bad recommendations that have demonstrably bad outcomes." is probably vastly short-sighted.
You then double down and claim it's probably even worse if one could see inside.
I would weight the opinions of their customers over those obviously cherry picking examples then making un-nuanced and sweeping generalizations. I am content with that approach. Seems more evidence based.
Take a big construction project. In the like of the Berlin airport. What do you think is more profitable for the consulting companies :
a) A well thought project, done in budget and in time. Where the consulting company gets the whole contract + all the bonuses associated with it.
b) A poorly managed project, that gets refinanced multiple times and that ends up being pushed back decades.
It's actually B. Consulting companies love long projects, because this allows them to place consultant for extended periods of time. And any consultant working for a client is a profitable consultant event without bonuses. Consulting companies hate projects that end up shorter than expected, because any bonus they might get from that project ends up being spent on consultant that are waiting for their next assignment.
The main KPI of any consulting company is "the %age of time you consultant are spending 'on assignment' vs 'on the bench'". And long projects where consultant are busy for years are the best way to bring that KPI to 100%, even when the underlying project is a complete mess. The only thing they get from shorter and better managed projects is a better image, which is easier and less expensive to get using marketing technique and PR.
However, zooming out, it's the incentive system that's completely broken: there is no skin in the game. Consulting firms are too detached from the consequences of their advice. Nassim Nicholas Taleb wrote a nice book about this phenomenon: https://en.wikipedia.org/wiki/Skin_in_the_Game_(book)
You get to recommend a better approach to an industry or technology and then go off and do it all while having equity in the company.
So if you oversaw the build-out of a system and everything went smoothly, good, but nothing to talk about during promotions.
On the other hand, if there were difficult issues faced and you fire-fought, sent out late emails with decisions to clients, came up with memos documenting tricky situations, awesome! Promotion material!
Of course, sharp consultants figured this out and the sharpest ones looked the other way when design documents had landmines -- just so they had known manageable issues to "manage" and "save the day" with.
Bad incentives, bad outcomes.
The issue with the MBA field is that it tends to attract power hungry narcissists/psychopaths who enjoy holding power over others. Engineers like to tinker with stuff and be left alone.
"Your interest" as in whoever pays the check. This service is immensely valuable to stakeholders, otherwise they would not continuously pay for it. A career manager at a company will have much more complexity in interests and loyalties as opposed to a consultant hired by a single, at the end of it, actor (whoever controls the signing and payment process).
Let's take a typical employee manager loyalty conundrum, pick one: loyal to the CEO, your boss, the shareholders at large, a specific shareholder group, the board? They often have different interests, and recruit or are looking to recruit agents for them. For the consultant? Whoever pays!
I found the book "Confronting managerialism: How the business elite and their schools threw our lives out of balance" by Locke and Spencer quite useful to understand some of the realities at play (not specifically consulting, but the broader managerial and by application consulting manager roles).
If leaders keep hiring consultants, there is value for them. This does not mean value for the organization. Most certainly, not for society at large, as the parent article can demonstrate.
What an important book.
Here’s a purchase link (non-affiliate but the URL that donates to your selected cause):
https://smile.amazon.com/Confronting-Managerialism-Business-...
It is somewhat telling that this book mostly gets cited by practitioners of CMS, Critical Management Studies, with a citation index in the hundreds.
Perhaps the explanation lies, as CMS luminary Alvesson puts it, in the basis of mainstream management research seeing itself as in the service of industry.
https://smile.amazon.com/Managerialism-Critique-Ideology-T-K...
And much more obscure but a wry delight:
https://smile.amazon.com/Have-Fun-at-Work-Livingston/dp/0937...
https://smile.amazon.com/Friends-High-Places-Livingston-1990...
One thing I've learned over time: expensive fees are a feature, not a bug.
People will listen more to what you have to say about any topic if they're paying a few hundred $K for that. And the same goes when you need to deliver a new tool to your client. Being expensive means my IT tickets won't be shelved for a week or two because some guy didn't like my face. It's often the case where a 3 weeks process with a five-people-approval form gets shortened to a single zoom meeting plus an email, and I really like that :). That's the difference between a 8 weeks project being put in production two weeks early and already getting traction because the "business people" are more engaged ; and a 2 years project going nowhere because the team gets shuffled constantly and requirements keeps changing.
PS: It only works if you can deliver what you promised, though
Not sure how right it is.
A fool and his money...that's their problem TBH. Those that hire them aren't grandmas on Social Security or mom-and-pop stores, they are supposedly super sophisticated businesses.
Sauce?
I have worked in Management Consulting, not with MK, but I have worked with MK alumni and in engagements where MK was there before us.
TL;DR: I respect their work, take the price tag away since it's meaningless. Running a business is hard, Management Consulting is also hard. Unbeknown to most people, Consulting companies also - often - execute, and there's something to be said about an outsider doing the heavy lifting, dirty work, and be the garbage person.
If that comes with a fancy label, well.. there's a price for that too.
Amen.
Also, McK is more about organizing change and getting buy in. That’s their value. Some Director could come up with a strategy but no one would follow it.
Just like IBM, if a strategy fails, nobody gets fired for having hired McK. There is value in that.
This is it right here. A shocking percentage of corporate boardrooms are McKinsey alumni — by hiring McKinsey to develop or even just validate your strategy, you buy credibility from the people who sign the checks because they know and trust senior people at McKinsey.
Consulting is a relationship business. The other purpose of consulting at the boardroom level is to enable companies to sidestep laws around collusion and insider trading — the SEC occasionally charges somebody, but it’s largely symbolic given how pervasive it is. It’s not unheard of for CEOs of companies that are direct competitors to have regular calls to discuss strategy, all while using consultants to create a paper trail that says the strategy was developed through rigorous analysis.
It's conceivable McK and other actually do offer some value. A 26 year-old may not have tons of real world experience, but working at McK would allow him/her to have exposure to a global team that has worked across many companies in the industry. Having an understanding of best practices across multiple companies in the industry is valuable. It's also valuable to come in with a fresh perspective that is not heavily influenced by working at the same company for decades.