Beware Management Consultants

Join the discussion

• Hacker News
• I see a disconnection here. Every once in a while we see a article criticizing management consultancy, yet the business is still booming and very powerful and sophisticated corporations still hire them. So, I'd assume that the consulting companies do offer some value, in fact billions of dollars of value. What are those values, then?
  by hintymad
• They are in the business of justifying blame from the executives to the frontline. Executives keep or increase their bonuses, layoffs ensue. If you are the decision maker of a company, and you can pay a team a few hundred thousand a year using company money, netting a 10 million increase in your own salary, its a deal too good to pass up.
  by waterTanuki
• It's self-propagating nonsense. In the immediate post-dotcom crash, I worked for a company that was run by a bunch of young HBS grads, who all had management consulting backgrounds, (and a few minor dotcom successes). They regarded themselves as geniuses. They couldn't make a decision on anything.

  Their preferred working style was to not make decisions, and to hire consulting firms to make the decisions for them. So they hired these even younger consultants, who would work for a few weeks, and make their recommendations, and then those recommendations would not be put into action. No. Instead, more consultants were hired to review and then discard the work of the previous consultants. Rinse and repeat for a few cycles.

  I cannot resist one story. The initial HBS/management consulting CEO was replaced by a new CEO, someone who had run one of the early search engine companies, and had a similar background. He turned out to be no better. What I found very entertaining about CEO2 was his business past. He was known for two decisions. 1) Declined to buy the very early Google for high six figures, when he had the chance. 2) Decided to buy Blue Mountain -- think Hallmark cards but online -- for $780M. Greeting cards. 3/4 of a billion dollars. 1000x the cost of Google at the time.

  Yes, hindsight and all, but still. If I had made both decisions by flipping a coin, my expected value would far exceed what this business genius accomplished.

  by geophile
• 1. When I was 8, my mom told me that people got paid what their work was worth to society. When I was 12 she told me not necessarily. She said this: "You were only 8. I was trying to make it simple for you."

  2. Management consultants get paid by shareholders to outsource blame for decisions made by management.

  by oh_my_goodness
• Management consultants exist as a liability shift. Boards or exec management pay them money, the consultants interview them in private, the consultants give them their ideas back. This provides two things: cover, and political lubricant. Worth every penny when the alternative is completely dysfunctional management teams, or when it is your reputation or job on the line.
  by zerotolerance
• Scapegoat as a service. You hire them to put a stamp of approval on any silly idea you have, implement it, etc. Then, if it turns out badly, well...it wasn't your fault.
  by tyingq
• My working theory is that in many cases, it's one of those absurdities that are actually necessary because the world isn't always rational.

  If you're the CEO, maybe you know exactly how your org should be restructured. But maybe it means stepping on a lot of toes and hurting people you have close relationships with.

  If you get the blessing of management consultants you can at least say it's not personal.

  by asdfman123
• You have to think of it like the nutritional supplements industry. They make mountains of money because people have certain misgivings or insecurities or unrealistic goals (or all of these things) with regard to their health. Would life go on just fine without the entire supplements industry? Sure. But that wouldn’t do anything to assuage the health concerns that people perceive themselves to have.

  The same is true of the consulting industry. Because companies _also_ have certain misgivings or insecurities or unrealistic goals with regard to their health.

  by subpixel
• I've always suspected that at least some of it is information laundering.

  I used to work in engine development and calibration. There aren't many people who know how to do engine cal and it's incredibly important to get your engine emissions certified to sell in a market like the USA. The problem is that most people who know how to do it work for a car manufacturer (OEM). So when I had that on my LinkedIn I would get pretty regular messages from some consultancy or another offering hundreds of dollars per hour to chat with me about my expertise. Of course I couldn't go talk to a competitor but I'm sure a lot of engineers were happy to make a few hundred bucks chatting with some generic consultant who was writing a general industry report with anonymous data and background info.

  Well the customer was usually a competitor or a foreign automaker exploring entering the US market. Everyone who could help them understand the timelines, cost, and process worked for their competitors. So the critical info got passed through consultancies into sanitized anonymized reports; laundering.

