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The story BCG offered me $16,000 not to tell

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Re: The story BCG offered me $16,000 not to tell

#31

Post by _delirium »

Silhouette wrote: post #19
bkrausz wrote: post #12

The tl;dr version: Large consulting companies often tell their clients what they want to hear, which more or less negates the point of consultants but can often pay better. There are ethical concerns here. I like the story, but the article itself has way too many metaphors that cloud the point. Or maybe I'm just too used to having all my stories condensed into 140 characters...

There was another important point: a guy new to the consulting business and with no significant amount of relevant training or support wound up being marketed as an expert and became the senior person on each project he joined. I've seen this in action, both from the client side (management brought in absurdly highly paid consultants to back up what they wanted when their own people wouldn't support it) and the other…

I think shareholders might not widely realize how it works. Often, shareholders are actually the ones who demand bringing in outside consultants, because it's seen as getting an independent third opinion. It looks more self-interested for the company's executives to set their own pay, than it does for an executive-recruitment consulting firm to recommend what the going rate is. Of course, executives have gotten good at getting the right consulting firms to answer those questions, and consulting firms know that if they don't answer appropriately, they aren't going to be asked back.

Re: The story BCG offered me $16,000 not to tell

#32

Post by nfnaaron »

swombat wrote: post #2

I couldn’t sleep at night. I’d fill up a bathtub and scream into it. Eh, what? Do (normal) people do this? Is it because it absorbs the sounds or something?

All replies to the parent are interesting speculation as to whether the author was screaming at, into or under the water, and what the water was for.

The key thing to notice, though, is that the author screamed. I have screamed, and life is bloody awful at those points in life.

Re: The story BCG offered me $16,000 not to tell

#33

Post by jakarta »

Silhouette wrote: post #19
bkrausz wrote: post #12

The tl;dr version: Large consulting companies often tell their clients what they want to hear, which more or less negates the point of consultants but can often pay better. There are ethical concerns here. I like the story, but the article itself has way too many metaphors that cloud the point. Or maybe I'm just too used to having all my stories condensed into 140 characters...

There was another important point: a guy new to the consulting business and with no significant amount of relevant training or support wound up being marketed as an expert and became the senior person on each project he joined. I've seen this in action, both from the client side (management brought in absurdly highly paid consultants to back up what they wanted when their own people wouldn't support it) and the other…

Shareholder activists will usually argue how companies stupidly waste money on consultants. It's just that there aren't a lot of them.

In the past, Buffett has criticized consultants.

1995 Letter:

Concluding this little dissertation on acquisitions, I can't resist repeating a tale told me last year by a corporate executive. The business he grew up in was a fine one, with a long-time record of leadership in its industry. Its main product, however, was distressingly glamorless. So several decades ago, the company hired a management consultant who - naturally - advised diversification, the then-current fad. ("Focus" was not yet in style.) Before long, the company acquired a number of businesses, each after the consulting firm had gone through a long - and expensive - acquisition study. And the outcome? Said the executive sadly, "When we started, we were getting 100% of our earnings from the original business. After ten years, we were getting 150%."

“I would rather throw a viper down my shirtfront than hire a compensation consultant.” -Charles Munger

Re: The story BCG offered me $16,000 not to tell

#34

Post by frederickcook »

andrewhyde wrote: post #9
swombat wrote: post #2

I couldn’t sleep at night. I’d fill up a bathtub and scream into it. Eh, what? Do (normal) people do this? Is it because it absorbs the sounds or something?

hmm... while I was backpacking on the PCT the term 'scream into a lake' was used (for when you got really mad). Ever talk or scream in a pool? Muffled, distant sound, but is still there.

Don't people hike the PCT because they've taken a break from the "scream into a lake" lifestyle?

Re: The story BCG offered me $16,000 not to tell

#35

Post by dantheman »

barrkel wrote: post #21

Something that leaped out at me: "I believe that voluntary exchange is not just a good method of incentivizing people to provide their labor and talents to society, but a robust moral system". Voluntary exchange is not a moral system. A free market doesn't have morals.

You are completely incorrect, the free market is a moral system because it does not rely on coercion or force to compel others to interact. All interactions in a free market system are voluntary and beneficial to all participants in the transaction. No other economic system can make those claims.

Re: The story BCG offered me $16,000 not to tell

#36

Post by abalashov »

"I’m a free marketeer. I believe that voluntary exchange is not just a good method of incentivizing people to provide their labor and talents to society, but a robust moral system — goods and services represent tangible benefit to people, market prices represent the true value of goods in society, and wages represent the value that a worker provides to others. Absent negative externalities or monopoly effects, a man receives from the free market what he gives to it, his material worth is a running tally of the net benefit that he has provided to his fellow man. A high income is not only justified, but there is nobility to it."

Oh, man, it'd be awesome if we had that. But then, much of the Web 2.0 "industry" about which this site revolves would not exist.

Re: The story BCG offered me $16,000 not to tell

#37

Post by eru »

chime wrote: post #10
carbocation wrote: post #3

He invokes Excel as an analytical engine several times in this story. I am trying to figure out if he actually considers it to be a powerful statistical engine, or if he is merely using it synecdochically for the benefit of non-technical readers, in order to represent statistical software more generally.

The 'Solver' ( http://www.solver.com/ ) tool in Excel is widely used for many business optimization problems. If you have x & y quantities of two raw materials and products A and B consume different proportions of each raw material, then you can use the solver to determine the most optimal production strategy that maximizes your profit (or minimizes your labor requirements etc.)

The joys of linear optimization. Do you know if it also supports integer optimization? (Doing that fast enough would be a feat in pure Excell.)

Re: The story BCG offered me $16,000 not to tell

#38

Post by ShabbyDoo »

eru wrote: post #37
chime wrote: post #10

Earlier quoted context omitted.

The 'Solver' ( http://www.solver.com/ ) tool in Excel is widely used for many business optimization problems. If you have x & y quantities of two raw materials and products A and B consume different proportions of each raw material, then you can use the solver to determine the most optimal production strategy that maximizes your profit (or minimizes your labor requirements etc.)

The joys of linear optimization. Do you know if it also supports integer optimization? (Doing that fast enough would be a feat in pure Excell.)

I believe it does. And, IIRC, it's a native code library that uses Excel for data input and results presentation.

Re: The story BCG offered me $16,000 not to tell

#39

Post by microcentury »

"At my salary level, and with my expected advancement path, I could comfortably retire in my thirties."

I've heard this or statements like it in quite a few articles over the years, but I've never actually met a retired thirties business consultant. Do they exist and am I just missing them? The only ones I know are well into their thirties, working 70+ hours a week, and looking forward to making even larger boatloads in their forties.

Re: The story BCG offered me $16,000 not to tell

#40

Post by sscheper »

microcentury wrote: post #39

"At my salary level, and with my expected advancement path, I could comfortably retire in my thirties." I've heard this or statements like it in quite a few articles over the years, but I've never actually met a retired thirties business consultant. Do they exist and am I just missing them? The only ones I know are well into their thirties, working 70+ hours a week, and looking forward to making even larger boatloads…

Agreed. The only retired consultants I've met had white hair (most didn't even have hair).
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