[HN Gopher] Have McKinsey and its consulting rivals got too big?
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Have McKinsey and its consulting rivals got too big?
Author : godelmachine
Score : 144 points
Date : 2024-10-19 14:46 UTC (8 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| nelblu wrote:
| https://archive.is/qlF5n
| detourdog wrote:
| I think more than becoming to big the solutions are founded on a
| narrow matrix of logic or group think.
| throw4950sh06 wrote:
| That's by design. They have few verticals that they focus on
| and have templates for every situation that might arise.
|
| (Former McK SW engineer here)
| toomuchtodo wrote:
| Would you say McK is the consulting equiv of SAP? Where they
| push the business into the vertical template vs do the actual
| legwork to improve the org in the vertical in question?
| throw4950sh06 wrote:
| In many cases, yes. But I wouldn't say it's not valuable if
| you're in these few verticals they care a lot about (one of
| them is mining, as an example). They won't provide you the
| data directly, but they _do_ have it and it 's central to
| everything they do - from across the industry, large and
| small clients, at all stages of life, and they stayed with
| many of them through significant transitions. They invested
| hundreds of millions of dollars into custom internal tools
| to make the data and derived analysis accessible to
| consultants. Where you have theories, experiments and
| anecdotes, they have statistics. And nobody has better than
| they do.
|
| Don't fall into thinking they just want to make some easy
| money and don't care about your situation. They most
| probably saw hundreds or thousands of clients like you, and
| know that unless you're a unicorn, the "standardized"
| approach will be better for you - they synthetized it from
| thousands of engagements to be as simple and as idiot proof
| as possible. And here I mean idiots on both sides -
| consultants as well as the client. If you were an unicorn,
| you wouldn't need to hire McKinsey. Remember, most of us
| aren't Gates/Jobs/... This is just like tech startups
| thinking they're an unicorn and spending an absurd amount
| of effort (and thus money - also opportunity cost) on
| reinventing the wheel and building for infinite
| scalability, instead of simply doing what works well for
| everybody else.
|
| Not saying they don't want money, but their approach to
| making easy bucks is to add a zero to their quotes, not by
| not doing anything worthwhile. The quotes seem crazy to us
| mere mortals, but the clients are usually happy - what's a
| few million dollars when they helped you save tens or
| hundreds of millions. You don't care how simple was what
| they did - you probably tried many times yourself before
| hiring them, and if they made a stupid thing work, you're
| grateful.
|
| Sometimes it's really stupid - like a consultant randomly
| noticing that the client buys protective earplugs from 20
| different suppliers while drinking coffee in the common
| area of 5th branch they're visiting; acting on it and
| making a much better deal (money _and_ services-wise) with
| just one or two suppliers globally, and similar kinds of
| random ad hoc but monetarily significant optimization.
| That's where the templates come in - if you hire McKinsey
| they just ask "how do you do X?" - and if you say '"well we
| don't have a global process for that, each location handles
| it themselves", their reaction is to implement a template
| process - and I think that's good. Yes, the branches will
| scream bloody murder, but the corporate doesn't care - it's
| not their business to create cultural centers for adults.
| Create a lifestyle business for yourself if you want that.
| smitty1e wrote:
| Deloitte sends a large delegation to Davos annually, but they do
| it ironically.
| mschuster91 wrote:
| Of course they got too big, and especially they got too enmeshed
| with the auditing business.
|
| It's time to break them all up. The "firewall" that should be
| there from a legal perspective is a joke in practice, and when
| there are only three to four companies, there is no place for
| fresh blood and with it fresh ideas to enter the market.
| jncfhnb wrote:
| McKinsey isn't in the auditing business at all. And those that
| do play both went the other way, transitioning from auditing
| into consulting.
|
| There's a ton of competition in consulting in general.
| metadat wrote:
| This is false, the Big 4 are all in the auditing business, in
| addition to high-end management consulting.
| SargeDebian wrote:
| What part of the statement is false?
| jncfhnb wrote:
| McKinsey is not a part of the Big 4. The Big 4 refers to
| the big four auditing firms.
| metadat wrote:
| Thanks for the correction.
| andsoitis wrote:
| > they got too enmeshed with the auditing business.
|
| McKinsey does not have an auditing business.
| insane_dreamer wrote:
| > too enmeshed with the auditing business
|
| that's not the issue; consulting pays much more than auditing,
| which is why the Big4 would probably be fine spinning off their
| auditing businesses
| wombatpm wrote:
| Said spinoffs would probably start new consulting branches
| after some period of time
| CPLX wrote:
| The firewall is of course a fiction.
|
| The entire _point_ of these consultancies is to allow collusion
| between competitors, which is otherwise illegal.
| imperialdrive wrote:
| Interesting, I never considered that thought before.
| chasd00 wrote:
| My sister worked at McKinsey some years ago. Her favorite
| story is the firm working on the Obama and McCain campaign at
| the same time! Heh just a wee bit of conflict there.
| jncfhnb wrote:
| Current McKinsey here. I don't think anyone expects the current
| difficulties to last indefinitely. Its fairly well established
| that consulting struggles during times of economic uncertainty
| (but does fine when things are outright bad or good).
| willcipriano wrote:
| Would there be any advantage for anyone to state they feel the
| opposite to your view publicly? Seems like a career limiting
| move.
| breakfastduck wrote:
| Depends how private the account they're posting the opinion
| on is!
| kolbe wrote:
| If all comments here were eyed with the same cynicism, we'd
| have no genuine discussions. And maybe we don't.
