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Adi

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8

What value does the consulting industry bring to the world?

Hi everyone,

Many of my classmates are recruiting for consulting and they urged me to prepare as well, so I kind of followed the crowd, but I don't really understand what value consulting brings. The majority of consulting firms' websites talk about clients and positive impact but it's not so clear what they mean.

I've had coffee chats with multiple consultants and partners and they love to tell me how they are making a measurable impact and work on exciting problems. But when I press further it doesn't seem that impressive: increasing sales of a product, post merger stuff, acquisitions for private equity, digital transformations... nothing groundbreaking or innovative really. And then when I google the biggest consulting firms, a lot of disturbing stuff pops up, almost all of which is regarding McKinsey & Company:

  • turbocharging opioid sales resulting in a epidemic in the US
  • restricting the caloric intakes of people in detention, cutting spending on medical supplies of ICE detainees
  • increased jail violence instead of reducing it in New York, USA
  • massive corruption scandal in South Africa and grossely overcharged a state-owned power utility
  • bankrupted Swiss Air
  • involved with various despotic governments, corrupt figures, and authoritarian regimes

The list goes on, it's pretty damning but I'm trying to keep this short. Even a guy who used to work there said to the New York Times "This is the banality of evil, M.B.A. edition. They knew what was going on. And they found a way to look past it, through it, around it, so as to answer the only questions they cared about: how to make the client money and, when the walls closed in, how to protect themselves."

All that to say that I'm truly lost regarding what positive value consulting really brings. I found those incidents with a 10 min google search so I'm afraid of what I would find if I actually joined a consulting firm. Would I spend my summer increasing the sales of perfume, then during the fall further cement authoritarian regimes and then in the winter help a PE firm extract value from a start-up? Or is it just McKinsey & Company that is evil, like the Goldman Sachs of investment banking?

Please help, I'm so confused and I feel like no one around me can answer objectively.

Hi everyone,

Many of my classmates are recruiting for consulting and they urged me to prepare as well, so I kind of followed the crowd, but I don't really understand what value consulting brings. The majority of consulting firms' websites talk about clients and positive impact but it's not so clear what they mean.

I've had coffee chats with multiple consultants and partners and they love to tell me how they are making a measurable impact and work on exciting problems. But when I press further it doesn't seem that impressive: increasing sales of a product, post merger stuff, acquisitions for private equity, digital transformations... nothing groundbreaking or innovative really. And then when I google the biggest consulting firms, a lot of disturbing stuff pops up, almost all of which is regarding McKinsey & Company:

  • turbocharging opioid sales resulting in a epidemic in the US
  • restricting the caloric intakes of people in detention, cutting spending on medical supplies of ICE detainees
  • increased jail violence instead of reducing it in New York, USA
  • massive corruption scandal in South Africa and grossely overcharged a state-owned power utility
  • bankrupted Swiss Air
  • involved with various despotic governments, corrupt figures, and authoritarian regimes

The list goes on, it's pretty damning but I'm trying to keep this short. Even a guy who used to work there said to the New York Times "This is the banality of evil, M.B.A. edition. They knew what was going on. And they found a way to look past it, through it, around it, so as to answer the only questions they cared about: how to make the client money and, when the walls closed in, how to protect themselves."

All that to say that I'm truly lost regarding what positive value consulting really brings. I found those incidents with a 10 min google search so I'm afraid of what I would find if I actually joined a consulting firm. Would I spend my summer increasing the sales of perfume, then during the fall further cement authoritarian regimes and then in the winter help a PE firm extract value from a start-up? Or is it just McKinsey & Company that is evil, like the Goldman Sachs of investment banking?

Please help, I'm so confused and I feel like no one around me can answer objectively.

8 answers

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Hey,

Have a look at this thread for a very similar question- https://www.preplounge.com/en/consulting-forum/career-at-mckinsey-given-the-scandals-9193.

I cant disagree with your sentiments and this is sadly true. But isnt this the case when economy/profits/growth becomes centre stage of human activity. There are bound to be crazies who take this to the next level. Scandals are everywhere- private & government unfortunately. If humans are happy and content of their own nature, such things will get reduced. But arent most of us looking for more, more & more?!

But there are good people too coming out of consulting or in consulting, who become good managers/leaders uplifting life around them. So, this should be your personal choice whether to get into consulting or not. And if you do, maintain highest standards for yourself, focus on learning and making a positive impact as much as you can. Dont do anything that doesnt align with your values. The choice is 100% yours.

Remember, your eyes will see what you want to see- good or bad.

