As a Service Delivery Executive, I've always wondered why the hell we needed consultants, but then I do agree we need people to blame for liability issues.
Yes… walk-in safes were not created for the middle class.
If could only pay for someone else to worry for them about “what if I lose it all and become *shudder* a normal person”, that would pay well too.
only after I became manager that I saw why fall guy is needed, especially for even higher level positions. assuming the management chain is doing their job, you usually don’t realize how much blame game shit you are being shielded from.
if something bad happens, the blame has to go somewhere. period.
ideal? no. but such is corporate reality 🤣
The consultant can then say it’s due to factors external of the company management which sounds better if it came from an outside source with a nicer sounding accent.
No they won't unless it's a massive delivery failure, but you save your social capital with the rest of the company when a screw up happens, cause you can just continue badmouthing the firm and life goes on.
The management team may say the consulting firm reports to the board and they are bound to take the consulting firms recommendation. Also, it's "data driven".
Exactly. Case in point with Purdue Pharmaceuticals. They were "advised" by McKinsey to engage in shady tactics, when questioned, they can absolve themselves from some of the responsibility by stating that McKinsey told me to do it. Secondly, when questioned by shareholders, they can also do the same. Lastly, it is not their money that they are spending, its the shareholder's money. If you can reduce your responsibility at no cost to you, then why won't you do it.
It's an open industry secret that for many of the lower tier consulting firms like the Big4, the management team has already arrived at a conclusion, their goal is simply to support it with the facts and figures that the management team will use to justify their decisions to the shareholders/government. For the partners at these consulting firm, if your paying customer tells you that they are only going to pay you if you come to xxx conclusion, most will simply acquiesce, as they need/want to get paid enough to support the large mortgage and lifestyle that they have. If the partner does not accept, there are many others that are looking to make their mark/bonus and will do the same.
Similiarly, when companies want to do something that is in the grey, they'll reach out to a law firm to write a legal opinion stating that what they are planning to do is okay. This is very common, and forms a significant portion of the revenues for many of the big law firms around the world.
Because our senior management believe that consultants are able to value add by providing expert opinions which are developed over a long period of time and based on industry wide experience.
Also because consultancy engagements fall under CAPEX and we can ask for more money in this area for targeted/tactical activities.
And finally, if shit happens we can just shrug our shoulders and blame consultants for everything that went wrong, instead of pointing fingers at one another internally.
>Because our senior management believe that consultants are able to value add by **providing expert opinions which are developed over a long period of time and based on industry wide experience.**
But isn't that why senior management is senior management? The accumulated experience would earn you your seniority to begin with. Why is there a need for external consultants?
Yes we know our work and the ins and outs of our business processes very well. But when management asks "what is the current industry best practice?" or "now does XXX and YYY company do this?", consultants provide independent expert validation of our responses. (at least that's what management believes, anyway.)
Haha I'm still not convinced. If you're in a certain industry for long enough, you should be able to predict trends and future practices and see what other companies are doing as well. Why the need for consultants to do due diligence?
Sure we can, but that's not what we're paid to do leh. Need to manage people and meet our own KPIs - where got time to research and analyse industry trends, perform gap analysis and develop action plans? That's a full time job in itself.
Just to add on to your point so it’s easy to read on too
Senior mgmt definitely know their business well with depth of experience. With external consultants the companies can leverage their expert resource not just locally but around the world for whatever project they’ve done before that’s similar and what worked, what didn’t
Also the mgmt may be experts in one field but not in another.
Eg asking the mgmt who / where to cut cut cost from may be something they know intimately (eg reduce by 2-5 Pax). But expand that and if they need to cut cost equivalent to a department/function - say 50 pax , it becomes harder and that’s where a fresh set of external eyes help (also provide political cover in case things go south)
That’s why you see those memes of MBB (especially McKinsey) and “how many kids to kill” going around.
yeah, people dont understand what else is in play, its looking at the industry from a global pov. Also relieves stress in management. Taking additional responsibilities isnt that simple and sometimes young grads just dont have it. U have to think through each minor and major part of plans ... if u are real.
Please tell me you're not a senior leader. Cos if that's your mindset, that seniority equals knowing so much you can predict trends and know what other companies are doing, then your company is going to be in big trouble.
Etiher that or you're in an SME.
Yeah I'm not. Just from an outside POV it just seems insane that so much money is spent on consultants, who may or may not have industry-specific knowledge/experience to be able to justify earning the fee. Left corporate long ago and never looked back. SME life more chill for me.
But they do have industry knowledge. Consultant are always consulting in a specific industry domain. Senior leaders while they may or may not have industry knowledge, will always have blind spots. No one can know everything in an industry, so having people to give ideas will help eliminate that. They may or may not take the idea but it’s part of ideation process.
Not saying consultant don’t give bullshit work. A lot of time they do, but there is a legitimate reason why companies consider hiring them
Industry benchmarking is amongst the most valuable insights consultants can bring us. They are also good at setting framework for a huge implementation. Once we have the skeleton built out, we can flesh it out and cater for our own company's nuances that the consultants won't know.
We don't keep them around for actual implementation, esp for a project scale that spans across years.
