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0 pointsbane14y ago0 comments

"To me, the financial industry looks like every other bubble right before the pop with everyone trying to pile in to the money machine, but any close examination of the machine reveals an empty ruse."

And I don't think I've ever heard a kind word about management consultants. A field dominated by 20 somethings with 0 professional work experience brought in to tell executives and managers of highly successful multi-million/billion dollar companies how to run their businesses...

A question each and every person that hires a management consultant should ask themselves, "would I hire this 20 something to run my organization?" If the answer is no, then why are you paying them to tell you how to run it?

It's a bit like bringing in a random, just out of school, development consultant and giving them charge over major development teams. Oh wait, I've seen that happen too, each project then proceeded to go several times over budget and were delivered broken and late and eventually scrapped.

"why is this industry so exceptionally lucrative?"

The honest to god real reason these guys are hired, and how the system ultimately works, is for a couple of really quite bad reasons

a) The CEO ends up in a bind with no good ideas, or knows that no matter what happens, they're screwed. It could be lack of product, or a better competitor, etc.

b) The CEO doesn't want to appear weak so that people will still follow him/her while the ship sinks.

So they bring in management consultants, sold as "experts". Having a bunch of Ivy Leaguers helps with that image. The entire problem, including the blame for when it inevitably fails, is intended to go onto the Consultants. Their job is to appear busy and smart, then take the blame (and the large consultancy fee) when it all falls apart. This leaves the CEO in a good position "I brought in experts and even they couldn't make it work!".

And that's it.

That's the entire management consultancy industry in a nutshell. Blame for pay.

A great article on the phenomenon that describes a life I've had confirmed by several friends in the field who've all since gotten out: http://tech.mit.edu/V130/N18/dubai.html

(they were all also shocked at how hard it is to actually run a company vs. what their years in management consultancy led them to believe)

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scottkduncan14y ago· 1 in thread

I think there's another reason related to your a) and b) why companies hire management consultants, particularly in less dire corporate situations than you describe above. I think a lot of management consultants' work comes from boards or division managers who have a difficult decision they know they want to make (fire workers, spin off less successful business units), but need an "impartial" "expert" to agree with them to help justify it. The company asks only the questions they want the consulting company to consider, they get the answers they want, and they have an "independent" (and expensive) second opinion that covers them so they can go ahead with what they knew they would do in the first place.

suking14y ago

That is 1 reason - another reason is because competitor XYZ might have hired them a few years ago and they can get some inside info. They might say they don't share anything, but if Person A worked for a past company and he now is consulting for you - don't you think he'll spill some secrets...

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scottkduncan14y ago· 1 in thread

suking14y ago

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