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.
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.
Not at McKinsey, but one of their competitors. I have to say there is a lot of unhealthy behavior being rewarded in lots of ways across the spectrum of consulting.
There is real work to be done in the consulting world. Its just that there are perverse incentives to not be the one doing it.
Whether an engagement is successful or goes down in flames isn't obviously apparent until it is nearly completed. Everything feels like a high school class project where the goal is to DO as little as possible and if its successful to grab as much credit as you can, and if it fails, to distance yourself from it.
I had to develop an entirely new way of dealing with him in order for it not to affect _my_ health. I literally went to a therapist for a bit to create a plan for working with him.
> 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.
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.
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.
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.
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.
There’s plenty like it, but you won’t find it if you’re looking only for body shops. Of course, startups have similar problems of their own and you have to put some work into finding the right team and right product niche for you (e.g for me, sales and ad tech aren’t my thing).
I’d call it product engineering over agency work. Keep an eye out for positions in your typical SaaS setup, as well as financial institutions - not glamorous but better than being an arse on a seat.
I haven't found it easy but my credentials... Could be better. I guess I'll have to pick s niche and really get to contributing to GitHub issues for it.
>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
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.
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.
> 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.
> 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 is pretty low level and still has its own gotchas. I’m imagining some hybrid of Go, Python, and Visual Basic with strong static typing, strong functional orientation with little shared state (to reduce the blast radius of each junior engineer), easy unit and integration testing, excellent post mortem debugging, big ints by default to avoid integer overflow bugs, FFI for integration with clients’ legacy code, and portability to mobile apps, desktop apps, and web front and back end.
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."
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
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.
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.
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."
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.
> 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.)
> 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.
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.
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.
Last year, we had 2 consultants hired from some Big 4 consultancy. The manager told us to give them whatever info they need. They came with us on a grand total of 2 calls. The scheduled 3rd call we could not attend coz of overlapping schedules. They never bothered blocking my calendar and I never heard from them again.
I reckon the manager wanted to use them for some political purposes.
> 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.
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.
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.
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.
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.
An even better example is the city of Chongqing. Looking at pictures of Chongqing from when I was in high school, I would say what stands today is simply not possible. Yet there it is.
If you cut out consultancy firms, we would still not be able to do anything close to that in America. There are many reasons. None that I would expect to figure out and resolve anytime soon , if ever.
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
The AKH (Vienna General Hospital) was orders of magnitude more expensive than the Nya Karolinska. It cost 43 billion Schilling to build in the 70s, amounting to roughly 5.8 billion euros today.
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.
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.
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.
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.
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.
Their reputation doesn’t come from the quality of their work but their size: they can just muscle their way in.
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
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.
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.
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.
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.
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.
It’s not marginal utility it’s supply vs demand. The reason SWEs can demand so much is because there are a lot of options to branch out solo or small company so companies need to pay competitive wages. The employees are therefore able to capture more of their value.
For chemical or mechanical engineers they need a lot of infrastructure to do work so employees are more locked to employers and wages are not as competitive. Employees are unable to capture their value without the employer therefore they get a smaller piece.
Also SV has an obsession with hiring the best while most large manufacturers consider heads interchangeable with only a few spots reserved for top talent.
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.
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.
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.
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).
> 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.
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.
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
> 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.
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.
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.
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.
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.
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
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.
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.
For a more detailed recount of McKinsey adventures (including their involvements in South Africa and with the opioid crisis), check out the book "When McKinsey Comes to Town" by Walt Bogdanich and Michael Forsythe.
> 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.
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.
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
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."
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?).
not OP but I had a similar experience with both his episodes on Rent/Housing. He made the problem seem like the problem is caused by institutional investors snapping up single family homes and speculating on rent, when they are a small fraction (< 8% iirc) of the homes being rented. He railed against the lack of affordable new housing when new housing by definition is not affordable. You don't buy an affordable new car fresh off the lot, you buy a used one - same with housing. Any new housing increases supply and decreases overall rent.
Vast majority of political pressure to restrict the housing supply comes from your average homeowner. They have been taught, and incentivized, to treat their home as an investment vehicle. Building more housing generally lowers their home's value due to supply vs demand.
Rent can be affordable, or housing can be a 'good' investment. We can't really have both, but it's a lot more palatable to blame the problem on Blackrock or rich condo owners than your audience.
> [...] lack of affordable new housing when new housing by definition is not affordable [...]