| willcipriano wrote:
| I don't think the people behind the opioid crisis should be
| trusted to be speaking in good faith.
| kolbe wrote:
| I don't think people who are so bitter about not being in
| a position of power that they will say any hyperbolic
| thing they can about McKinsey should be trusted on the
| topic either
| jncfhnb wrote:
| I mean we're not allowed to say anything either way
| candiddevmike wrote:
| > Its fairly well established that consulting struggles during
| times of economic uncertainty
|
| Only the bullshit kind of consulting McKinsey is known for,
| IMO. The value of someone coming in and repeating what the
| smart folks on the team are saying is no longer there. Plenty
| of boutique consulting shops are eating just fine right now.
| Delivering real results/solutions and being a SME is always in
| demand.
| jncfhnb wrote:
| I don't do that kind of thing but for what it's worth The
| value of coming in and listening to what smart people are
| saying and then telling the C Suite to actually do it is
| hugely valuable when the organization is otherwise paralyzed
| by bureaucracy.
| blinded wrote:
| For sure! Just a real frustrating aspect of change in
| enterprise.
| mordymoop wrote:
| I have worked in specialist consulting for 10 years and I
| agree with this take. Our business does the best during times
| of uncertainty. During lean times, operators want to make
| sure they are allocating capital intelligently, so they pay
| for our insights and advice. In the good times, they just
| plow all their revenue into making the flywheel spin faster,
| no need to be cautious or thoughtful when money is coming in
| no matter what you do.
| lenerdenator wrote:
| > Its fairly well established that consulting struggles during
| times of economic uncertainty (but does fine when things are
| outright bad or good).
|
| The culture engendered into corporate America by businesses
| like McKinsey is exactly what causes economic uncertainty.
|
| When the only thing that matters is the number at the bottom of
| the piece of paper being big enough for some analyst in lower
| Manhattan to be happy, humans will do all sorts of
| unpredictable things to make that number be that way.
| jncfhnb wrote:
| I thought for sure it was war in Europe, bubbles burst in
| Chinese real estate, and a general fracturing in the west vs
| the rest globalization but ok
| lenerdenator wrote:
| And we've faced more headwinds than that before.
|
| The difference is, before, people had at least some
| confidence in their ability to make a living. We've
| whittled down the average person's wages and job security
| to the bone and when people don't feel secure, they don't
| spend, or maybe they do, but they put it on the card...
| which is another problem and story unto itself. And places
| like McKinsey are a part of the knife that did that
| whittling.
|
| Anyways, when people don't spend, businesses don't do
| better over the long term.
| FredPret wrote:
| What data are you looking at that shows decreasing wages
| and spending?
| wombatpm wrote:
| Stagnant wages in high inflation is the same as
| decreasing wages
| FredPret wrote:
| Show me that data.
|
| Here's the opposite perspective:
|
| Real disposable income is up:
| https://fred.stlouisfed.org/series/A229RX0 Real median
| personal income is up:
| https://fred.stlouisfed.org/series/MEPAINUSA672N
| jncfhnb wrote:
| We've faced more headwinds... and experienced vast worse
| economic conditions too.
|
| The current situation is one of uncertainty that things
| may get worse. It's not even a recession.
| ProllyInfamous wrote:
| Let me propose an alternate theory: fines and enforcement have
| become too small, so-as to become _just a cost of doing
| business_.
|
| Many of these employees are so-incentivized by fiscal profit that
| they fail to see the immorality, just seeing opportunity. Maybe
| if our regulators weren't _in bed with_ so many of the major
| funds...
|
| "If you think there's a solution, you're part of the problem."
| --George Carlin (Conan O'brien interview)
| paulddraper wrote:
| You're gonna have to connect some dots to legal fines, etc.
| ProllyInfamous wrote:
| Your request requires a consultation.
|
| Fortunately we also receive miniscule enforcement/penalties.
|
| Press `X` to accept terms & conditions.
| alexashka wrote:
| Yes, but go on taking the logical steps: _why_ are the
| regulators in bed with so many of the major funds?
|
| You very quickly boil it down to morality and ethics.
|
| Americans have a broken ethics code that says the free market
| magically solves the need for anyone to be a good person - if
| someone's a selfish ass, the free market and 'competition' will
| magically fix it.
|
| Therefore I can be in bed with whoever I like, whenever I like
| - both literally and figuratively.
|
| Life wasn't too bad as long as Americans believed in religions
| and this extremely stupid free market idea was balanced by an
| extremely stupid idea of God that wants you to be 'good'.
|
| Now that Americans are unconstrained by _anything_ and further
| emboldened by extremely stupid ideas of magical free markets -
| they 're well on their way to societal collapse.
|
| This is why Jordan Peterson is trying to bring God back - he
| knows Americans are a collapsing, degenerate culture. It's the
| wrong move and it won't work but he (unlike 99% of people) at
| least understands the root the problem. Oh well.
|
| I wouldn't mind it too much because stupid societies full of
| stupid people _should_ and _do inevitably_ collapse but these
| stupid people have nuclear weapons. The way it 's going - we
| will have nuclear war.
|
| ps. most other cultures are _also_ extremely stupid (they just
| have a different set of extremely stupid ideas). Americans just
| happen to have become the world ruler so they 're of greater
| interest.
| ProllyInfamous wrote:
| >why are the regulars in bed with so many of the major funds?
