A retiring consultant’s advice on consultants(economist.com)
economist.com
A retiring consultant’s advice on consultants
https://www.economist.com/business/2023/08/17/a-retiring-consultants-advice-on-consultants
119 comments
The one time I dealt with KcKinsey, the partner was pretty sharp, one of the associates was as well, and the other, well, more arrogant than justified.
Overall, in retrospect, the experience was... not terrible.
We answered a lot of questions, did a lot of education. They produced a bunch of spreadsheets that kept the business planning people occupied (a good thing). And they basically validated to the senior management that the product managers and related advising on strategy were on the right track. Expensive, yeah. But it's not always the worst thing to get an external sanity check.
Overall, in retrospect, the experience was... not terrible.
We answered a lot of questions, did a lot of education. They produced a bunch of spreadsheets that kept the business planning people occupied (a good thing). And they basically validated to the senior management that the product managers and related advising on strategy were on the right track. Expensive, yeah. But it's not always the worst thing to get an external sanity check.
I would recommend a good psychic for this -- someone skilled at cold reading. You will receive even better validation and a similarly reliable "external sanity check."
If I were in Europe, I'd leave it at that. For the Americans, it's important to dot the i's and cross the t's, so: An art of the industry is telling people what they want to hear. That gets you hired again. Consultants are no good as an external sanity check.
They are great for taking the blame for decisions you had planned on making.
If I were in Europe, I'd leave it at that. For the Americans, it's important to dot the i's and cross the t's, so: An art of the industry is telling people what they want to hear. That gets you hired again. Consultants are no good as an external sanity check.
They are great for taking the blame for decisions you had planned on making.
I know it can seem this way.
But the best consultants, and even leaders, know that sometimes the way you get everyone to listen to the people who actually know what a company should be doing is hire a consultant.
A consultants job is to find them, elevate their voice, and get out of the way.
Edit: added “sometimes” - the alternative is to build a low ego culture and listen to the people closest to the work.
But the best consultants, and even leaders, know that sometimes the way you get everyone to listen to the people who actually know what a company should be doing is hire a consultant.
A consultants job is to find them, elevate their voice, and get out of the way.
Edit: added “sometimes” - the alternative is to build a low ego culture and listen to the people closest to the work.
The reason hiring a consultant works, even when your employees are telling you what to do. It's because the consultant costs 10x more and is specifically being hired for direction... it's merely rationalizing "we're paying them $1000/hr for their opinion... that makes their opinion very valuable and we should listen to their advice. Johnny in the corner cubicle is paid to code, not for his opinions..."
Here in Norway, a "consultant" is just someone who is employed by a different company but works for your company. We don't get people to listen to the right people.
We just work like everyone else while the company pays a premium for us and we're the first to be let go if things go downhill.
We just work like everyone else while the company pays a premium for us and we're the first to be let go if things go downhill.
In the US, that's a contractor. Many contractors are called "consultants," but it's mostly because "consultant" sounds better.
Consultants are (in abstract) paid much more for their expertise, and engagements are much more limited. A contractor might work 40 hour work weeks for one client for years.
My experience is that the take-home pay is almost identical for all three. To give an example, at one point in my career, I could:
* Charge $600-$900/hour as a consultant
* Charge $125-350/hour as a contractor
* Charge $150k-$200k as an employee
On paper, that works out to >$1M, 0.25-0.75M, and 0.15-0.2M, respectively, if I worked 40 hour work-weeks. In practice, at least for me, net pay was very similar for all three:
* Consulting had many hours overhead for one hour of work, and clients would often cancel on short notice.
* Contracting had an even split between selling myself and working. Work came in spurts (either too much, or not enough)
* Employment was steady
Free markets converged to very similar net take-home pay. Contracting and consulting had much more diversity of work (contracts, marketing, etc.), more flexibility on side projects (startups, etc.), and much more volatility. Volatility can be good or bad. A dry-spell can mean time to finally go on that vacation or focus on that startup. Or it can mean a lost mortgage. It depends on your life stage, savings, etc.
As a recent grad, contracting worked well for me. As a Dad, I preferred employment. Late stage (no kids at home, and mortgage paid off), consulting seems like the way to go.
Consultants are (in abstract) paid much more for their expertise, and engagements are much more limited. A contractor might work 40 hour work weeks for one client for years.
My experience is that the take-home pay is almost identical for all three. To give an example, at one point in my career, I could:
* Charge $600-$900/hour as a consultant
* Charge $125-350/hour as a contractor
* Charge $150k-$200k as an employee
On paper, that works out to >$1M, 0.25-0.75M, and 0.15-0.2M, respectively, if I worked 40 hour work-weeks. In practice, at least for me, net pay was very similar for all three:
* Consulting had many hours overhead for one hour of work, and clients would often cancel on short notice.
* Contracting had an even split between selling myself and working. Work came in spurts (either too much, or not enough)
* Employment was steady
Free markets converged to very similar net take-home pay. Contracting and consulting had much more diversity of work (contracts, marketing, etc.), more flexibility on side projects (startups, etc.), and much more volatility. Volatility can be good or bad. A dry-spell can mean time to finally go on that vacation or focus on that startup. Or it can mean a lost mortgage. It depends on your life stage, savings, etc.
As a recent grad, contracting worked well for me. As a Dad, I preferred employment. Late stage (no kids at home, and mortgage paid off), consulting seems like the way to go.
When I was an IT industry analyst (basically a type of consultant) for about 10 years, we got good rates when we were directly (or near-directly) on the clock--up to about $10K per day or so. But the rub was that were relatively rarely on-the-clock. Bigger firms can make it work better because they bill out juniors at higher rates than they really are worth. It also works if you only want sort of part-time interesting work anyway. But it's not generally a great steady income stream.
As a contractor I'm paid regardless of my project status. I could earn more working with provision at a different agency but I like the security i have where I am now.
It's the kind of gig where I just work 40 hours a week for years. If something happens they just find me a new project. It's pretty chill.
It's the kind of gig where I just work 40 hours a week for years. If something happens they just find me a new project. It's pretty chill.
That’s what consultant means in many places, but the thing being talked about in this thread is a management or strategy consultant, of which there are a few big prestigious firms who do this, and which is a reasonably common career path for ambitious young people.
Do you know any psychics good at excel?
Oracle
They require basic computer proficiency and the ability to work long hours in the clairvoyancy business these days.
[deleted]
There must be a plugin, or a VBX somewhere..?
Internal people with their own biases and investments are always right. Of course.
I think it’s more that two times wrong doesn’t make something right.
Ah, algebra. Perhaps, geometry?
The right thing to do is hire one or more people who have deep knowledge with the problems you are slogging in. Pay them what they are worth.
Otherwise, what's left is to higher outside consultants to solve your problem that is so pressing that you are hiring outside consultants to solve it. Fire them and hire new consultants if they don't perform.
And if you get very lucky, three lefts will make a right!
The right thing to do is hire one or more people who have deep knowledge with the problems you are slogging in. Pay them what they are worth.
Otherwise, what's left is to higher outside consultants to solve your problem that is so pressing that you are hiring outside consultants to solve it. Fire them and hire new consultants if they don't perform.
And if you get very lucky, three lefts will make a right!
