Management Consulting for Humanities Ph.D.s

Ezra Klein referred me to a 2006 article, “The Management Myth,” by Matthew Stewart, which has just led to a new book by the same name. Stewart has a Ph.D. in nineteenth-century German philosophy and was a founding partner of a management consulting firm; I have a Ph.D. in twentieth-century intellectual history and spent three years as a management consultant (at McKinsey) before co-founding a software company, so I thought I might find a kindred soul. Also, I’ve been thinking for years that I should write a book about my strange journey through the business world, but will probably never get around to it, so I was wondering what that book might have looked like.

Well, we’re not so kindred after all, although my criticisms of the management consulting industry certainly overlap with his. One difference: I have never, ever found myself thinking, “I’d rather be reading Heidegger!,” although (or perhaps because) I read my share of Heidegger back in the day – Being and Time was on my orals list. (That said, I have also never read books about management, which is what Stewart was doing when he was wishing for Heidegger.)

Stewart is full of scorn for the “management literature” – meaning books with big fonts, bullet points, and truisms disguised as buzzwords – and I’m sure that scorn is well-deserved. But he blurs that scorn into scorn for the management consulting industry itself. And while the latter may deserve scorn for its own reasons, I think the two – the books and the consulting firms – are quite different.

As a management consultant, on an actual project, I can’t recall anyone ever discussing, let alone taking seriously, anything he or she had read in a business book or learned in a corporate strategy class. Our main job was digging up information, doing analysis that was trivially lightweight by academic standards but more than most companies do on their own, and packaging the whole thing into a coherent storyline that made a point. What McKinsey brought to the exercise was smart people who were willing to work extremely hard and obsess about trivial details until late at night – for example, after photocopying presentations for a client, someone had to flip through them to make sure that none of the pages got rotated or pushed off-center by the copier – along with some core skills in turning relatively little data into a convincing-sounding story.

As for getting an MBA, I would say that 90% of the consultants I knew already acknowledged what Stewart argues – it’s not what you learn at business school that matters, it’s the screening function. Top business schools screen for the attributes that certain types of companies, including consulting firms and investment banks, value – above-average intelligence, ambition, presentability, ability to get along with others, willingness to follow orders, and a strong streak of conformism. McKinsey recruits people with Ph.D.s (and certain other advanced degrees) as well because the Ph.D. is an indicator of intelligence and (to some extent) ambition, but it is considerably harder to get a consulting job as a Ph.D. from a top school than as an MBA from a top school because of the other things that an MBA signals. But the point is that everyone knows this already, and many people still choose to go to business school, because it’s the rational choice given the job market.

I think the biggest problem with management consulting is that most of the work on a project is done by junior people who know absolutely nothing about the industry they are serving, and don’t even realize how little they know. (And generally the partners don’t know that much, either, since many of them have never worked anywhere except in consulting or maybe banking.) Having worked as a consultant to the software industry and then as an employee of the software industry, I have seen this from both sides, and I’m embarrassed for the naive consultant I used to be. But it’s also true that many of our clients could not have assembled teams of people to do the kind of work that we were doing – not because they didn’t have the right people, but because those people are invariably too important to be freed up from their day jobs.

I hear that in the legal industry more and more clients are refusing to let law firms bill them for first-year associates. I think that the consulting industry will probably move that way.  But even so I think there is some place for management consulting firms.

By James Kwak

70 responses to “Management Consulting for Humanities Ph.D.s

  1. Management consulting firms

    *can say stuff that might get managers in trouble politically,

    *provide good scapegoats when ideas backfire.

    *offer a fresh perspective

    *waste time and money

    *make you wish you were reading Heidegger

  2. Dear Mr. Kwok,

    I don’t think you really rebutted Stewart’s arguments about the utter uselessness of both management consultants and their “theories”. Yakkis makes the point that management consultants mainly get used because of political problems within organizations, i.e. that managers can’t say certain things because of risks to their careers, or that management consultants supply needed scapegoats to senior management.
    This might point to a more useful way to think about the field: in the context of the sociology of organizations(bureaucracies).
    In my own field, public secondary school edumacation, the plague of consultants, curriculum specialists, overpaid principals/superintendants and perhaps most egregiously the staggeringly futile and completely wasteful so-called “professional development” would also be fruitful area of study.
    To sum up: since management consulting, perhaps even all consulting outside of scientific or engineering fields is a complete “folly”, why do organizations hire them?

    Sincerely,
    Ed Beaugard

  3. My opinion is that there are some situations in which external management consultants provide services that companies cannot provide to themselves, either because those companies don’t have the right people, or because those people are too busy in their day jobs. I can’t really prove this, but I’m just going off of the projects I worked on. In some we were basically wasting time; in some we were providing services that the client wanted, but were probably not worth what we charged; in some we were providing services that were definitely valuable to the client.

    To make a somewhat loose analogy, no one denies that temp agencies are useful, even if they charge more than you would pay for an employee. Why do people insist that management consultants are never useful?

  4. James, you miss the chief reason for hiring McKinsey (and the only reason I have ever hired them): it provides a different logo and format on your Powerpoint.

