Some time back, one of Insty’s contributors made the following comment regarding the foul McKinsey consulting company:
In my first hand experience, McKinsey was hired (no doubt at great expense) to “review” and “improve” the faltering Bloomberg TV network. What did they do? First, the “consultants” asked all the employees what they did, and how things worked. Then they created mountains of PowerPoint presentations and simply repeated what they’d been told. Finally, they recommended a “reduction in forces” (corporate-speak for layoffs). This pattern is the modus operandi for McKinsey: “Teach me what you do, and then I’m going to tell you how to do it.” Another pattern is that often consultants convince clients that they ought to be hired “in-house.” McKinsey doesn’t mind that at all because it’s one more “in”, one more tentacle reaching into corporate America.
It’s actually a lot worse than that — and McKinsey are far from the only bad actors in the management consulting business: pretty much all of them (Bain, Booz Allen, Accenture, Deloitte, etc.) are pretty much the same, and operate in the same manner as McKinsey, as described above.
They are called “process” consultants in that they bring little actual industry experience to the party; senior partners will make the sales pitches, but once the contract is signed, they’ll send in the freshly-minted MBAs (“junior associates”) who spend an inordinate amount of (billable, of course) time in learning the client’s business and industry mostly by talking to mid-level managers in the company. These managers not only know the business, but are quite likely to know the solutions to whatever problems senior management don’t know how to address.
This knowledge will then be (stolen) used by the MBAs in drawing up their conclusions, with the caveat that if the client management do not adhere to their recommendations to the letter, then the consulting firm cannot be held responsible for any future failure. Of course, this means eventual failure of the process as no one can follow a plan to the letter, ever.
The other kind of consultancy, by the way, is called “experiential”, meaning that the consultancy brings actual industry familiarity and a track record of both building and running a particular business practice or system.
I was one of those. Typically, I would be brought in by a retail company to either help build or rebuild a customer loyalty program, back before there were actual systems designed to run them. Building from scratch meant designing a reporting stream (first), and then creating the database structure that would enable such a reporting stream to function. Rebuilding often meant tweaking the existing system to work properly, but to be honest, most of the time the programs were a veritable shit-show of catastrophes because they had been designed and built by the IT department rather than designed by Marketing. I would come with an actual drop-in-ready reporting system to start with, that management could tweak or enhance (depending on their specific needs), and a database- and table structure to support it — CEO-level overviews, Buying/Merchandising detailed data, Store Operations (down to store-manager level) and Marketing/Advertising.
I never had a system fail on me, despite all attempts by IT to sabotage or delay implementation. (I have stories, hoo boy do I have stories…)
If I were running a large-ish business today and needed help in a particular area where I had little experience, I would only hire consultants in the latter group, and probably not even then — it’s always better to find someone who knows the problem and has solved it before than to make it a blank-page project.
But the process guys? Waste of money, waste of time.
I remember once working for a Great Big Company whose management decided that we needed restructuring, and hired Bain & Co. to consult on the project. Because most of us peons were pretty smart guys, we soon realized two things: a) the Bainies were scouting for people and functions they could recommend for termination, and b) the Bainies themselves were only interested in recommendations over a two-year period (the time in which they themselves were going to be judged by their own management). Consequently, whenever “interviewed” by a Bainie, you had to make sure that in showing them your function and your business plan, that plan had to have a resolution date of at least three or (better yet) five years in the future. Then they’d lose interest in you and move on to greener pastures. As I recall, this intelligence was communicated company-wide by jungle telegraph (cafeteria lunch table, phone calls to friends in the branch offices etc.) after the first three days of Bain’s involvement. (When I told my boss this tale — long after the Bainies had left — he just put his head in his hands and laughed for five minutes.)
I don’t know what Bain finally recommended to our senior management, but I never saw any particular change in the day-to-day. Quite frankly, the Bain money would have been better spent in performance bonuses, but no doubt the Finance department would have had a shit-fit, for all their usual reasons.
Don’t get me started on Finance…
I remember hearing a consultant defined as “A guy from more than a hundred miles away who doesn’t know any more than you do. You pay him big money to give you the answer that you’ve already figured out you need to hear.”
John Ross, author of “Unintended Consequences” once wrote on his blog that “A consultant is someone who uses your watch to tell you what time it is.”
We got McKinsey infiltrating our company right fricking now. I actually told one, to his face, that he didn’t know a damn thing about how a real project gets done. He agreed and then put that in his presentation. Fuck me. Things have gone bad to worse.
And yeah, for what we spent on those bastards, each and every one of us could have received a decent Christmas bonus.
I work in the Fed GOV, and we’re rife with all of ’em coming into our workplaces, touting their ‘expertise’, wanting access all over the place, and holding do-nothing meetings that are anything but productive.
We too have a jungle-telegram system, and were warned\updated, but our Senior MGT\SES types by their drivel hook\line\sinker. But, our ace in the hole is employees are pretty much protected employment status (about the only good thing the unions fight for), and the leaches cannot get their tentacles\bloodsuckers in deeper than a contract reads.
We have several BoozAllen temps, and we give them ONLY what their contract stipulates they have – nothing else. They cry\whine about not being able to do their job, but we tap the paper, and smile. Its not total, but its our wooden shoes into the machinery…
You think these guys are bad. I have had experience with Blue Ribbon committees who have been brought in to fix something or other with government. They are composed of corporate types who don’t have a clue how government works or doesn’t work. So for starters they are ignorant. Secondly, they are volunteered by assorted CEOs with contacts with the governor or whoever. Any takers on the proposition that these are the best and brightest that corporations have to offer. Any of you guys with military experience know what happens when a unit is told to provide troops to another unit.
