Have McKinsey and its consulting rivals got too big?

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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&#x27;t valued. You do the thing that has the shortest ROI.<p>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.<p>I am now in a full time engineering position. I don&#x27;t talk to clients anymore.<p>What I miss the most is coming into contact with people with a huge variety of backgrounds.<p>Which surprisingly were the people with who I had to spent the most amount of time explaining how software works.<p>Maybe I&#x27;m bad at it? Who knows. But I learned a lot, and I&#x27;m happy where I&#x27;m at now, so any bitterness would be misplaced.<p>Not to mention they paid for my GC.

Used to be at BCG. I think it&#x27;s worth bearing in mind that relatively little consulting revenue -- even at the top strategy shops -- comes from pure strategy work anymore.<p>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.<p>It is basically a better business to become something like a premium Accenture, a &quot;get stuff done&quot; kind of consultancy. You can staff an army of junior people for a very very long time on those kinds of projects.<p>It&#x27;s just not that easy to keep people staffed on 5-6 person teams solely on 8-12 week pure strategy engagements.<p>These kinds of projects are also the first discretionary spending yo get cut when times get tough.<p>If you&#x27;re going to be focused on the pure strategy work, you&#x27;ll probably want to stay really really small. We&#x27;ve seen some of this in investment banking with firms like Allen &amp; Co or Qatalyst. Challenge is that consulting doesn&#x27;t come with scalable monetization via success fees.<p>It&#x27;s just not great business to be a boutique consultancy, I think.

It&#x27;s not just that they&#x27;re too big—it&#x27;s that they&#x27;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.<p>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) &quot;McKinsey recommended it, so it must be right,&quot; and b) &quot;If it goes wrong, it’s on McKinsey, not us.&quot;

I have a small story about McKinsey from friend of mine in the Indian Bureaucracy from about 10-12 years ago.<p>McKinsey was doing some work for their dept. I asked him what they did. He said, &quot;McKinsey asked us for lots of information. Then they put it into a dossier and gave it back to us.&quot;

Don&#x27;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&#x2F;McKinsey), Karuma Hydroelectric Project (Uganda&#x2F;Deloitte), Chongwe River Water Supply Project (Zambia&#x2F;Boston Consulting Group), Isimba Dam Project (Uganda&#x2F;McKinsey), Haramain High-Speed Rail Project (Saudi Arabia&#x2F;Deloitte), and Shoreham Nuclear Power Plant on Long Island, New York (McKinsey).<p>In constrast, China&#x27;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.

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.<p>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.

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).

The mentioned memo can be read here: <a href="https:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20240316081510&#x2F;https:&#x2F;&#x2F;obligationtodissent.com&#x2F;" rel="nofollow">https:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20240316081510&#x2F;https:&#x2F;&#x2F;obligatio...</a><p>McKinsey has been doing &quot;silent layoffs&quot; in the last few review cycles, i.e., shrinking overall headcount after performance reviews – as there&#x27;s not enough work to go around. Hard do meet the bar for a one-year BA, if you&#x27;ve only been on 1-2 studies – which is not exactly your fault.

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&#x27;s interesting to me here is that in the period 2013-2023, only E&amp;Y, KPMG and McK of the &quot;great eight&quot; 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&#x27; management. On the other hand, I&#x27;d love to know the yield per employee. That would be an interesting read.

I&#x27;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 &quot;When McKinsey Comes to Town&quot; by Walt Bogdanich and Michael Forsythe.

&gt; 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.<p>The cloud divisions of &quot;big tech&quot; might be the catalysts for this upcoming disintermediation.

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Quick reminder that McKinsey helped Purdue Pharma &amp; co boost their opioid drugs sales, starting the opioid dependency and overdose epidemic in the US.<p><a href="https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;McKinsey_%26_Company" rel="nofollow">https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;McKinsey_%26_Company</a>

Is it fair to say that ...<p>Consulting is the oldest profession ;)

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: <a href="https:&#x2F;&#x2F;youtu.be&#x2F;AiOUojVd6xQ?si=anI1_FKkDM4oDI1M" rel="nofollow">https:&#x2F;&#x2F;youtu.be&#x2F;AiOUojVd6xQ?si=anI1_FKkDM4oDI1M</a>

Let me propose an alternate theory: fines and enforcement have become too small, so-as to become <i>just a cost of doing business</i>.<p>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&#x27;t <i>in bed with</i> so many of the major funds...<p>&quot;If you think there&#x27;s a solution, you&#x27;re part of the problem.&quot; —George Carlin (Conan O&#x27;brien interview)

&gt; 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.<p>During a gold rush teach people how to use their shovels.

I think more than becoming to big the solutions are founded on a narrow matrix of logic or group think.

Gotten*<p>C&#x27;mon, The Economist

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.<p>It&#x27;s time to break them all up. The &quot;firewall&quot; 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.