    When you are financing a business, you need to explain its prospects to a lot of lenders. They are simple people, and in a simple world, they don’t trust the guy asking them for money. So you pay McKinsey or Bain half a million dollars and they take your presentation, reformat it with some nice callout graphics, and give it back to you. Then when someone asks you a question in the lender presentation you can say everything was validated by McKinsey, and the gathered crowd will accept it as though it came from a peer reviewed journal.

    Alternatively, when you want to unload a division or buy something and management doesn’t like it, you don’t dare make them do it – you have to live with these people the next day. So you give your presentation to McKinsey and a couple of weeks later a guy who was studying Boccioni a few months ago at Yale stands up and delivers it in his finest grad student seminar voice. He leaves, you say “damn, he’s right, we’ve got to do this,” and everyone goes away happy.

    The idea that the guys (a) know something special about the industry or (b) are going to learn something special about the industry in a few weeks that elude everyone actually in the industry is pretty fanciful.

  5. “Heidegger … – Being and Time was on my orals list.”
    so he really is alive and kicking in the US – the guy was enamoured with Aryan stuff but so long as he had only praised the glory of it without actually doing the killing, that’s allright of course that’s nothing … and not apologize, of course not, after all he was Heidegger with a “free pass” from Hannah Arendt but maybe he got that for some non-philosophical talents of his – hope they include that in their teachings of Heidegger

    “someone had to flip through them to make sure that none of the pages got rotated or pushed off-center by the copier”
    and for doing that job the client was charged a consultant’s i.e. university graduate’s hourly rate?

    “core skills in turning relatively little data into a convincing-sounding story.”
    ahhhh – that explains the unwillingsness to listen to anything intricate

    “above-average intelligence, ambition, presentability, ability to get along with others, willingness to follow orders, and a strong streak of conformism.”
    you forgot “shockingly bad manners of the most basic kind” including a no-nonsense haughtiness, very becoming in very young men when they talk to those senior to them by decades of rank, experience and expertise. Lower orders of course have to accept that they are no-knothing-imbeciles who will never ever be able to follow the musings of superior minds

    “those people are invariably too important to be freed up from their day jobs.”
    no!!! that’s BS – there are heaps and heaps of people in a corporation, especially a big one, who would enthusiastically put in all kinds of extra hours for the vague promise of getting things corrected
    - however, what “those people” would necessarily come up with, would, no matter how carefully shrouded, imply criticism of prior top management decisions and you can’t have the lower orders criticize the top-top ones – they have after all to defend the myth that they are in possession of superior talent which is rare, precious and hard to find, how else could they keep the leader aura intact

  6. “*provide good scapegoats when ideas backfire.”

    never in my life-time …
    ideas approved by top-management NEVER backfire and if something goes wrong it is the fault of obstinate incapable of CHANGE staff

    but:
    provide good excuses for the firing sprees …
    also to keep middle management quiet who desperately search for the accumulated expertise which vanished with some of their senior employees who having been kicked in no-nonsense-allowed style chose to exercise the retiree’s right to go mute

    not reading Heidegger, after all his expertise was more in the theoretical part of Herrenmenschentum …

  7. “is a complete “folly”, why do organizations hire them?”

    to provide the mantle of science/superior wisdom for any “folly” that has a must-have-feel to it for the toptopguy – after all you do not wish to meet your equals at the next gathering having nothing “innovative” to talk about -

  8. “Why do people insist that management consultants are never useful?”

    these kids in their suits and ties come in and openly suck up to the toptopboss and you want them to be regarded fairly

    but seriously:
    maybe because they offend those employees who want change, maybe even the kind of change the consultant helps the management to make but not only got no credit for their input (which they could accept in good grace because acknowledgement could mean trouble with their bosses, after all there is a chain of command to uphold) but were made to understand while cooperating how incapable of superior understanding they were

    there must be a reason why from the lab cleaner to the upper ranks of middle management the stories told are almost identical

  9. I got half way through a PhD in Philosophy, and then joined McKinsey, so I have had a similar experience.

    First off, I never have and never will read a “management” book- “What Roger Federer’s Backhand Volley Can Tell You About Successfully Leading Change”, all that sort if stuff. There’s definitely more to consulting than that (thankfully).

    It can work quite well. Very few firms have such good management information systems that they can completely understand their own economics, and teasing out the right analysis from disparate and improperly structured data can take hundreds of hours. This could indeed be done internally, but it is not likely to be, partly because people have other jobs and partly because the skills are not that common. The ability to access information from elsewhere in the firm is also useful. I believe that the book “Dangerous Company” is fair and balanced on when consulting does and doesn’t work.

    I’ve always suspected that one reason it is used, though, is that a lot of CEOs enjoy their regular strategic chats with the partners and directors (who are smart, quick on their feet and trained to communicate well). They consider the half-million dollar engagements to be the price they pay for the regular chats, I suspect. Given that the CEOs aren’t accountable for the money they spend, why not? I would do it myself, if I could.