  Note: I'm not sure whether talking to a consultancy would have violated my employment contract at the time but I never took the calls so I had no reason to look it up. I know that coworkers did and just called it a gray area. I pass no moral judgement one way or another.

  by MerrimanInd
• "What would you say you do here?" - The Bobs
  by bigmattystyles
• Office Space[1], for those who somehow haven't seen it yet.

  [1]: https://www.imdb.com/title/tt0151804/

  by magicalhippo
• Not gonna lie, the website of a remarkably ordinary frozen food supermarket found on most UK high streets is not where I'd expect to find this kind of content :)
  by notahacker
• and here I thought it was from the Nation of Iceland and was very impressed by the volume of their anti-management consultant stance.
  by zaphod12
• Never thought I'd see them posted on here, but I honestly have a lot more respect for them after seeing this.
  by RobotToaster
• I wish I new of more gems like this. Company sites that go into detail where they went wrong and how they turned things around make for both amazing reading and great educational material.
  by outofpaper
• Malcolm Walker, the founder and his son Richard Walker the current chairman are (for such an ordinary seeming supermarket) surprisingly progressive and have often spearheaded sustainability and corporate responsibility campaigns. Malcolm Walker was an active member of Greenpeace and Iceland worked with Greenpeace on several campaigns over the years.
  by codeulike
• The antique illustrations on this are fantastic.
  by sillywabbit
• They’re a set of clip art provided with Microsoft PowerPoint called ‘Screen Beans’.
  by cjs_ac
• I spent a few years on and off consulting working for two of the Big 4. I can’t speak for all the teams but the ones I worked with provided good value. Our job was to protect our customers from poor designs and lack of accountability. Some of the projects I worked with were very big involving dozens of suppliers. Our customers didn’t have the capability to coordinate so much work and they also lacked the know-how and expertise in many of the domains. Also many of the big engineering and tech companies out there can be very sloppy. Don’t think because they carry a recognizable name (I don’t want to name them but they are SP500) they always do good work. I have seen stuff that is really really bad, like unsafe bad. That’s where my team would step in and fill those roles on the customer side. Many of the projects I participated were also highly regulated, and that’s a whole additional layer of complexity for which you need people with experience in very particular areas. A bad design that leads to an environmental disaster or even a violation of regulations can be extremely costly.
  by tedggh
• The work is important and mysterious
  by rrr_oh_man
• That's why mums go to Iceland.
  by unfunco
• And then they came up with a brilliant term called "agile methodology". The word "agile" was a big selling point. Under the new methodology, there will be standup meetings and introspection every 5 minutes during the race.
  by zkmon
• Am I misreading something, or was it not in fact the corporate leaders who torpedoed the reorg suggestions they knew were coming, who were at fault?

  This is a classic hierarchy-brain/ bureaucracy problem, where "leaders" think the top is more important to the org than the bottom.

  by ang_cire
• My interpretation of the parable is really just that management consultants are paid to tell you what you already know and give you the conclusions you want to hear - hence why their "solution" is non-specific and the retrospective analysis vindicates what upper management already wanted.

  It's also a criticism of management-heavy offices who have lost touch with reality, but consultants are a byword for such things, so I guess the title is succinct at the cost of accuracy.

  by ivanbakel
• Private firms are entertainingly idiosyncratic in ways only founder-powered public firms barely approach. The other big one I find entertaining is Dr Bronner’s soap which has a massive label full of dense text that is totally stream of consciousness sentences. Amazing.

  Perhaps it’s a characteristic of closed groups. SQLite has its moral code that is the Ten Commandments++. Good stuff.

  by arjie
• Dr. Bronner lost his family in the Holocaust and it seems to have broken his brain a little.
  by wat10000
• Haha my friend buys that stuff and the label text reminds me of Timecube.
  by taneq
• Actually had no idea Dr. Bronner's was this weird. The guy started it as a tax-exempt religious organization!
  by vostrocity
• I imagine that Dr Bronner's unhingedness is a net asset for the brand. I always prefer to buy things that seem less sterilized by corporateness.
  by ajkjk
• If a public co CEO acts differently than others and then underperforms the market, shareholders then look at rhe idiosyncrasy as a bad thing. So they naturally all start to act like each other. Buffett had a similar idea he termed the institutional imperative.

  If you’re the private owner/CEO you just get to be steered by the customer, and can even stop growing if you want.

  by jbs789