The family owned commercial printing company I worked for at the turn of the century got on the list for ” free help ” from the B School from the famous Red school by the River here in Cambridge Mass. Soon enough a group of future process consultants arrived to do their case studies. The process was exactly as you described. In short order they produced a bunch useless powerpoint presentations describing how we ran the business, complete with all the latest $ 20 buzz words, business speak, and other nonsense.
Missing from the presentation was what we all knew was the problem, but nobody had told them. No amount of tweaking was going to fix rapidly declining demand for fancy Printed Annual Stockholder Reports and glossy Sales brochures that were the core of our business. The growth of the internet and the ability to move all the material we used to print to an online Web site was rapidly making the Commercial printing business as obsolete as Buggy Whip manufactures.
Did that sort of gig for EDS when I was young and foolish and thought my seniors were wise and legit.
And figured out, as you say, that we were in there asking lower and mid level people what they were doing, how they did it, and what they thought could be done to fix it.
See, I thought we were genuinely trying to help. More fool me.
Got their own people to give us our answers and packaged it up nice for senior managers, who were often in bed with our senior managers and angling to get us to explain to their C suite guys that Bob, currently manager of Paper Clips, should become Bob, VP of Corporate Supply Closets., and oh by the way, give us a long term contract to run their systems.
Needless to say I have a strongly negative opinion about consulting firms, and particularly the people who make their livings coming up with “the latest thing” that your company MUST have in order to succeed, like, oh, say, Agile, or Blockchain, the two gimmicks I saw in my waning time as a programmer working at the coalface.
Usual summary –
You need these things, even if they don’t fit your environment, and you need to revamp your systems to use these things, and we’ll happily give seminars and lectures and symposiums and take your money while we scout for the next greatest thing since sliced bread that we can sell to a gullible market.
With out us producing anything truly useful.
Turns out it’s just like politics and government, which is why it flourishes in that world.
After I retired from Navy Medicine after 38 years (Acquisition Level III, KO, VA/DoD CIO cert and Certified Fraud Examiner), I was selected by the VA for a 2-year temp SES (Senior Executive Service) position as a internal consultant for health care contracts. I lasted 11 months. It only took about a week for me to figure out that these types of companies had infiltrated all levels of the VA and subsumed many responsibilities and a level of authority that they were, by regulation and statute, were not allowed to have. After my initial assessment report and Plan of Action, I got slow rolled for a couple of months, then reassigned to a do-nothing desk job. When my 1-year review was scheduled 45 days early, I saw the writing on the wall and resigned, but not before registering a complaint with the VA Inspector General. I would subsequently start my own company and contract with various agency’s IG for fraud detection and mitigation, but when I started pointing out that various fraud mechanisms were being replicated across departments and differing agencies, my contract was not renewed. Seems I gave a little too much attention to business processes that couldn’t withstand the attention. If you want a taste of the kind of work I did, look into the SIGAR reports on how money was spent in Afghanistan. FEDGOVCO lost billions there, is losing billions more in Ukraine, hundreds of billions in Medicare and Social Security. I finally got tired of having my audits wind up in a landfill, so I moved on.
Which I guess is why I now own a commercial bakery and kitchen. Most of my employees are ex-cons. At least they are trying to put their criminal pasts behind them.
We had a situation where our sales director and an accomplice at another company dreamed up “The BIG idea” that was going to transform the industry, by moving the business from an opex to a apex driven model. Myself (operations manager) and the CFO both privately thought they were full of shit, but we sat through rounds of presentations etc waiting for someone to call bullshit. So, one day after tweedle dee and tweedle dum had done their pitch to the board the MD looks round the table and asks “so what do you guys all think?” CFO gets up and points out all the magic thinking embedded in the idea. I got up and said “ I don’t want to be negative, but….” Rather than make a decision the MD got in a Tier 1 consulting shop. This was an all in gamble they were proposing. I was in the briefing when the CFO pointedly said to the principal consultant, don’t just take these revenue and cost projections as granted, we want them really tested.
So the dumbass consultants just took the made up numbers from the sales director and came back a month later all aglow at their brilliance and the size of the prize.
Took five minutes to completely demolish their key assumptions (yes, we had done some work over the month).
MD sits through it and quietly says “you’ve just done the thing we specifically asked you not to do. You have added no value whatsoever. Fuck off.”.
Unbelievable.
What’s unbelievable is that he was blunt about their failure. Most execs aren’t.
I worked for a company that had hired consultants the year before I got there. Their project managers were paid hourly and the consultants said to make everyone salary. The company did. One guy apparently put in tons of hours but only charged his projects the management hours that were budgeted so that his projects would be completed under or at budget. When the pay was restructured, they used the billed hours on projects as a person’s salary and this guy got screwed the like a five cent hooker on fleet week. He left and became quite successful someplace else.
many times the lower echelon folks know how to fix the problem or improve operations but I have found that the big dogs won’t listen to us peons because afterall, we are just peons. I was told in a review that I had to master the current policies before I can suggest improvements. Yeah, ok. I’ll keep quiet since my input clearly isn’t wanted and I’ll go find someplace else that will value my contributions.
JQ
“One guy apparently put in tons of hours but only charged his projects the management hours that were budgeted so that his projects would be completed under or at budget.”
Rookie mistake, that.
survival strategy, afraid he’d lose his job if he admitted that the projections and planning was completely and disastrously off.
Projections and planning probably not done by him but he’d be the one blamed for the failure.
Been there, done that, lost jobs for not playing the game.