  10. Nice. You believe your own BS. Self-deception is the purest form of haughtiness!

  11. “a lot of CEOs enjoy their regular strategic chats with the partners and directors”

    do the “partners and directors” bring couches along or do the CEOs provide those?
    and have the couches to be a valued antiquities or some piece of modern art? http://courses.washington.edu/freudlit/Couch.JPG

    and after the therapy the CEO will go and dazzle his subordinates with brilliant new verbal garbage and at his next CEO get-together will be able to represent his company well in the competition of who can utter the most high-falluting intricate new creations

    and do not forget the trickle down effects …

    corruption of language is potentially highly explosive stuff whether you “purify” it as the Nazis claimed they did or you “elevate” it by inserting a lot of long words makes no difference …
    Incidentally, was William F. Buckley the one who got the fashion going of excelling at sprinkling your writing with rare stuff of Latin origin but undiscoverable usefulness to the text? Some eulogies of his merits seem to suggest it.

    there once was an American habit of sneering at bragging via the use of long words in general, wouldn’t it be nice if that were revived

  12. “So you pay McKinsey or Bain half a million dollars and they take your presentation, reformat it with some nice callout graphics, and give it back to you.”

    That is patently not true – in vast majority of cases it works the other way around: McKinsey or Bain produce a presentation, which then gets used or re-used internally.

    Furthermore, the main argument of any major presentation by a consulting company is developed and reviewed by the partner leading the project, who typically is very experienced in the industry. Junior team members provide supporting analyses (and do the decks, of course).

  13. “My opinion is that there are some situations in which external management consultants provide services that companies cannot provide to themselves, either because those companies don’t have the right people, or because those people are too busy in their day jobs.”

    Yes, these are often the reasons. One other common reason is when a company has differences of internal views on an important issue, which they cannot reconcile, and they decide to hire an outside party to provide an independent point of view.

    Another reason is to take advantage of consultants’ knowledge of industry practices or of trends in adjacent or emerging industries, which until the project the client company did not have to know much about.

  14. “… take advantage of consultants’ knowledge of industry practices or of trends in adjacent or emerging industries, which until the project the client company did not have to know much about.”

    how does that differ from industrial espionage? seriously I am not being sarcastic I’d really like to know. If the knowledge comes just from a more thorough reading of the press any halfway alert cubicle person could do it if it is something more where is the line drawn? Is there any?

  15. While there is a continuum of options from “industry practices” to “industrial espionage”, in every case the determination is not very hard (yes, sort of like pornography vs. erotics – you can tell the difference when you see it).

    If only one company uses a certain approach and derives a competitive advantage from it, it cannot be shared. All consulting firms sign NDAs and will get sued if they do share some proprietary knowledge.

    If many companies use a certain approach and it is not viewed as proprietary, then it can be summarized as an industry practice and can be shared with others without disclosing specifics.

  16. I see most of my comments have been anticipated, but I wrote this before I read them, so, what the heck, I’m not going to throw them away now.

    I would explain differently Kwak’s conclusion that, despite its mind-bending superficiality, there is still a bit of redeeming social — well, at least commercial — merit in what consultants do.

    He makes it seem a matter of above-average intelligence — not so subtly flattering himself in the process, of course. And even trying to throw us off this whiff of vanity a bit by saying that management has its own people who are just as intelligent, but they are too involved in working on the front lines to be put on a second order analytical team.

    It’s not about knowledge. It’s about power. The one thing the outside consultant can do that people on the inside cannot as easily do is politely — always politely, because they are billing — tell the emperor that he has no clothes. But, of course, blame that fact on someone else whom the emperor can conveniently shoot without taking a bullet himself.

    This is especially true with McKinsey, whose USP in the industry boils down to the fact that their presentation signature is landscape rather than portrait mode — even dating back to pre-PowerPoint years! So clever of them.

  17. I am in consulting–pensions, not management consulting.

    For smaller organizations, I think we offer a very valuable service. We are far cheaper than cultivating and retaining their own in-house expert or set of experts. The legal issues, technical issues, and knowledge of what other organizations are doing requires a deep base of knowledge that one or two, or even three people cannot possibly learn on their own. Even large organzations need our assistance because of internal bureaucracies and their sitiations are far more complex. In some cases, they don’t need us–their internal staffs are very good; they just need us to get an outside opinion. Nothing wrong with that, either, if done right.

    Sometimes I find consulting is just stating the obvious. Clients are bombarded with information and have difficulties organizing and prioritizing the data. Cutting through the BS, the insignificant details and getting clients to focus on the big issues and then following through to get the details and implementation right is a valuable service. I am proud of my work.

    As to management consulting, the theories do seem rather faddish and don’t have an intellectual rigor to them. I don’t think there is any one right oganizational or leadership style. If I compare to football, I see yellers and bullies win (Woody Hayes, Bill Parcells), as well as quiet, reflectful types (Tom Landry, Tony Dungy). In each case, they had talent and the coaches were able to get the teams to band together to meet the challenges. These leaders are important. The other side of management consulting–strategic and organizational consulting–it seems to me, is an important service.

    But it seems to me there are business leaders that truly want to run a company better. As I said before, there is nothing wrong with an outside, indepedent opinion. (I hate the cases where we aren’t really independent, we’ve been hired to rubber stamp a decision already made. But clients are smart enough to know what direction our recommendations will be, so they select the consultant to fit their particular needs and I rarely run into a big conflict with the client.)

  18. Having worked a few years at a big (media) company, my sense is that employees understand the road to success is telling the boss what he wants to hear. Bad news is never delivered up the chain of command. If any boss wants to learn something true, therefore, he simply must tiptoe outside. Unfortunately, what the consultants do, in my experience, is quickly guage what the boss wants to hear and promptly tell him that. But look, the economy is losing enough jobs as it is. Let’s not bring down an entire industry just for the sake of a little truth.

