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

#241

Post by pseudalopex » Thu, Dec 05, 2019, 10:39 PM UTC

naravara wrote: post #209

slg wrote: post #107

Earlier 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…

>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 solution, and then the recommendation is implemented. Speaking as a consultant, my experience has been the opposite. I have walked into many organizations, said , and been hailed as a hero by the handful of folks who had been…

The "told you so" afterglow wears off when the people they told take credit, get bonuses, and still don't listen.

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

#242

Post by sjy » Thu, Dec 05, 2019, 10:39 PM 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?

Matt Stoller has been pumping out issues about government contracting over the past few months, and they’ve all been popular on HN. McKinsey is the archetypal management consulting firm and the role of consultants is an important part of any discussion about the concentration of market power. Often comment on these issues concerns the tech companies many HN readers work for.

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

#243

Post by sjg007 » Thu, Dec 05, 2019, 10:47 PM UTC

thundergolfer wrote: post #238

sjg007 wrote: post #148

Earlier quoted context omitted.

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

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.

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

#244

Post by bumby » Thu, Dec 05, 2019, 10:48 PM UTC

ndarwincorn wrote: post #227

bumby wrote: post #216

Earlier quoted context omitted.

I get the impression some of the commenters don't really have experience with government contracts on either the public or private side. The IG report points out real problems, but I think people are extrapolating too far because they don't truly understand how contracts are awarded via the GSA schedule. I think people are confusing being awarded a listing on a GSA schedule with an actual order. Being on the GSA sche…

I get the impression you're over-simplifying this and grasping for whatever assumption you need just to try to make your point. While some of us have run with my oversimplification, there are plenty of comments in this sub-thread about down-selecting. Your answer to that is a giant assumption on what the article (which again is rigorously sourced) 'implies'. > The article also implies other contractors are also liste…

If anything, my intent was to guard against the oversimplified conclusions by adding some nuance. I concede the point that it's larger than just McKinsey. But it seems like people are extrapolating to make a point that the government is forced into picking between just a few favored firms. That point is central to the author's larger theme about the politics of monopolies. The issue I have is, while there seems to be some graft, it doesn't mean there is a monopoly. In the same vein:

> They're awarding the bid to an already-short list

This makes it sound like the GSA is forcing agencies to select from a small handful of contractors from a list catered to make the GSA the most money. I don't think it's actually true and it seems like it's inferred from the article without evidence. There are literally thousands of vendors just in the IT Services schedule mentioned in the article[1].

What seems more likely is what another commenter stated. Agencies select the excessively expensive McKinsey because they are essentially buying social capital.

Edit: there’s actually over 13k vendors listed under IT services [2]

[1]https://www.gsa.gov/technology/technology-purchasing-program...

[2] https://www.gsaelibrary.gsa.gov/ElibMain/scheduleSummary.do?...

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

#245

Post by sjy » Thu, Dec 05, 2019, 10:49 PM UTC

codesforhugs wrote: post #81

smacktoward wrote: post #26

Earlier quoted context omitted.

In terms of lawmaking, the usual way to deal with this problem isn't with front-end analysis, but rather by adding a "sunset provision" (see https://en.wikipedia.org/wiki/Sunset_provision ). That's a clause in a bill that requires it to be re-authorized periodically in order to stay in effect. If a law with a sunset provision ends up causing unintended consequences, then lawmakers can let it die just by doing nothing…

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.

Would you apply the same rule to a software codebase? Perhaps if nobody can be bothered refactoring that code, it’s not needed anymore and should just be deleted?

Sunset provisions are a pain for anyone who administers the law or makes plans for the future based on it. Laws that depend on the current date are bad, and stable legal institutions are good. That’s why we incrementally “reform” the law, rather than periodically replacing it like some depreciating asset.

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

#246

Post by MFLoon » Thu, Dec 05, 2019, 10:51 PM UTC

l5870uoo9y wrote: post #230

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…

It is not only a US pattern, go to every major European capital and the consultancies will be located right next to the ministries.

I'm sure they are, but do the European governments equivalent of the GSA also have incentives to actually drive up the price of consulting contracts they source for their governments? It's not just the coziness that is concerning, but the particularly perverse incentive structure that essentially makes the GSA an inside agent of the consulting industry.