I'm sorry, but affordable (and newly built) housing, at least in Central Europe, where I live, is most certainly a thing. It's a question of building type, unit size, density, local infrastructure, government subsidies and the location overall. I can recommend taking a look at the housing market in cities such as Vienna. Newly built housing can be affordable and of a high quality.
Why that is a seeming impossibility in the US, I cannot say, though I have seen some, albeit more than likely somewhat biased, evidence that at least some forms of higher density, low-rise mixed-use building styles common in Central Europe are not possible in certain areas of the US due to zoning laws. Unless I am mistaken, I seem to remember that zoning legislation was something the LWT piece on the topic specifically pointed out as one of many parts of what is a multifaceted problem that needs to be approached as such.
Another area that is, according to reporting, very good on the front of providing newly built, affordable housing is Singapore, though I know no first-hand experiences (I have no friends currently residing in Singapore public housing) to truly contextualize whether the system there works as well as it appears to. In either case, though, new housing can be affordable if done right.
> They have been taught, and incentivized [...]
Ok, but if that is the case, then both new and old housing cannot be affordable. You are saying, new housing by definition is not affordable, then point out that, for historic reasons, owners expect their property to increase in value, making old/existing housing even less affordable.
At the core they avoid consideration of an entire side of the story except to cherry pick certain individuals from that side and then lob a string of personal attacks on them; making fun of how they look or how they talk.
It's entertainment. Don't let it cloud your decisions aside from considering the raw facts. Thoroughly research everything on your own. The laughs are not free.
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.
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
I think you may be referring to the Lulu Garcia-Navarro interview [0]. It's so good! I was pleasantly surprised to hear that they have 12 researchers (fact-checkers) and a bunch of lawyers (in addition to the writers) that are working on ensuring the accuracy of the episodes.
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.
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.
??? 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.
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)
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.
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.
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.
> 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.
[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.
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.
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?
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.
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"
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.
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.
https://archive.is/qlF5n
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.
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.
It's funny I worked with someone for a few months who was ex McKinsey. You could be describing him.
Not at McKinsey, but one of their competitors. I have to say there is a lot of unhealthy behavior being rewarded in lots of ways across the spectrum of consulting.
There is real work to be done in the consulting world. Its just that there are perverse incentives to not be the one doing it.
Whether an engagement is successful or goes down in flames isn't obviously apparent until it is nearly completed. Everything feels like a high school class project where the goal is to DO as little as possible and if its successful to grab as much credit as you can, and if it fails, to distance yourself from it.
I heard the same about McKinsey
That cant be good for his health.
I had to develop an entirely new way of dealing with him in order for it not to affect _my_ health. I literally went to a therapist for a bit to create a plan for working with him.
> 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.
I took it to mean that you’d think it would have been annoying to have to repeatedly explain things, but he misses them.
>Not to mention they paid for my GC.
What does GC mean in this context?
Green card
Thank you I was literally wondering what garbage collection needs to be paid for.
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.
Yes but it would still feel weird for me to thank my employer for that.
General contractor. GP made some changes to his house using the money his employer paid him.
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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.
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.
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.
There’s plenty like it, but you won’t find it if you’re looking only for body shops. Of course, startups have similar problems of their own and you have to put some work into finding the right team and right product niche for you (e.g for me, sales and ad tech aren’t my thing).
I’d call it product engineering over agency work. Keep an eye out for positions in your typical SaaS setup, as well as financial institutions - not glamorous but better than being an arse on a seat.
Can’t speak for outside of Europe and UK though.
I haven't found it easy but my credentials... Could be better. I guess I'll have to pick s niche and really get to contributing to GitHub issues for it.
>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
How is the work culture overall? I am of the opinion they are ruthless and will cull you if they think you are underperforming.
>You do the thing that has the shortest ROI.
This is a tombstone for humanity and lots of companies if we all do this.
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.
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.
> 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.
> 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 is pretty low level and still has its own gotchas. I’m imagining some hybrid of Go, Python, and Visual Basic with strong static typing, strong functional orientation with little shared state (to reduce the blast radius of each junior engineer), easy unit and integration testing, excellent post mortem debugging, big ints by default to avoid integer overflow bugs, FFI for integration with clients’ legacy code, and portability to mobile apps, desktop apps, and web front and back end.
F#?
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."
How do you want to regulate somebody giving advice to people for money?
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
> 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?
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.
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.