  19. pornography nice analogy specially because the definition of you know it when you see is so much subject to the eye of the beholder

    “be shared with others without disclosing specifics”

    disclosing no hinting at yes?????
    if both is no, then why is the knowledge deemed so valuable?

  20. feel the urge to defend Kwak
    - can’t think of descriptions for an academic more damning than these

    “willingness to follow orders, and a strong streak of conformism”

    maybe IQ would have been a more apt word than intelligence but if he had to pay an editor this blog wouldn’t be free

  21. can’t think of descriptions for an academic more damning than these “willingness to follow orders, and a strong streak of conformism”

    Damning in whose eyes?

  22. Management science in a nutshell: “In many of my own projects, I found myself compelled to pacify recalcitrant data with entirely confected numbers.”

  23. what you describe does not qualify as the kind of consulting which has infuriated me in the past (if it would provide cover for an insurer’s sales pitch then I would rail against it)

    you consult about something you have actual expertise in

    you do not pontificate on the latest revelation from Guru X or Y from company X or Y which for all I know he may have had while meditating in grotto/ashram X or Y

  24. can’t find the quote in this thread

  25. (from the Stewart article referenced at the beginning of the post)

  26. must be a poor power pointer who needs to confect numbers when all you have to do is shift context a little or use another of the infinite number of fiddling tools which are used quite ingeniously by the cubicle level to give the boss his heart’s delight

  27. I’m another poet turned management consultant. I spent several years at McKinsey before heading elsewhere in business and government and have done the occasional free-lance consulting project in recent years.

    Good consultants can – but not all consultants do – provide the following good things for their clients:
    1. Get information up the ranks. In any large organization, there is a constant tendency to hide bad news and send good news up the chain of command. There is thus a chronic need at senior levels for honest input from below. And execs don’t always recognize that need. Probably the most valuable thing I did at McKinsey was help disabuse the head of a very large brokerage that the best use of the internet (in its relatively early days) was to sell his clients paraphernalia with the
    logo of the brokerage on it. He’d been told before. But it took us to deliver the message in a way that he would act on it.
    2. Serve as a father-confessor for senior management. Most executives find it very difficult to let their hair down in public – part of their (self-perceived) role is to serve as totemic figures who reassure the line staff that a) there is a plan and b) the company is executing against it. That makes it hard to admit that they don’t know how to tackle a particular issue. Throw the inevitable corporate politics in the mix, and there can be few safe internal confidants. Senior consultants are by and large smart and knowledgeable people who know something about both a particular client and its industry. They’re not rivals for promotion, and their business depends on their ability to keep secrets. They’re about the only available sounding boards.
    3. Real insights. Everything people write above about arrogant 25 year old consultants who know nothing of their client’s business can be true. I’ve also seen teams of such people deliver shockingly basic (and therefore valuable) insights about the economics of a business. James’ point about the general weakness of corporate MIS is true – lots (if not most) companies operate in a fog. I spent much of 2007 and 2008 on a free-lance consulting gig helping diagnose and then repair the problems with a business unit in a big investment bank. After a week of asking really basic questions, my colleague and I were able to a) understand the transfer pricing in the organization – something that no one had bothered to do before – and b) consequently show that the unit had never been profitable in the first place.
    4. Provide direction for a organization. Important issues in business are often highly ambiguous. Consultants are often derided as BS’ers (see above) for coming up with recommendations despite that ambiguity. A 60% right answer followed with 60% conviction – the conviction coming in part because an external consultant has helped provide the answer – is a pretty good outcome in many cases. The alternative is not a 100% answer followed with fanatic drive but continued drift.

    I’ve also seen other consulting projects that were a waste of the time of all concerned.

  28. My question is, since management consultants and their ideas are entirely useless, why do organizations hire them?(No one knows why some organizations function well and some don’t). And since, in general we desire understanding and knowledge of the world to the extent that is possible, the more useful way to think about the field is to ask why do corporations use Mckinsey, Bain et al. knowing their uselessness.
    To me, this points the way towards the sociology and economics of corporate bureaucracy as the way toward some understanding of why organizations engage in this “folly”(a word I heard Chomsky use during an interview recently). It appears that management consultants supply something, what it is no one’s sure, that organizations can’t supply themselves, but it’s useless/could be done much better themselves.
    Nassem Talib’s approach is very helpful in this situation. He asked similar questions about Value-at-risk which, in his opinion, is intellectual fraud, as well as the whole field of risk management, also entirely useless in his view. The question would be, why did financial institutions engage in the folly of risk management and VAR when they should have known better or did know that leveraging at 30-to-1 is insane? Again, for me, this points the way towards sociology and economics, NOT taking VAR or risk management seriously as a discipline itself.
    The question would be, why do organizations act irrationally?

  29. It’s not the fees charged by these consultants that I object to, it’s that they do nothing for the simple reason as I said before, that no one knows why some organizations function well and some don’t. Again, Taleb’s approach towards exaggerated claims of knowledge is quite helpful here,
    Also, I don’t agree that a temp worker and a management consultant are comparable, a temp worker is performing some particular job within the organization, answering phones, document production, etc. that is not what management consultants do.

  30. I would say this post proves my point. Everything Marcus mentioned points toward sociology of organizations as the reason management consultants get used, nothing else.