>They are great for taking the blame for decisions you had planned on making.
One might say that's the point of consultants! They're there to externalise accountability, you're outsourcing taking the heat.
One might say that's the point of consultants! They're there to externalise accountability, you're outsourcing taking the heat.
We had a McKinsey consultant team at a large governmental agency I was contracted to as an SME. Scope creep was a daily threat with them; they were always trying to get into another subline in the business and set up a new basecamp there as work faded elsewhere. The worker bees were earnest but had little or no domain-specific experience, and worked off obviously pre-fabricated steps that were carefully calibrated to emit "just enough" progress -- but not too quickly. I remember advising higher-ups we needed to get off that train, but the problem was the agency was far too shorthanded and relied on them for even basic operational tasks instead of higher-level conceptual ones, thus making them essential, and their management almost certainly knew it. I moved onto another opportunity and I have no doubt they're still there in some capacity.
Thanks for sharing your experience. Agree with this last paragraph 100% — I would also highlight that part of the value consultants provide is in helping senior management cut through politics to actually solve problems and encourage cross-functional cooperation.
>In short: The people you’re talking to aren’t the people who are doing the actual work, The people who are doing the work have no industry experience And the numbers they’re basing their analysis on are probably whatever they found on google.
this has always been the most mindboggling thing about consultants. I have a few friends working as consultants and occasionally when they discuss cases, I always think to myself, "who on earth are you to advise them about so-and-so management when you literally just graduated college a year or two ago?"
this has always been the most mindboggling thing about consultants. I have a few friends working as consultants and occasionally when they discuss cases, I always think to myself, "who on earth are you to advise them about so-and-so management when you literally just graduated college a year or two ago?"
The value is that (ideally) they've asked around and figured out how half a dozen peer firms do what you're struggling with. So while they may not have solved your management problem personally, they can give you an idea of what's worked for your peers without all the icky industrial espionage and antitrust violations you'd need to find it out yourself.
They call it “best practices”.
Where did they learn what’s changed in best practices for fast food logistics since the last time they consulted for Burger King? Well, funny enough, they were recently engaged by McDonalds…
Where did they learn what’s changed in best practices for fast food logistics since the last time they consulted for Burger King? Well, funny enough, they were recently engaged by McDonalds…
It’s not espionage, it’s an expert network!
The thing is, they would need experience to tell which of the best practices apply best in what situations.
I had a similar reaction, the first time I heard a graduating CS undergrad say that they were going into management consulting: "But you don't know anything yet..."
But I guess it's not that different from the new grads who are instantly called Software Engineers.
Some percentage will rise to quality work, through mentoring&training, effort, and experience... and quickly earn the title.
And some percentage will go through the motions... and still get paid lots of money.
But I guess it's not that different from the new grads who are instantly called Software Engineers.
Some percentage will rise to quality work, through mentoring&training, effort, and experience... and quickly earn the title.
And some percentage will go through the motions... and still get paid lots of money.
To me, the point of a software engineer is to write code. An experienced software engineer can quickly write quality code while also doing other responsibilities, but their fundamental job is still code. A new grad may not be good at writing code, and they may not be as good at ancillary things, but fundamentally they are still capable of writing code.
In contrast, the point of a consultant is to provide expertise in an area that some company doesn't have. A new CS grad may have more expertise in software than a non-tech company, but they definitely have less expertise in software than a tech company, and less experience in management than almost any company with more than 1 person in it.
In contrast, the point of a consultant is to provide expertise in an area that some company doesn't have. A new CS grad may have more expertise in software than a non-tech company, but they definitely have less expertise in software than a tech company, and less experience in management than almost any company with more than 1 person in it.
In Norway the only difference between consultants and everyone else is that we cost more and are easier to fire.
Besides that we just do software development like everyone else. And sure we have colleagues to lean on but so do the companies we work for. Most of them are huge.
Besides that we just do software development like everyone else. And sure we have colleagues to lean on but so do the companies we work for. Most of them are huge.
That's a contractor.
Consultants are software engineers for human software, i.e. how a business runs itself. Just like software engineering, there are best practices, state-of-the-art, ways to pass on knowledge from seniors to juniors, etc. Just like software there are company 'assets' (the source code repository) with past cases, problems that were solved and how (or not solved and why not), etc. They are very similar businesses actually that just scale differently: consulting scales worse than software but at much lower risk as all 'development' is funded (typically mostly by the first customer than partially by N+1).
Source: 25 years as a consultant...
Source: 25 years as a consultant...
In defense of consulting the “sales pitch” on consulting is that the people on top, the partners and managers, have the industry experience to guide the more junior employees who don’t have experience but have good analytical skills. How true that is is up to interpretation but that’s the steel man version
A friend of mine who worked as a very high level consultant for years once said that consultants are often wrong, but never in doubt. Having just graduated doesn't really change that dynamic, as long as you have the confidence to pull it off.
“Often wrong, but never in doubt” is a great tagline
The idea is they reduce problems to conceptuals. You don’t need experience, and in fact industry or specific experience is often a hindrance, to solving conceptual problems.
They do this many times a year (see: young people working crazy hours). Pattern recognition develops. They now lead 20-somethings doing this work.
The idea that age == competence is a bad one IMO.
They do this many times a year (see: young people working crazy hours). Pattern recognition develops. They now lead 20-somethings doing this work.
The idea that age == competence is a bad one IMO.
I've seen this as well. And while not defending such practices, how much experience do the consultant worker-bees need when much of what they gather come from the staff of the hiring company?
That is, these consulting firms get called in more because office politics and organization dysfunction is high, too high. The fees aren't so much for expertise per se, but a stupidity tax on the hiring company that lacks the leadership and management to get out of its own way.
Put another way, these consulting firms don't hire themselves. The fact that they do get so much work is more of a reflection of how weak and rudderless some Big Incs actually are, than the strengh of the snake oil sells.
That is, these consulting firms get called in more because office politics and organization dysfunction is high, too high. The fees aren't so much for expertise per se, but a stupidity tax on the hiring company that lacks the leadership and management to get out of its own way.
Put another way, these consulting firms don't hire themselves. The fact that they do get so much work is more of a reflection of how weak and rudderless some Big Incs actually are, than the strengh of the snake oil sells.
Mostly this. Whenever you hear someone say “I’ve been telling them to do X for years”, you have to keep in mind that the value of the consultant is not to come up with the idea to do X, but to tell them to listen to you.
Lots of Fortune 500 to 1000 companies lack the ability to recruit the best and brightest. And mostly they don't really need them. But when they do, consultants offer a ready made solution to get a project done.
These places farm companies with the “best and brightest” as well.
They sell a shortcut for management. Their asshole hired gun nature lets them short circuit the organization’s power structure. Not too many second layer executives are good at manipulating these consultants.
They sell a shortcut for management. Their asshole hired gun nature lets them short circuit the organization’s power structure. Not too many second layer executives are good at manipulating these consultants.
It is satire, not actually written by a consultant. This is the humor page at the end of the economist. But the fact that it is accurate actually does make it funny, if a bit trite.
> This is the humor page at the end of the economist.