Hey,

Have a look at this thread for a very similar question- https://www.preplounge.com/en/consulting-forum/career-at-mckinsey-given-the-scandals-9193.

I cant disagree with your sentiments and this is sadly true. But isnt this the case when economy/profits/growth becomes centre stage of human activity. There are bound to be crazies who take this to the next level. Scandals are everywhere- private & government unfortunately. If humans are happy and content of their own nature, such things will get reduced. But arent most of us looking for more, more & more?!

But there are good people too coming out of consulting or in consulting, who become good managers/leaders uplifting life around them. So, this should be your personal choice whether to get into consulting or not. And if you do, maintain highest standards for yourself, focus on learning and making a positive impact as much as you can. Dont do anything that doesnt align with your values. The choice is 100% yours.

Remember, your eyes will see what you want to see- good or bad.

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Short Answer: Storytelling.

The honest truth is [strategy] consulting does not involve a high level of analytical capability/robustness/rigor.

Rather, strategy consultants are tasked with taking very very complicated/messy problems and simplifying them. They need to cut all the noise/mess, and hone in on the key things that truly matter.

This is because CEOs/Execs don't have time to interview/investigate their entire organization...they need the key takeaways. It's also because "regular" employees don't have time/energy/desire to pay attention much to all the complexities of running a business from the top.

That's why we work in powerpoint...if you can't explain an entire business problem in 1 slide, what's the value?

That's why we framework. That's why cases are oversimplifications of business problems.

Strategy consultants are storytellers.

Short Answer: Storytelling.

The honest truth is [strategy] consulting does not involve a high level of analytical capability/robustness/rigor.

Rather, strategy consultants are tasked with taking very very complicated/messy problems and simplifying them. They need to cut all the noise/mess, and hone in on the key things that truly matter.

This is because CEOs/Execs don't have time to interview/investigate their entire organization...they need the key takeaways. It's also because "regular" employees don't have time/energy/desire to pay attention much to all the complexities of running a business from the top.

That's why we work in powerpoint...if you can't explain an entire business problem in 1 slide, what's the value?

That's why we framework. That's why cases are oversimplifications of business problems.

Strategy consultants are storytellers.

(edited)

Interesting question and something I can definitely relate to. Hopefully we can get some objective answers here

Interesting question and something I can definitely relate to. Hopefully we can get some objective answers here

Interesting question but it's important not to put all consulting firms in the same bucket. Yes, some have more scandals than others, but that shouldn't turn you off when other firms have a pretty clean track record. I feel like you're really turned off by McKinsey, understandably, but be sure to chat with other consultants as well and try to cast a wide net : Bain and BCG, Oliver Wyman, Kearney, Roland Berger etc are all respectable firms with much less bad press. And maybe while talking to those consultants you'll realize why they love their job: most of them do, or at least they love the advantages the job brings (prestige, exit opportunities, interaction with c-suite, variety of work, world-class training, etc...).

Interesting question but it's important not to put all consulting firms in the same bucket. Yes, some have more scandals than others, but that shouldn't turn you off when other firms have a pretty clean track record. I feel like you're really turned off by McKinsey, understandably, but be sure to chat with other consultants as well and try to cast a wide net : Bain and BCG, Oliver Wyman, Kearney, Roland Berger etc are all respectable firms with much less bad press. And maybe while talking to those consultants you'll realize why they love their job: most of them do, or at least they love the advantages the job brings (prestige, exit opportunities, interaction with c-suite, variety of work, world-class training, etc...).

I think all the scandals are going to lead to the downfall of McKinsey in the long term. With Bob at the head of McKinsey, he’s incredibly commercially focused and always thinking about growing the business and offerings. I expect McKinsey to go further downstream chasing even greater growth than they’ve had in the last decade. It's likely that McKinsey to step away from all the processes they put into place to stop Purdue like studies from happening in the name of growth. You said it yourself, it's pretty obvious that for them it's profit above all.

Right now, McKinsey needs a different kind of a leader. Kevin is a humble leader who is being punished for putting processes into place. The senior partners at the firm have never told No before, this vote is a punishment for Kevin’s attempt to do so.

I think all the scandals are going to lead to the downfall of McKinsey in the long term. With Bob at the head of McKinsey, he’s incredibly commercially focused and always thinking about growing the business and offerings. I expect McKinsey to go further downstream chasing even greater growth than they’ve had in the last decade. It's likely that McKinsey to step away from all the processes they put into place to stop Purdue like studies from happening in the name of growth. You said it yourself, it's pretty obvious that for them it's profit above all.

