Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor

mattstoller.substack.com

Post reply on HN
Print view View original

81–90 of 328 posts

Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor

#81

Post by codesforhugs »

smacktoward wrote: post #26
hwbehrens wrote: post #5

The IFF referenced in the article seems like a great example of how good-intentioned changes to incentive structures can have very warped outcomes, potentially years later. These kinds of effects keep popping up for me, even in industry contexts (e.g. stack ranking). Are there accepted mechanisms for systematically identifying these knock-on effects, and if so, what are they and how can they be more broadly applied?…

In terms of lawmaking, the usual way to deal with this problem isn't with front-end analysis, but rather by adding a "sunset provision" (see https://en.wikipedia.org/wiki/Sunset_provision ). That's a clause in a bill that requires it to be re-authorized periodically in order to stay in effect. If a law with a sunset provision ends up causing unintended consequences, then lawmakers can let it die just by doing nothing…

If I were writing the constitution for a representative democracy today, I think it would include mandatory sunsets for all legislation.

Yes, this would lead to the legislature spending a lot of time just reauthorizing existing legislation, but I would argue that the majority of new legislation being passed in modern representative democracies would be better off as revamps of existing legislation anyway.

Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor

#82

Post by mountainofdeath »

mips_avatar wrote: post #43
txcwpalpha wrote: post #16

There's a lot to unpack here, but the general gist is that McKinsey is overpaid for mediocre services. It's hard to argue against that, and McK in particular does have some insanely unjustifiable rates, but I do think the author has a bit of a misunderstanding of why consultancies are hired in the first place. To be clear, when a consultancy like McK puts a 23 year old analyst on a project, the $50k/week bill isn't j…

It seems like people do really well for themselves after they leave McKinsey, do you think this is mostly a function of the cache having McKinsey on your resume brings? What skills are really developed as a management consultant?

Basically. It's a filter that proves someone who worked there is smart and hardworking. It also explains their virtually universal requirement for an Ivy league (or similar) background.

Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor

#84

Post by nikanj »

mips_avatar wrote: post #43
txcwpalpha wrote: post #16

There's a lot to unpack here, but the general gist is that McKinsey is overpaid for mediocre services. It's hard to argue against that, and McK in particular does have some insanely unjustifiable rates, but I do think the author has a bit of a misunderstanding of why consultancies are hired in the first place. To be clear, when a consultancy like McK puts a 23 year old analyst on a project, the $50k/week bill isn't j…

It seems like people do really well for themselves after they leave McKinsey, do you think this is mostly a function of the cache having McKinsey on your resume brings? What skills are really developed as a management consultant?

Dressing well, having a good handshake and solid banter, etc.

Soft skills that we IT folk tend to hate with a passion, and which really make a massive difference over a life-long career trajectory

Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor

#85

Post by WhompingWindows »

gwd wrote: post #77
surak wrote: post #49

McKinsey have messed up government policies all over the world when it comes to McDonaldization of Society. They are using simple measurements to model how complex societies should work, unfortunately this is only works for McKinsey and their partners.

Sounds a bit like a lot of "machine learning" actually (when it's done blindly). But do you have any specific references for the kind of thing you're talking about? It sounds plausible, but if I had a dollar for every time something plausible-sounding was completely wrong...

Sounds like someone doing linear regression, claiming it's artificial intelligence, and charging $150k salary in a year for said data science...

Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor

#86

Post by organsnyder »

z3ugma wrote: post #21

I was a technical project management consultant for a long time. The value that most orgs get from a consultant isn't really in the advice the consultant gives them, it's the political cover to make changes they knew they should make all along, but didn't have the social capital or the focus to make those changes until they had a person in a chair across from them.

That's also Epic's (the healthcare software vendor) big value proposition. Their software is okay—among an industry filled with shit, their turd is at least polished.

But their delivery model is incredible: they make customers woo them (shouldn't vendors be doing the wooing?), and they have a prescribed way of doing things if they decide you're worthy to purchase their product. What you get in return is a constant cudgel of "this is the Epic way" to yield when talking with practitioners who are used to doing things their own way (especially doctors—nurses are more flexible and pragmatic, in my experience). This can be especially useful when you have a system of multiple facilities that's grown through acquisitions, with each facility having decades of accumulated practices that aren't quite aligned with your other locations.

Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor

#87

Post by shantly »

gowld wrote: post #65
z3ugma wrote: post #21

I was a technical project management consultant for a long time. The value that most orgs get from a consultant isn't really in the advice the consultant gives them, it's the political cover to make changes they knew they should make all along, but didn't have the social capital or the focus to make those changes until they had a person in a chair across from them.

This is why consultants hire Ivy League graduates. To create a myth of "Ivy League" "quality" justifying the decisions they are hired to recommend. The other thing management consultants do is industrial espionage -- they go into a company to learn how it work, and then advise other companies on how "industry leaders" operate.

> The other thing management consultants do is industrial espionage -- they go into a company to learn how it work, and then advise other companies on how "industry leaders" operate.

This one doesn't get mentioned enough, I think. They'll happily sell you an outline of what you need to do to be in line with "industry best practices", where those practices are all the things your competitors are doing better than you (and guess what they'll sell those companies if they spot anything you're doing better than they are? Where do you think they learned about those "best practices" in the first place?).

It's basically a kind of weird, expensive, inefficient, unofficial business process collaborative R&D program.

Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor

#88

Post by codesforhugs »

hwbehrens wrote: post #5

The IFF referenced in the article seems like a great example of how good-intentioned changes to incentive structures can have very warped outcomes, potentially years later. These kinds of effects keep popping up for me, even in industry contexts (e.g. stack ranking). Are there accepted mechanisms for systematically identifying these knock-on effects, and if so, what are they and how can they be more broadly applied?…

The fundamental problem with incentives is that they're asymmetric in nature: The incentivee has a lot more time (and direct motivation) to come up with a way to game the incentive than the incentivizer can spend when setting it.

The only real way to address that is to revise incentives on a frequent and regular basis — but who wants to do that? Certainly not legislatures.

Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor

#89

Post by maxkwallace »

z3ugma wrote: post #21

I was a technical project management consultant for a long time. The value that most orgs get from a consultant isn't really in the advice the consultant gives them, it's the political cover to make changes they knew they should make all along, but didn't have the social capital or the focus to make those changes until they had a person in a chair across from them.

On the positive side, I do think that if we repeat this truth enough times we can decrease the "cover my ass" value of consulting and help more orgs make change autonomously.

Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor

#90

Post by organsnyder »

salamander014 wrote: post #79
globuous wrote: post #48

Earlier quoted context omitted.

This ! In france, its a classic move by big companies to have mbb formalize what they already know: a need to restructure which unfortunately involves firing people. Its easier to justify restructuring because mbb said so than because the company says so for some reason ^^

Companies trust capital expenses more than operational expenses for some strange reason. I don't know why.

I think it's psychological. With capital expenses, the decision to spend a lot of money tends to be a discrete event/process, while operations usually grow slowly over time. We place inherent value in big purchases—after all, I decided to make the purchase, so it must be valuable.
Post reply on HN