Don't forget fixing bread prices!
>Have McKinsey and its consulting rivals got too big?
Do they still exist?
Then, yes.
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."
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.
> 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.)
> 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.
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.
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.
They’re usually expensive. How is a non manager authorized to order this engagement?
Exactly.
Glad you mention this.
Last year, we had 2 consultants hired from some Big 4 consultancy. The manager told us to give them whatever info they need. They came with us on a grand total of 2 calls. The scheduled 3rd call we could not attend coz of overlapping schedules. They never bothered blocking my calendar and I never heard from them again.
I reckon the manager wanted to use them for some political purposes.
Yup makes sense from that point of view.
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."
It’s part of the executive game. Make their position or opinion seem legitimate
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.
> 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.
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.
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.
Yeah, but that report is required by government to be done independently. That makes it very different.
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.
> 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
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.
An even better example is the city of Chongqing. Looking at pictures of Chongqing from when I was in high school, I would say what stands today is simply not possible. Yet there it is.
If you cut out consultancy firms, we would still not be able to do anything close to that in America. There are many reasons. None that I would expect to figure out and resolve anytime soon , if ever.
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
The AKH (Vienna General Hospital) was orders of magnitude more expensive than the Nya Karolinska. It cost 43 billion Schilling to build in the 70s, amounting to roughly 5.8 billion euros today.
But how is the shareholder value doing?
Not a joke. Our metrics are different from their metrics. They might have succeeded.
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.
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.
There is nobody left, old enough, to remember that the last project with that consulting firm failed.
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.
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.
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.
Their reputation doesn’t come from the quality of their work but their size: they can just muscle their way in.
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
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.
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.
More likely they pay you X and they charge 3X, but yes I agree.
I’m pretty sure my average multiple is 6x
3x is standard, you should push for a 2x raise. You might have to jump ship twice to do that
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.
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.
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.
It’s not marginal utility it’s supply vs demand. The reason SWEs can demand so much is because there are a lot of options to branch out solo or small company so companies need to pay competitive wages. The employees are therefore able to capture more of their value.
For chemical or mechanical engineers they need a lot of infrastructure to do work so employees are more locked to employers and wages are not as competitive. Employees are unable to capture their value without the employer therefore they get a smaller piece.
Also SV has an obsession with hiring the best while most large manufacturers consider heads interchangeable with only a few spots reserved for top talent.
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
Lives on an oil rig doing to get that
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.
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.
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.
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?
The board is neither independent nor objective or often really in touch with the business. Therefore they need cover from a big name firm
It's always nice to point to a third party and keep blame from c-suite or board.
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).
> 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.
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
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.
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.
What data are you looking at that shows decreasing wages and spending?
Stagnant wages in high inflation is the same as decreasing wages
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
Would there be any advantage for anyone to state they feel the opposite to your view publicly? Seems like a career limiting move.
Depends how private the account they're posting the opinion on is!
If all comments here were eyed with the same cynicism, we'd have no genuine discussions. And maybe we don't.
I don't think the people behind the opioid crisis should be trusted to be speaking in good faith.
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
I mean we’re not allowed to say anything either way
> 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.
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.
For sure! Just a real frustrating aspect of change in enterprise.
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.
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.
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.
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
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.
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.
For a more detailed recount of McKinsey adventures (including their involvements in South Africa and with the opioid crisis), check out the book "When McKinsey Comes to Town" by Walt Bogdanich and Michael Forsythe.
> 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.
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.
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
Is it fair to say that ...
Consulting is the oldest profession ;)
> Consulting is the oldest profession ;)
Some would dissagree. Though i think prostitution comes after politician. /s
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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
Obligatory John Oliver video on the topic: https://youtu.be/AiOUojVd6xQ?si=anI1_FKkDM4oDI1M
Nothing about John Oliver is obligatory
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.
He's one of the most obvious ragebait puppets I've ever seen. Physiognomy doesn't lie.
I one hundred percent agree with you - he's dangerously wrong on some things, sometimes seemingly intentionally.
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?).
not OP but I had a similar experience with both his episodes on Rent/Housing. He made the problem seem like the problem is caused by institutional investors snapping up single family homes and speculating on rent, when they are a small fraction (< 8% iirc) of the homes being rented. He railed against the lack of affordable new housing when new housing by definition is not affordable. You don't buy an affordable new car fresh off the lot, you buy a used one - same with housing. Any new housing increases supply and decreases overall rent.
