Elon Musk spells danger for Accenture, McKinsey and their rivals | Hacker News Reader

Elon Musk spells danger for Accenture, McKinsey and their rivals

economist.com

The danger for consulting companies is that Elon is using their strategies with even more arrogance, even younger and poorly-qualified consultants, even less understanding of the what they're wrecking, and even more contrived metrics to make decisions.

DOGE is the accelerationist end-state of the consultant economy.

Not sure if you are right, but it really made me laugh.

  And up and up they fly,
  as fireworks in the sky,
  screeching ever higher,
  towards their inevitable bang,
  a great ball of fire,
  a last flash of yang,
  before relentless gravity,
  indifferent to hubris,
  brutally ends this crisis,
  and restores back harmony.

Elon will also make more money personally than even Accenture senior managers could have ever dreamed of. He's also achieved 100% regulatory capture by simply being in a position to fire any regulators investigating his businesses. Quite an achievement.

Consulting companies destroy valuable institutional knowledge and make the government less effective, so I'm onboard in theory.

The flipside of removing them is you now need to hire experts/specialists to do the work properly, not fire them...

https://youtu.be/ycVBoWsGLJs

> Consulting companies destroy valuable institutional knowledge and make the government less effective

Can you explain?

Because the entire idea is that they bring knowledge to the institution that hires them, and proposes/implements processes to make government more effective.

If a department needs full-time experts in an area for decades, they generally hire them. But very often, a department needs to make a complicated decision in an area that is not its core competency, and after the decision is made and implemented it doesn't need those experts anymore. Their job is done. That's where consulting shines.

You can buy knowledge in all sorts of form, from books to consultation hours, but the most efficient when applying this knowledge to a task is still a human being. A consulting company might not even guarantee you that the same person will be sent to you for the whole time of the project.

Institutions can become caught in a trap of paying high prices for consultants and low/no prices for internal experts. Obviously, consultants are incentivized to cultivate this codependency. In many cases, the institution would be better served by building expert capabilities in the domains they care about rather than using consultants.

That is the idea and that is not what happens. Management consulting companies like this are the literal analog of pharmacy companies not wanting to cure anything because then you lose business. If you spend more than a few days working with them you realize that they promote people who find and make long-term revenue streams, not anyone who solves or actually helps anything.

The actual people who do work are generally clueless recent grads on their first job, are trained to produce just enough to pass what is being sold, and they leave (or move up to selling) when they understand the game they have been playing.

See old.reddit.com/r/consulting for a ground-level view into the consulting machine

That's the shiny picture. The reality is that they let outsource risk and competence, turning the business into an empty shell of a former valuable self.

Institutional knowledge stays in the institution and builds up after people have moved from those roles even. Consulting companies bring the operational knowledge to help with a specific situation. Sometimes you may need the institutional knowledge (if it aligns with the mission of the organisation) and sometimes it is better to concentrate on your mission and use the consultancy's knowledge to help you. Blanket statements are problematic. Particularly for something as complex of the goverment as a whole.

That strikes me as expecting to find real followers of Jesus in American evangelical churches. Or maybe expecting the pro peleton at Soul Cycle.

> Because the entire idea is that they bring knowledge to the institution that hires them, and proposes/implements processes to make government more effective.

No. That's the idea they sell.

What they bring is a cohort of interchangeable recent graduates, with flashy powerpoint presentations, fast talk, and "multidisciplinary skills". Which you can charitably translate to "no relevant knowledge".

LLMs killed this grift.

They showed how easy it is to churn out consultant-level reports.

The bar will be raised for consultants now, and only those who can actually bring unique contextually relevant and sound insights will survive. Such consultants exist, but are rare.

The only palpable defense of hiring them, as a practice, lies in the fact that they are big entities and there's implied trust. In my view reality has shown time and time again that big companies are a liability to individuals and other larger structures.

Some fun reading

"Rental car agency Hertz filed a $32 million lawsuit in April against consulting giant Accenture because it “failed to deliver the website and apps for which it was so generously paid.”" https://madeintandem.com/blog/massive-hertz-accenture-lawsui...

"Deloitte treated Marin County as little more than a "trial-and-error public sector training ground" for its inexperienced consultants, the lawsuit claimed." https://www.reuters.com/article/business/deloitte-hit-with-3...

"And in May 2022, New York City stopped using McKinsey’s system for classifying detainees. In the end, the city spent $27.5 million on McKinsey’s services, with precious little to show for it. McKinsey, on the other hand, collected its money and moved right along." https://www.thenation.com/article/society/mckinsey-whistlebl...

For those bored, wikipedia pages are a good starting point. I would be surprised if there were many, out of the top 100 consulting companies, that didn't have a controversies (or similar) section on their wiki page.

https://en.wikipedia.org/wiki/McKinsey_%26_Company#Controver...

https://en.wikipedia.org/wiki/Deloitte#Litigation_and_regula...

https://en.wikipedia.org/wiki/Accenture#Controversies

> The flipside of removing them is you now need to hire experts/specialists to do the work properly, not fire them...

