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

#261

Post by ACow_Adonis » Thu, Dec 05, 2019, 11:51 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…

Except the consultants don't always put forward the one best solution, they put forward the solution of the person paying the dollars.

I remember one awkward situation i was familiar with where two diametrically opposed groups both notionally hired the same consultancy firm to write their respective proposals/submissions.

No points for guessing whether the consultancy offered the same advice...

Funny in one sense, but only because if you don't laugh you'll cry...

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

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Post by braythwayt » Fri, Dec 06, 2019, 12:00 AM UTC

slg wrote: post #143

braythwayt wrote: post #133

Earlier quoted context omitted.

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.

Speaking as a frequent commenter and author, I suggest this is teh system working as intended. There are not letters to the editor you put in in envelope and mail away.

When HN "published" your letter to the editor, it's not printed on atoms and distributed all over town, or mailed out to subscribers.

You can post a comment, edit it, and maybe even fix something based on feedback. I suggest that without being completely slipshod, it's better to go ahead and make a comment when you have a coherent thought.

The community will help you sort out any spelling, grammar, or attribution hiccups. I think this is a good thing for everyone, reducing friction and eliminating even self-gate-keeping.

Mixing up two homophones is not a tragedy. Someone not contributing because they fear that they'll be snubbed for getting a word wron? That's a tragedy.

JM2C, &c.

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

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Post by TrackerFF » Fri, Dec 06, 2019, 12:08 AM UTC

MFLoon wrote: post #200

Sort of a buried lede here. There's nothing shocking about overpriced, underdelivering consultants. But the bit about how the GSA is essentially profit sharing with said overpriced consultants at the expense of the rest of the government and taxpayers, via the IFF incentive structure, is pretty mind blowing. Another brilliant financial "innovation" by the Clinton Administration that's been quietly burning billions of…

McKinsey, Bain, BCG, et. al. are all extremely close to state and industry in all countries.

I'm from Norway, and every now and then someone will publish articles about the governments exorbitant use of consultants (McKinsey at that) for seemingly menial tasks which should be handled internally.

Truth is, these management consulting firms have some very good advantages to keep their business model going:

1) Their alma matter is spread all over the world, usually in the upper management.

2) They get highly detailed information from all sides, and can tweak their best practices accordingly.

3) They take the blame, so as others have mentioned, they're basically a million $ CYA insurance for both politicians and executes alike.

You could remove incentives like those mentioned, but I'm sure they'll find some other way to make money. They're so tightly integrated, and in so many places around the world, they probably have hundreds and thousands of strategies up their sleeves.

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

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Post by spamizbad » Fri, Dec 06, 2019, 12:09 AM UTC

underdown wrote: post #212

spamizbad wrote: post #135

Earlier quoted context omitted.

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.

Sorry to hear that. Hope things worked out.

It did! I wasn’t even super pissed about it, was just the straw that broke the camels back

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

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Post by sjg007 » Fri, Dec 06, 2019, 12:14 AM UTC

kube-system wrote: post #149

sjg007 wrote: post #132

Earlier quoted context omitted.

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…

Yeah... I don't really subscribe to this viewpoint. I think it's a meme at this point. "Politicized" is a trope in my opinion.

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

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Post by solveit » Fri, Dec 06, 2019, 12:23 AM UTC

opencl wrote: post #229

crazygringo wrote: post #217

Earlier quoted context omitted.

If you look at entry-level consultant salaries at McKinsey and then divide by the fact that they're often working 7-day, 100-hour workweeks... you'll quickly discover that your "23 year old snot" is actually making around minimum wage on an hourly basis. They could be flipping burgers instead with a lot less stress. The consultants aren't the ones taking the money home, the firm is. So don't blame the 23 year old. He…

100 hours a week at federal minimum wage is less than $38k. These people are not making anything remotely close to minimum wage.

But federal minimum wage ($7.25) is a lot smaller than, say, the NYC minimum wage ($15), which is more relevant. At the NYC minimum wage, 100-hour work weeks get you about 80k a year, which is about the base pay for an undergraduate new hire at McKinsey.

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

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Post by Nicholas_C » Fri, Dec 06, 2019, 12:34 AM UTC

cafard wrote: post #123

I 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?

The Astros’ current general manager Jeff Luhnow worked at McKinsey before he got into baseball.

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

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Post by TrackerFF » Fri, Dec 06, 2019, 12:43 AM UTC

Aunche wrote: post #103

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=... .

If the underlying assumption is that you can mainly attract top talent through high salaries / compensation.

I think we need to acknowledge that "top talent" is going to go other places, driven by other incentives. The academic world is filled with "top talent" that work for a measly salary, compared to the industry, because they have more freedom - and can work on what they want.

Or you have the military, which operate with a caped base salary for around $180k for their 4 star generals / admiral. It's hard to argue that the top 0.1% talent in the military are any worse than their peers at high-paying companies.

People choose different jobs / industries based on their own incentives. The smartest and most driven person I know is currently a post-doc earning $70k while doing cutting edge research in Deep Learning. He could easily be making 5-6 times that, if he just joined the industry...but he's content. /anecdote

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

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Post by thundergolfer » Fri, Dec 06, 2019, 12:47 AM UTC

sjg007 wrote: post #243

thundergolfer wrote: post #238

Earlier quoted context omitted.

Why would you expect that? He’s been given opportunity to acknowledge the problems with McKinsey and he has avoided the issue.

Do you have a reference? I’d be interested to read more about it.

Here it is: https://nymag.com/intelligencer/2019/02/a-long-talk-with-dem...

I originally came across these comments of his when reading the piece written about him in Current Affairs.

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

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Post by connicpu » Fri, Dec 06, 2019, 12:47 AM UTC

excursionist wrote: post #180

speby wrote: post #162

Earlier quoted context omitted.

Thats because there is 0 additional marginal cost for their salaried consultants' time, too. Like many in the workforce, they are a paid a salary, and it's the same amount whether working 40 hours or 80 hours.

Isn't unpaid overtime illegal?

It's only illegal if your total salary would work out to less than minimum wage. Working 80 hour weeks year round at WA's 2020 minimum wage works out to $70k a year if you include time and a half after 40hrs/week.