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

mattstoller.substack.com

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

#141

Post by jkestner »

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…

I know y’all want to repeat the whole thing about consultants we've all heard before, which sure, is “exactly this”, but the article goes much deeper, and is specific to the government.

Here, consultants are ripping off taxpayers because a Clinton-era rule financially incentivized the government to outsource work to “entrepreneurs”. This department is literally given a percentage of the money it gives to consultants.

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

#142

Post by kube-system »

beambot wrote: post #105
crazygringo wrote: post #66

Earlier quoted context omitted.

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.

Money is one thing, but there's also just plain old information bias. Politics don't go away when the consultants come in. The consultants are going to be working closer with the group that brought them in. It's not uncommon in my experience for the 'other group(s)' to ghost the consultants.

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

#143

Post by slg »

braythwayt wrote: post #133
slg wrote: post #125

Earlier quoted context omitted.

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!

Thanks. At this point I should probably go ahead and hire an editor to review my comments before publishing.

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

#144

Post by guntars »

johnnyo wrote: post #127
codesforhugs wrote: post #81

Earlier 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.

Other countries have solved this issue simply by automatically forcing an election if a budget is not passed. Their representative are somehow able to overcome ideological differences and pass legislation once their jobs are on the line.

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

#145

Post by abeppu »

On glassdoor it seems like that recent grad business analyst is taking home ~100k [1]. One of the articles earlier this week about McKinsey as "Capital's Willing Executioners" [2] talked about how the firm spreads a specific capitalist ideology.

Given that (in this instance), the company is charging a 30x markup for the labor of that recent grad business analyst ... should we be thinking of McKinsey analysts as misguided exploited workers?

[1] https://www.glassdoor.com/Salary/McKinsey-and-Company-Busine... [2] https://www.currentaffairs.org/2019/02/mckinsey-company-capi...

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

#146

Post by code4tee »

Have been on the receiving end of several McKinsey engagements.

The work itself was generally not all that good. The knowledge of “experts” brought into meetings rarely contributed more than what a reasonably intelligent person could dig up on Google search results in an hour. They were also often farmed out on random staff augmentation functions that just annoyed the hell out of people. “Hi I need you to fill out this excel spreadsheet with 35 columns so we can put a presentation together... oh and if you could do that by 6 PM tonight that would be great.” That sort of nonsense so they could produce some nonsensical 50 page PowerPoint deck that nobody read.

There were a few decent people there but by and large value was not generated. As others have pointed out a major motivator seemed to be to provide some C-level exec with CYA coverage to claim that programs being implemented were based on the advice of outside “experts.”

In the two main cases I saw the McKinsey strategy ended up being a total disaster that seriously damaged the company and the C-level exec that hired them in both cases got canned as a result so in the end even the CYA concept didn’t really work.

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

#147

Post by greggyb »

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.

An additional aspect is focus. By being expensive and not part of the normal reporting hierarchy, a consulting firm working on a project can have the luxury of focusing on just that project. This is a huge benefit.

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

#148

Post by sjg007 »

WhompingWindows wrote: post #83

Pete Buttigieg worked at McKinsey after his college days...which was only 10-15 years ago. I wonder if/how he was exposed to unethical practices and grafting like this...

If he was I expect he understand the issue and as President would work with Congress to reform the practice.

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

#149

Post by kube-system »

sjg007 wrote: post #132
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 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.

There are many projects where the build vs buy decision itself is politicized. Political rifts between business and IT is a story that is just as old as business software itself.

Super common scenario:

* The business thinks IT is too slow to implement, and doesn't understand business needs

* IT thinks the business changes priority too much and doesn't even understand their own business processes, and it's leading to technical debt because the demands of the business are half-baked

* So, the business brings in a consultant who says they will do everything they want, without any push-back, in half the time

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

#150

Post by TurkishPoptart »

organsnyder wrote: post #86
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 cu…

Very interesting. I'm part of a project to unify EHR systems for a number of giant hospitals in my area...all under Epic! The way they're selling it is "One patient, one bill, one record." There's all these Epic people running around, and they're all quite young and presentable, and they probably make some _killer_ slide decks. The funny thing is, our institution (a state body) actually hired some Deloitte people for their expertise. They told us to stick with Cerner, from which we're migrating. Nope, not gonna happen, we're too invested in Epic!
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