|
| "Show me the incentive, and _I 'll show you the outcome_"
| --Charlie Munger (RIP)
|
| Money? Is the answer to your question _money?_
| pphysch wrote:
| Which contemporary cultures are not "extremely stupid", in
| your opinion?
| alexashka wrote:
| I've provided all the necessary information to piece it
| together without explicitly telling you.
|
| That was not an accident.
| pphysch wrote:
| Given the reddit energy of these posts, I'm guessing it's
| a Japan/Scandinavia preference. Right or wrong?
| FactKnower69 wrote:
| you might start by narrowing it down to the ones that have
| managed to complete a public works project in the past 20
| years
| lucianbr wrote:
| You should read about the popes in medieval times. Point
| being, everything you wrote is about humans, not about
| americans. And having religion changed nothing. Who knows
| what those people believed inside their minds, but outward
| they had religion, and outward is all we can see for anyone.
|
| > stupid societies full of stupid people should and do
| inevitably collapse
|
| No society endures forever it seems (maybe I'm misinformed?),
| but no society is immune to stupidity, so I'm not sure your
| statement about stupid societies actually has meaning.
| Collapse is certain, the causes less so.
|
| I take solace in the fact that either nuclear annihilation or
| some kind of climate disaster, seems inevitable, but also
| nobody's fault in particular. We could avoid it if we weren't
| human. But I'm not sure that I want that. The good would
| likely be gone with the bad.
|
| Maybe the cokroaches will manage better, or the robots, but
| maybe the Fermi paradox solution is that life always evolves
| to be too greedy for it's own good.
| xbar wrote:
| Fines are trivial.
| nothercastle wrote:
| It Usally costs more to process the fine internally then the
| nominal value of the fine
| kolbe wrote:
| I find it less that the fines are trivial than it is fines
| are levied on the wrong entities. Consultants break the law--
| fine them personally. Police's officers abuse power--fine
| them personally. Bankers shirk regulation--fine them
| personally. Nothing will ever change if the people committing
| the acts aren't the ones punished.
| robertoandred wrote:
| Gotten*
|
| C'mon, The Economist
| js2 wrote:
| Pretty sure it's a US/UK thing.
| seabass-labrax wrote:
| Historically speaking, it's common to both UK and US English
| because it predates the European colonization of America:
|
| http://www.miketodd.net/encyc/gotten.htm
|
| Personally, for a situation like this I'd use the somewhat
| more formal 'become' instead!
| lysace wrote:
| Agreed. "got" is more informal _and_ less universal across
| variants of the English language than "become". Bad
| editing.
| graemep wrote:
| Given "got" is used in both British and American English
| and "gotten" is used only in American English (I do not
| think it is used in other variants either) I do not agree
| about "universal"
| lysace wrote:
| I meant to agree that "become" should have been used
| instead.
| klelatti wrote:
| > Excitement among clients over this type of "generative" AI is
| also creating opportunities for new work. Mr Schweizer says that
| BCG has already completed hundreds of projects with clients
| around the technology. Accenture has booked $1.1bn-worth of
| generative-AI work in the past six months.
|
| During a gold rush teach people how to use their shovels.
| throwawaycons wrote:
| [throwaway because ...reasons; also, I ran my comment thru
| ChatGPT to anonymize it]
|
| I'm currently working at Accenture, collaborating with a well-
| known German car manufacturer (OZJ). We receive a new RFP
| almost every other month, and due to our long-standing
| relationship with them, we end up securing the majority of the
| projects. We manage to deliver on these projects--or at least
| ensure they are billed.
|
| Occasionally, we engage in some RAG work or even delve into
| image generation, though the quality of these outputs tends to
| be quite subpar. Sometimes, it surprises me that the client
| even accepts it, but ultimately, they receive a functioning
| product (most of the time), we get compensated, and the end
| consumers cover the costs.
| chasd00 wrote:
| I'm very close to Accenture and am suspicious of that $1.1B
| number. That's 500 $2M projects, I just don't see it. They must
| be very generous with the definitions. Like a $100M
| maintenance/operations deal that has a small genai POC as part
| of the scope and then putting the whole $100M deal in the genai
| bucket.
| jakubmazanec wrote:
| Obligatory John Oliver video on the topic:
| https://youtu.be/AiOUojVd6xQ?si=anI1_FKkDM4oDI1M
| artursapek wrote:
| Nothing about John Oliver is obligatory
| stonethrowaway wrote:
| Less than nothing. It has flipped to the other side in the
| bullshit of it all. Pundit hot takes have ruined quality
| dialogue. Frankly I'd rather have discussions with people who
| do their own research and form their own opinions, no matter
| how faulty those opinions may be (there is always room for
| improvement precisely because there is room for discussion),
| than to hear them regurgitate party-speak drivel shilled by
| actors.
|
| Talking heads are a cancer upon society.
|
| edit: to the folks responding saying something to the effect
| of "you don't know what you're talking about!" - I could have
| saved you the trouble and written your responses down ahead
| of time. They're trite and reflexive. Oliver is a shill, down
| to the so-called data. He's an approved mouthpiece on behalf
| of the state. He discusses and he frames only what is allowed
| to be said in a context it's allowed in, and his edgy woke
| takes are the complete opposite of. They're edgy because of
| how milquetoast the Overton window has become.
|
| Put another way, if you're in unison cheering for someone who
| is allowed to have their own TV show, it's time to ask
| yourself if you're being played with bread and circuses. You
| won't hear the opposition because, well, in older times and
| other places they'd be disappeared/imprisoned, but today it's
| mostly people like this twat (and yourselves) drowning out
| the contrarian voices.