Vast majority of political pressure to restrict the housing supply comes from your average homeowner. They have been taught, and incentivized, to treat their home as an investment vehicle. Building more housing generally lowers their home's value due to supply vs demand.
Rent can be affordable, or housing can be a 'good' investment. We can't really have both, but it's a lot more palatable to blame the problem on Blackrock or rich condo owners than your audience.
> [...] lack of affordable new housing when new housing by definition is not affordable [...]
I'm sorry, but affordable (and newly built) housing, at least in Central Europe, where I live, is most certainly a thing. It's a question of building type, unit size, density, local infrastructure, government subsidies and the location overall. I can recommend taking a look at the housing market in cities such as Vienna. Newly built housing can be affordable and of a high quality.
Why that is a seeming impossibility in the US, I cannot say, though I have seen some, albeit more than likely somewhat biased, evidence that at least some forms of higher density, low-rise mixed-use building styles common in Central Europe are not possible in certain areas of the US due to zoning laws. Unless I am mistaken, I seem to remember that zoning legislation was something the LWT piece on the topic specifically pointed out as one of many parts of what is a multifaceted problem that needs to be approached as such.
Another area that is, according to reporting, very good on the front of providing newly built, affordable housing is Singapore, though I know no first-hand experiences (I have no friends currently residing in Singapore public housing) to truly contextualize whether the system there works as well as it appears to. In either case, though, new housing can be affordable if done right.
> They have been taught, and incentivized [...]
Ok, but if that is the case, then both new and old housing cannot be affordable. You are saying, new housing by definition is not affordable, then point out that, for historic reasons, owners expect their property to increase in value, making old/existing housing even less affordable.
At the core they avoid consideration of an entire side of the story except to cherry pick certain individuals from that side and then lob a string of personal attacks on them; making fun of how they look or how they talk.
It's entertainment. Don't let it cloud your decisions aside from considering the raw facts. Thoroughly research everything on your own. The laughs are not free.
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.
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
I think you may be referring to the Lulu Garcia-Navarro interview [0]. It's so good! I was pleasantly surprised to hear that they have 12 researchers (fact-checkers) and a bunch of lawyers (in addition to the writers) that are working on ensuring the accuracy of the episodes.
[0]: https://youtu.be/Q9kNMJ8SguQ
He's high quality research by comparison to the absolute garbage that exists today--not by say classical Frontline or 60 Minutes standards
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.
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.
??? 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.
Even on topics where I agree with him directionally, I find he misrepresents the truth or omits significant caveats.
If only you did your own research on how John Oliver does his research.
Source: trust me bro?
https://youtu.be/Q9kNMJ8SguQ?t=898
Please, do your own research. That's the whole point.
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)
You're gonna have to connect some dots to legal fines, etc.
Your request requires a consultation.
Fortunately we also receive miniscule enforcement/penalties.
Press `X` to accept terms & conditions.
Fines are trivial.
It Usally costs more to process the fine internally then the nominal value of the fine
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.
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.
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.
>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?
Which contemporary cultures are not "extremely stupid", in your opinion?
I've provided all the necessary information to piece it together without explicitly telling you.
That was not an accident.
Given the reddit energy of these posts, I'm guessing it's a Japan/Scandinavia preference. Right or wrong?
you might start by narrowing it down to the ones that have managed to complete a public works project in the past 20 years
> 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.
[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.
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.
I think more than becoming to big the solutions are founded on a narrow matrix of logic or group think.
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)
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?
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.
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Gotten*
C'mon, The Economist
Pretty sure it's a US/UK thing.
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!
Agreed. "got" is more informal and less universal across variants of the English language than "become". Bad editing.
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"
I meant to agree that "become" should have been used instead.
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It's not a fair question. Any size larger than 0 would satisfy it.
Deloitte sends a large delegation to Davos annually, but they do it ironically.
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.
> they got too enmeshed with the auditing business.
McKinsey does not have an auditing business.
> 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
Said spinoffs would probably start new consulting branches after some period of time
The firewall is of course a fiction.
The entire point of these consultancies is to allow collusion between competitors, which is otherwise illegal.
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.
Interesting, I never considered that thought before.
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.
This is false, the Big 4 are all in the auditing business, in addition to high-end management consulting.
McKinsey is not a part of the Big 4. The Big 4 refers to the big four auditing firms.
Thanks for the correction.
What part of the statement is false?