Serious question: does McKinsey have a track record of success and what we see in the news is a small number of failures; or are they just really good at selling the C-Suite?
Mayor de Blasio's deputy, part of the group that decided to hire McKinsey in the first place, is now a senior advisor there... Maybe hiring decisions like that have something to do with it?
> The mayor’s office denied that McKinsey was hired partly to provide political or legal cover, as did Shorris, who is now a senior adviser to McKinsey and teaches at Princeton University.
Even if you're not a fan of management consulting I think giving The Lords of Strategy by Walter Kiechel a read is worthwhile to understanding why they are such a big part of our world. It gives a good modern history of the profession and how they made such a profound impact on the business world.
I think ultimately what happened was most of what made them famous in the 60s, 70s, and 80s has largely become standard business practice. With the low hanging fruit gone they've moved onto laundering accountability and/or very expensive side-steps of corporate bureaucracy.
There is definitely a level of networking effects and downright cronyism.
However one thing that is less talked about is that external consultants are extremely useful to implement unpopular decisions or to 'settle' disputed decisions.
If investors appoint a new CEO and he needs to implement something unpopular like fire people, it is much easier to get the whole board behind the decision if an external consultancy "analizes" the issue and proposes measures (usually aligned with the CEO's direction).
The same thing happens with 'factions' of the board if some people are behind a proposal but are being blocked be another 'faction', an external consultancy can act as a arbiter (usually in the direction of those who hired them).
A useful consequence is that in terms of accountability you can always take cover behind the recommendation of the subject matter expert consultants.
All that said there are definitely a lot of bright people with insightful knowledge in that field. My point is that consultancy as a business also ends up serving a less glamorous purpose.
I work for BCG. It’s like McKinsey but nerdier (and maybe with more scruples).
Most of the time, we’re explicitly hired to keep things quiet. We rarely advertise clients, much less engagement outcomes.
But be sure most revenues come from long lasting relationships. In some cases, decades old relationships. And unlike what some commenter said, revenues are growing double digits % YoY, despite BCG being over 50yo (McKinsey is almost 100yo)
So I guess MC delivers at least for those singing the check.
Excellent question, and I'll offer you a frustrating answer that splits the difference.
Because McKinsey works in so many areas, it has a huge portfolio of outcomes. There's not a lot of public visibility into what each exact outcome might be. So the firm (and others like it) are able to benefit from this opacity.
To wit: top consulting firms are able to present prospective clients with a recap of their best engagements and wins. Is that representative? Cherry picked? No one ever knows.
I know Bain consulting has an internal “benchmark”. It tracks the stock performance of the companies that they consult for and compare that to eg sp500.
pseudo0|5 years ago
> The mayor’s office denied that McKinsey was hired partly to provide political or legal cover, as did Shorris, who is now a senior adviser to McKinsey and teaches at Princeton University.
spamizbad|5 years ago
I think ultimately what happened was most of what made them famous in the 60s, 70s, and 80s has largely become standard business practice. With the low hanging fruit gone they've moved onto laundering accountability and/or very expensive side-steps of corporate bureaucracy.
DoingIsLearning|5 years ago
However one thing that is less talked about is that external consultants are extremely useful to implement unpopular decisions or to 'settle' disputed decisions.
If investors appoint a new CEO and he needs to implement something unpopular like fire people, it is much easier to get the whole board behind the decision if an external consultancy "analizes" the issue and proposes measures (usually aligned with the CEO's direction).
The same thing happens with 'factions' of the board if some people are behind a proposal but are being blocked be another 'faction', an external consultancy can act as a arbiter (usually in the direction of those who hired them).
A useful consequence is that in terms of accountability you can always take cover behind the recommendation of the subject matter expert consultants.
All that said there are definitely a lot of bright people with insightful knowledge in that field. My point is that consultancy as a business also ends up serving a less glamorous purpose.
throwawaybcg223|5 years ago
Most of the time, we’re explicitly hired to keep things quiet. We rarely advertise clients, much less engagement outcomes.
But be sure most revenues come from long lasting relationships. In some cases, decades old relationships. And unlike what some commenter said, revenues are growing double digits % YoY, despite BCG being over 50yo (McKinsey is almost 100yo)
So I guess MC delivers at least for those singing the check.
texasbigdata|5 years ago
“From 2009 to 2019, BCG’s global sales grew from $2.75 billion to $8.5 billion, and its workforce expanded from 6,900 to 21,000 employees worldwide, tripling in size. “ https://www.bcg.com/en-us/press/12march2020-bcg-revenues-rea...
GCA10|5 years ago
Because McKinsey works in so many areas, it has a huge portfolio of outcomes. There's not a lot of public visibility into what each exact outcome might be. So the firm (and others like it) are able to benefit from this opacity.
To wit: top consulting firms are able to present prospective clients with a recap of their best engagements and wins. Is that representative? Cherry picked? No one ever knows.
andruby|5 years ago
They showed this during a recruiting event once.
lucasverra|5 years ago
so it must be true !
Sarcasm apart, selling to young people the dreams is probably their 2nd most profitable activity (after selling to C-level)