I see a disconnection here. Every once in a while we see a article criticizing management consultancy, yet the business is still booming and very powerful and sophisticated corporations still hire them. So, I'd assume that the consulting companies do offer some value, in fact billions of dollars of value. What are those values, then?
My working theory is that in many cases, it's one of those absurdities that are actually necessary because the world isn't always rational.
If you're the CEO, maybe you know exactly how your org should be restructured. But maybe it means stepping on a lot of toes and hurting people you have close relationships with.
If you get the blessing of management consultants you can at least say it's not personal.
Scapegoat as a service. You hire them to put a stamp of approval on any silly idea you have, implement it, etc. Then, if it turns out badly, well...it wasn't your fault.
I've always suspected that at least some of it is information laundering.
I used to work in engine development and calibration. There aren't many people who know how to do engine cal and it's incredibly important to get your engine emissions certified to sell in a market like the USA. The problem is that most people who know how to do it work for a car manufacturer (OEM). So when I had that on my LinkedIn I would get pretty regular messages from some consultancy or another offering hundreds of dollars per hour to chat with me about my expertise. Of course I couldn't go talk to a competitor but I'm sure a lot of engineers were happy to make a few hundred bucks chatting with some generic consultant who was writing a general industry report with anonymous data and background info.
Well the customer was usually a competitor or a foreign automaker exploring entering the US market. Everyone who could help them understand the timelines, cost, and process worked for their competitors. So the critical info got passed through consultancies into sanitized anonymized reports; laundering.
Note: I'm not sure whether talking to a consultancy would have violated my employment contract at the time but I never took the calls so I had no reason to look it up. I know that coworkers did and just called it a gray area. I pass no moral judgement one way or another.
It's self-propagating nonsense. In the immediate post-dotcom crash, I worked for a company that was run by a bunch of young HBS grads, who all had management consulting backgrounds, (and a few minor dotcom successes). They regarded themselves as geniuses. They couldn't make a decision on anything.
Their preferred working style was to not make decisions, and to hire consulting firms to make the decisions for them. So they hired these even younger consultants, who would work for a few weeks, and make their recommendations, and then those recommendations would not be put into action. No. Instead, more consultants were hired to review and then discard the work of the previous consultants. Rinse and repeat for a few cycles.
I cannot resist one story. The initial HBS/management consulting CEO was replaced by a new CEO, someone who had run one of the early search engine companies, and had a similar background. He turned out to be no better. What I found very entertaining about CEO2 was his business past. He was known for two decisions. 1) Declined to buy the very early Google for high six figures, when he had the chance. 2) Decided to buy Blue Mountain -- think Hallmark cards but online -- for $780M. Greeting cards. 3/4 of a billion dollars. 1000x the cost of Google at the time.
Yes, hindsight and all, but still. If I had made both decisions by flipping a coin, my expected value would far exceed what this business genius accomplished.
1. When I was 8, my mom told me that I got paid what my work was worth to society. When I was 12 she told me not necessarily. She said this: "You were only 8. I was trying to make it simple for you."
2. Management consultants get paid by shareholders to outsource blame for decisions made by management.
Private firms are entertainingly idiosyncratic in ways only founder-powered public firms barely approach. The other big one I find entertaining is Dr Bronner’s soap which has a massive label full of dense text that is totally stream of consciousness sentences. Amazing.
Perhaps it’s a characteristic of closed groups. SQLite has its moral code that is the Ten Commandments++. Good stuff.
Weird story ... Dr Bronner also appeared in the greatest unreleased movie ever made. With Bill Murray and Dan Ackyroyd and Liz Taylor's ex husband. And it was the only movie Dr Bronner appeared in according to imdb: https://www.imdb.com/name/nm0111462/
If a public co CEO acts differently than others and then underperforms the market, shareholders then look at rhe idiosyncrasy as a bad thing. So they naturally all start to act like each other. Buffett had a similar idea he termed the institutional imperative.
If you’re the private owner/CEO you just get to be steered by the customer, and can even stop growing if you want.
> The ruling stated that the supermarket chain founded in 1970 "cannot reasonably trademark the name of a country that has been around since the 9th century"
And then they came up with a brilliant term called "agile methodology". The word "agile" was a big selling point. Under the new methodology, there will be standup meetings and introspection every 5 minutes during the race.
I smirk and laugh this little slideshow and then remember that my own work involves internal tools to promote governance and productivity while formalizing requirements to two outsourced developers.