Isn't this just a Bartleby article? Their column on management
Isn't this just a Bartleby article? Their column on management
I've been on both sides - as a management consultant at a top firm and within a corporation hiring a top consulting firm.
The grunt consultants are the ones making the slides, but they aren't deciding the direction of the project or the output. Every project I worked on as a consultant had a lot of input from the person who sold the work (their reputation is on the line!). But let's be honest, most consulting projects aren't mind blowing - basic stuff like "what is the competition doing", "what is the the flavor of the month for fund raising".
And in terms of "not having experience in the area", that's fine in a lot of cases. Often consultants are brought in to do work the company doesn't have the resources to do. Or, if it's a new area you need advice on, you partner with the consulting firm on how to do that. Maybe it's interviewing experts in the field, maybe it's creating case studies of how other companies did it.
I did work with one consulting firm that had domain knowledge (small boutique firm). The consultants had industry experience and a ton of contacts. We basically boiled down what answered we needed and they tracked down the answers.
While on both side I've never been a part of the a project where what consultants offered wasn't 100% clear to the client. HN acts like consultants are pulling the wool over clients eyes but that's never been my experience. They new exactly what they were paying for.
The grunt consultants are the ones making the slides, but they aren't deciding the direction of the project or the output. Every project I worked on as a consultant had a lot of input from the person who sold the work (their reputation is on the line!). But let's be honest, most consulting projects aren't mind blowing - basic stuff like "what is the competition doing", "what is the the flavor of the month for fund raising".
And in terms of "not having experience in the area", that's fine in a lot of cases. Often consultants are brought in to do work the company doesn't have the resources to do. Or, if it's a new area you need advice on, you partner with the consulting firm on how to do that. Maybe it's interviewing experts in the field, maybe it's creating case studies of how other companies did it.
I did work with one consulting firm that had domain knowledge (small boutique firm). The consultants had industry experience and a ton of contacts. We basically boiled down what answered we needed and they tracked down the answers.
While on both side I've never been a part of the a project where what consultants offered wasn't 100% clear to the client. HN acts like consultants are pulling the wool over clients eyes but that's never been my experience. They new exactly what they were paying for.
In my experience, this is all disclosed (partner/manager/associate). Pretty much any proposal I've seen from the top firms includes a cost estimate built by using hours x rate for each respective job title and often further broken down by stage of the project. Time and material bids are most common so you should be asking for this up-front, I actually view it as a bit of a red flag if they don't voluntarily disclose/bid it this way (eg. if I'm paying for time, I need to know how much time is being planned for and by which rate level).
The more expensive the services, the less likely you are to get a bid in this format.
Very true. I regularly get it on $500k-$2m projects, that's probably considered small. Of course it's caveated to hell with talk of "projection", "risk", etc. But that's part of my job is asking questions so I can anticipate whether they can execute on this or if it's perhaps some ambitious low bidding techniques.
FWIW, I also don't work in tech. Finance/accounting/management consultants are my world. I could definitely see how software/tech is more ambiguous by it's very nature.
FWIW, I also don't work in tech. Finance/accounting/management consultants are my world. I could definitely see how software/tech is more ambiguous by it's very nature.
This is very true. The more ambitious the scope is, the more difficult it is to provide a bid in that format. Also, expensive engagements are priced on perceived value anyway.
In reality, we would usually take the value-based fee (how much we think it’s worth) and then allocate it down to scope bullets, which are also usually very vague.
>In short: The people you’re talking to aren’t the people who are doing the actual work, The people who are doing the work have no industry experience And the numbers they’re basing their analysis on are probably whatever they found on google.
I think this really sets the wrong expectations.
The partner or director that sold you the work may not be doing the day-to-day work, but that doesn't mean they aren't involved. Behind the scenes, the consulting team should be frequently checking in with the director/partner to make sure they are on the right track. Major deliverables are reviewed by the director/partner before they are seen by the client. You should also be meeting with the director/partner frequently to make sure they are aware of any feedback you have about the consulting team's work. If these things aren't happening, you should give that feedback to the partner and look elsewhere for future work.
The good consulting firms may not hire people with industry experience, but instead they select hires that are good at researching and gathering data from a lot of different sources and synthesizing it into pieces of information that are more easily digestible by others. This is what enables those consultants to get quick feedback from people who do have industry experience (the directors, partners, or others in the consulting company that they have access to) and course correct where needed.
Don't get me wrong, there are a lot of scummy consulting groups out there. IMO the key thing is to understand that while the partner who sells you the work may not be the one _doing_ the work, the people doing the work _will_ follow in the partners footsteps. If the partner is mostly absent, or you think the partner is pulling a fast one on you, their team probably is too (or vice versa), and you should ditch them at the first opportunity. If you have a good relationship with the partner and think you can trust them, they are going to try and maintain that trust by making sure the team doesn't do anything to betray that trust.
I think this really sets the wrong expectations.
The partner or director that sold you the work may not be doing the day-to-day work, but that doesn't mean they aren't involved. Behind the scenes, the consulting team should be frequently checking in with the director/partner to make sure they are on the right track. Major deliverables are reviewed by the director/partner before they are seen by the client. You should also be meeting with the director/partner frequently to make sure they are aware of any feedback you have about the consulting team's work. If these things aren't happening, you should give that feedback to the partner and look elsewhere for future work.
The good consulting firms may not hire people with industry experience, but instead they select hires that are good at researching and gathering data from a lot of different sources and synthesizing it into pieces of information that are more easily digestible by others. This is what enables those consultants to get quick feedback from people who do have industry experience (the directors, partners, or others in the consulting company that they have access to) and course correct where needed.
Don't get me wrong, there are a lot of scummy consulting groups out there. IMO the key thing is to understand that while the partner who sells you the work may not be the one _doing_ the work, the people doing the work _will_ follow in the partners footsteps. If the partner is mostly absent, or you think the partner is pulling a fast one on you, their team probably is too (or vice versa), and you should ditch them at the first opportunity. If you have a good relationship with the partner and think you can trust them, they are going to try and maintain that trust by making sure the team doesn't do anything to betray that trust.
Yeah this is pretty spot on. I didn't work for one of the big consultancies, but it was pretty much the same playbook in the three different places I worked. As one of the underlings, I always tried to do good work for clients, but in the end I don't think it was usually worth it for them to pay us as much as they did. It's a weird world, where the value you provide is one of the following:
1. Using up someone's budget, because they don't get to keep it and want to look like they're doing something with it.
2. Doing a bunch of pretend work so you can come to the conclusion the VP wanted in the first place.
3. Being sent in to die on a doomed project, so you can take the blame for it.
Eventually, you look back at your career and notice nothing you've ever worked on made a difference to anybody. The paycheck is nice, but there are other places to get one just like it.
1. Using up someone's budget, because they don't get to keep it and want to look like they're doing something with it.
2. Doing a bunch of pretend work so you can come to the conclusion the VP wanted in the first place.
3. Being sent in to die on a doomed project, so you can take the blame for it.
Eventually, you look back at your career and notice nothing you've ever worked on made a difference to anybody. The paycheck is nice, but there are other places to get one just like it.
>I don't think it was usually worth it for them to pay us as much as they did.