|
| Job well done lads.
| malfist wrote:
| I get the feeling you haven't watched Jon Oliver. He does
| deep dives on relevant issues and does a ton of research. I
| was recently interviewed about his process and it's pretty
| enlightening. He complains about how activists often twists
| perfectly good data to make a point but under scrutiny it
| falls apart, even if the original data would have been good
| enough.
|
| He's about as far from a hot takes engine as you could get
| kolbe wrote:
| He's high quality research by comparison to the absolute
| garbage that exists today--not by say classical Frontline
| or 60 Minutes standards
| rc_mob wrote:
| ??? John Oliver has always does a great job of
| understanding and communicating an issue in depth. He is
| exactly the opposite of everything you are accusing him of.
| kevinventullo wrote:
| Even on topics where I agree with him directionally, I
| find he misrepresents the truth or omits significant
| caveats.
| rolandog wrote:
| I disagree.
|
| The phrase "doing one's own research" has been co-opted by
| people doing conspiracy-windowshopping. It's designed to
| get lazy people stuck in the muck while sending them on a
| Shawshank-Redemption-style crawl through the sewers of the
| Internet... Only those who can cut through the bull -- pun
| slightly intended -- make it to the other side.
|
| You have to start trusting people at some point.
| Researchers and scientists have proven to be trustworthy,
| if (IFF!) the right incentives system is in place. (Edit:
| and talking heads, of course; my claim is that John Oliver
| and his team of researchers and writers is more trustworthy
| due to the effort that they put into making things as
| accurate as possible, while funny as well... All while
| elevating the quality of newscasters by showing attribution
| to what they are saying and connecting the dots on why it
| is relevant to the viewers).
|
| But we are living at an awkward stage of civilization: the
| very rich are backing political leaders who make a religion
| out of economic systems and don't view them as useful tools
| to balance development and inequality.
| stonethrowaway wrote:
| I agree with majority of what you've said. I think we
| are, predominantly, in agreement. Or at the very least we
| would overlap from time to time. I'll skip on the John
| Oliver details because so much of what these programs
| focus on with research is telling you what to think by
| framing facts, omitting details and derailing
| discussions. I'll focus on the other bits.
|
| Both the nutty conspiracists and the people nodding along
| and cheering with TV shows fall to the same kind of self
| inflicted ignorance: their biases get the best of them
| and they won't look for counter arguments or entertain
| alternative viewpoints or possibilities. Now, I don't
| care about what biases those are in particular, but it's
| worthwhile to ask both sets of people, upon listening to
| them make their case/statement, a somewhat simplistic and
| mildly derogatory question: "where did you hear that?"
| because both sets are looking elsewhere for authority on
| what to think or believe.
|
| Many a time I've had to reel peoples fantastical takes in
| by plainly stating back to them their sources and walking
| them through the narrative they've constructed in their
| head and listening to people who - in many cases - are
| even in a lesser position to obtain accurate enough facts
| to make a solid case. Not the most welcoming party trick
| but it does work to help wake people up from a self-
| inflicted trance.
|
| I'm reminded in all of this by the usefulness of
| something like an LSAT, where it's asking you to recite
| back minute details of what has been said or happened, or
| what has not been said and therefore is presumptuous,
| without necessarily forming an opinion along the way.
|
| You raise a good point on having to soften a hardline
| stance and trust people putting in the work.
| jakubmazanec wrote:
| If only you did your own research on how John Oliver does
| his research.
| karmakurtisaani wrote:
| Source: trust me bro?
| jprd wrote:
| https://youtu.be/Q9kNMJ8SguQ?t=898
| jakubmazanec wrote:
| Please, do your own research. That's the whole point.
| datavirtue wrote:
| Agreed. I watched an a show on something I knew a lot about
| and was appalled out how much he missed the mark and/or had
| an agenda. I always liked his show and tended to agree with
| his take until then. Great rehtoric, Im just concerned that
| people might be eating his shit and forming "informed"
| opinions on things because Oliver's team "already did all the
| research."
|
| Keep some salt handy.
| rolandog wrote:
| Could you elaborate a bit more? I'm interested to know on
| which topic did Last Week Tonight miss the mark (and, why
| do you consider they had a hidden agenda?).
| ned_at_codomain wrote:
| Used to be at BCG. I think it's worth bearing in mind that
| relatively little consulting revenue -- even at the top strategy
| shops -- comes from pure strategy work anymore.
|
| You can push much, much more volume and absolute impact through
| by running big merger integrations, digital transformation, and
| other large scale change projects at big companies.
|
| It is basically a better business to become something like a
| premium Accenture, a "get stuff done" kind of consultancy. You
| can staff an army of junior people for a very very long time on
| those kinds of projects.
|
| It's just not that easy to keep people staffed on 5-6 person
| teams solely on 8-12 week pure strategy engagements.
|
| These kinds of projects are also the first discretionary spending
| yo get cut when times get tough.
|
| If you're going to be focused on the pure strategy work, you'll
| probably want to stay really really small. We've seen some of
| this in investment banking with firms like Allen & Co or
| Qatalyst. Challenge is that consulting doesn't come with scalable
| monetization via success fees.
|
| It's just not great business to be a boutique consultancy, I
| think.
| ghaff wrote:
| It's true in the IT analyst business too. While there are
| people in 1-10 person firms who earn a living, they're mostly
| not getting rich and this is a long term trend line with a lot
| of consolidation of medium sized firms over time. To be
| reasonably successful you probably need a real focus and be
| good at selling.