I don't think I'm one of the red team's 7 captains, but I don't exactly have my hands on the paddle every single day. After all, I can find the time to lollygag on HN between 9-5.
I think generalizations are usually bad. I genuinely am weirded out by management's fascination with consultants. It really is about incentives, and consultants usually do not have the right ones, at least the big ones. Also, there are management which feel like companies always need change, but really you have to examine the competitve position within the broader industry not just a vacumm. Things honestly stay the same for a long time. IBM had more revenue then Microsoft all the way up to the early 2010s. Switching costs are powerful - https://s-1.vercel.app/posts/why-dropbox-is-a-obvious-pe-tar...
I think a key takeaway is the human nature to constantly act, and not just sit and do nothing. Lot's of value in sitting around, especially in investing.
Generalizations are heuristics we build upon our experiences. Not 100% correct but a good mental model to adopt situationally.
You are shooting down the whole notion of generationalizion without much backing.
You gotta provide why it's bad instead of whataboutism direction you took.
Generalizations can be bad, yes. Everyone knows about management consultants ruining companies and governments, contributing to the opioid crisis, etc. But what else do they do?
Let’s crowdsource examples of management consultants delivering a huge amount of value to a company or society in a way that the company couldn’t have accomplished without them.
sometimes, employees are bad at their jobs, or organizations are unable to solve their own problems. people who have no long term loyalty or political agency within the organization can help resolve internal issues, provide external validation and new perspectives, and solve problems.
I tire of the snide arrogance of people like you; you think you can solve everything if you cared to. not every organization can afford to hire people as amazing and all knowing as you.
making talented people available on short contracts, for employers with terrible reputations who cannot hire the right people able to deal with ambiguity and short timelines can be a win win arrangement for both sides.
Are there issues across the industry, including misaligned incentives? absolutely. but that isn't a reason to dismiss the entire industry out of hand.
perhaps we should be equally dismissive of all software devs given the sheer amount of terrible software and predatory revenue models? or are we also going to blame some other faceless group for that as well?
My interpretation of the parable is really just that management consultants are paid to tell you what you already know and give you the conclusions you want to hear - hence why their "solution" is non-specific and the retrospective analysis vindicates what upper management already wanted.
It's also a criticism of management-heavy offices who have lost touch with reality, but consultants are a byword for such things, so I guess the title is succinct at the cost of accuracy.
Not gonna lie, the website of a remarkably ordinary frozen food supermarket found on most UK high streets is not where I'd expect to find this kind of content :)
Malcolm Walker, the founder and his son Richard Walker the current chairman are (for such an ordinary seeming supermarket) surprisingly progressive and have often spearheaded sustainability and corporate responsibility campaigns. Malcolm Walker was an active member of Greenpeace and Iceland worked with Greenpeace on several campaigns over the years.
Richard Walker tried to become a Conservative MP, but when no constituency party selected him as their candidate defected to Labour, who put him in the House of Lords.
I wish I new of more gems like this. Company sites that go into detail where they went wrong and how they turned things around make for both amazing reading and great educational material.
With all respect, I just downvoted you because you're becoming recognizable. Your account is scarcely a year old with almost no karma, and checking your profile right now, the first page of comments is all but one you posting a link to your own app. You gotta slow down. This is a discussion board, not a growth hacking mixer. Plenty of people become known for popular products and companies they're associated with, but it can't be all you ever talk about. The world at large isn't a sales conference and doesn't find that interesting.
At the possible expense of just linking every page of their dark ages saga, The Chief Executive's handbook is somehow even more mask off 'but really, just absolutely fuck that guy'.
Yeah, except profits are down from the peak. I do not know enough about the market, but my suspicion is that they basically benefited by focusing on a specific market, "Focus," and will basically see this erode over time as more companies in the high end move into their market.
Score-settling by the ousted (and then returning) CEO Malcolm Walker. After Iceland merged with Booker in 2000, Walker was pushed out and a new management team led by Bill Grimsey took over. Sales declined, head office staff ballooned and they hired a lot of McKinsey types. Walker's point is that they'd overcomplicated what was basically quite a simple business.
I worked for a public sector organisation around then that had the same chairman (not CEO) as Iceland, sorry, “the Big Food Group”. He was genuinely one of the most obnoxious, bullying people I’ve ever encountered - known internally as the Poison Dwarf. So none of this greatly surprises me.
Reading between the lines, you kind of get the picture...
2006
A spectacular turnaround sees a 10% sales decline turned into growth of 20% year-on-year by March 2006, making Iceland the UK’s fastest-growing food retailer.
