Having worked in the field for a few years after graduation myself, I've come to think of "strategy consulting" as mostly bureaucratic arbitrage.

8 times out of 10, the organization knows exactly what needs to be done. However, big organizations have thousands of stakeholders with competing desires. Steering the ship in a different direction can have negative consequences for thousands of people.

Due to this problem...even the people in charge struggle to do what needs to be done without being pitchforked out of the place.

BCG, McKinsey, etc. provide the perfect cover. Their mythical brand image and powerpoint sales abilities allow management to do what needs to be done, while offloading the risk onto a 3rd party. If the changes don't work out, you can fire the consultants! The management was just following the advice of the outside experts.

So what then is the actual role management plays? They're paid the big bucks (absurdly so in the typical large US corporation), and yet largely they hardly make clear decisions, frequently "didn't know" about decisions that go catastrophically wrong and get golden handcuffs and parachutes to sweeten the do nothing but create anodyne PowerPoint decks with vapid goals. And when real decisions need to be made, yet more big bucks are paid to outside contractors to tell them what most everyone in the company already knows needs to be done.

Sigh ... the incentives and consequences for the top "decision makers" in a modern corporation are corrupt to the core.

I'm not sure how it is in other countries, but at least here in the US there's this cultural tendency to want to crush anyone who's made any kind of mistake, or even made the right decision but happened by chance to have had something go wrong in a way that could have been avoided with a different decision, if they can be blamed for it, but also to accept paper-thin excuses for why a person who might be held responsible can't, in fact, be blamed for it, and once blame has been so laundered enough times we just forget about the whole thing. It's completely weird, really expensive, and ethically gross. And it's present at every level of our society, just about everywhere.

> In the immigration story, MacDougall shows that the consulting firm encouraged ICE to give less food and medical care to detainees.

I guess this is one big reason companies hire consulting firms - a consultant can act as a mouthpiece to say things you want people to hear, but not say yourself. A kind of moral laundry, absolving insiders from blame. Similarly they could recommend a risky business plan that someone believes in but doesn't want to stick their neck out for - if it fails, blame the consultants and move on.

>It seems like you’re just paying people for critical thinking.

That's exactly what it is. Unfortunately most organizations, probably even ones like the NSA, really struggle with doing any kind of critical thinking on their own. This is especially true when trying to decide on a future direction for the org: the org itself is most likely biased to just doing things the way it's always been done. In that regard, having an outsider's perspective, especially one that has also done work at other similar organizations and has taken note of all the various ways other orgs do things and knows what works and what doesn't, can be quite beneficial.

I completely disagree with this. McKinsey is often used to sell an existing idea. Plus for really boring MS office work. They don't bring in any new ideas.

The company I worked for had various McKinsey consultants; this is pretty much what they were hired for unfortunately. Various consultants (not all) were also way too young (+lack of work experience) to suggest they had that magical knowledge.

They basically just sell what some people in the organization already intend to do. McKinsey has the name, plus the people are usually better focussed on the political game that's in a big organization. There's not much magic going on though.

Getting an outsider perspective - sure. That I can get behind, it can obviously be helpful.

But getting an outsider to tell you what to do? A complete overhaul? That’s a leap. You’re going from getting perspective to getting directed by an outsider. A recipe for disaster, and from what we’re seeing here, that’s exactly what has happened.

>You’re going from getting perspective to getting directed by an outsider

Yes, but it's not like this outsider has no idea what they're talking about. This outsider has decades (sometimes centuries) of knowledge working with organizations exactly like yours, and they have seen what works and what doesn't. When McK goes to consult for the NSA, they likely bring along with them experience from doing similar projects for the CIA, or DIA, or DoD. Your own organization likely doesn't have much insight into the successes and failures of your fellow (sometimes competitor) organizations, while a consulting company does, and they can lend you that knowledge.

At least, that's what is supposed to happen (and indeed it does happen if you are diligent about the specific team of consultants you hire). I have increasingly witnessed a lot of deception and bullshit in the consulting industry, so it's completely understandable to me why people are skeptical.

Makes sense. Thanks for pointing this out.

" the org itself is most likely biased to just doing things the way it's always been done."

This is powerful, and true, because often nobody has the power to change anything.

This is why 'funder led' companies can have an advantage, founders have that 'mythical status' that enables them to move the needle on projects. Of course this can be bad as well, but hopefully the bad ones fail early.

Even 'good companies' are full of cruft and bureaucracy - Google, Apple, MS, FB no exception. It seems the 'good companies' are able to move the pieces they need to move quickly enough to steer towards market needs, knowing large chunks of the company will be left behind.

Think of all the Apple apps that have only marginally changed in a decade, and how many zillions of devs are working on them.

Easy, McKinsey and their ilk give zero shits about office political stuff, just the principal paying the bill.

In some orgs, people working in the org cannot defy certain non-cooperative people. The consultants can come in, demand the data they need, and immediately escalate to the principal.

The director of the NSA gets a modest salary of $180,000. That's roughly the comp of an associate at Mckinsey or entry level at a FAANG. I doubt that they can attract the top talent with the amount they're paying.

https://cryptome.org/2014/03/nsa-salaries.htm#:~:targetText=....

If the underlying assumption is that you can mainly attract top talent through high salaries / compensation.

I think we need to acknowledge that "top talent" is going to go other places, driven by other incentives. The academic world is filled with "top talent" that work for a measly salary, compared to the industry, because they have more freedom - and can work on what they want.

Or you have the military, which operate with a caped base salary for around $180k for their 4 star generals / admiral. It's hard to argue that the top 0.1% talent in the military are any worse than their peers at high-paying companies.

People choose different jobs / industries based on their own incentives. The smartest and most driven person I know is currently a post-doc earning $70k while doing cutting edge research in Deep Learning. He could easily be making 5-6 times that, if he just joined the industry...but he's content. /anecdote

Something is clearly going wrong if the NSA thinks it's worth it to pay for $700/hr consultants from McKinsey. All the three-letter-agencies think Palantir is cutting edge, yet anecdotally, I hear that they're charging millions of dollars for some fancy charts and rudimentary data science.

Of course, there will always be some hyper-dedicated public servant types who are top of the line, and I'm sure that the director of the NSA is one of them. However, I doubt that the average rank and file senior engineer at the NSA is as competent their counterpart at Palantir because otherwise, they could just do all their work in house.

I can only say, based on my own short experience as purchase manager, that the process looks something like this:

1. The company needs to expand / upgrade / whatever, and there's a meeting on how this should be tackled. More often than not, in large companies, this part is also delegated to some consulting firm.

2. Report from said firm comes in, you have a meeting, and either go with their recommendations, or something else which has come up internally.

3. Upper management is convinced that using outside consultants / contractors is the way to go, because it's lighter on the company (no hiring, etc.)

4. Upper management gets wined and dined by the largest players, and are convinced its better to go with the most establishes firms.

Often times they have good relationships with these firms from beforehand, and don't even bother checking out their competition.

I've been myself in the situation where we spent months on coming up with the best deal possible, only to get steamrolled by executives, because they wanted to go with someone they knew - and pay many multiples extra.

In the end, it's the tax-payers or shareholders that are paying for this kind of stuff.

As someone who has been a underpaid .gov person, that’s not really true. When you factor benefits, pensions, etc, the compensation isn’t that bad.

You also have the mission. Contributing to the defense of the country, ensuring that people get social services or that the roads are safe is more rewarding that making some billionaires some more cash!

He’s not motivated by money but by something no one else can offer: knowing secrets.

The organization may not need them, but the (at some level appointed) leadership may want to do something despite the organization...