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

#101

Post by shantly » Thu, Dec 05, 2019, 7:25 PM UTC

jgeada wrote: post #93

irrationalactor wrote: post #53

Earlier quoted context omitted.

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…

I'm not sure how it is in other countries, but at least here in the US there's this cultural tendency to want to crush anyone who's made any kind of mistake, or even made the right decision but happened by chance to have had something go wrong in a way that could have been avoided with a different decision, if they can be blamed for it, but also to accept paper-thin excuses for why a person who might be held responsible can't, in fact, be blamed for it, and once blame has been so laundered enough times we just forget about the whole thing. It's completely weird, really expensive, and ethically gross. And it's present at every level of our society, just about everywhere.

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

#102

Post by mixmastamyk » Thu, Dec 05, 2019, 7:26 PM UTC

alexchamberlain wrote: post #41

> ... Work of a 23-Year Old This really bothers me. I understand the point of the article is that they're charging a lot of money for an inexperienced consultant and no bias (discrimination) was meant, however, age is irrelevant. There are a lot of very "experienced" 23 year olds, as long as you're asking them about the work they've done. There are a lot of people in their 50s with very little experience (as their ac…

There's a lot of truth to this, but the fact remains that a 43 year old will have twenty additional years of experience in life and various fields, not merely a narrow subject. This can improve a project's chance at success.

For an example young folks can relate to, rate your current self against self-five_years_ago for an important task.

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

#103

Post by Aunche » Thu, Dec 05, 2019, 7:26 PM UTC

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…

The director of the NSA gets a modest salary of $180,000. That's roughly the comp of an associate at Mckinsey or entry level at a FAANG. I doubt that they can attract the top talent with the amount they're paying.

https://cryptome.org/2014/03/nsa-salaries.htm#:~:targetText=....

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

#104

Post by surak » Thu, Dec 05, 2019, 7:26 PM UTC

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...

I don't want to personalize the comment. But in Europe there are many examples where McKinsey implement a model to fix the money distribution problem. At the end, society gives up the culture and ideals. While the ppl get short handed the partners get a bonus. Still, I think this is mostly a problem of bad public leadership that is not approachable.

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

#105

Post by beambot » Thu, Dec 05, 2019, 7:26 PM UTC

crazygringo wrote: post #66

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.

It's exactly this. Within any organization, you can have 3 or 6 important people pushing in completely different strategic directions. And it can be clear to any unbiased observer that there's only one good, responsible choice, but within your org that gets met with essentially "but that's just your opinion , man". So you call in a consulting firm and they deliver what most of the people already know. The consultants…

"Referee" is too unbiased a word. Shocking how frequently the consultants' conclusions mirror the arguments posed by the side that pays their fees.

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

#106

Post by mumblemumble » Thu, Dec 05, 2019, 7:27 PM UTC

mumblemumble wrote: post #39

Vaslo wrote: post #20

Had a lot of experience with McKinsey doing projects at my company at different levels I’ve been in throughout it the years. When it’s highly technical things like implementing a new technology you know nothing about or a new manufacturing footprint that is tangible to perform, they do good work. Anything “Strategic” or fluffy I find a waste of time. They are excellent salespeople and do a lot to calm the C-suite but…

Doesn't seem surprising. If it's implementing a specific technical process, there are measurable outcomes that must be met, and your client will know whether or not you met them. Senior leadership contracting an outsider to tell them how their own industry works and explain their place in it, though, is right up there with asking the Psychic Friends Network for career advice. They're just begging to be taken for a ri…

I'm realizing that I should temper my cynicism.

"Senior leadership contracting an outsider to tell them how their own industry works and explain their place in it" might be a straw man. Strategic consulting could just as easily be, "We're considering expanding into this new market that we don't know as well, and we're hiring a consultant who specializes in that." Or, a previous employer hired a consultant for guidance on how to prepare the company to be sold.

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

#107

Post by slg » Thu, Dec 05, 2019, 7:28 PM UTC

crazygringo wrote: post #66

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.

It's exactly this. Within any organization, you can have 3 or 6 important people pushing in completely different strategic directions. And it can be clear to any unbiased observer that there's only one good, responsible choice, but within your org that gets met with essentially "but that's just your opinion , man". So you call in a consulting firm and they deliver what most of the people already know. The consultants…

>Also, this lets the CEO appear unbiased to all the people who "lost". So they can get on board with the new policy but not feel like the CEO shot them down personally, which is bad for morale, can lead them to quit, etc.

The flip side is that it is also bad for morale for someone to be recommending a solution for some time, the recommendation is ignored, a consultant is hired, the consultant recommends the same solution, and then the recommendation is implemented. This is exacerbated when the consultant's fee is some large percent or maybe even a multiple of the salary of the person who originally recommended the solution. It makes the original employee feel worthless and doubt the leadership's ability to properly evaluate solutions.

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

#108

Post by jshaqaw » Thu, Dec 05, 2019, 7:28 PM UTC

jshaqaw wrote: post #95

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…

By the way, this is not to denigrate the analysts at McKinsey who were in my time typically very smart, nice, hardworking, etc... They performed an important data gathering function. But the bill for their time has the sort of relationship you get when a Legal Assistant at Cravath photocopies stuff in your file. No they aren’t “worth” $500k/hour or whatever rate they bill at these days to photocopy but that isn’t the point. You are paying for Cravath and how that Cravath fee is broken down is largely irrelevant.

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

#109

Post by [deleted] » Thu, Dec 05, 2019, 7:29 PM UTC

xnyan wrote: post #98

crazygringo wrote: post #75

Earlier quoted context omitted.

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.

[deleted]

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

#110

Post by ramzyo » Thu, Dec 05, 2019, 7:30 PM UTC

Lost me at the end ... took an otherwise detailed and nuanced analysis and concluded it with a broad generalization that smooths over all of the detail and nuance.

“At any rate, at some point decades ago, we decided that most political and business institutions in America should be organized around cheating people. In this case, the warped and decrepit state of the GSA leads to McKinsey-ifying the entire government. Mr. Clinton, you took a fine government that basically worked, and ruined it. McKinsey sends its thanks.“