Do understand that, most businesses have zero way to actually hire competent employees outside of their areas of expertise. So if a bread factory wants a CRM spun up to manage their sales and orders, they don't know where to start in terms of finding that sort of talent, and a consultant is a far, far safer option for realizing their goals. The realization of a goal holds nontrivial value, which is what a consulting firm is billing them for.
Could they do it cheaper? Yes, absolutely, but, they'd also need to get lucky, and, understandably, luck isn't really something most successful businesses are willing to leverage.
Do understand that, most businesses have zero way to actually hire competent employees outside of their areas of expertise. So if a bread factory wants a CRM spun up to manage their sales and orders, they don't know where to start in terms of finding that sort of talent, and a consultant is a far, far safer option for realizing their goals. The realization of a goal holds nontrivial value, which is what a consulting firm is billing them for.
Could they do it cheaper? Yes, absolutely, but, they'd also need to get lucky, and, understandably, luck isn't really something most successful businesses are willing to leverage.
That’s the difference between management consulting and technical/expert consulting. Expert consulting is for spinning up CRMs or installing SAP, management consulting is far more vague and strategy level.
Some of the big firms have started mixing the terms up because they can charge more that way.
Some of the big firms have started mixing the terms up because they can charge more that way.
this.
same for machine producing industry and software...
same for machine producing industry and software...
> 2. Doing a bunch of pretend work so you can come to the conclusion the VP wanted in the first place.
I was once a contractor at a company that had been acquired twice. The Finance lead all off a sudden had a big team of people, and he lacked the imagination to use them effectively. His team were a waste of space. His solution was to hire a consultancy to 'benchmark' the size of the Finance team. Guess what they found...all of the acquired people had to go!
I felt he lacked the backbone to just make a decision himself.
I was once a contractor at a company that had been acquired twice. The Finance lead all off a sudden had a big team of people, and he lacked the imagination to use them effectively. His team were a waste of space. His solution was to hire a consultancy to 'benchmark' the size of the Finance team. Guess what they found...all of the acquired people had to go!
I felt he lacked the backbone to just make a decision himself.
Seems like definitely a CYA move. Some things seem intuitively 'right' but following that intuition isn't always necessarily the best move. But right or wrong, many folks want a CYA card, and hiring external consulting group is usually it.
I think I just realized why an org I worked for would never hire a consultancy to do that: our peer organizations would find that we're much smaller than we should be.
>Eventually, you look back at your career and notice nothing you've ever worked on made a difference to anybody. The paycheck is nice, but there are other places to get one just like it.
Can't tell you how much motivation was lost after seeing my billed rate to a client vs. what the consultancy was paying me. They should bill higher than what they pay me for sure, but 6 times my rate? I was only doing the bare minimum after seeing that.
Can't tell you how much motivation was lost after seeing my billed rate to a client vs. what the consultancy was paying me. They should bill higher than what they pay me for sure, but 6 times my rate? I was only doing the bare minimum after seeing that.
This is why consulting companies are basically organized blight - you hire them to do work but 80% of the money goes to the customer facing/relationship management side of the business and the workers get fuck all done because they’re just following dumb orders half-interestedly, as opposed to a good team of workers who, if properly managed, might actually get something great done.
It's amazing how much money there is to be made in simply using up someone's budget in a way that's "good enough" so they can keep that money next year.
I've always (only half-jokingly) offered clients like this the opportunity to buy Gift-Cards (in $10,000 denominations) - I'll issue them in this financial year to soak up budget under-run, and they can spend them (or not) whenever the need arises.
WARNING: May not be SoX-compliant
WARNING: May not be SoX-compliant
The same holds for marketing and advertising, which makes sense if you consider an agency to be a consultancy.
The pattern I've seen repeated everywhere: A genuinely knowledgeable expert sells their expertise via online content, books, and seminars. This attracts the clients. The expert will attend a few key client meetings. But then, unbeknownst to the client, they disappear and leave the work to juniors.
This is so ubiquitous that, earlier this year, I decided to change my career aspirations. I'd long wanted to be an agency leader, but the pattern above was repeated at every successful agency I came across, and it's not something I can stomach any longer.
So, I decided to put myself out there as the expert. I write a newsletter. I published a book. I'm pursuing speaking engagements. Just like the other consultants do.
However, I don't pass my clients onto anyone else. They're hiring me. They were sold on my expertise, so my expertise is what they're going to get.
When a project grows too big for one person to handle, or when there are aspects of the work that don't justify my high hourly rate, I transparently inform my clients of my intention of bringing on freelancers for those aspects. It's all done out in the open.
And while I do charge a markup on the work my subcontractors do on my behalf, it works out to far less than my hourly rate, and my clients are fully aware of the markup being charged and what value I'm providing in return (i.e.: supervision).
All of which is to say: I think consultants can provide incredible value. (I know, I know... a consultant who believes on consulting. Shocking!) But you do have to be careful, and oddly enough, the bigger and more reputable the consulting firm, the less I would trust them. The business rewards bad players.
The pattern I've seen repeated everywhere: A genuinely knowledgeable expert sells their expertise via online content, books, and seminars. This attracts the clients. The expert will attend a few key client meetings. But then, unbeknownst to the client, they disappear and leave the work to juniors.
This is so ubiquitous that, earlier this year, I decided to change my career aspirations. I'd long wanted to be an agency leader, but the pattern above was repeated at every successful agency I came across, and it's not something I can stomach any longer.
So, I decided to put myself out there as the expert. I write a newsletter. I published a book. I'm pursuing speaking engagements. Just like the other consultants do.
However, I don't pass my clients onto anyone else. They're hiring me. They were sold on my expertise, so my expertise is what they're going to get.
When a project grows too big for one person to handle, or when there are aspects of the work that don't justify my high hourly rate, I transparently inform my clients of my intention of bringing on freelancers for those aspects. It's all done out in the open.
And while I do charge a markup on the work my subcontractors do on my behalf, it works out to far less than my hourly rate, and my clients are fully aware of the markup being charged and what value I'm providing in return (i.e.: supervision).
All of which is to say: I think consultants can provide incredible value. (I know, I know... a consultant who believes on consulting. Shocking!) But you do have to be careful, and oddly enough, the bigger and more reputable the consulting firm, the less I would trust them. The business rewards bad players.
You're still overseeing other subcontractors. My next step is likely in a similar direction but I want to start out with a couple of former colleagues in more of a partnership role.
IMO being responsible for other people is tiring and unrewarding, I just want a structure to tackle interesting projects without a middleman.
IMO being responsible for other people is tiring and unrewarding, I just want a structure to tackle interesting projects without a middleman.
You run into scalability limits pretty quickly. Unless you are truly the world expert on weird ball bearing failures or whatever. Or can genuinely speak or do consulting days that clients will line up to pay you $20K+ per day to do. (And even that isn't all that much absent a pretty full dance card. Just how the math works.)
> IMO being responsible for other people is tiring and unrewarding, I just want a structure to tackle interesting projects without a middleman.
You're not wrong, but that's also only a problem to you, not the client. So it's not an ethics question, but a matter of what you enjoy doing. All the power to you if you sort that out.
If I put myself in the shoes of my clients: They want their problems to be solved in a cost-effective way. They don't mind paying a premium for genuine expertise, because they see the value. But they WOULD have a problem paying that premium if it turned out that I was quietly passing on the work to people without the same expertise.
