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The one time I dealt with KcKinsey, the partner was pretty sharp, one of the associates was as well, and the other, well, more arrogant than justified.

Overall, in retrospect, the experience was... not terrible.

We answered a lot of questions, did a lot of education. They produced a bunch of spreadsheets that kept the business planning people occupied (a good thing). And they basically validated to the senior management that the product managers and related advising on strategy were on the right track. Expensive, yeah. But it's not always the worst thing to get an external sanity check.

I would recommend a good psychic for this -- someone skilled at cold reading. You will receive even better validation and a similarly reliable "external sanity check."

If I were in Europe, I'd leave it at that. For the Americans, it's important to dot the i's and cross the t's, so: An art of the industry is telling people what they want to hear. That gets you hired again. Consultants are no good as an external sanity check.

They are great for taking the blame for decisions you had planned on making.

Internal people with their own biases and investments are always right. Of course.

I think it’s more that two times wrong doesn’t make something right.

Ah, algebra. Perhaps, geometry?

The right thing to do is hire one or more people who have deep knowledge with the problems you are slogging in. Pay them what they are worth.

Otherwise, what's left is to higher outside consultants to solve your problem that is so pressing that you are hiring outside consultants to solve it. Fire them and hire new consultants if they don't perform.

And if you get very lucky, three lefts will make a right!

Do you know any psychics good at excel?

Oracle

They require basic computer proficiency and the ability to work long hours in the clairvoyancy business these days.

There must be a plugin, or a VBX somewhere..?

>They are great for taking the blame for decisions you had planned on making.

One might say that's the point of consultants! They're there to externalise accountability, you're outsourcing taking the heat.

I know it can seem this way.

But the best consultants, and even leaders, know that sometimes the way you get everyone to listen to the people who actually know what a company should be doing is hire a consultant.

A consultants job is to find them, elevate their voice, and get out of the way.

Edit: added “sometimes” - the alternative is to build a low ego culture and listen to the people closest to the work.

Here in Norway, a "consultant" is just someone who is employed by a different company but works for your company. We don't get people to listen to the right people.

We just work like everyone else while the company pays a premium for us and we're the first to be let go if things go downhill.

That’s what consultant means in many places, but the thing being talked about in this thread is a management or strategy consultant, of which there are a few big prestigious firms who do this, and which is a reasonably common career path for ambitious young people.

In the US, that's a contractor. Many contractors are called "consultants," but it's mostly because "consultant" sounds better.

Consultants are (in abstract) paid much more for their expertise, and engagements are much more limited. A contractor might work 40 hour work weeks for one client for years.

My experience is that the take-home pay is almost identical for all three. To give an example, at one point in my career, I could:

* Charge $600-$900/hour as a consultant

* Charge $125-350/hour as a contractor

* Charge $150k-$200k as an employee

On paper, that works out to >$1M, 0.25-0.75M, and 0.15-0.2M, respectively, if I worked 40 hour work-weeks. In practice, at least for me, net pay was very similar for all three:

* Consulting had many hours overhead for one hour of work, and clients would often cancel on short notice.

* Contracting had an even split between selling myself and working. Work came in spurts (either too much, or not enough)

* Employment was steady

Free markets converged to very similar net take-home pay. Contracting and consulting had much more diversity of work (contracts, marketing, etc.), more flexibility on side projects (startups, etc.), and much more volatility. Volatility can be good or bad. A dry-spell can mean time to finally go on that vacation or focus on that startup. Or it can mean a lost mortgage. It depends on your life stage, savings, etc.

As a recent grad, contracting worked well for me. As a Dad, I preferred employment. Late stage (no kids at home, and mortgage paid off), consulting seems like the way to go.

As a contractor I'm paid regardless of my project status. I could earn more working with provision at a different agency but I like the security i have where I am now.

It's the kind of gig where I just work 40 hours a week for years. If something happens they just find me a new project. It's pretty chill.

When I was an IT industry analyst (basically a type of consultant) for about 10 years, we got good rates when we were directly (or near-directly) on the clock--up to about $10K per day or so. But the rub was that were relatively rarely on-the-clock. Bigger firms can make it work better because they bill out juniors at higher rates than they really are worth. It also works if you only want sort of part-time interesting work anyway. But it's not generally a great steady income stream.

The reason hiring a consultant works, even when your employees are telling you what to do. It's because the consultant costs 10x more and is specifically being hired for direction... it's merely rationalizing "we're paying them $1000/hr for their opinion... that makes their opinion very valuable and we should listen to their advice. Johnny in the corner cubicle is paid to code, not for his opinions..."

