Why top firms fire good workers

That shouldn't be happening. This is managerial incompetence normalized. Why does the management of a company not trust its own people? They should have hired their people from "the outside" already. The correlation you're seeing is people who are not leaders but bosses in charge of teams. Good leaders don't need external validation, they either trust their team or make the problem fully outsourced to an external team like a consultant firm.

> all the work I've ever seen done by Deloitte, McKinsey, or PWC was mediocre at best

That tracks with my experience. Everyone I've met whom I know are competent at what they do have had similar remarks on these firms.

From my observation, they are part of a larger endemic issue of metric-chasing. They come up with a list of check boxes where if you follow them like a formula you'll achieve measurable results. Everything they do revolves around measurements and meeting measurement targets.

The problem is, when targets aren't met, then their method and advice is put into question. Therefore there is a perverse incentive at play where on one hand they do really want you to succeed, but on the other hand getting into the weeds and figuring out why you can't meet the targets deviates from their check-list approach. It will look like they advised you to do something, and now they're telling you you should do something else, it will look like they don't know what they're doing, and the one cardinal rule of consulting is you never say you don't know (or appear like it). The result is they water down what needs to be done, and they'll be flexible with interpretations of what counts as measurable.

In summary, I would like to say there is a place for these firms, but I won't, because I don't know if that is even true. I'll say that an outside firm will never have your company/team as their #1 priority; there will absolutely and without exception be scenarios where it will be a conflict of interest for them to do something that will benefit your team/org.

And using these companies to justify decisions, or back up decisions.. that again is part of the leadership endemic. People who do that are not leaders. They're bosses covering their own you-know-what. My opinion is that they facilitate poor/weak management culture.

Talent-wise, there is no doubt they hire the most talented and experienced people. But it almost feels like hiring a navy seal to be your personal trainer, but if you do what they say and you're not seeing results, they're not allowed to figure out what really is happening and correct their own advice. And to start with, they won't even aim to make you look like a navy seal, but work out some formula most people can work with, so the whole navy seal thing is just for show anyways.

Sorry for rambling on, maybe I'm too biased with my own experience here.

EDIT: I just wanted to add: If any company is firing the bottom performers, their management don't understand the problem of perverse incentives. Actual performance no longer matters, performance that can fool the measurement system sufficiently enough is what matters. The metrics will look good, revenue will be mediocre and long term sustainability will degrade. Good or bad, metrics and measurements shouldn't be used to make decisions, they can only be used to ask questions! An employee can have bad metrics if they're spending all their time helping other team members or solving yet-to-be-measured problems. Matter of fact, I would even dare say that metrics/measurements/KPOs shouldn't even be considered at all unless goals aren't being met. If your golden goose is laying bigger and bigger eggs, don't perform explorative surgery on it.

The top employee is probably getting noticed and headhunted by the clients.

The top employee is probably getting pissed off at the mediocrity surrounding them, and annoyed at constantly having to share credit for their hard work with their bad manager who did nothing.

The top employee quickly realises that this is a badly-paid gig, and plans to spend the minimum time doing it that will confer the necessary Resume points.

The worst employee has no other options, is scared of losing this gig because they struggle to find other gigs, enjoys being able to hide their mediocrity in the team, and will stay as long as possible. They'll probably end up being promoted.