Most projects don't need expertise for every aspect, or can't justify the budget needed for true expertise at each level.
For example, let's say you're building a website. There are several functions involved in that:
- Planning
- Information Architecture
- Copywriting
- Design
- Front-End Development
- Back-End Development
- Infrastructure
If your client is a major corporation, there's an argument to be made for expertise at every one of those levels. So they pay for that expertise. But what's galling is how rarely they actually receive that expertise, because even though they get face time with the experts, the work is being done by juniors, often without the client's awareness.
If your client is a small company, the problem isn't with getting the expertise they paid for, but with only paying for the expertise they actually need.
The advice I give to my clients is to focus on the planning and copywriting, because those, in my opinion and experience, are what make the biggest impact on whether or not your website will be an effective sales tool for your company. Invest there first, and if you need to hire juniors for the rest, hire juniors for the rest. Or hire me and I'll hire the juniors so you don't need to worry about it.
What agencies and consulting firms do, however, is charge expertise-level rates for every aspect of the project, even though 80% of it is being done by junior-level people. This, to me, is dishonest, and is what I'm trying to avoid as a consultant.
You're not wrong, but that's also only a problem to you, not the client. So it's not an ethics question, but a matter of what you enjoy doing. All the power to you if you sort that out.
If I put myself in the shoes of my clients: They want their problems to be solved in a cost-effective way. They don't mind paying a premium for genuine expertise, because they see the value. But they WOULD have a problem paying that premium if it turned out that I was quietly passing on the work to people without the same expertise.
Most projects don't need expertise for every aspect, or can't justify the budget needed for true expertise at each level.
For example, let's say you're building a website. There are several functions involved in that:
- Planning
- Information Architecture
- Copywriting
- Design
- Front-End Development
- Back-End Development
- Infrastructure
If your client is a major corporation, there's an argument to be made for expertise at every one of those levels. So they pay for that expertise. But what's galling is how rarely they actually receive that expertise, because even though they get face time with the experts, the work is being done by juniors, often without the client's awareness.
If your client is a small company, the problem isn't with getting the expertise they paid for, but with only paying for the expertise they actually need.
The advice I give to my clients is to focus on the planning and copywriting, because those, in my opinion and experience, are what make the biggest impact on whether or not your website will be an effective sales tool for your company. Invest there first, and if you need to hire juniors for the rest, hire juniors for the rest. Or hire me and I'll hire the juniors so you don't need to worry about it.
What agencies and consulting firms do, however, is charge expertise-level rates for every aspect of the project, even though 80% of it is being done by junior-level people. This, to me, is dishonest, and is what I'm trying to avoid as a consultant.
Small consultants, like me, are a world apart from what is otherwise an accurate depiction of big consulting. My firm and many of my friendly competitors, work on specific questions or projects - do it cheaply, quickly and within scope.
Sometimes you need the resources size brings to the project, but absent mergers, migrations and enterprise software launches - small consulting is probably the better choice.
Also, the same can be said of big law and big accounting - albeit on the legal side senior partners often bring more value.
Sometimes you need the resources size brings to the project, but absent mergers, migrations and enterprise software launches - small consulting is probably the better choice.
Also, the same can be said of big law and big accounting - albeit on the legal side senior partners often bring more value.
Small consultants can be worth their weight in gold, it's unfortunate the stereotypical experience with big firms colors the perception of the entire engagement model. Particularly for niches where you have no experience or existing best practices. Simply having someone in the room who has seen a half dozen solutions to XYZ and knows the common pitfalls is worth the cost, let alone the actual labor/execution.
I'm a partner in one of these firms, clients know they can hire a small team of us and turn us loose (literally their secret weapon). We will gather requirements, apply our domain knowledge to refine processes, and build a complete product before the business can even work out the high level agreements. If this is even possible with a body shop, it is not, then you need to tell them every single thing that needs considered and implemented. We just run with it and get it done. Our rate is too low...about 20-30% higher than the "body shops."
This is absolutely true. I am essentially a graduate in a company of 5 people. I bring solid knowledge in data analysis and statistics but no expertise in air quality (our specialty). But with the guidance from those who are actual experts and my own skills we are providing real value and insight to clients. There’s no BS, we turn down clients or tell them they dont need more constantly.
I worked at an MBB for a few years. With CS background, mostly on digitalization topics.
Never before did I spend so much energy into truly trying to solve the problems our clients had. More than once, our recommendation was to go along with an idea that was already present within their organisation (presented sharply and as factual as possible).
But it also happened that we recommended going a completely different way to whatever their CEO, the VPs, middle managers or employees wanted, because we discovered they were so entrenched in their way of thinking. I am grateful to have had the privilege to do this work.
Never before did I spend so much energy into truly trying to solve the problems our clients had. More than once, our recommendation was to go along with an idea that was already present within their organisation (presented sharply and as factual as possible).
But it also happened that we recommended going a completely different way to whatever their CEO, the VPs, middle managers or employees wanted, because we discovered they were so entrenched in their way of thinking. I am grateful to have had the privilege to do this work.
Every consulting experience ever:
They all work at “top” firms and have “elite” educations. All of them. Seeing it in this thread.
After we sign the contract, “the problem is far, far greater than we were led to believe, and the solution is more consulting.”
The HR solution is always the opposite of what we’re doing. Title drift? Reduce titles! College grads have same titles as seasoned veterans? More titles!
The operational solution is always the same bundle of crap they sell to everyone else, but they’ll tell you it’s custom. Good luck getting any fixes in a reasonable time frame or expense.
They all work at “top” firms and have “elite” educations. All of them. Seeing it in this thread.
After we sign the contract, “the problem is far, far greater than we were led to believe, and the solution is more consulting.”
The HR solution is always the opposite of what we’re doing. Title drift? Reduce titles! College grads have same titles as seasoned veterans? More titles!
The operational solution is always the same bundle of crap they sell to everyone else, but they’ll tell you it’s custom. Good luck getting any fixes in a reasonable time frame or expense.
I am sure the authors contribution will be missed. ;)
1. Consultants form long-term support relationships out of necessity, as training existing staff without them leaving for higher paying positions is sometimes impossible. There is a wide set of circumstances that make this true.
2. Savvy people that "middleman" their services have already failed their integrity check. You can be sure a "Turtles All The Way Down" project plan will lead to cascade failure, or be resold into a dozen other firms within a year.
3. Risking any project above 12% of annual revenue means your company will likely be driven into the ground eventually (applies to both ends of the deal). Most probably still think that a company with a $7.4B market cap won't still try to short you the last installment after deployment... lol... most corporations put professional bandits to shame. IP theft, piracy, and blackmail... you may find international business is not for fools and or idealists.
4. posting 87.4% LLM machine learning garbage articles will potentially earn you a plagiarism copyright strike or worse
"Just cause you got the monkey off your back doesn't mean the circus has left town." (George Carlin)
1. Consultants form long-term support relationships out of necessity, as training existing staff without them leaving for higher paying positions is sometimes impossible. There is a wide set of circumstances that make this true.