|
| Had a conversation with an ex-Gartner analyst--now at a product
| company--and his comment is that even at the big analyst firms,
| comp isn't great at least below senior management.
| chasd00 wrote:
| > It's just not great business to be a boutique consultancy, I
| think.
|
| You bill per hour and there's only so many hours to bill and
| your rate can only be so high. The only way to scale revenue is
| headcount so you can bill more hours.
|
| It's like handling radioactive dynamite but I think a boutique
| firm specializing in fixed price projects could make a decent
| amount of money. You have to be really really good though
| because one bad project contracted at a fixed price could mean
| lights out.
| cpeterso wrote:
| > You can staff an army of junior people for a very very long
| time on those kinds of projects.
|
| Given this is a common business model and has known bad
| outcomes, what would a Blub programming language and rapid
| development environment designed to improve the quality and
| maintainability of an army of rising junior engineers look
| like? (I originally wrote "productivity", but reducing billable
| hours is not a positive outcome for the consultancy. They
| surely still want to produce quality software like to reduce
| customer-impacting bugs and negative headlines.)
|
| Go was supposedly designed for a similar audience,
| inexperienced engineers at Google, but it still has own
| gotchas. I'm imagining something hybrid of Go, Python, and
| Visual Basic with strong static typing, strong information
| hiding with little shared or global state, easy unit and
| integration testing, and excellent post mortem debugging.
| whatever1 wrote:
| With labor becoming fungible in the eyes of c-suites, the holders
| of institutional knowledge are the libraries of the consulting
| firms. Consulting firms also have tech talent that traditional
| businesses had no access to in the past, so any large scale data
| driven related project is done with consultants.
|
| However: 1. The costs are insane and probably we reached the
| point where the benefits do not justify the prices they are
| charging. 2. Wfh is a cheat code to get access to cheap tech
| personnel that is pissed with the RTO of big tech. I keep hearing
| tech folks working at traditional manufacturing shops remotely
| these days.
| candiddevmike wrote:
| The economics of consulting are pretty raw: they basically
| arbitrage the hourly rate of folks. They pay you X and then
| bill you for X*1.3 (minimum). Folks are starting to realize
| they could just go direct to the customer, and the recent non-
| compete uncertainty has made a dent in the quality of talent
| these places have on their bench. Not to mention most of the
| talent at these shops are just window dressing for cheap
| offshore labor that actually does the work with mixed results.
| whatever1 wrote:
| More likely they pay you X and they charge 3X, but yes I
| agree.
| jncfhnb wrote:
| I'm pretty sure my average multiple is 6x
| FredPret wrote:
| 3x is standard, you should push for a 2x raise. You might
| have to jump ship twice to do that
| sevensor wrote:
| This is a surprising take, considering the consultants I've
| worked with never took the trouble to learn anything about the
| business despite sitting shoulder to shoulder with us for
| weeks, and then proceeded to give us spectacularly terrible
| technical advice. "You need machine learning for this. Trust
| us, we've done this before." They hadn't, and it became clear
| they'd wasted our time and hadn't listened to a word we said.
| whatever1 wrote:
| There is nobody left, old enough, to remember that the last
| project with that consulting firm failed.
| jumping_frog wrote:
| Are we living in middle ages that electronic records don't
| exist of what happened in the past engagement. Maybe one
| can locate the last McKinsey dossier on OneDrive? The
| problem is and always was of incentives of people involved.
| Scalestein wrote:
| Generally there Firms prize "first principles" thinking
| and don't put a ton of effort into leveraging previous
| engagements. Think of it like how engineers will throw
| out a solution and rebuild it rather than understand and
| build upon it.
|
| It is also quite difficult to surface useful information
| amongst all the noise in the giant archive of documents
| throw4950sh06 wrote:
| Oh no, that's not true at all. They care about data, and
| they will actually tell you themselves that they already
| did it for you - right after convincing you that you need
| to do it again.
| whatever1 wrote:
| Would you trust a random soggy doc for which you don't
| know the person who wrote it and their competence, or the
| flashy deck from McKinsey? The answer is 99% of the
| times: McKinsey.
|
| Only time that answer is different is when a person in
| power is still around and they pretty much veto the
| engagement with a consulting company.
| ljm wrote:
| Don't even need that trust when your org probably has
| some intensely bureaucratic procurement setup where past
| performance has zero influence on a new tender, so long
| as they can undercut the competition.
| watwut wrote:
| I have yet to see big consultant company to improve things on
| technical levels. They are great at talking to upper levels of
| management and avoiding accountability for results.
|
| They don't improve how things run.
| nothercastle wrote:
| Traditional mfg companies don't understand tech. They don't
| like that tech employees demand higher wages and benefits and
| hire bottom tier talent or try to convert existing non tech
| employees into programmers.
| whatever1 wrote:
| Which kinda makes sense. The work of an SWE at big tech can
| bring in a ton of cash due to (almost) infinite scaling of
| software and (almost) zero marginal cost.
|
| But as an SWE at a manufacturing company, how much can your
| work increase their revenue/profit? The bulk of their income
| is still coming from the widget/commodity they are producing.
| throw4950sh06 wrote:
| I mostly agree, but for sake of honest discussion... Why
| are the mechanical/electrical engineers also not paid well
| at these companies? Even at these companies capable of
| achieving massive scale with new products they design.
