Success stories from McKinsey (et al.)

Perhaps one of my most favorite quotes I've read on hackernews:

"This was one of those big eye opening moments for me. Consultants are hired mercenaries in coporate warfare, they don't care about you, they don't care about your company or the rivalries or the squabbaling. You pay them a bunch of money to come run roughshod over your enemies by producing reams of analysis and Powerpoints, to fling the arrows of jargon, and lay siege to your enemies employees by endlessly trapping them in meetings and then they depart. Consultants are brought in to secure your flank, to provide air cover and to act as disposable pawns in interoffice combat.

They are not brought in to solve problems, to find solutions, or because of their incredibly acumen. It's because they have no loyalty or love but money."

- Kneebonian

McKinsey worked to drive sales of Purdue Pharma’s OxyContin painkiller into the opioid crisis. I'd say that would count [to McKinsey] as a succeess.

Although that one cost McKinsey $600M in a count settlement.

And we've yet to see what it costs the Sacklers

The first step of a consultant is to define the problem. Common problems are

-I have an idea and I want everyone onboard.

-I want to get rid of x with no legal consequences.

-My company is inefficient because of x, but it is not about x because x is emotionally unsolvable, so can you solve my companies inefficiencies?

Note that all of these are easily known beforehand, but getting a group to get on the same page and actually move in one direction is hard, so bring in consultants.

Management consulting companies offer their stamp of approval that shields the execs against the shareholders and the legal system. Here, we followed the Big Consulting advice. Which btw also writes your legislation.

They train a lot of people. I worked with a founder who had just finished a tour at McKinsey and we built a voice chat service for the Brazil market that got 300,000+ users and that he was able to sell successfully. I am certain his experience there helped prepare him for that role.

Last Week Tonight had an excellent round up of McKinsey results:

https://m.youtube.com/watch?v=AiOUojVd6xQ

We had a group show up at our company. We trapped them in a never ending series of meetings that was with high level executives but never made any accomplishments. They made fantastic PowerPoints, charged for 12 hrs a day then burned out and accomplished nothing. The gal was super hatable and nobody even said hi to her.

Went well for whom?

For the rank and file employees or customers, almost never.

For the executives looking to shift blame, justify an unpopular decision, or sell more oxy… plenty of “success”.

The one company I've ever worked at that had layoffs was after they brought in ex-McKinsey hires (as Chief of Staff or similar).

The company was already super toxic due to middle managers being brought in, the McKinsey folk I guess laid a few of them off (along with half of the company, including the CEO). The company was profitable and had just raised eight figures or so. Apparently it's doing better now culturally though.

This isn't a success story, it led to mass layoffs. But some of the core assholes who drove the culture into the ground lost their jobs too, so there is a bright side to it I guess.

I was previously at a public European company that was losing money. I was just a lowly engineer when they brought in a McKinsey consultant. A lot of the changes such as layoffs and cost cutting that came after the arrival was already common sense.

I think the company has at least stopped bleeding money. In my lowly position I did not notice any significant change.

I have experienced deteriorating conditions at other companies that accepted vc money then brought in their own people.

You're calling out a correlation, not a cause and effect.

Companies that are growing quickly, money coming, happy investors, don't hire McKinsey to make drastic changes to the company. They don't need to.

Companies who aren't growing, money is a problem, and investors are asking "what the fuck"? Hire consultants to make major changes.

It's similar to companies that go into bankruptcy. They often hire CEOs that are skilled in winding down operations, selling off parts, taking the company through bankruptcy. Someone needs to do that, it's not simple or easy to do well, so they are very well compensated. Then people complain why this CEO go a bonus when the company is filing for bankruptcy.

I’ll just speak positively for consulting (despite my other comment)

It is useful to have outside perspective to help you think through problems. People need help defining the problem.

In my experience it’s usually not a consultants idea that helps. But, like a lot of coaching and therapy, consultants can help a client bring focus to the most important problems and focus areas.

Consultants are actually generalists. I work in the search domain and often what I actually do is see someone’s problem from a broader lens of the entire search landscape of technical issues other companies have in general.

So it’s really about helping clients with perspective and not really about having big ideas. A good consulting engagement you eventually fade into the background and the client gets all the credit.

NullPointerException

I don't think anyone really answered your question. I work at McKinsey and can try to provide an understanding of how we add value. I have a PhD in computer science from a T1 university, so I'm not exactly the MBA type; but I am on the exact same track as them as a generalist consultant (called integrative).

Here are the good parts:

1. We are pretty good at being translators. For companies I serve, making sound business decisions requires understanding of the technical details. However, most of the time, the C-suite will not dive deep into them (most have no time; some just refuse to learn). Our job is to distill the complex topics into something that is digestible for everyone, and I mean everyone. The time spent by an analyst or associate is mainly on slide-making for this reason - there is a lot of iteration until the message and storyline are perfected.

2. We provide a voice for the technical working teams. Pretty much every project I worked in, the technical teams have a pretty good understanding of what they can do and what they need, but this doesn't always get heard by higher-ups. Part of our job is to relay these thoughts (again, in a digestible way) - anonymously if need be. Most of the time a representative of the client team also joins our C-suite discussion, which is a great career opportunity for them.

3. In addition to point 2 above, when the technical teams don't know what they need, we build out a plan for them. I built financial models, workplans, capability assessments for e.g., cloud migration for automotive part manufacturers (i.e., high-tech but not necessarily computer savvy companies) directly collaborating with working teams. They can then use these to present their case to higher-ups, enabling them to actually get what they need.

4. We have an understanding of the industry overall, because we go around and see what's happening everywhere. In order to prevent unintended spillage of company secrets, we get "conflicted out" of working with direct competitors when we serve a client, but we can work with different parts of the supply chain. We also have industry experts, internal and external, who can provide insights - which is sometimes very critical to get up to speed quickly.

The burnout is also real, and I am actively trying to move on to a "real" tech job after approximately 2 years at the Firm. But positive client interactions are very fulfilling, and I have learned so so so much about so many different things, it's incredible.

I'm also pretty lucky to have worked mainly in growth or go-to-market strategy. I have never laid anyone off, never led to someone losing their job whatsoever (I actually kinda did the opposite once by helping them overcome a PIP), never participated in political battles, and never did anything that could be considered unethical like the Purdue thing. Just solved cool business problems for tech companies for 4-8 weeks at a time.

Companies that hire mercenaries are usually not the type that people LOVE to work for.

Insitutional imperative

McKinsey speaks to everyone so they know what each industry’s mainstream insights are. In real time.

Fomo, insecurity and incompetence on behalf of management calls for action—>hire McKinsey

It takes strong leadership to trust local insights brought within the company and ignore consultants

Mciinsey & the like have had no love from Steve Jobs & Elon Musk

You are either a leader or you faked it till you made it & are now calling for help

We’ll, no CEOs ever got fired for hiring McKinsey…