  31. to read up on folly literature and/or the novel are much more to the point than sociology with is tidbits can ever come

    My favourite on the human and therefore corporate capacity of folly is Oscar Wilde’s De Profundis

    I consider the title to be apt, in no way pompous

  32. Chomsky was quoting Quine, who used the word “folly” to describe some of the pursuits of scientists. He(Chomsky) didn’t mention what Quine was referring to in particular, but a belief in strong-AI certainly comes to my mind anyway, as an example of folly.

  33. Warren Buffet’s octogenerian friend, Charlie Munger, notes (in Poor Charlie’s Almanack, 3rd ed.) that he’s never met a corporate leader who had actually read a report by a consulting firm.

  34. People hire McKinsey for one of two reasons:

    1. The people sponsoring the engagements are ex-McKinsey consultants who were placed in senior leadership positions at client firms with the express purpose of hiring McKinsey to do additional work in the future.

    or

    2. The people bringing in McKinsey are middle managers who lack the pedigrees to move as high as they desire on their own and bringing in the firm opens up an otherwise inaccessible network to them.

  35. well, they do not read the reports they ask their subordinates for either – getting supplies of huge piles of papers seems to be good for the ego, maybe the printer is the tool which gave the biggest boost to managers’ egos

    and then they have fits where they want it all to slim down. tighten the organization, become more efficient etc. etc. and cancel all reports including those which would supply them with very simple to monitor key figures and which any person actually managing would be eager to have at his fingertips for planning and deciding

  36. I definitely believe that a lot of consultancy engagements, if not the majority of them, are not a good use of resources. I think it’s only a small minority that are effective and useful. Is that self-deception? I find it hard to believe that consultancy can *never* be useful.

    But on the other hand I don’t care that much. It was 2 years out of my life 10 years ago, and I learned some very useful skills that have helped me a lot in my career since.

    P.S. I like the phrase “haughtiness”.

  37. Funny… I did have in mind something like business psychotherapy for CEOs.

    Not as a means of justifying the use of consultancy, but explaining it. I am sure that most people faced with a lot of tough problems and a lot of responsibility would enjoy regular conversations with someone who is smart and reasonably well-informed, where the topic is primarily these problems and responsibilities. Is it worth a few million a year? I doubt it, but as these firms lump all of their advisory fees together in footnote in their annual report, and the sums are small compared to other costs, the expenditure passes by without comment. (If firms had to list the exact fee paid and the topic of each consultancy engagement, I bet far fewer consultants would be hired.)

    I agree with what you say about the language of management consultants. I used to find it intolerable.

  38. Self-Deception is a necessary INGREDIENT of haughtiness (like in I think I am …)

    but quite often the guys just seemed pityably insecure to me, didn’t make them any less pleasant though

  39. the kind of mayor for the location of “my” corporation solved the problem in a very simple way.

    As a free lance side job I was writing pieces to feed to the local newspapers reporting to him. He taught me the image I was to create for the public himself in monthly meetings. After two or three of them the meetings dwindled to short decision making talks and then he would offer me a Sherry and we’d chat about general stuff. He had no direct power over me (and I was sure he would never ever use the indirect one) and of course he did not want me to rat on anyone or afterwards sing his praise to the masses. The chats must just have felt good to him and even when I’d say to his secretary that I had no decisions to ask from him he would want this hourly monthly chat.

    So go ahead with your therapy for the big brass – there is need for it

  40. I agree with much of what the consultants have said about why McKinsey is hired and what its strengths and weaknesses are.

    But I am somewhat surprised by the vehement negativity towards consultants in particular. Hasn’t anyone been charged by a law firm for the time of a 1st year associate who says nothing during a conference call, or had their time wasted by an investment banker’s pitch, or had an accounting firm research a small issue and then send a large bill?

    All outside business service specialists can pad their services with a layer of BS– but that doesn’t obviate the need for specialized advice, and it doesn’t mean that savvy clients can’t use such specialists wisely. A company that makes one acquisition every few years will probably benefit from a good investment banker who looks at dozens of deals every year. Similarly, a company only enters China once, only thinks about its response to the Internet or carbon legislation once, only launches its new product once, and it seems foolish not to take advantage of specialists who have thought deeply about the topic and/or seen similar instances play out in similar industries. There is a market need for top-tier management consulting firms, and it’s not all due to CEO insecurity, middle management politics, or as a job market signal for arrogant MBAs. (Though all of those things may be an element of it.)

    That said, anyone thinking about hiring McKinsey or its peer firms should define the scope of work very tightly and make sure their own organization has the internal capacity to work on the project. Every company knows it should have an experienced general counsel riding herd on law firms during a major lawsuit, or a deal point person overseeing investment bankers in a transaction (or, for that matter, a good project manager overseeing general contractors on a physical construction project). Similarly, outside consultants need to be managed tightly and their progress reviewed regularly, or the consultants will define the relationship and the results may be unnecessary, unusable, and frustrating.

    I also agree with James that management literature is generally unreadable. Business porn books by reputable journalists (e.g., of the Smartest Guys in the Room or Barbarians at the Gate variety) are marginally better because they contextualize actual events, though they tend to be breathlessly gossipy in a People magazine way at times. I think well-researched biographies (e.g, anything by Ron Chernow) are the most interesting and informative if you have the inclination. But personally I’d rather read good fiction.