| Think something like 3M, making billions of units of
| widgets and commodities.
| whatever1 wrote:
| Depending on their profit margins and the talent scarcity
| they do pay.
|
| A seasoned cheme at oil and gas was easily pulling 300k +
| 2M pension + 10% 401k match
| apwheele wrote:
| So have not dealt with McKinsey specifically, but other
| MBA/Consultant types I feel like they treat software
| engineering like we are ditch diggers -- they just request
| things and expect it to magically happen.
|
| So most of the requests are insipid, some are impossible, and
| they have no desire to spend effort to understand either.
| albert_e wrote:
| Is it fair to say that ...
|
| Consulting is the oldest profession ;)
| hulitu wrote:
| > Consulting is the oldest profession ;)
|
| Some would dissagree. Though i think prostitution comes after
| politician. /s
| alkonaut wrote:
| The big firms just need to be big and known. There value
| delivered isn't in the PowerPoint explaining that cutting costs
| and increasing revenue will increase profits. The value added is
| that companies buy a stamp from a famous firm when they deliver
| staff cuts, reorganizations or other controversial news. As such
| it doesn't really hurt to go for scale. They're a standards org
| for headcount reduction.
| betaby wrote:
| Why though? Why a company with a board, which is already
| independent, would need some consulting? Isn't the board to
| convey ideas to CEO?
| nothercastle wrote:
| The board is neither independent nor objective or often
| really in touch with the business. Therefore they need cover
| from a big name firm
| alkonaut wrote:
| It's always nice to point to a third party and keep blame
| from c-suite or board.
| samdung wrote:
| I have a small story about McKinsey from friend of mine in the
| Indian Bureaucracy from about 10-12 years ago.
|
| McKinsey was doing some work for their dept. I asked him what
| they did. He said, "McKinsey asked us for lots of information.
| Then they put it into a dossier and gave it back to us."
| crazygringo wrote:
| To be fair, a lot of organizations _can 't do this on their
| own_. Which is why they hire a consultancy.
|
| Information is siloed, teams compete rather than cooperate, any
| team's own dossier is going to be seen as biased and
| unobjective.
|
| There's real value in hiring a neutral, competent vendor to
| come in, assemble the relevant information using best
| practices, and present a "dossier" with common-sense
| conclusions. Then the leader who hired them can use that as
| political cover for taking the necessary actions they wanted to
| in the first place, because the leader is no longer siding with
| one bureaucratic faction against another, but merely taking
| objective advice from an outsider.
|
| That's actually worth a lot.
| samdung wrote:
| Yup makes sense from that point of view.
| neilv wrote:
| > _teams compete rather than cooperate [...] political cover
| for taking the necessary actions they wanted to in the first
| place_
|
| That looks like three deeper problems than the consultants
| were tasked to solve.
|
| (Not only do you have counterproductive, misaligned culture;
| but even the CEO can't/won't fix it; and the CEO even has to
| play political games, just to work around the bad culture,
| for smaller goals.)
| datavirtue wrote:
| This comment and the parent sums up GE exactly. These
| consulting engagements were/are a constant stream there.
| However, they were often ordered by ineffectual, siloed
| pretend managers and absolutely nothing came of it aside
| from a bill and the manager getting to feel like a manager
| for triggering the engagement.
| toast0 wrote:
| > That looks like three deeper problems than the
| consultants were tasked to solve.
|
| No, this is exactly the reason the consultants were hired.
| Not to solve the cultural problems, but to work the broken
| process. It's not really in the consultants interest to
| solve the cultural problems anyway, because it drives
| repeat business.
| throw4950sh06 wrote:
| Very often it's yet another consulting company proving to
| their clients that the big cultural change they are
| suggesting needs to be done.
|
| There is big money in doing that too - you gain a client
| for life if you're successful, and you get to recommend
| all your friends in Professional Services companies who
| give you a cut/forward strategy business your way.
| neilv wrote:
| There've been variations on this saying/joke for at least as
| long as I've been working, not specific to McKinsey.
|
| Example: "A consultant is someone who charges you $100K, to
| tell you at the end, what you told them at the beginning."
| nothercastle wrote:
| It's part of the executive game. Make their position or
| opinion seem legitimate
| LaundroMat wrote:
| As the saying goes, you pay a consultant to look at your watch
| and tell you what time it is.
|
| Sometimes this means consultants bring you back to the right
| perspective, sometimes it means they don't add any value.
| brtkdotse wrote:
| > McKinsey asked us for lots of information. Then they put it
| into a dossier and gave it back to us."
|
| To be fair, that's exactly what a psychologist does
| geoka9 wrote:
| That's how any financial consultant/auditor works: an outside
| team sets up shop in one of your offices with your management's
| permission to ask any person in your company for any related
| information. Then they compile a report/financial statements,
| send it to your management and collect their fee.
| throw4950sh06 wrote:
| Yeah, but that report is required by government to be done
| independently. That makes it very different.
| geoka9 wrote:
| Not every company has a group that reports directly to the
| top management and has access to all the
| employees/information in the company. Therefore the same
| people who do required audits are sometimes engaged by the
| management to prepare similar reports as consultants. I've
| read a few audit reports and they did sound like a set of
| recommendations to the management.
| thaumasiotes wrote:
| > McKinsey was doing some work for their dept. I asked him what
| they did. He said, "McKinsey asked us for lots of information.
| Then they put it into a dossier and gave it back to us."