2005
The Big Food Group is taken private and Iceland returned to the management of Malcolm Walker and other senior executives who had been ejected in 2001.
2004
The Big Food Group is nearing bankruptcy as provisions made in 2001 come close to exhaustion.
2002
Iceland-Booker is renamed The Big Food Group and launches a grandiose recovery plan (Click here to read the saga of ‘The one, two, three, four, five year recovery plan’) but customer numbers and sales remain in steady decline while costs escalate.
2001
New Iceland chief executive Bill Grimsey issues a massive profit warning, and Malcolm Walker and other senior managers are forced to leave the company
Thats a good point of view of the traditional Managment consultants, now for the "AI era", this type of interventions will not exist
Maybe now the Big coorp will finally get closer to real life solutions to the problems companies face
My company is "AI native" in the sense that even though we are not a tech company we are using it heavily to build a bunch of tech that makes us more efficient.
Think building better SaaS products around our actual process rather than whatever bespoke niche SaaS product provides. this has yielded real savings in both software costs and efficiency. Compared to our peers, we are light years ahead. Even the supposed "leading AI readiness consultants" hired by the group board agreed.
our board have still hired kpmg[1] or some other vague merchant to come and help us deliver "efficiencies"
[1] its not them, but I want to keep some level of mystique about where I work
Nope. Everyone has their strengths and should avoid some types of work. AI doesn't change this.
Many consultants and entrepreneurs are too shameless to do that. AI only amplifies their dysfunction.
What most businesses are doing instead is squeezing their middle management to do more with less. No consultants. AI is cheaper. This squeeze happens every time the economy stagnates, and adding AI as "help" is irrelevant.
I won’t lie. I want to be Captain/Director, not the rower.
It’s very satisfying to get rich by doing pretty much nothing. And there’s some sadness when some rower does their best but doesn’t even come close to directors/captain positions.
Some excellent rowers can make it sure, but we all are not excellent. Oh well, I stop
If you're the CEO, maybe you know exactly how your org should be restructured. But maybe it means stepping on a lot of toes and hurting people you have close relationships with.
If you get the blessing of management consultants you can at least say it's not personal.
A thing to keep in mind is that expecting the systems humans built to act rationally at all times is perhaps expecting too much.
I used to work in engine development and calibration. There aren't many people who know how to do engine cal and it's incredibly important to get your engine emissions certified to sell in a market like the USA. The problem is that most people who know how to do it work for a car manufacturer (OEM). So when I had that on my LinkedIn I would get pretty regular messages from some consultancy or another offering hundreds of dollars per hour to chat with me about my expertise. Of course I couldn't go talk to a competitor but I'm sure a lot of engineers were happy to make a few hundred bucks chatting with some generic consultant who was writing a general industry report with anonymous data and background info.
Well the customer was usually a competitor or a foreign automaker exploring entering the US market. Everyone who could help them understand the timelines, cost, and process worked for their competitors. So the critical info got passed through consultancies into sanitized anonymized reports; laundering.
Note: I'm not sure whether talking to a consultancy would have violated my employment contract at the time but I never took the calls so I had no reason to look it up. I know that coworkers did and just called it a gray area. I pass no moral judgement one way or another.
Their preferred working style was to not make decisions, and to hire consulting firms to make the decisions for them. So they hired these even younger consultants, who would work for a few weeks, and make their recommendations, and then those recommendations would not be put into action. No. Instead, more consultants were hired to review and then discard the work of the previous consultants. Rinse and repeat for a few cycles.
I cannot resist one story. The initial HBS/management consulting CEO was replaced by a new CEO, someone who had run one of the early search engine companies, and had a similar background. He turned out to be no better. What I found very entertaining about CEO2 was his business past. He was known for two decisions. 1) Declined to buy the very early Google for high six figures, when he had the chance. 2) Decided to buy Blue Mountain -- think Hallmark cards but online -- for $780M. Greeting cards. 3/4 of a billion dollars. 1000x the cost of Google at the time.
Yes, hindsight and all, but still. If I had made both decisions by flipping a coin, my expected value would far exceed what this business genius accomplished.
2. Management consultants get paid by shareholders to outsource blame for decisions made by management.
Perhaps it’s a characteristic of closed groups. SQLite has its moral code that is the Ten Commandments++. Good stuff.