  41. I have never been in a position where the decision to hire a consultant could have been mine, I have been at the level of those receving their advice/commandments/announcements and having to try to make them work in everyday office life and that experience is enough to make you bristle already when you hear another one is about to arrive.

    and if you take lifestyle consultants into the fold then I am still at their mercy
    - OK I could stay away from fashion magazines, but I love to look at their beautiful photos and right next to them they are with their do this, do that, you must do that, if you do not do that you will suffer from catastrophe A, B or C.

    Maybe this ubiquity this unability to avoid the constant screaming of the know-betters explains the vehement negativity

  42. Well … I’m not sure I have the time to pursue what Heidegger really meant to say. The starting point of his philosophy appears to be the distinction between “being” and “beings”.

  43. All outside business service specialists can pad their services with a layer of BS

    Or pad their BS with another layer of BS.

  44. do you think they teach this part of his philosophy at university

    “The German people must choose its future, and this future is bound to the Führer[9]“.

    one should never forget that the “Führer” loved to carry a riding whip – how I’d loved to see a movie how he managed to turn on the Heideggers of this world by insinuating with that whip hitherto unknown delights.

    and besides everything I find such pompous language repelling

    but of course he was a Großer Geist (big mind/thinker) and so his close to criminal nuttiness must be disregarded

  45. thanks!!!
    I had been told by Nigel Warburton of the wonderful Podcast Philosophy Bites that Hubert Dreyfus is super, a star within the philosophy professor guild – so I downloaded it – he talked a lot about the Greek pantheon but couldn’t get his references to the Gods right and as I am enamoured by the Olympians I couldn’t tolerate that and pressed delete.

    Since then I have discovered that even though I had my appetite for philosophy awakened at the age of about 15 the philosophers of today I have tried to listen to always evade to explain to me how their findings square with that you can never step twice into the same river (Heraklit) and that the more you know the more you know that you know nothing (Socrates) (both of which were explained to me in school at the age of about 15) – since realizing that it’s strictly history for me. There at least they can never pontificate without acknowledging just a whee bit the human preference for quirky behaviour. Presently I admire Quentin Skinner who is a historian talking about philosophers’ writings and topics like “what is the state?”

    I thought I was going way off topic with that rant but since Management Consultants are to be recruited from the philosophists I am maybe right on topic.

    Imagine once philosophers did science, I mean real science, hard core science, science where if one exception popped up it meant the theory would be discarded.

  46. James, I had my own legal services company for many years. I am very bright, but always looking to do some brain picking with those who were “educated” in business operations formulae. I hired a management consultant to help me formulate a new and improved business plan. He lasted two days. What he did show me is what I had suspected. Management is not about formulas or education. It’s about intellect, understanding the job, knowing how to work with people to maximize their drive to succeed in whatever they do, but most of all learning to successfully organize the trivial. Law, as with most services, is almost entirely about endless trivia. I found that the most successful employees I had like to build models, were perfectionists, and had a natural inclination toward games and game theory, as well as an insatiable love of trivia. Every business takes certain kinds of brains to succeed. Consultants who have no experience in the industry they are consulting with can’t possible understand how to make the operation of a business in that industry effective.

  47. “learning to successfully organize the trivial”

    thank you, that’s what I have been trying to get across all along without ever being able to get it nailed in one sentence.

    Those of my bosses not just in law who took trivia-obsessing nit pickers seriously and gave us the fitting kind of job descriptions I will always warmly remember for having made my professional life paradisical – especially those bosses who could accept that I was quite content with my “low” station in life as long as I had work I could wreck my brain on while performing it.

    I luckily met the first one of those at the early age of 18 when within three months after his arrival people had stopped all vicious infighting worked amiably together and even one who would have easily won any competition in how to evade work had turned into an eager and competent clerk taking pride in running her little corner faultlessly.

  48. James, you and I have been down almost exactly the same path, from Marty Jay to consulting and software, and I must say you get the story entirely right. I believe it was Nick Lemann who ten years ago in the New Yorker described the typical McKinsey recruit as evincing an unpleasant combination of hyper-competitiveness and hyper-conformism, and I certainly think that’s an apt summation of the case — and before other management consultants snicker, it should be emphasized that McKinsey is a closer approximation of the ideal type than most other consulting organizations.

    If you want to read a better book about management consulting, I recommend: http://www.amazon.com/Worlds-Newest-Profession-Management-Consulting/dp/0521810396/ref=sr_1_1?ie=UTF8&qid=1250518333&sr=8-1

  49. I was hired by a consulting company to be the lead researcher and writer for a report that The World Bank had commissioned on the use of IT in Uganda. Prior to this gig, I had spent many years writing case studies at a leading business school, so my background in research was more academic in nature. I found the assignment to be, at best, a joke. I do blame myself partially for not seeing early on what a waste of time and money this assignment would be.

    I spent two weeks in Uganda interviewing various government officials, academics, and private sector business people about how they used IT to create more efficient and effective organizations. Upon returning to the States, I had four months to deliver a strategic plan on how to improve the use of IT for five different industries in Uganda.

    Now what could I have possibly gleaned during two weeks of field research that was not already known by those who lived and breathed these same industries on the ground? The World Bank has its own people (or, more likely, contractors) who live in Uganda and whose job it is to study the very same industries that were profiled in this report.