|
| Shifting context a bit, I used to experience school classmates
| complaining to me about some problem they had, and, when I
| repeated their information back to them, thanking me for being
| helpful.
|
| That didn't feel like it was helpful to me, but other people
| seem to disagree. This can't even be explained by the internal
| communication barriers that exist within large organizations -
| an organization of _one person_ has no such barriers.
| chasd00 wrote:
| I've been doing tech consulting for about 15 years. At the
| senior levels, 30% of the job is like being a corporate
| therapist. Just listening to a client during a discovery
| phase go on and on and on and then saying it back to them
| causes all kinds of things to fall into place. It's like
| helping someone do a puzzle, once you get them started and no
| longer overwhelmed by the scope of the problem off they go.
| OptionOfT wrote:
| It was a really interesting place to work at a Software Engineer.
| It made me understand the business. It made me understand that
| doing the right thing isn't valued. You do the thing that has the
| shortest ROI.
|
| It also made me realize that it is horrible to build software
| with people who expect short term deliveries like the usual
| McKinsey engagement. People who expect that the automation of an
| Excel file takes the same time as getting a BA to do it.
|
| I am now in a full time engineering position. I don't talk to
| clients anymore.
|
| What I miss the most is coming into contact with people with a
| huge variety of backgrounds.
|
| Which surprisingly were the people with who I had to spent the
| most amount of time explaining how software works.
|
| Maybe I'm bad at it? Who knows. But I learned a lot, and I'm
| happy where I'm at now, so any bitterness would be misplaced.
|
| Not to mention they paid for my GC.
| mtlynch wrote:
| > _Not to mention they paid for my GC._
|
| What does GC mean in this context?
| hammock wrote:
| Green card
| davidcalloway wrote:
| Thank you I was literally wondering what garbage collection
| needs to be paid for.
| bitwize wrote:
| Garbage collection always needs to be paid for -- in
| working set size and CPU time. That's why you never see
| production kernels, databases, video codecs, or high
| performance games written in GC languages.
| davidcalloway wrote:
| Yes but it would still feel weird for me to thank my
| employer for that.
| ambicapter wrote:
| > What I miss the most is coming into contact with people with
| a huge variety of backgrounds. > Which surprisingly were the
| people with who I had to spent the most amount of time
| explaining how software works.
|
| How is this surprising? I read this as "huge variety of
| backgrounds", meaning, all kinds of backgrounds which are NOT
| software. It would make sense to me they don't understand how
| software works.
| 1123581321 wrote:
| I took it to mean that you'd think it would have been
| annoying to have to repeatedly explain things, but he misses
| them.
| ljm wrote:
| I had a hard time working for an ex-McKinsey/Deloitte/MBA type
| a while ago for similar reasons: it was _always_ favourable to
| push a quick hack to resolve an immediate issue, and literally
| nothing else mattered.
|
| If you had to fight fires all hours day, night and weekend to
| keep on top of it, then so what? That's the job. Getting heart
| palpitations because the red circle came up on the Slack icon
| on your screen? That's the job.
|
| Even with a clear path to a mid-term or even sustainable
| solution, it was like you weren't building software but in a
| constant race to keep ARR ahead of churn, like in Wallace and
| Gromit where Gromit is frantically laying down track to keep
| his train going. Does the software even work? Who cares... it's
| the $$$ that count.
|
| I wasn't really built for that, I felt like I was at odds with
| my own passion and I didn't really want to put my name to the
| work I was doing.
| Discordian93 wrote:
| Other than code related data annotation for LLMs, this is the
| only kind of work I've ever been able to find in software
| development, all the consulting shops big or small work like
| that here. When I read about people having proper testing,
| code review, product managers setting actual expectations of
| what the software should do... It sounds like a wonderland to
| me.
| throw4950sh06 wrote:
| Yeah, unfortunately you need a proper startup culture at
| your location to have access to companies small and big
| like that. I don't think there is a single place like that
| in Europe. Fortunately, it's quite easy to find work for
| American companies. And well paid.
| FactKnower69 wrote:
| >If you had to fight fires all hours day, night and weekend
| to keep on top of it, then so what?
|
| Same type of person who is completely incapable of
| understanding that doing more methodical, higher quality work
| now _saves_ you the time wasted putting out fires later
| burnte wrote:
| I work with a guy who used to be at McKinsey. He's literally
| the worst coworker I've ever had. Everything needs to be done
| yesterday, except he takes weeks between responses. He
| delegates nothing to his people, and constantly tries to take
| over things from other departments, making himself an
| INCREDIBLE constraint and burden. They have an insanely toxic
| culture there.
| aswanson wrote:
| That cant be good for his health.
| Mistletoe wrote:
| >You do the thing that has the shortest ROI.
|
| This is a tombstone for humanity and lots of companies if we
| all do this.
| ainiriand wrote:
| I've por es as an external consultant to KPMG as a software
| engineer and I loved that all processes are clearly defined. I
| think is big because all steps are clear for everyone in the
| company so the do not misstep that often.. I also felt like we
| had so few meetings and a lot of work was done in little time
| with almost 0 interference from management.
| mentalgear wrote:
| It's not just that they're too big--it's that they're morally
| corrupt and largely unregulated. These firms have been involved
| in everything from tobacco lobbying to the 2008 financial crisis
| to pushing opioids, and that's just scratching the surface.
| Despite their role in these crises, they've faced zero
| accountability and continue to rake in massive profits.
