Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor • Hacker News Board

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

#91

Post by organsnyder » Thu, Dec 05, 2019, 7:12 PM UTC

shantly wrote: post #87

gowld wrote: post #65

Earlier quoted context omitted.

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…

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

That's a great elevator pitch for Gartner.

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

#92

Post by kortilla » Thu, Dec 05, 2019, 7:13 PM UTC

crazygringo wrote: post #75

gowld wrote: post #65

Earlier quoted context omitted.

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.

Well, it's not just that. Basically they need a bunch of people who are really good at ingesting a ton of data, analyzing it, and summarizing it. Turns out those are exactly the same skills involved in writing academic papers, which gets you good grades. So these people really are statistically disproportionately the people in Ivy League schools and similar who also got high GPA's in those schools. So there's some re…

Not really. To get into an Ivy League school you only need to perform well in high school and have the right connections and/or guidance to build the perfect resume.

With college grade inflation and the fear of blowback from failing well-connected ivy students, the only guarantee you get from hiring an average Ivy League student is that you have someone who can write high school essays well. The typical undergrad graduate still barely has any critical thinking ability.

If you want people fresh out of school who can ingest data, analyze it, and summarize it, you want good grad students. Good grad students come from non-Ivy schools more often than not.

The only industries that care about Ivy League at this point are the ones where connections matter more than intellectual ability. Everywhere else has recognized that the pedigree is not a useful signal (see Google’s hiring data on this).

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

#93

Post by jgeada » Thu, Dec 05, 2019, 7:14 PM UTC

irrationalactor wrote: post #53

xvector wrote: post #23

From the linked article[1]: I find it absolutely INSANE that highly specialized organizations like the NSA rely on McKinsey to direct their future operations. These people have intimate knowledge of their organization and culture, shaped and hardened by years of challenges and learned experiences. What can they possibly think bringing an outsider in to do a complete overhaul will solve!? Why can they not apply their…

Having worked in the field for a few years after graduation myself, I've come to think of "strategy consulting" as mostly bureaucratic arbitrage. 8 times out of 10, the organization knows exactly what needs to be done. However, big organizations have thousands of stakeholders with competing desires. Steering the ship in a different direction can have negative consequences for thousands of people. Due to this problem.…

So what then is the actual role management plays? They're paid the big bucks (absurdly so in the typical large US corporation), and yet largely they hardly make clear decisions, frequently "didn't know" about decisions that go catastrophically wrong and get golden handcuffs and parachutes to sweeten the do nothing but create anodyne PowerPoint decks with vapid goals. And when real decisions need to be made, yet more big bucks are paid to outside contractors to tell them what most everyone in the company already knows needs to be done.

Sigh ... the incentives and consequences for the top "decision makers" in a modern corporation are corrupt to the core.

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

#94

Post by dpeck » Thu, Dec 05, 2019, 7:14 PM UTC

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.

Exactly. Early in my career I learned that a consultant is almost never hired by an organization, a consultant is hired by a faction within an organization who already knows what they want the deliverable to be.

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

#95

Post by jshaqaw » Thu, Dec 05, 2019, 7:15 PM UTC

Former McKinseyite here (and one reasonably skeptical of the firm as a whole)... nobody hires McKinsey for fresh college grads. That’s just something they tell fresh top of class Ivy League college grads to make them feel important. Clients hire Directors to give them peer level strategic counsel. How they technically allocate payment for time across consultants is just backfillling to get to a number already agreed to in advance.

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

#96

Post by shantly » Thu, Dec 05, 2019, 7:17 PM UTC

boudewijnrempt wrote: post #44

starpilot wrote: post #42

If you know anyone personally who works at McKinsey, you know them to be brilliant, humble, hardworking, and unfailingly likeable. Think Pete Buttigieg. It's hard to square this with the company's public reputation in anti-establishment screeds.

I guess you meant this to be sarcastic, right? Doltish, vainglorious, lazy and unfailingly boorish is what comes to my mind when I review the McKinsey people I've met.

That'd all go for about 80% of my exposure to same, can confirm. Doltishness and lack of self-awareness re: the same sorts of things the consult on for others were especially surprising to me.

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

#97

Post by kortilla » Thu, Dec 05, 2019, 7:21 PM UTC

mountainofdeath wrote: post #82

mips_avatar wrote: post #43

Earlier quoted context omitted.

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.

> It's a filter that proves someone who worked there is smart and hardworking.

Disagree

> It also explains their virtually universal requirement for an Ivy league (or similar) background.

This is all it is. It’s an indicator that you played the connections game well enough to get into an Ivy and kept up the skills after graduating.

You don’t hire from them for hardworkers. You hire from them for connected people.

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

#98

Post by xnyan » Thu, Dec 05, 2019, 7:22 PM UTC

crazygringo wrote: post #75

gowld wrote: post #65

Earlier quoted context omitted.

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.

Well, it's not just that. Basically they need a bunch of people who are really good at ingesting a ton of data, analyzing it, and summarizing it. Turns out those are exactly the same skills involved in writing academic papers, which gets you good grades. So these people really are statistically disproportionately the people in Ivy League schools and similar who also got high GPA's in those schools. So there's some re…

Is there any empirical evidence of the claim that ivy league and similar grads are objectively better analytical writers than the mean college grad, and if so, how much better? How is that quantified?

The only conclusion you can always make about someone who graduated from a prestigious college is that many people will find this impressive. That's not to say this has no value, clearly it does.

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

#99

Post by sbuttgereit » Thu, Dec 05, 2019, 7:23 PM UTC

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.

I have been on the "client" side of consulting engagements and a consultant myself. I think you identify the central truth of consulting: that usually we're not bringing any magic knowledge to the table.

However, I think there are other circumstantial values that appear alongside the one you identify. I find that consultants not only provide cover, but also provide a level of focus on non-immediate, but important, problems that doesn't otherwise materialize on its own. Nobody wants to be seen wasting the highly paid consultant's time so you often get people paying attention when they might not otherwise. There's also setting the stage for what ends up as a sort of professional group therapy sessions and with the consultant as a mediator. I think you touch on that, but maybe I see some greater emphasis on that bit.

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

#100

Post by bsder » Thu, Dec 05, 2019, 7:24 PM UTC

globuous wrote: post #48

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 ! 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 ^^

> Its easier to justify restructuring because mbb said so than because the company says so for some reason

Is it a legal thing? European regulation tends to be quite aggressive when people get laid off, so I imagine that an external assessment helps give some cover for that.