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Have McKinsey and its consulting rivals got too big?

economist.com

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Re: Have McKinsey and its consulting rivals got too big?

#131

Post by ziptron »

terminalbraid wrote: post #91
mentalgear wrote: post #82

It's not just that they're too big—it's that they're morally corrupt and largely unregulated. These firms have been involved in everything from tobacco lobbying to the 2008 financial crisis to pushing opioids, and that’s just scratching the surface. Despite their role in these crises, they’ve faced zero accountability and continue to rake in massive profits. As for their supposed value (which comes directly from ex-e…

> they’ve faced zero accountability https://www.insurancejournal.com/news/national/2024/10/18/79... Is that not an example of accountability directly for the things you're complaining about?

Since this is reported on by "Insurance Journal" it makes wonder how much of this fine was paid for by their liability insurer. Does anyone know? Presumably they have no coverage for illegal activities, but they never agreed they did anything illegal.

Re: Have McKinsey and its consulting rivals got too big?

#132

Post by aswanson »

burnte wrote: post #116
OptionOfT wrote: post #61

It was a really interesting place to work at a Software Engineer. It made me understand the business. It made me understand that doing the right thing isn't valued. You do the thing that has the shortest ROI. It also made me realize that it is horrible to build software with people who expect short term deliveries like the usual McKinsey engagement. People who expect that the automation of an Excel file takes the sam…

I work with a guy who used to be at McKinsey. He's literally the worst coworker I've ever had. Everything needs to be done yesterday, except he takes weeks between responses. He delegates nothing to his people, and constantly tries to take over things from other departments, making himself an INCREDIBLE constraint and burden. They have an insanely toxic culture there.

That cant be good for his health.

Re: Have McKinsey and its consulting rivals got too big?

#133

Post by chasd00 »

noleary wrote: post #32

Used to be at BCG. I think it's worth bearing in mind that relatively little consulting revenue -- even at the top strategy shops -- comes from pure strategy work anymore. You can push much, much more volume and absolute impact through by running big merger integrations, digital transformation, and other large scale change projects at big companies. It is basically a better business to become something like a premium…

> It's just not great business to be a boutique consultancy, I think.

You bill per hour and there’s only so many hours to bill and your rate can only be so high. The only way to scale revenue is headcount so you can bill more hours.

It’s like handling radioactive dynamite but I think a boutique firm specializing in fixed price projects could make a decent amount of money. You have to be really really good though because one bad project contracted at a fixed price could mean lights out.

Re: Have McKinsey and its consulting rivals got too big?

#134

Post by thaumasiotes »

samdung wrote: post #58

I have a small story about McKinsey from friend of mine in the Indian Bureaucracy from about 10-12 years ago. McKinsey was doing some work for their dept. I asked him what they did. He said, "McKinsey asked us for lots of information. Then they put it into a dossier and gave it back to us."

> McKinsey was doing some work for their dept. I asked him what they did. He said, "McKinsey asked us for lots of information. Then they put it into a dossier and gave it back to us."

Shifting context a bit, I used to experience school classmates complaining to me about some problem they had, and, when I repeated their information back to them, thanking me for being helpful.

That didn't feel like it was helpful to me, but other people seem to disagree. This can't even be explained by the internal communication barriers that exist within large organizations - an organization of one person has no such barriers.

Re: Have McKinsey and its consulting rivals got too big?

#135

Post by whatever1 »

throw4950sh06 wrote: post #125
whatever1 wrote: post #112

Earlier quoted context omitted.

Which kinda makes sense. The work of an SWE at big tech can bring in a ton of cash due to (almost) infinite scaling of software and (almost) zero marginal cost. But as an SWE at a manufacturing company, how much can your work increase their revenue/profit? The bulk of their income is still coming from the widget/commodity they are producing.

I mostly agree, but for sake of honest discussion... Why are the mechanical/electrical engineers also not paid well at these companies? Even at these companies capable of achieving massive scale with new products they design. Think something like 3M, making billions of units of widgets and commodities.

Depending on their profit margins and the talent scarcity they do pay.

A seasoned cheme at oil and gas was easily pulling 300k + 2M pension + 10% 401k match

Re: Have McKinsey and its consulting rivals got too big?

#136

Post by FredPret »

lenerdenator wrote: post #126
jncfhnb wrote: post #97

Earlier quoted context omitted.

I thought for sure it was war in Europe, bubbles burst in Chinese real estate, and a general fracturing in the west vs the rest globalization but ok

And we've faced more headwinds than that before. The difference is, before, people had at least some confidence in their ability to make a living. We've whittled down the average person's wages and job security to the bone and when people don't feel secure, they don't spend, or maybe they do, but they put it on the card... which is another problem and story unto itself. And places like McKinsey are a part of the knif…

What data are you looking at that shows decreasing wages and spending?

Re: Have McKinsey and its consulting rivals got too big?

#137

Post by alkonaut »

betaby wrote: post #99
alkonaut wrote: post #57

The big firms just need to be big and known. There value delivered isn’t in the PowerPoint explaining that cutting costs and increasing revenue will increase profits. The value added is that companies buy a stamp from a famous firm when they deliver staff cuts, reorganizations or other controversial news. As such it doesn’t really hurt to go for scale. They’re a standards org for headcount reduction.

Why though? Why a company with a board, which is already independent, would need some consulting? Isn't the board to convey ideas to CEO?

It's always nice to point to a third party and keep blame from c-suite or board.

Re: Have McKinsey and its consulting rivals got too big?

#138

Post by kayo_20211030 »

What's interesting to me here is that in the period 2013-2023, only E&Y, KPMG and McK of the "great eight" moved up or down in the ranking, and they only moved around in the 4 through 6 spots by tiny revenue amounts. Maybe that was a max scale decision on the part of those companies' management. On the other hand, I'd love to know the yield per employee. That would be an interesting read.

Re: Have McKinsey and its consulting rivals got too big?

#139

Post by graemep »

lysace wrote: post #124
seabass-labrax wrote: post #86

Earlier quoted context omitted.

Historically speaking, it's common to both UK and US English because it predates the European colonization of America: http://www.miketodd.net/encyc/gotten.htm Personally, for a situation like this I'd use the somewhat more formal 'become' instead!

Agreed. "got" is more informal and less universal across variants of the English language than "become". Bad editing.

Given "got" is used in both British and American English and "gotten" is used only in American English (I do not think it is used in other variants either) I do not agree about "universal"

Re: Have McKinsey and its consulting rivals got too big?

#140

Post by chasd00 »

swiftuser wrote: post #121

The mentioned memo can be read here: https://web.archive.org/web/20240316081510/https://obligatio... McKinsey has been doing "silent layoffs" in the last few review cycles, i.e., shrinking overall headcount after performance reviews – as there's not enough work to go around. Hard do meet the bar for a one-year BA, if you've only been on 1-2 studies – which is not exactly your fault.

All of consulting has been doing this for a while. Interest rates went up and fears of recession made companies pull back on spending. That hits consulting pretty hard. Usually consulting does well when things are going so bad you need the expertise no matter the cost or when things are nice and stable and you want to try something new. Anywhere in-between is hard times.
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