|
| As for their supposed value (which comes directly from ex-
| employees): big consulting firms are essentially hired as a
| liability shield for the C-suite. Their main job is to back up
| whatever the CEO already wants to do (usually cost-cutting). This
| way, executives can claim: a) "McKinsey recommended it, so it
| must be right," and b) "If it goes wrong, it's on McKinsey, not
| us."
| terminalbraid wrote:
| > they've faced zero accountability
|
| https://www.insurancejournal.com/news/national/2024/10/18/79...
|
| Is that not an example of accountability directly for the
| things you're complaining about?
| eesmith wrote:
| How much did they make from helping lying drug dealers? The
| article doesn't say. If damages weren't at least 3x revenue +
| attorney fees, it's the cost of doing business. It's not like
| every shady thing they do gets caught.
|
| Better would be if people faced jail time.
| ziptron wrote:
| Since this is reported on by "Insurance Journal" it makes
| wonder how much of this fine was paid for by their liability
| insurer. Does anyone know? Presumably they have no coverage
| for illegal activities, but they never agreed they did
| anything illegal.
| throw4950sh06 wrote:
| How do you want to regulate somebody giving advice to people
| for money?
| VHRanger wrote:
| Correct.
|
| The word here is not "regulate" it's "enforcement".
|
| People doing illegal things should face personal
| responsibility on the actions. So do managers who approved
| it.
|
| The issue with enforcement is the same thing that happened in
| 2008: enforcing white collar crimes is expensive and high
| risk for prosecutors who want slam dunks to advance their
| careers
| FactKnower69 wrote:
| Don't forget fixing bread prices!
| fuzzfactor wrote:
| >Have McKinsey and its consulting rivals got too big?
|
| Do they still exist?
|
| Then, yes.
| photochemsyn wrote:
| Don't all these consulting firms have a really bad record when it
| comes to large-scale infrastructure projects? Some of the worst
| examples are Ciudad Real International Airport (Spain/McKinsey),
| Karuma Hydroelectric Project (Uganda/Deloitte), Chongwe River
| Water Supply Project (Zambia/Boston Consulting Group), Isimba Dam
| Project (Uganda/McKinsey), Haramain High-Speed Rail Project
| (Saudi Arabia/Deloitte), and Shoreham Nuclear Power Plant on Long
| Island, New York (McKinsey).
|
| In constrast, China's infrastructure projects are highly
| successful - high-speed rail now covers 42,000 km across 100
| corridors, and the first one was only completed in 2008. Based on
| their example, the most efficient way to build modern
| infrastructure is to cut the consultancy firms out of the loop
| entirely.
| immibis wrote:
| But how is the shareholder value doing?
|
| Not a joke. Our metrics are different from their metrics. They
| might have succeeded.
| napoleongl wrote:
| Nya Kalolinska Hospital in Stocholm was pretty much the work of
| BGC... most expensive hospital in the world. (In Swedish but
| GPTs exist nowadays so...)
| https://www.svt.se/nyheter/lokalt/stockholm/nks
| openrisk wrote:
| > The quicker corporate clients become comfortable with chatbots,
| the faster they may simply go directly to their makers in Silicon
| Valley. If that happens, the great eight's short-term gains from
| AI could lead them towards irrelevance. That is something for all
| the strategy brains to stew on.
|
| The cloud divisions of "big tech" might be the catalysts for this
| upcoming disintermediation.
| datavirtue wrote:
| In the very near future your grandma is going to carry on a
| conversation with a machine at her bank and she will have no
| idea it was not human.
|
| After the election everything that remotely touches AI is going
| to be at eleven. Everything from companies laying pipe to
| startups who are delivering services that integrate AI with
| bespoke business processes. The upswing is going to be far
| bigger than anyone is imagining right now. The market PE could
| shave ten points and it will still be gangbusters in AI.
|
| Don't fight the trend.
| fHr wrote:
| fuck mck, every company they get their hands on is turning into a
| piece of shit human capitalism slavery where max profit is the
| only important thing fuck consultancies
| LunaSea wrote:
| Quick reminder that McKinsey helped Purdue Pharma & co boost
| their opioid drugs sales, starting the opioid dependency and
| overdose epidemic in the US.
|
| https://en.m.wikipedia.org/wiki/McKinsey_%26_Company
| fsndz wrote:
| Yes. Company continue to pay them for political reasons mostly.
| Just look at how many McKinsey partners became CEOs and failed
| terribly at it (latest example Starbucks
| swiftuser wrote:
| The mentioned memo can be read here:
| https://web.archive.org/web/20240316081510/https://obligatio...
|
| McKinsey has been doing "silent layoffs" in the last few review
| cycles, i.e., shrinking overall headcount after performance
| reviews - as there's not enough work to go around. Hard do meet
| the bar for a one-year BA, if you've only been on 1-2 studies -
| which is not exactly your fault.
| chasd00 wrote:
| All of consulting has been doing this for a while. Interest
| rates went up and fears of recession made companies pull back
| on spending. That hits consulting pretty hard. Usually
| consulting does well when things are going so bad you need the
| expertise no matter the cost or when things are nice and stable
| and you want to try something new. Anywhere in-between is hard
| times.
| kayo_20211030 wrote:
| What's interesting to me here is that in the period 2013-2023,
| only E&Y, KPMG and McK of the "great eight" moved up or down in
| the ranking, and they only moved around in the 4 through 6 spots
| by tiny revenue amounts. Maybe that was a max scale decision on
| the part of those companies' management. On the other hand, I'd
| love to know the yield per employee. That would be an interesting
| read.
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