Some of the stupidest decisions I've ever witnessed has been driven by multi-million dollar strategies from McKinsey. At a place I worked previously McKinsey advised in-housing software development to spark innovation and digital transformation. Then three years later in 2020 to it was advised that software development be outsourced to cut costs.
Obviously this was a move of utter insanity but for our executives it didn't matter. If McKinsey suggested it, we did it. There was literally no debate on these decisions no matter how hard we tried or how obvious of a mistake it was.
During my time at said company I was working on an innovation project which imo would have been fairly revolutionary for the company's future. For about a year we gathered input across the business and it was understood by every team we spoke to that this technology would be central to the continued success of the company. Importantly, it was understood the importance of us owning the IP and being market leaders in this technology so we could use it as leverage.
The cost of the project was estimated at around £100,000 - which was a fraction of what we were being billed by McKinsey every year. Encouraged by the the overwhelming support we got from every segment of the business and the relatively affordable development costs, we pitched our plan to the executive team.
A couple of weeks later we learnt that the executives deemed the project too expensive and sent us several companies who were suppliers of McKinsey who had built similar solutions. We tried to explain to executive team that the tech we wanted to build didn't yet exist and these solutions from McKinsey's suppliers were no where near ready for rollout, and in most cases these suppliers were actively lying about their tech. But it was an impossible battle. In their eyes we knew nothing despite months of research and McKinsey's word may as well have been gospel.
I left the company shortly after this and have heard things have continued to go down hill. I guess I never understood why the executive team seemed to just defer all of their executive decision making to McKinsey in the first place, especially given the lack of success and costs. Why was our own executive team not better placed to form corporate strategy? Is it common for corporate executive teams to just serve as puppets to large consultancy firms like McKinsey?
The relationship said company had with McKinsey was unlike any I've ever seen before. In my experience suppliers are normally on the backfoot, not calling the shots, yet this doesn't seem to be the case for McKinsey. It seems many corporates are more than willing to follow McKinsey over a cliff and I have no idea why.