2. Savvy people that "middleman" their services have already failed their integrity check. You can be sure a "Turtles All The Way Down" project plan will lead to cascade failure, or be resold into a dozen other firms within a year.
3. Risking any project above 12% of annual revenue means your company will likely be driven into the ground eventually (applies to both ends of the deal). Most probably still think that a company with a $7.4B market cap won't still try to short you the last installment after deployment... lol... most corporations put professional bandits to shame. IP theft, piracy, and blackmail... you may find international business is not for fools and or idealists.
4. posting 87.4% LLM machine learning garbage articles will potentially earn you a plagiarism copyright strike or worse
"Just cause you got the monkey off your back doesn't mean the circus has left town." (George Carlin)
So after years of being an engineer there is a part of me that is entranced by the idea of being a quick talking, sharp suited business consultant. Anyone whose been one of those "management consultants" have any advice for moving from tech to get picked up by one of the big firms?
EDIT: As for the why, I've been working as an engineer at large organizations so long I figure it might be nice to be on the other side of the consulting table and be considered an "expert" instead of the obnoxious "human resource" constantly whining about obnoxious reality. It get's tiring, and it seems nice to be one of the slick suited bad guys.
EDIT: As for the why, I've been working as an engineer at large organizations so long I figure it might be nice to be on the other side of the consulting table and be considered an "expert" instead of the obnoxious "human resource" constantly whining about obnoxious reality. It get's tiring, and it seems nice to be one of the slick suited bad guys.
It is only glamorous to other people. There is an enormity to being the Jon Hamm that takes a toll. You are playing an archetype in a three act play.
Being picked up by a big firm is easy, they are always hiring. Once you're in, you can pivot into the sales process, especially if you can hunt your own kills.
Being picked up by a big firm is easy, they are always hiring. Once you're in, you can pivot into the sales process, especially if you can hunt your own kills.
From what I know, they mostly hire people at select elite campuses who are graduating from either their bachelor's, MBA, or PhD program. They hold recruiting events and you show up.
I believe it's quite difficult to get in any other way, but I'd be curious if anyone knows people who were working at another job and simply applied and got interviewed and a job.
I believe it's quite difficult to get in any other way, but I'd be curious if anyone knows people who were working at another job and simply applied and got interviewed and a job.
The Big Three hire people midcareer from other companies, including from the tech world
Look into “solution engineer”, sometimes called “sales engineer” or “pre-sales engineer”. They are often paired with a sales expert as their technical partner. There are often 1 solution engineer to 2-4 sales experts.
Solution engineers are often engineer / developers who are good at communicating, explaining, asking questions. Activities often involve “technical proof-of-concepts” (commonly called POCs), running trials and “bake offs” (for example comparing between competitors). SEs often work closely with product engineering - communicating customer requirements, figuring out how to integrate with a clients’s particular setup, hosting workshops & webinars, going to a clients HQ and whiteboarding solutions. Often 25% travel (1-2 days on site with local customers, and travel once a month by flight to spend time with a customer for workshop.) You are expected to keep your tech skills sharp. Some progressions of this role are called “Field CTO”. This person is often a domain + technology expert (eg eCommerce + cloud microservices).
One financial benefit of a SE role is that - being on the sales org of the company, you are on the revenue generating side - not a cost center. Quality of life in the company can be nice because of that. Your compensation will often have a variable “bonus” to it - tied to the performance of the sales team (eg 25%+ of your total compensation).
If you know a piece of software, tool, or general domain, and you’re personally a big fan of them and use their software, that might be a good company to talk to about SE positions. Sometimes they might have a “developer advocate” role - which is someone who is also very plugged into the company’s customer / developers community.
If you’re interested in getting an SE job, one easy “cheat code” would be recording yourself doing “how to” on that company’s software, post to a youtube, and sharing it where customers are - might even be a subreddit you’re already in.
I saw a video where someone scanned thru months of a niche subreddit, found most common problems, and then made videos on how to solve those. Another idea is to use a tool like AnswerThePublic.com to find top questions related to a topic you know well (its based on search trends) - pick questions that are easy for you to answer, be prepared to see how crappy and annoying most videos are to solve that… then make your own video. Don’t want to get much into video on this thread, but Google Slides + OBS / simple 5 min how-to screenshare with decent audio would be better than 95% of the videos out there.
I’ve done this for awhile and happy to answer questions/ help out - worked at large cloud SaaS companies, and my clients are large well-known “Fortune 500” companies.
My career has bounced around from developer / architect / project manager / professional services (consultant) / customer success (technical account manager) / engineering product manager/ entrepreneur/ solution engineer and “fractional CTO” for startups.
Solution engineers are often engineer / developers who are good at communicating, explaining, asking questions. Activities often involve “technical proof-of-concepts” (commonly called POCs), running trials and “bake offs” (for example comparing between competitors). SEs often work closely with product engineering - communicating customer requirements, figuring out how to integrate with a clients’s particular setup, hosting workshops & webinars, going to a clients HQ and whiteboarding solutions. Often 25% travel (1-2 days on site with local customers, and travel once a month by flight to spend time with a customer for workshop.) You are expected to keep your tech skills sharp. Some progressions of this role are called “Field CTO”. This person is often a domain + technology expert (eg eCommerce + cloud microservices).
One financial benefit of a SE role is that - being on the sales org of the company, you are on the revenue generating side - not a cost center. Quality of life in the company can be nice because of that. Your compensation will often have a variable “bonus” to it - tied to the performance of the sales team (eg 25%+ of your total compensation).
If you know a piece of software, tool, or general domain, and you’re personally a big fan of them and use their software, that might be a good company to talk to about SE positions. Sometimes they might have a “developer advocate” role - which is someone who is also very plugged into the company’s customer / developers community.
If you’re interested in getting an SE job, one easy “cheat code” would be recording yourself doing “how to” on that company’s software, post to a youtube, and sharing it where customers are - might even be a subreddit you’re already in.
I saw a video where someone scanned thru months of a niche subreddit, found most common problems, and then made videos on how to solve those. Another idea is to use a tool like AnswerThePublic.com to find top questions related to a topic you know well (its based on search trends) - pick questions that are easy for you to answer, be prepared to see how crappy and annoying most videos are to solve that… then make your own video. Don’t want to get much into video on this thread, but Google Slides + OBS / simple 5 min how-to screenshare with decent audio would be better than 95% of the videos out there.
I’ve done this for awhile and happy to answer questions/ help out - worked at large cloud SaaS companies, and my clients are large well-known “Fortune 500” companies.
My career has bounced around from developer / architect / project manager / professional services (consultant) / customer success (technical account manager) / engineering product manager/ entrepreneur/ solution engineer and “fractional CTO” for startups.
Great tips. Thanks for sharing.
What kind of success did you have with the videos?
Was it generating money from views or mainly as a lead magnet for your services?
What kind of success did you have with the videos?
Was it generating money from views or mainly as a lead magnet for your services?
Hey, thanks for sharing, very interesting tips here. I haven't heard about a solution engineer before, would you say the difference between that and solution architect is that the former is also in charge of implementation?
Find someone in your network who already works there and get them to refer you for an open position.