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

#247

Post by luma » Thu, Dec 05, 2019, 10:55 PM UTC

sailfast wrote: post #219

luma wrote: post #207

Earlier quoted context omitted.

As a consultant I like to flip this situation around, and let the internal staff who are already advocating for the direction I feel is best to be my biggest cheerleaders. Engage them early, let them know you're there to help them personally, and they'll help you do a better job when presenting your shared ideas to the brass.

But... it’s not your shared idea. It’s their idea, and the company didn’t have a process in place to let them present it except through your consulting engagement. Sure, if it’s a good outcome for the employee to work with you to get things implemented fine, but it still stings a bit that someone from the outside was trusted more than an invested employee before any traction occurred. See also: “let’s hire a consulti…

I don't control the situation I've walked into and the events preceding, but I can control the outcomes. I'm not there to take credit for other people's work, but if management isn't on board with their ideas, I can oftentimes help to frame the message so it will be better received. If the "rank and file" is willing to work with me, I'm going to bend over backwards to make sure they have a seat at the table and that their existing work is recognized. I get paid either way so there's no point in trying to take all the credit.

I understand that, as the employee whose ideas have gone unheard, this whole situation may be perceived as a ridiculous waste of time and money. Sometimes it actually is. It might be management's own inability to discern good ideas from bad, a poor understanding of the business or technology problems they face, the solutions available on the market, or lack of trust in their own staff.

More often it's simply managers looking for a broader perspective from an outsider who has engaged other organizations with similar business and technology problems. I start with the understanding that they're sincerely looking to do the right thing until they give me reason to believe otherwise.

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

#248

Post by hogFeast » Thu, Dec 05, 2019, 10:59 PM UTC

iudqnolq wrote: post #113

jshaqaw wrote: post #95

Former McKinseyite here (and one reasonably skeptical of the firm as a whole)... nobody hires McKinsey for fresh college grads. That’s just something they tell fresh top of class Ivy League college grads to make them feel important. Clients hire Directors to give them peer level strategic counsel. How they technically allocate payment for time across consultants is just backfillling to get to a number already agreed…

I'm trying to parse the phrase "peer level strategic counsel". Does it mean advice as good as the advice we're giving other firms like you?

Your mistake is trying to "parse". I am sure the phrase has meaning - it, presumably, means take advice from someone with the same social status - but at any deeper level it is quite meaningless. Don't bother. It isn't worth it.

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

#249

Post by hogFeast » Thu, Dec 05, 2019, 11:15 PM UTC

Vaslo wrote: post #20

Had a lot of experience with McKinsey doing projects at my company at different levels I’ve been in throughout it the years. When it’s highly technical things like implementing a new technology you know nothing about or a new manufacturing footprint that is tangible to perform, they do good work. Anything “Strategic” or fluffy I find a waste of time. They are excellent salespeople and do a lot to calm the C-suite but…

A question I have asked myself a few times as the guy who has to work out whether to invest in the guys hiring McKinsey: if you need McKinsey to do "technical" work for you then why am I giving you money?

Strategy is very useful...but, again, McKinsey know almost nothing about this too. In my experience, capital allocators are born not made. The idea that you can be a strategic genius without ever taking any risk yourself (i.e. the kind of person who goes to the colleges McKinsey hires from) is just wrong.

And the funniest thing about McKinsey is they are, apparently although not so much anymore, arch capitalists but largely exist to milk money from the principal-agent problem. McKinsey is the problem.

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

#250

Post by slowhand09 » Thu, Dec 05, 2019, 11:16 PM UTC

sailfast wrote: post #219

luma wrote: post #207

Earlier quoted context omitted.

As a consultant I like to flip this situation around, and let the internal staff who are already advocating for the direction I feel is best to be my biggest cheerleaders. Engage them early, let them know you're there to help them personally, and they'll help you do a better job when presenting your shared ideas to the brass.

But... it’s not your shared idea. It’s their idea, and the company didn’t have a process in place to let them present it except through your consulting engagement. Sure, if it’s a good outcome for the employee to work with you to get things implemented fine, but it still stings a bit that someone from the outside was trusted more than an invested employee before any traction occurred. See also: “let’s hire a consulti…

My boss' (we were internal consultants) mantra was "we can accomplish anything if we don't get hung up on who gets the credit". She is one of the best I worked for.