Except that currently hired experts/specialists who don't argue correctly what their purpose is, are fired by Musk. The hole left is then to be filled up by external consultancy.

McKinsey were major contributors to the opiate epidemic. They should have been banned from any US government business already.

https://www.mckinsey.com/de/news/presse/settlement-funds

I really see no problem in posing a danger for consulting companies.

It’s unlikely. Every time the US cuts it’s federal bureaucracy, it overwhelmingly cuts experts which means the US has to hire consultants and contractors en masse and no longer has experts who can even tell if the services the US government is paying for are reasonably priced or even work properly at all.

Just think of Yosemite National Park firing their only(?) locksmith. It sounds like the most boring job but such a big park and many buildings. As soon as someone locks themselves into or out off something it becomes highly lucrative for a contractor to do this task. Replacing broken locks or cutting new keys won't get cheaper. It will be the same on many other levels. https://www.washingtonpost.com/climate-environment/2025/02/1... https://www.instagram.com/natevince/p/DGLxMKbyKwq/

I think that’s true on the very low end, but also on the high end. If the US government didn’t purge most of its software experts in the 90s on the basis that the US would be buying, not building, most of its software then maybe the Obamacare rollout wouldn’t have been bungled so badly. A competent senior software engineer in the room might have been able to prevent a horrible contractor from being hired in the first place, and they might have been able to tell the bureaucrats that they need to relax some of their impossible or impractical requirements.

Which was basically the point of the USDS, which has now been gutted of its original purpose and turned into DOGE

Yes, USDS was responding to a need for tech professionals inside the government _after_ the (IIRC) 1990s purge. But the scope is even bigger than just digital services (it's just the domain I'm most familiar with)--the same applies to domain experts (e.g., accountants and tax lawyers to oversee the digital services built for the IRS, aerospace engineers to oversee the systems built by the DOD, etc). "Small government" isn't an unreasonable goal, but when you stupidly hack away at existing government, you end up writing blank checks to contractors and consultants ("welfare for consultants" doesn't even do it justice). Trump supporting Americans are about to find out why expertise is a real, valuable thing, although I'm skeptical that they will connect the dots between their policy and its outcomes.

> If the US government didn’t purge most of its software experts in the 90s on the basis that the US would be buying, not building

I hadn’t heard about this before, would love to learn more. Got any good links?

In the 90s, the Clinton Admin pushed a government efficiency program similar to DOGE (except much more organized). Around 250k federal employees were laid off.

It destroyed a significant portion of local economies (as several military base towns/cities like Rantoul IL, Lynn MA, and Pittsburg CA saw their economies collapse) and caused our defense industries (Aerospace, Shipbuilding, etc) to be forced to consolidate and ossify.

IMO, we need to re-look Clinton's legacy and see how much of a negative impact his policies had over the long term, just like we are now doing so for Reagan.

https://en.m.wikipedia.org/wiki/National_Partnership_for_Rei...

I might be misremembering, but I think Congress had passed a law mandating "buy, not build". Was Clinton pushing that policy, or was he implementing it, or am I conflating multiple distinct "small government" initiatives?

The Federal Acquisition Streamlining Act of 1994 ("buy not build") was a part of this.

These consultancies don't have experts as you mean it and don't provide then. They have very good talkers and management can offload unpopular decisions on them.

But, they don't have expertise, just confidence. They generally leave companies in worst shape as they were originally.

The actual experts are then hired from elsewhere.

I think you might be misunderstanding my comment. I was arguing that the government has variously employed experts, and when they've been fired under the pretense of "smaller, more efficient government" then we end up hiring contractors and consultants who can take advantage of a stupider government and charge astronomical rates for broken systems. I'm NOT making a claim about the expertise of these consultancies. Stupidly hacking away at government results in costlier, lower-quality governance (which suits the billionaire class that is less dependent on governance and directly benefits from a lack of oversight, at least in the short term).

I have seen so many millions of dollars thrown away by the government on projects where nothing was delivered. All the consultancies made out like bandits. Over time it's better for government to be very small and not get involved in too many things. They cannot execute and everything gets bastardized over time.

I have seen the same in private corporations. Consultancies made made out like bandits, the company was left more dysfunctional then before.

Goverment is bad is act of faith on the conservatives. They intentionally sabotage it and then claim it can not deliver. You just literally described how small goverment claim was used as a vehicle for corruption.

https://archive.is/gPqAz

Hopefully they will all come out weaker from mutual fight.

I wouldn't be surprised if they aren't able to jockey into a position that sees their continued success. That's what they are good at right?

Don't threaten me with a good time..

I keep asking myself when HN will stop censoring everything about Musk

OK, why is this flagged?!? It's from the Economist for god's sake, I can't help but feel the reason why it got flagged was because it was critical of Musk?

Pay wall but headline has me in high spirits. Good riddance, Elon remains a fart face but anything that hurts the blight that is these consultancies is welcome.

Broken clock does what?

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