Having been in the trenches of various startups and bigcorps, and having interfaced with multiple consultants along the way over the decades, there's an insidious pattern I've observed, especially over the last 10 years. Consultants, no matter how polished their decks or refined their methodologies, often seem to be selling a form of abstracted advice. They've taken a page out of the growth hacker / patrick mckenzie playbook, but without the authenticity nor the qualifications to back up their advice: commoditizing broad-strokes strategies and repackaging them for a premium.
And there's the glaring detachment from day-to-day operations. Consultants offer overarching guidance while skipping the nuance
There's also this consistent overemphasis on bigcorp-style "best practices" checklists. In the world of startups, where innovation and disruption are celebrated, these canned best practices can be the antithesis of genuine growth. As someone smarter than me once said, startups flourish not by following the well-trodden path, but by blazing their own.
Perhaps most frustrating about consultants is the temporal nature of their involvement. The transient "parachute in, advice, parachute out" / garbage in - garbage out strategy leaves startups grappling with the real-world implementation of sometimes nebulous strategies, and many organizations in utter shambles if allowed to run amoc
To be clear, i'm not branding all consultants under this shadow, and this might be a bit harsh after some recent negative experiences. There are some genuinely talented individuals doing consulting work and some who genuinely add value. But the increasing commoditization of startup advice and the corporatization of the field, where every consultant seems to have a canned playbook, does make one wonder: at what point does advice become noise?
Also, for those who've found genuine value in consultants or who haven't noticed these trends I described, would love to hear your counterpoints. Maybe I am just stuck on the dark side of the moon
And there's the glaring detachment from day-to-day operations. Consultants offer overarching guidance while skipping the nuance
There's also this consistent overemphasis on bigcorp-style "best practices" checklists. In the world of startups, where innovation and disruption are celebrated, these canned best practices can be the antithesis of genuine growth. As someone smarter than me once said, startups flourish not by following the well-trodden path, but by blazing their own.
Perhaps most frustrating about consultants is the temporal nature of their involvement. The transient "parachute in, advice, parachute out" / garbage in - garbage out strategy leaves startups grappling with the real-world implementation of sometimes nebulous strategies, and many organizations in utter shambles if allowed to run amoc
To be clear, i'm not branding all consultants under this shadow, and this might be a bit harsh after some recent negative experiences. There are some genuinely talented individuals doing consulting work and some who genuinely add value. But the increasing commoditization of startup advice and the corporatization of the field, where every consultant seems to have a canned playbook, does make one wonder: at what point does advice become noise?
Also, for those who've found genuine value in consultants or who haven't noticed these trends I described, would love to hear your counterpoints. Maybe I am just stuck on the dark side of the moon
We worked with a McKinsey consultant not too long ago, seemed like a nice fella.
Didn't say much, mostly showed up and took notes during meetings (typical vague "digital transformation" project from the executives).
Probably cost a fortune, despite being the youngest in the room.
Didn't say much, mostly showed up and took notes during meetings (typical vague "digital transformation" project from the executives).
Probably cost a fortune, despite being the youngest in the room.
If you found out who is father was and where he was from I'm sure it'd make perfect sense.
This is Big 4 consulting at it's finest. I saw Accenture and McKinsey fleece a lot of big companies and government agencies with these tactics. Some were downright underhanded and deceitful.
There is also a world of actual expert consulting. I worked in this space for a long time and while we definitely sniffed for opportunities to increase our scope we mostly did it by building reputation and delivering exceptional work. It's really, really hard to tell the difference from a pitch though.
There is also a world of actual expert consulting. I worked in this space for a long time and while we definitely sniffed for opportunities to increase our scope we mostly did it by building reputation and delivering exceptional work. It's really, really hard to tell the difference from a pitch though.
Neither Accenture nor McKinsey are Big 4. The Big 4 are PwC, EY, KPMG, and Deloitte. Despite what the name suggests they aren’t actually the top consulting firms (the name comes mostly from their accounting work.The three consulting firms, at least in terms of cost/prestige, are McKinsey, BCG, and Bain (MBB for short).
Consultants very, very rarely bring any genuine novel insight. In my experience, their prime contribution is simultaneously their most cynical and most useful: they navigate sclerotic bureaucracies, locate the people who know the answer, and then present the answer to decision-makers in a way that cuts through organizational politics and saves executive face.
Small orgs don’t need consultants. Not because they can’t afford them, but because small orgs don’t have the dysfunctional communication patterns of large orgs, which is the prime driver of demand for consultants.
The client already has the answer within their possession. The client should already be able to surface that answer and execute on it. But they just can’t. They are institutionally incapable of finding the already-existing answer within themselves.
The old adage says the consultant will borrow your watch to tell you the time. This quip masks the fact that clients don’t know how the big hand relates to the little hand, or where their watch is located.
Small orgs don’t need consultants. Not because they can’t afford them, but because small orgs don’t have the dysfunctional communication patterns of large orgs, which is the prime driver of demand for consultants.
The client already has the answer within their possession. The client should already be able to surface that answer and execute on it. But they just can’t. They are institutionally incapable of finding the already-existing answer within themselves.
The old adage says the consultant will borrow your watch to tell you the time. This quip masks the fact that clients don’t know how the big hand relates to the little hand, or where their watch is located.
Very spot on — consultants are able to navigate the bureaucratic structure within an organisation to deliver work that the orgnaisation cannot navigate itself.
I've worked a decade in technology consulting. 10 years ago the client had no idea what they needed — apps, e-commerce, digital self-service were all new concepts. Now, organisations are already equipped with smart people who know the answer — but sometimes you just need to catalyse change when you can't do yourself.
The existence of consultancies, or agencies in the creative/marketing side for that matter, isn't a failure of an organisation — not always at least. Sometimes its simply becasue the organisation has created a structure which works very well in one set of circumstances and very poorly in others.
(There is a reason why big tech, for all its expertise, has a roster of outside ad agencies who do development and deployments of their non-core services ... it's just faster to have agencies do web dev than setting up internal teams. You get a few agency devs set up on google3, and you've got yourself a billable pipeline...)
I've worked a decade in technology consulting. 10 years ago the client had no idea what they needed — apps, e-commerce, digital self-service were all new concepts. Now, organisations are already equipped with smart people who know the answer — but sometimes you just need to catalyse change when you can't do yourself.
The existence of consultancies, or agencies in the creative/marketing side for that matter, isn't a failure of an organisation — not always at least. Sometimes its simply becasue the organisation has created a structure which works very well in one set of circumstances and very poorly in others.
(There is a reason why big tech, for all its expertise, has a roster of outside ad agencies who do development and deployments of their non-core services ... it's just faster to have agencies do web dev than setting up internal teams. You get a few agency devs set up on google3, and you've got yourself a billable pipeline...)
Only had to do it a few times, but exactly my experience. The main one was spending ~3 months and speaking to ~40 people in order to write 2 rest APIs in about 300 python LoC.
It was a minor integration between 4 different services owned by different groups, with no one knowing anything about any system/functionality outside a very small slice of the domain they controlled. At best they could point me to another person to ask, with every question taking a minimum of three levels of indirection to resolve.