Thanks for sharing your experience. Agree with this last paragraph 100% — I would also highlight that part of the value consultants provide is in helping senior management cut through politics to actually solve problems and encourage cross-functional cooperation.

We had a McKinsey consultant team at a large governmental agency I was contracted to as an SME. Scope creep was a daily threat with them; they were always trying to get into another subline in the business and set up a new basecamp there as work faded elsewhere. The worker bees were earnest but had little or no domain-specific experience, and worked off obviously pre-fabricated steps that were carefully calibrated to emit "just enough" progress -- but not too quickly. I remember advising higher-ups we needed to get off that train, but the problem was the agency was far too shorthanded and relied on them for even basic operational tasks instead of higher-level conceptual ones, thus making them essential, and their management almost certainly knew it. I moved onto another opportunity and I have no doubt they're still there in some capacity.

>In short: The people you’re talking to aren’t the people who are doing the actual work, The people who are doing the work have no industry experience And the numbers they’re basing their analysis on are probably whatever they found on google.

this has always been the most mindboggling thing about consultants. I have a few friends working as consultants and occasionally when they discuss cases, I always think to myself, "who on earth are you to advise them about so-and-so management when you literally just graduated college a year or two ago?"

The value is that (ideally) they've asked around and figured out how half a dozen peer firms do what you're struggling with. So while they may not have solved your management problem personally, they can give you an idea of what's worked for your peers without all the icky industrial espionage and antitrust violations you'd need to find it out yourself.

It’s not espionage, it’s an expert network!

They call it “best practices”.

Where did they learn what’s changed in best practices for fast food logistics since the last time they consulted for Burger King? Well, funny enough, they were recently engaged by McDonalds…

This. You can have an open acknowledgement that the consultant knows jack as long as they can give you the sourcing of their underlying insights and best practices and it passes the sniff test.

Usually it is google search

The thing is, they would need experience to tell which of the best practices apply best in what situations.

I had a similar reaction, the first time I heard a graduating CS undergrad say that they were going into management consulting: "But you don't know anything yet..."

But I guess it's not that different from the new grads who are instantly called Software Engineers.

Some percentage will rise to quality work, through mentoring&training, effort, and experience... and quickly earn the title.

And some percentage will go through the motions... and still get paid lots of money.

To me, the point of a software engineer is to write code. An experienced software engineer can quickly write quality code while also doing other responsibilities, but their fundamental job is still code. A new grad may not be good at writing code, and they may not be as good at ancillary things, but fundamentally they are still capable of writing code.

In contrast, the point of a consultant is to provide expertise in an area that some company doesn't have. A new CS grad may have more expertise in software than a non-tech company, but they definitely have less expertise in software than a tech company, and less experience in management than almost any company with more than 1 person in it.

In Norway the only difference between consultants and everyone else is that we cost more and are easier to fire.

Besides that we just do software development like everyone else. And sure we have colleagues to lean on but so do the companies we work for. Most of them are huge.

That's a contractor.

In defense of consulting the “sales pitch” on consulting is that the people on top, the partners and managers, have the industry experience to guide the more junior employees who don’t have experience but have good analytical skills. How true that is is up to interpretation but that’s the steel man version

A friend of mine who worked as a very high level consultant for years once said that consultants are often wrong, but never in doubt. Having just graduated doesn't really change that dynamic, as long as you have the confidence to pull it off.

“Often wrong, but never in doubt” is a great tagline

Consultants are software engineers for human software, i.e. how a business runs itself. Just like software engineering, there are best practices, state-of-the-art, ways to pass on knowledge from seniors to juniors, etc. Just like software there are company 'assets' (the source code repository) with past cases, problems that were solved and how (or not solved and why not), etc. They are very similar businesses actually that just scale differently: consulting scales worse than software but at much lower risk as all 'development' is funded (typically mostly by the first customer than partially by N+1).

Source: 25 years as a consultant...

The idea is they reduce problems to conceptuals. You don’t need experience, and in fact industry or specific experience is often a hindrance, to solving conceptual problems.

They do this many times a year (see: young people working crazy hours). Pattern recognition develops. They now lead 20-somethings doing this work.

The idea that age == competence is a bad one IMO.

I've seen this as well. And while not defending such practices, how much experience do the consultant worker-bees need when much of what they gather come from the staff of the hiring company?

That is, these consulting firms get called in more because office politics and organization dysfunction is high, too high. The fees aren't so much for expertise per se, but a stupidity tax on the hiring company that lacks the leadership and management to get out of its own way.