Right now, McKinsey needs a different kind of a leader. Kevin is a humble leader who is being punished for putting processes into place. The senior partners at the firm have never told No before, this vote is a punishment for Kevin’s attempt to do so.

This forum will also not be able to answer your question "objectively".

This forum will also not be able to answer your question "objectively".

Very well made points.

I do believe the press-coverage you mention is also part of the value Consulting brings to the table.

Think of it this way: an existing company is in a mess and any solution may cause a public relations, brand, etc. meltdown. Strategy Consultancies allow you to cut through the mess, get a clear picture of what you have to do and (!) they rubberstamp qualitatively what you have to do. The client executive is in the clear. If it goes south, the consultancy's name will be leaked. As a client you pay for damage control. And when the outcomes are only positive... well... the client executive can take the credit and the consultancy has to stay quiet.

Other, e.g. more operational consultancies, help you with leading the execution. If you own staff are too frightened to cut through the tape or busy protecting each other, these consultancies will help you gain momentum and realise your business case. Usually the take on project or workstream lead roles and may even by incentivised based on the P&L benefits they generate. They may even conduct cost-out and firing sessions when clients are not in a position to do so (e.g. a new exec doesn't want to tarnish his/her reputation at the start but needs to take out 20% of the staff... let the consutlant do it). Again, if it is successful, the client pays a paltry sum to the consultants for generating a high muliple of their cost in benefits. If it goes south, the consultant is to blame.

On the other side: The consultant gets a carrier booster, a high-salary, and a great network. If the consultant advises something unsavioury, he/she can simply point to the instruction given by the client. So all sides sleep well. Obviously, you do need a healthy portion of cynicism for this point of view. But the value generated for all sides is real.

Very well made points.

I do believe the press-coverage you mention is also part of the value Consulting brings to the table.

Think of it this way: an existing company is in a mess and any solution may cause a public relations, brand, etc. meltdown. Strategy Consultancies allow you to cut through the mess, get a clear picture of what you have to do and (!) they rubberstamp qualitatively what you have to do. The client executive is in the clear. If it goes south, the consultancy's name will be leaked. As a client you pay for damage control. And when the outcomes are only positive... well... the client executive can take the credit and the consultancy has to stay quiet.

Other, e.g. more operational consultancies, help you with leading the execution. If you own staff are too frightened to cut through the tape or busy protecting each other, these consultancies will help you gain momentum and realise your business case. Usually the take on project or workstream lead roles and may even by incentivised based on the P&L benefits they generate. They may even conduct cost-out and firing sessions when clients are not in a position to do so (e.g. a new exec doesn't want to tarnish his/her reputation at the start but needs to take out 20% of the staff... let the consutlant do it). Again, if it is successful, the client pays a paltry sum to the consultants for generating a high muliple of their cost in benefits. If it goes south, the consultant is to blame.

On the other side: The consultant gets a carrier booster, a high-salary, and a great network. If the consultant advises something unsavioury, he/she can simply point to the instruction given by the client. So all sides sleep well. Obviously, you do need a healthy portion of cynicism for this point of view. But the value generated for all sides is real.

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Hello!

The problems which you have raised in your question indeed have great importance for people who are standing on the crossroad, as you do, and for everyone concerned about moral issues and current situation across all over the world. Indeed, any action has the consequences and not all of them end up in a positive way.

Nonetheless, the world is changing and so are people. We need to understand that any company, whether it be McKinsey or any other one, is based on people. People who are making choices, deciding on their own values, and building the future. The consulting industry is not an exception. And the impact it spreads across the world can be changed for the better.

Totally agree with Adi, its 100% your choice - what values you will stick to, how will you behave and how seriously you will take your job. Entering the company doesn’t only mean an opportunity to develop your career and professional skills, it also means an opportunity to change things and make them better.

Follow your path, and stick to your values.

Sounds good to you?

GB

Hello!

The problems which you have raised in your question indeed have great importance for people who are standing on the crossroad, as you do, and for everyone concerned about moral issues and current situation across all over the world. Indeed, any action has the consequences and not all of them end up in a positive way.

Nonetheless, the world is changing and so are people. We need to understand that any company, whether it be McKinsey or any other one, is based on people. People who are making choices, deciding on their own values, and building the future. The consulting industry is not an exception. And the impact it spreads across the world can be changed for the better.

Totally agree with Adi, its 100% your choice - what values you will stick to, how will you behave and how seriously you will take your job. Entering the company doesn’t only mean an opportunity to develop your career and professional skills, it also means an opportunity to change things and make them better.

Follow your path, and stick to your values.

Sounds good to you?

GB

(edited)