    As far as I know, the final product, some 90 pages worth of primary and secondary research, has never seen the light of day. My 6-month contract was up as the Bank was still reviewing the report.

    While I am not in a position to say that consultants can never be useful, in my case I saw incredible waste.

  50. I think most college degrees are essentially about posting a bond–not just in money, which anyone can borrow, but in time and sweat. I’m not saying you don’t learn anything in college…but, for most people without very specialized technical degrees (engineering, medicine, law), the “learning” function of college is decidedly secondary to the “prove your committment” function. There’s also a limited ability to wash out the idiots, but that falls down if the idiots are from well-connected families or play a desirable sport.

  51. I couldn’t agree more that many times consultants can be costly and provide little benefit to an organization in need of real structure and effective change management. I had found this to be the case until I was hired by the consulting software company, Infotool Inc. In this generation of consultants, there are advanced diagnostic tools available to provide more precise analysis so that consultants can eliminate the “guesswork” and accurately pinpoint areas of misalignments and areas of opportunities. The problem is that many CEO’s know that they need change, they are just not able to SEE where and how much change is actually needed. They are simply told by consultants what they think their problem areas are. I believe that Infotool’s software changes the perception of consultants because it actually provides advanced statistical and diagnostic analysis at every level of the organization. CEOs, Supervisors, Managers and Directors are able to easily view an interactive x-ray of their organization. Furthermore, the software provides built-in solutions for every manager in every department.

    http://www.infotool-online.com

    I would be interested to see if our website changes some of the views of the respondents who view consultants as merely publicity stunts, rather than necessities for sustained change and customer satisfaction.

  52. What a thoroughly ignorant thing to say about science, and, by implication, philosophy. Clearly Silke knows little or nothing about the process of scientific thought to think that a single exception, or even multiple exceptions to or anomalies within a scientific theory are, or should be, sufficient to knock if for a loop. The process is infinitely more subtle than that.

    This is the sort of nonsense that the Creationists and Intelligent Design people peddle as reasons for rejection Darwinian evolution.

    C’mon, man, get up to date on your (philosophy of) science.

  53. I’d add my thoughts and experienced from eight years in management consulting:

    * It’s a wide umbrella of diversity (e.g., IT, benefits, strategy, compensation, performance)

    * Sub-categories have different value propositions. Some are “merely” outsourced activities (where there may be an advantage b/c it’s not core to the business), others are based on expertise

    * Sometimes the hiring is politically motivated (in which case the justification is dubious). For example, compensation consultants hired by managers (versus the Board) are hired to justify pay levels, a dubious activity. But, many expert consultants are truly adding value as third-parties who have experience in adjusting business processes across industries; sometimes, the best way to get to best practice is to use a consultant with this informed, outside perspective

    * James is so right that often times the client pays for junior time. The professional services economic model is based on maximimizing profit/partner which is a product of three drivers: billing rate, staffing model, and utilization. Under this priority, a consulting firm is motivated to increase “leverage” (a word a consultant often hears) which means bulk up on low-cost associates.

    * Some of the consulting models are dying, some are thriving

    David Harper

  54. And, does it also allow the CEO to leverage strategic assets for the finding of optimal solutions in a framework of total quality management? Does it build on age-old wisdom, clarifying the functions and core competencies of the various relevant players across departments and industries?

    Of course it does!

  55. Well there is the absolutism of mathematical theories were a single counterexample is enough to disprove it, and scientific theories which are provisional at best and always capable of being revised.

    As a practical matter, when new exceptions are found, the rule is modified to take the exceptions into account…until the exceptions swallow the rule.

  56. Providing upper mismanagement with scapegoats, providing middle mismanagement with an entree to upper management and hand-holding for corporate debtors are all worthy functions of the management insultant.

    But noone has quite come out and said that often, the real function of a successful management insultant (and often a infestment banker) is to tell upper mismanagement what they want to hear.

    The top brass have a pet scheme that they want to implement, something involving buying a competitor so that they can justify paying themselves fatter bonuses and to make their willies bigger than those of the other dudes at the country club.

    Bring on Bain or whatever! The Bain insultants will put on a slick degeneration babbling something about “leveraging managed synergies” or whatever buzzwords the BS generator is pumping out this week. The content is at best irrelevant, because the insultants are good at nothing if not figuring out what mismanagement wants to hear and then feeding it back to them.

    Mismanagement suffer through the power point degeneration and announce that They Have Seen the Light!

    And what pesky shareholder would oppose The One True Way? After all, mismanagement’s directives have The Seal of Bain, and what shareholder preseumes to be smarter than Bain?

    If things go wrong, mismanagement still have their boners and bonuses, and they can always blame the insultants, pesky prostitutional infestors, looser unemployees, etc. for What Went “Boom!”

    In many ways, this seems similar to the practices of a certain class of high-end shrink.

    But I am only a stupid communistic housecat, so what do I know?