Put another way, these consulting firms don't hire themselves. The fact that they do get so much work is more of a reflection of how weak and rudderless some Big Incs actually are, than the strengh of the snake oil sells.

Mostly this. Whenever you hear someone say “I’ve been telling them to do X for years”, you have to keep in mind that the value of the consultant is not to come up with the idea to do X, but to tell them to listen to you.

Lots of Fortune 500 to 1000 companies lack the ability to recruit the best and brightest. And mostly they don't really need them. But when they do, consultants offer a ready made solution to get a project done.

These places farm companies with the “best and brightest” as well.

They sell a shortcut for management. Their asshole hired gun nature lets them short circuit the organization’s power structure. Not too many second layer executives are good at manipulating these consultants.

It is satire, not actually written by a consultant. This is the humor page at the end of the economist. But the fact that it is accurate actually does make it funny, if a bit trite.

Like most good satire it’s based on reality

> This is the humor page at the end of the economist.

Isn't this just a Bartleby article? Their column on management

I've been on both sides - as a management consultant at a top firm and within a corporation hiring a top consulting firm.

The grunt consultants are the ones making the slides, but they aren't deciding the direction of the project or the output. Every project I worked on as a consultant had a lot of input from the person who sold the work (their reputation is on the line!). But let's be honest, most consulting projects aren't mind blowing - basic stuff like "what is the competition doing", "what is the the flavor of the month for fund raising".

And in terms of "not having experience in the area", that's fine in a lot of cases. Often consultants are brought in to do work the company doesn't have the resources to do. Or, if it's a new area you need advice on, you partner with the consulting firm on how to do that. Maybe it's interviewing experts in the field, maybe it's creating case studies of how other companies did it.

I did work with one consulting firm that had domain knowledge (small boutique firm). The consultants had industry experience and a ton of contacts. We basically boiled down what answered we needed and they tracked down the answers.

While on both side I've never been a part of the a project where what consultants offered wasn't 100% clear to the client. HN acts like consultants are pulling the wool over clients eyes but that's never been my experience. They new exactly what they were paying for.

In my experience, this is all disclosed (partner/manager/associate). Pretty much any proposal I've seen from the top firms includes a cost estimate built by using hours x rate for each respective job title and often further broken down by stage of the project. Time and material bids are most common so you should be asking for this up-front, I actually view it as a bit of a red flag if they don't voluntarily disclose/bid it this way (eg. if I'm paying for time, I need to know how much time is being planned for and by which rate level).

The more expensive the services, the less likely you are to get a bid in this format.

This is very true. The more ambitious the scope is, the more difficult it is to provide a bid in that format. Also, expensive engagements are priced on perceived value anyway.

Very true. I regularly get it on $500k-$2m projects, that's probably considered small. Of course it's caveated to hell with talk of "projection", "risk", etc. But that's part of my job is asking questions so I can anticipate whether they can execute on this or if it's perhaps some ambitious low bidding techniques.

FWIW, I also don't work in tech. Finance/accounting/management consultants are my world. I could definitely see how software/tech is more ambiguous by it's very nature.

In reality, we would usually take the value-based fee (how much we think it’s worth) and then allocate it down to scope bullets, which are also usually very vague.

>In short: The people you’re talking to aren’t the people who are doing the actual work, The people who are doing the work have no industry experience And the numbers they’re basing their analysis on are probably whatever they found on google.

I think this really sets the wrong expectations.

The partner or director that sold you the work may not be doing the day-to-day work, but that doesn't mean they aren't involved. Behind the scenes, the consulting team should be frequently checking in with the director/partner to make sure they are on the right track. Major deliverables are reviewed by the director/partner before they are seen by the client. You should also be meeting with the director/partner frequently to make sure they are aware of any feedback you have about the consulting team's work. If these things aren't happening, you should give that feedback to the partner and look elsewhere for future work.

The good consulting firms may not hire people with industry experience, but instead they select hires that are good at researching and gathering data from a lot of different sources and synthesizing it into pieces of information that are more easily digestible by others. This is what enables those consultants to get quick feedback from people who do have industry experience (the directors, partners, or others in the consulting company that they have access to) and course correct where needed.

Don't get me wrong, there are a lot of scummy consulting groups out there. IMO the key thing is to understand that while the partner who sells you the work may not be the one _doing_ the work, the people doing the work _will_ follow in the partners footsteps. If the partner is mostly absent, or you think the partner is pulling a fast one on you, their team probably is too (or vice versa), and you should ditch them at the first opportunity. If you have a good relationship with the partner and think you can trust them, they are going to try and maintain that trust by making sure the team doesn't do anything to betray that trust.