Comment by gringoDan | Hacker News Reader

Comment by gringoDan | Hacker News Reader

For better or for worse, consulting companies exist to:

1) Enrich their partners

2) Lend credibility to their clients

Consulting firms are hired based on an "appeal to authority" fallacy. Companies don't want to make hard/unpopular decisions, so they outsource them to consultants. Data point: management consulting is one of the industries that is hit hardest by a recession. [0] If consultants truly provided value, this is exactly when they would be most needed.

The people actually doing the work on these deals are 22-25 year olds. They are highly incentivized to make their firm look good (thus enriching the firm's partners). Anything else is gravy. Anecdotally, I have many friends who worked in the industry, and when asked if they would hire consultants for their own hypothetical businesses, the answer was always "No".

I highly recommend this article on McKinsey's work restructuring Puerto Rico's debt - it pulls back the curtain on the industry: http://nymag.com/intelligencer/2019/04/mckinsey-in-puerto-ri...

[0] https://www.ft.com/content/1a229d54-4548-11de-b6c8-00144feab...

Overly cynical.

All companies exist to provide profits to their owners.

Your argument about the datapoint can also be argued for lending: credit disappears when it’s most needed. It must be completely and utterly useless, then.

Or perhaps when a crisis strikes, if you want to minimize spending, you first eliminate consultant bills, instead of, idk, firing internal employees?

Part of the value of a consultant is that they are more mobile than an employee, so they get to see the same problem in different companies, and get expertise on that issue more quickly that if you stay on the first company in which you solved that issue. I’ve dealt with the same very-specific software on about 20 different banks, for example (disclaimer: I’m a consultant :) ); I have people under 25 on the team that are real experts on very specific things, and run cicles around people with 2x - 5x their experience if you count it in days and not problems solved.

And then of course consultants are sometimes hired for the wrong reasons and asked to do obvious recommendations. Politics were there before the consultants arrived.

Overly cynical.

All companies exist to provide profits to their owners.

Overly simplistic.

Not all companies exist to provide profits to their owners. There are thousands of companies in the U.S. and elsewhere which exist for other reasons.

Sure, “all” is a powerful word. It was simplistic enough to support my point, which still stands though. Perhaps it is more useful to discuss the central point on debate, instead of being picky on points that are not central to the debate?

>All companies exist to provide profits to their owners.

No. This is very mistaken. There are many more stakeholders that companies have than their owners. For example, their customers. For example. Private Hospitals do not exist to make money. They can make money. But they exist to provide healthcare to sick people. As a side effect they pay their employees and make money for their owners; but if they fail to provide healthcare then they cease to exist. On the other hand, if they fail to make money they are often taken over and continue with new owners.

Companies exist to serve a function in our society, they depend on our society and they are part of it. They are not cash machines.

I feel that you're describing companies as they should be, while the quoted comment line is describing them as they have become treated.

I get what you mean, really, but it is not what I’m talking about.

Depending on the country, the “companies” that you mention have a different legal status than an enterprise / business kind of company. I think my point was clear: not only management consultants are the ones who seek to make money out of their business.

And of course to belabor your point, if private hospitals and bakeries and carmakers are all in to make a better world, up to that standard of idealism, consultants are there too.

>All companies exist to provide profits to their owners.

Management consultants nearly always have a conflict of interest though (i.e. the preoccupation of consultants is almost always "sell, sell, sell" rather than "help the client make money") due to the nature of their work and their short-term contact-based engagements mean they rarely have to stick around and deal with the messes that they create.

Large management consulting firms IME tend to hire (or develop maybe) people who are smart and ambitious but highly conformist and reluctant to challenge authority. Combined with nature of the work I described above (and ofc existing to make owners /partners rich), this is sort of a perfect storm for lots of "semi-unintentional" unethical behavior and sometimes fully intentional unethical behavior.

Fwiw, from what I observed this dynamic actually makes the consulting work environment terribly exploitative and miserable for non-partner consultants but consultants tend not be the personality types who would leave consulting (and the prestige/"potential to become a partner") over it --unsurprisingly, else the industry wouldn't exist as it does now.

> Management consultants nearly always have a conflict of interest though (i.e. the preoccupation of consultants is almost always "sell, sell, sell" rather than "help the client make money") due to the nature of their work and their short-term contact-based engagements mean they rarely have to stick around and deal with the messes that they create.

Not my experience at all. If you show value to the client and you build a trust relationship then you enter into a relational mode that is fruitful for both sides, and you skip/streamline all the tedious commercial topics (RFPs, competitors, beauty contests, the purchasing department demanding a 3% discount...). On the other hand, if you want to milk the cow dry then you end up on a very transactional relationship and you need to start cold selling from scratch after every project, which takes a lot of effort, time and energy.

In any case, again, the conflict of helping the client vs. overselling is hardly a consultant-specific topic; I’d say the smaller the shop, and the closer the ownership to the sales team, the more pressure there will be, in general. Case in point: the actual doctors that overprescribe opioids!

>If you show value to the client and you build a trust relationship then you enter into a relational mode that is fruitful for both sides, and you skip/streamline all the tedious commercial topics (RFPs, competitors, beauty contests, the purchasing department demanding a 3% discount...). On the other hand, if you want to milk the cow dry then you end up on a very transactional relationship and you need to start cold selling from scratch after every project, which takes a lot of effort, time and energy.

This is greatly at empirical odds with the near ubiquitous distrust for consultants among almost everyone who has worked with them.

And there is certainly no shortage of willingness to repeatedly cold sell in order to advance one's own career in consulting.

> near ubiquitous distrust for consultants among almost everyone who has worked with them

Perhaps this empirical observation doesn’t have enough unbiased samples. Consulting in general, more in particular management consulting, and even more in particular strategy consulting (where MMB, McKinsey, Boston, Bain are leaders; and the kind that sparkled this discussion), are 3 different, huge, mature, global industries. So there are empirical odds enough to say that people trust them enough to pay them, which is at odds with that universal distrust you state.

Perhaps that “ubiquitous distrust” is just more prevalent in HN or in the IT industry.

>i.e. the preoccupation of consultants is almost always "sell, sell, sell" rather than "help the client make money"

The hilarious part for me, as an independent consultant, is my partner and I often agonize over how to help the client make money in spite of themselves.

I'm not disagreeing with you---if we were employees for a big-c Consulting Firm we'd likely be under the gun to act as you describe whether we wanted to or not, and what we offer is definitely different from the most common experience people have of working with a consulting firm, but it's just funny for me to read.

Right! I should clarify that I'm only describing the big management consulting firms that most everyone has heard of. I should have wrote "management" before each time I wrote" consultant" but I didn't want to be repetitive and hoped it would be clear from the context.

Independent consultants are an entirely different group and behave very differently.

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