$1M for a six week “EM plus two” engagement is on the high side, but it’s about par for the course for most McKinsey contracts. The standard is usually $500k-$1M for that kind of engagement. I think this is kind of a non-story for anyone who is actually familiar with the consulting business model. The brand is all McKinsey really has, and they are very quick to offer free engagements to protect the brand if true value isn’t being delivered.
Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
131–140 of 328 posts
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#132I 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 don't subscribe to this viewpoint. You have to have the clout to bring in the consultant in the first place. Now it may be a buy vs build decision and you are looking for advice on the buy side but I don't see it being about political cover when your "reputation" would be tied up with the consultant.
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#133Earlier quoted context omitted.
Wasn't sure if this was an autocorrect problem, but if it wasn't, by "exasperated" did you mean "exacerbated"?
Yep, although I can't blame autocorrect. I simply spelled it wrong and lazily chose the first suggestion from the browser's spell checker without giving it much thought. Thanks for the heads up. Ironically the situation is exacerbated leaving the person exasperated.
Also /s/moral/morale, although they can be closely related: People imposing immoral policies definitely create bad morale!
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#134Earlier 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 ^^
> 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.
It's both. In France for example, there isn't a sane and legal way to unilaterally lay off a permanent worker.
However there are provisions that allow a company to lay off whole percentages of its workforce if the company is planning to face financial difficulties or similar. This has to be justified somehow so better get external reports to cover your ass.
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#135Earlier quoted context omitted.
>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 solu…
Wouldn't one enjoy some benefits from being proven right?
I've been in this position. The feeling of satisfaction wears off in a few minutes. My resume was updated later that week and I was on to the next adventure within two months.
And this was with a DR who stuck up for me and mentioned to the CEO directly that we paid a consultancy big bucks to tell us something a chorus of engineering team members have been saying for years.
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#136I 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 the political cover to make changes they wanted to make all along
There is a difference, sometimes subtle sometimes not so
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#137Earlier quoted context omitted.
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.
This assumes you don’t have gridlock in the House/Senate, so it’s a bad idea. We already have govt shutdowns when we can’t pass a budget, imagine if a law that legalized gay marriage was allowed to expire, or one that granted people health care or immigration status. Even if a non-discrimination law only expired for a short period of time, that would be enough to do real damage to people’s lives.
Gridlock problems are particular to two party systems. A modern constitution would also include voting methods that don't result in a two party system.
You could also reduce the risk by the constitution itself being exempt from sunsetting and enumerating crucial rights and services therein.
Anyway it's not something that's ever going to be implemented anywhere, so it doesn't really matter if it could work.
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#138I 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.
There's another piece to it too: they are able to legally sell trade secrets between organizations. They update their "knowledge base" every engagement and become "specialists" in the field.
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#139The 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?…
I might just be dense, but I don't fully understand how the IFF was supposed to work. What was its intended effect? Is it just a tax that the contractors have to pay on spending the government's money, to disincentivize them to spend that money?
It was intended to make the GSA self-sustaining in budget terms. Under the old system, the costs of running the GSA came out of the Federal budget. The goal back in the '90s was to reduce expenditures in order to cut down the budget deficit. IFF let them push the cost of running GSA off of the Federal budget, by pushing it onto the budgets of the vendors winning GSA contracts.
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#140I don't remember seeing HN articles about McKinsey before this month or last. Now there are three articles about McKinsey on HN, including one that says that the Houston Astros' sign-stealing exemplifies the decline of a McKinsified America. (Or maybe it's the Astros that are M'd.) How did it become the flavor of the month?
I would like to know too, thought it was Baader–Meinhof effect.