If you’re the private owner/CEO you just get to be steered by the customer, and can even stop growing if you want.
https://en.wikipedia.org/wiki/Dr._Bronner's_Magic_Soaps
In this day and age, bad UX is great for preventing ADHD users
https://en.wikipedia.org/wiki/Iceland_v_Iceland_Foods_Ltd
amazing
Some people have no shame at all. This is so absurd it read like a comedy sketch.
I don't think I'm one of the red team's 7 captains, but I don't exactly have my hands on the paddle every single day. After all, I can find the time to lollygag on HN between 9-5.
I think a key takeaway is the human nature to constantly act, and not just sit and do nothing. Lot's of value in sitting around, especially in investing.
You gotta provide why it's bad instead of whataboutism direction you took.
Let’s crowdsource examples of management consultants delivering a huge amount of value to a company or society in a way that the company couldn’t have accomplished without them.
I’ll start:
sometimes, employees are bad at their jobs, or organizations are unable to solve their own problems. people who have no long term loyalty or political agency within the organization can help resolve internal issues, provide external validation and new perspectives, and solve problems.
I tire of the snide arrogance of people like you; you think you can solve everything if you cared to. not every organization can afford to hire people as amazing and all knowing as you.
making talented people available on short contracts, for employers with terrible reputations who cannot hire the right people able to deal with ambiguity and short timelines can be a win win arrangement for both sides.
Are there issues across the industry, including misaligned incentives? absolutely. but that isn't a reason to dismiss the entire industry out of hand.
perhaps we should be equally dismissive of all software devs given the sheer amount of terrible software and predatory revenue models? or are we also going to blame some other faceless group for that as well?
As a consultant myself, I don't get it, that might be true for management consultants, but not for technical ones.
As a software engineering one, there hasn't been a single time where I wasn't among the top performers after a month.
My incentive was always to do a good showing so they may call you for other projects in the future.
This is a classic hierarchy-brain/ bureaucracy problem, where "leaders" think the top is more important to the org than the bottom.
It's also a criticism of management-heavy offices who have lost touch with reality, but consultants are a byword for such things, so I guess the title is succinct at the cost of accuracy.
[1]: https://www.imdb.com/title/tt0151804/
https://about.iceland.co.uk/our-performance/
https://about.iceland.co.uk/our-story/the-dark-ages/the-chie...
Like, it's the only page with the 'we're in the UK and I don't want to be sued for libel at the drop of a hat' disclaimer at the bottom.
https://en.wikipedia.org/wiki/Gr%C3%ADmsey
2006 A spectacular turnaround sees a 10% sales decline turned into growth of 20% year-on-year by March 2006, making Iceland the UK’s fastest-growing food retailer.
2005 The Big Food Group is taken private and Iceland returned to the management of Malcolm Walker and other senior executives who had been ejected in 2001.
2004 The Big Food Group is nearing bankruptcy as provisions made in 2001 come close to exhaustion.
2002 Iceland-Booker is renamed The Big Food Group and launches a grandiose recovery plan (Click here to read the saga of ‘The one, two, three, four, five year recovery plan’) but customer numbers and sales remain in steady decline while costs escalate.
2001 New Iceland chief executive Bill Grimsey issues a massive profit warning, and Malcolm Walker and other senior managers are forced to leave the company
and thought it was interesting enough to submit on its own
Well that's cursed
but the same thing keeps happening.
top heavy organizations.
Because he beat up all the other captains.
> why isnt he rowing
Because he’s the Captain and he doesn’t want to.
> why are we rowing, and where are we rowing to?
The Captain knows. Don’t you trust the Captain?
My company is "AI native" in the sense that even though we are not a tech company we are using it heavily to build a bunch of tech that makes us more efficient.
Think building better SaaS products around our actual process rather than whatever bespoke niche SaaS product provides. this has yielded real savings in both software costs and efficiency. Compared to our peers, we are light years ahead. Even the supposed "leading AI readiness consultants" hired by the group board agreed.
our board have still hired kpmg[1] or some other vague merchant to come and help us deliver "efficiencies"
[1] its not them, but I want to keep some level of mystique about where I work
I have a steer that people, process and services are all in scope, but again thats vague-as-a-service™
Many consultants and entrepreneurs are too shameless to do that. AI only amplifies their dysfunction.
What most businesses are doing instead is squeezing their middle management to do more with less. No consultants. AI is cheaper. This squeeze happens every time the economy stagnates, and adding AI as "help" is irrelevant.
It’s very satisfying to get rich by doing pretty much nothing. And there’s some sadness when some rower does their best but doesn’t even come close to directors/captain positions.
Some excellent rowers can make it sure, but we all are not excellent. Oh well, I stop