  57. thank you Yakkis – I knew I was right to believe the mathematicians in one of these programs
    http://www.bbc.co.uk/radio4/history/inourtime/inourtime_current.shtml
    of course I miswrote it but when talking of philosopher/scientists I had guys like this one in mind http://en.wikipedia.org/wiki/Thales#Geometry

  58. billyblog
    fortunately for us we decadent old Europeans do not do Creationism and/or Intelligent Design as yet in any serious way

    - probably we have to thank our by US-standards severely flawed freedom of speech laws*) that the believers are having a hard time making their fantasies public knowledge – I remember having heard one of them (claiming the eye could not have come about without God designing it personally) about twenty or more years ago in a radio program called Aula signifying university where academics are given half-hour-long uninterrupted time to read or have read an essay. Nothing remotely similar has shown up there since.

    *) as well as in most countries a language barrier

  59. ‘In charge of advertising we find an anti-democratic, because anti-rational, Mr. Hyde — or rather a Dr. Hyde, for Hyde is now a Ph.D. in psychology and has a master’s degree as well in the social sciences. This Dr. Hyde would be very unhappy indeed if everybody always lived up to John Dewey’s faith in human nature. Truth and reason are Jekyll’s affair, not his. Hyde is a motivation analyst, and his business is to study human weaknesses and failings, to investigate those unconscious desires and fears by which so much of men’s conscious thinking and overt doing is determined. And he does this, not in the spirit of the moralist who would like to make people better, or of the physician who would like to improve their health, but simply in order to find out the best way to take advantage of their ignorance and to expolit their irrationality for the pecuniary benefit of his em­ployers. But after all, it may be argued, “capitalism is dead, consumerism is king” — and consumerism re­quires the services of expert salesmen versed in all the arts (including the more insidious arts) of persuasion. Under a free enterprise system commercial propa­ganda by any and every means is absolutely indis­pensable. But the indispensable is not necessarily the desirable. What is demonstrably good in the sphere of economics may be far from good for men and women as voters or even as human beings.’

    From;

    VI.
    The Arts of Selling

    Brave New World Revisited
    http://www.huxley.net/bnw-revisited/index.html

  60. ‘There seems to be a touching belief among certain Ph.D.’s in sociology that Ph.D.’s in sociology will never be corrupted by power. Like Sir Galahad’s, their strength is as the strength of ten because their heart is pure — and their heart is pure because they are scien­tists and have taken six thousand hours of social studies.’

    From;

    III.
    Over-Organization

    Brave New World Revisited
    http://www.huxley.net/bnw-revisited/index.html

  61. how could I forget that I hadn’t read that yet – thank you

    here is a podcast where the BBC presents the latest in sociological research in a way very interesting/entertaining to the laywoman – must say though those presenting their research sound neither sinister, all-knowing, manipulative nor stupid, just young and curious

  62. A few remarks:
    1) You (original post) see the problem from the junior consultant’s point of view, not from the client CEO or partner’s one. What you describe is what was achieved, but not what was bought (don’t forget your cost: a few thousand $ a day). What was bought was a miracle. Something that only exceptionally smart people could understand and that even smarter people could conceive and deliver.
    2) For years International consulting firms have believed they could find ‘the one best way’ and force them on organisations (cf. Reengineering that would cut staff by two, CRM that would automatically orient a company toward its market’s needs, etc.), hence management fads and armies of junior consultants. Management fads didn’t work but consultants made a lot of money. (Using consultants may have been a substitute for real action. That may explain why obvious failures didn’t penalize consultants for years.)
    3) It would be interesting to compare what this blog says and what consultants such as McKinsey have been telling their clients, and writing, for the last decades…

  63. Sock Puppet of the Great Satan

    Having worked in a management consulting firm, I’ve got to echo the

    But management consulting didn’t start as crappily as this. The first management consulting firm was Arthur D. Little, which (before it tried copying the Big 4 and creating a mega-IT practice, promptly going bankrupt) had a great lineup of consultants who really did know their industries: experts on food additives, pet food, etc. Other similar domain-knowledge strong consultancies shrank into boutique operations during the same period.

    I don’t know whether this happened because of the ability of the Big 4 to co-sell strategy consulting with IT projects, or McKinsey’s better b-school social networks, or that having actual domain expert with a decade or so of knowledge was too expensive versus a bunch of green MBAs supervised by a journeyman consultant with 3-5 years experience.

    But it seemed to me that the whole consultancy business had and has degenerated into a form of career networking and entertainment for mid- to upper-level management of the client firms.

  64. Other than variance in presentation technique with PowerPoint slides, I doubt the deliverable varies substantially from one higher tier management consulting firm to another. The partner or head of the engagement samples the political environment for latitude of the solution set, and then heavily relies upon MBAs with less than 3 years experience to do most of the heavy lifting. We consultants all attended the same limited set of business schools, and our results in turn were constrained by the same political forces within our consulting firms and clients.

    That’s not to say there isn’t value in the deliverable, as some astute contributors have mentioned in this blog. I just happen to believe that consulting services are priced on the perceived value of the brand, and that outside of networking opportunities and risk aversion, the price premium commanded by the top firms is difficult to cost justify.

  65. I found quite a number of university-finishers with or without a doctor title to have tools at their disposal of how to think your way through a problem in order to solve it
    - those tools couldn’t be learned from a how-to-book, it took obviously something more to acquire them
    I think they themselves call it the ability to think analytically thereby claiming it all for themselves.
    but that’s not true the ability/the inclination to think analytically is a talent quite evenly distributed through the classes. The “elites” only have tools to put this talent (if they have it) to better use.