They were fully aware of the situation too; utterly shocked we managed to close it out in those 3 months. They had more than enough software developers and knowledge to do it themselves — my only value add was piercing the veil, navigating through all their compartmentalized knowledge to get a straight answer
It was a minor integration between 4 different services owned by different groups, with no one knowing anything about any system/functionality outside a very small slice of the domain they controlled. At best they could point me to another person to ask, with every question taking a minimum of three levels of indirection to resolve.
They were fully aware of the situation too; utterly shocked we managed to close it out in those 3 months. They had more than enough software developers and knowledge to do it themselves — my only value add was piercing the veil, navigating through all their compartmentalized knowledge to get a straight answer
After being on the inside and outside. Can confirm.
For decades on the inside I was pissed that we paid consultants since we already knew what to do.
Now being a consultant. I see this is true. The main thing we bring is just aggregation and bodies. (and someone to blame). But hate being apart of it. Really the customers should staff up some and do their own internal consulting.
Large corporations should just die, they are not efficient, not innovative, they are just a large pooling of capital that takes on its own life and feeds on humans.
The entire system is MOLOCH.
For decades on the inside I was pissed that we paid consultants since we already knew what to do.
Now being a consultant. I see this is true. The main thing we bring is just aggregation and bodies. (and someone to blame). But hate being apart of it. Really the customers should staff up some and do their own internal consulting.
Large corporations should just die, they are not efficient, not innovative, they are just a large pooling of capital that takes on its own life and feeds on humans.
The entire system is MOLOCH.
Some truth to this (minus the ritual child sacrifice). However it’s hard to do complex ambitious things like manufacturing semiconductors or designing consumer laptops in a small company. Big problems demand a big organization and increasingly they’re what drives our economy.
The lived experience inside big companies is bad and getting worse. Consultants are a symptom of this, but I think the root cause is an insatiable demand for earnings growth and productivity which is basically a force of nature at this point. The alternative is deindustrialization or some rethinking of the social contract.
The lived experience inside big companies is bad and getting worse. Consultants are a symptom of this, but I think the root cause is an insatiable demand for earnings growth and productivity which is basically a force of nature at this point. The alternative is deindustrialization or some rethinking of the social contract.
Yep.
I have no argument for heavy industry.
Things like semiconductors do take a lot of capital, and a large organization.
I'd be curious to find out how much Intel or TSMC use consultants.
The old school Intel was run by engineers, I would bet they did not use consultants as much as modern Intel.
The problem seems to be how much technical knowledge is kept in-house, thus not needing consultants.
Versus
Companies that have outsourced their technical knowledge and now can't survive without consultants.
The old school Intel was run by engineers, I would bet they did not use consultants as much as modern Intel.
The problem seems to be how much technical knowledge is kept in-house, thus not needing consultants.
Versus
Companies that have outsourced their technical knowledge and now can't survive without consultants.
As a former McKinsey consultant this is very true. Most of the time the work was just cutting through the bureaucracy, interviewing people, getting all the data, synthesising it and present it back.
To be fair though, once in a while there were some cases where a client genuinely did not have the required expertise in house or needed a solution quicker than their in-house teams could deliver.
To be fair though, once in a while there were some cases where a client genuinely did not have the required expertise in house or needed a solution quicker than their in-house teams could deliver.
Strongest defense of consulting I've read
The cynical take is consultants are there to embed themselves in an organization so deeply that they ensure that more of their consultants are hired in the future.
I also think any “Mechanical Turk but we need over-achieving Ivy League educated 25 year olds to actually do it” tasks are also very well served by consultants.
Conducting surveys, combing through massive data, etc.
Conducting surveys, combing through massive data, etc.
I agree with most of your points, and would like to point out that the “client” is not a single person or organism, but just a lot of people. Just as the internet already contains all the answers in it, you might need a search engine (or LLM) to find them. Crawling the web or the org is grunt work that you might have no time for.
> their prime contribution is simultaneously their most cynical and most useful: they navigate sclerotic bureaucracies, locate the people who know the answer, and then present the answer to decision-makers in a way that cuts through organizational politics and saves executive face.
Is this not a description of a successful middle manager inside the org as well?
Is this not a description of a successful middle manager inside the org as well?
The middle manager has the opposite set of incentives. They want to solidify and grow their position inside the company, which often isn't in line with what is the best outcome for the company. This is the principal agent problem and is the root cause of this issue.
This is true of the big name consultants where they're just sending new Ivy grads into the org. Small consultancy shops can be really useful to smaller orgs when:
1. The consultants are ex or current operators who actually know something
2. Those smaller orgs can't afford that level of talent full time.
I think there can be times were a consultant is useful to a small org. For example when using or investigating a technology they have no experience in yet it might be faster to get a consultant to help. Or trying to get compliance with some regulation or standard.
> They are institutionally incapable of finding the already-existing answer within themselves.
Or sometimes, as OP mentions, they have the answer already but need consultants for political cover to implement the solution.
Or sometimes, as OP mentions, they have the answer already but need consultants for political cover to implement the solution.
I am a software "consultant". In reality, I just end up an FTE on a project for 2-4 years. Definitely self-complimenting, but that's what happens if you actually do your job until the company grows enough to finally replace your team with 10 teams.
Thank you and everyone else that shares a convenient paywall-busting archive link on HN front page stories. It always makes me smile to see them.
We used to have them built into the context bar for every submission - it said “web.” But the mod removed them because people asked for it (for some reason?)
Using consultants as a potential fall guy for some big and risky initiative is extremely common in my experience.
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There's a lot of negativity in this article and the comments. I'm married to an almost-partner at a prestigious consulting firm and they truly do care about their clients and has genuinely solved a lot of problems for them--well into their 30s I will add! So clearly the advice here is to only hire good ones, say maybe my spouse? ;)
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As a solo consultant this doesn't resonate so much. Isn't it like everything else that you can just look if they come in a suit or birkenstock? You cross polinate a bit from other succesfull places but mostly just work hard, play nice and have a more benefitial tax situation.
> The work will mostly be done by clever but pimply 20-somethings, armed with two-by-two matrix frameworks … What they lack in wisdom will be made up for in long hours.
The structure of consulting firms is that a partner (who does actually have a lot of experience with the industry) will “sell” the work to the client and oversee the team that actually does the work. Partners will sell multiple cases at a time and most of time is spent doing sales so most of the work is done by the consulting team with some guidance from the partner. The consulting team will be comprised of a couple of consultants 1-3 years out of undergrad and couple of consultants 1-3 years out of their MBA and a manager who has maybe 5 years of consulting experience. Usually none of them will have any specific domain knowledge.
> Question everything
Since most of the work is done by (nearly) fresh grads they won’t have a lot of specific industry experience. At the same time it’s hard to find information on the obscure topics they’re researching so the actual information they find will be iffy. Sometimes it will even be made up (they’ll tell the client it’s based on “industry experience” or something but it was probably invented by 23 year old in excel). Regardless the information will be presented to the client as rock solid and scientific (with maybe a little disclaimer at the bottom)
In short: The people you’re talking to aren’t the people who are doing the actual work, The people who are doing the work have no industry experience And the numbers they’re basing their analysis on are probably whatever they found on google.
I know this comment sounds really critical but I do think there is some value in consultants and they are really good at structuring out a problem but the analysis they do is probably 75% accurate at best