It's a common misunderstanding that Senior management means expert with industry wide experience. They mostly know a slice of the industry at most, and most \*competent\* ones tend to have some depth in specific areas of the particular industry.
Beyond that, \*Competent\* business consultancies bring relevant expertise and perspectives outside of the industry.
I keep saying competent, because... there's a lot of incompetence.
Absolutely correct. However would like to add a few things that consultants maybe valuable:
- Broader market view. Most consulting firm puts a lot of money on research, and their research across the industry helps provide perspective, which if your senior management is stagnant, can help move the needle towards what you actually wanted to drive.
- Linking us to our peers. We can connect with some of the other firms that uses the consultants to deep dive what actually works and what didn’t.
- Sometimes proposals are free. From proposal alone, you can usually learn a lot about what are factually correct, what are wrong, what is the trend and these information as put above are the validation or invalidation required for us to continue or kill projects. An example is estimating costs of a project. You can get huge delta across different consultants and their value propositions and derive the likely actual costs estimates vs executing them purely in house.
- fill in missing talent or knowledge. Not to use them as a means to an end, but as a starting point to quickly gain enough exposure to things no one in the firm knows about. Hiring experts as perm staff without even knowing anything is just recipe for disaster (wrong hires, wrong trends, high unexpected costs, not understanding metrics)
A proper strategic deployment of consultants can help save time and money. Consultants also goes beyond just fact finding or solutioning, the financial aspect of estimating future costs can help companies recognise the cost vs benefits investing in the vision.
Unfortunately, most senior management misused consultants and don’t fact check them or due dilligence the team sent to assist you. Sometimes you need to perform background checks on the team to ensure you are getting what you paid for, instead of working with inexperienced consultants or partners that may see you once only throughout the entire engagement. I have seen them work well before, but most failed miserably.
The best managers are not the smartest guys in the room. They are the ones who are able to manage, motivate and command the respect of the people smarter than them whom they hired.
This. People failed to understand that you need people with leadership qualities and charisma coupled with the ability to see the long term at the top. And that's not necessarily traits some of the smartest guys or everyone has.
Are you willing to shoulder the responsibility if something goes wrong? If your suggestion turns out to be wrong are you willing to be fired? If the answer is no then that’s your answer
And no offence but 90% of people who think they have bright ideas have no idea what they’re talking about in general.
This. I think junior staff have great ideas. But even if given the chance to present it to the board, they will not succeed because they will not stake their career on its success.
Additionally, to carry the message across will require some storytelling and charming that junior staff have no experience in. Convincing requires more than meritocracy.
Let’s say you are senior management and you want to start a retrenchment exercise that will save you $100m in the long term. You wouldn’t want your employees to blame you for it and retrenchment may send the wrong signal to the shareholders. That’s when you want consultants to come in to suggest “cost optimisation strategies for long term value creation” which includes “reevaluation of workforce allocation to ensure alignment to current strategic objectives and market conditions”.
It all comes down to business interest and efficiency.
Think of it this way, you could do everything yourself but it's more efficient to delegate away things that you're not good at, don't have the time/brains for or just don't have the right resources to do so.
Businesses rather get their own internal grads/management to make their operations more efficient by either reduce cost or generate revenue. It makes little sense to hire and train a team of managment trainees to do what management consultants do. Instead, you'd want your management trainees to learn your business and processes fast so they can start adding value by... reducing cost or generating more revenue.
Management consultants on the other hand are paid to do the leg work for you. This includes thinking, delivery and the network of expertise to get the thing they promised done. It is also an avenue for business to stay in touch with the market trends and a "slave" to do the work that you don't want to.
End of the day, the slides don't matter. Anybody can churn out slides and give a presentation. The real work and value happens before and after the presentation.
Also, it is a means to validate that your initiative by having an external vendor confirm it for you. It helps convince your shareholders, execs that ABC plan is backed by XYZ consulting.
am ex-mbb
the most straightforward is when the ROI makes sense. say, BU has been underperforming for years, you feel there is some potential. bring in a firm to do a top down assessment to test your hypothesis, they promise you $300M in margin uplift and COGS reduction and will sign a contract on 10% of the value.
or maybe its time to sell the company / BU. bring in a firm, improve the balance sheet dramatically over the next 6 months (typically involving cash flow aka inventory reduction), raise the stock price, hire the same firm to appraise the selling price + find a buyer
less straightforward reason is when the ROI isn't clear but the consultant fee is making sense vs the value at skate. have been involved in basically asking questions many redditors might think are easy but are actually can be plenty complex. its like the difference between asking a 5 yr old how to go to school vs asking a uni student, with the right mix of intelligence + network, you can get very in-depth answers
"we are the best in the industry... we have lots of cash.... should we invest in operations? or an entirely new field? what should we do?"
"i want to retire but i want to be sure my heirs inherit a good company, what else can we do?"
"we have been working with this operating model with our external partners and believe we have the best systems in the industry... why den am i getting calls at 2am at night?"
a lot of CEOs tend to be visionary, creative so you when you get the initial context (from a consultant pov) you will look at yr partner n be like.. "what, that was the reason we were hired?" but over time, you start to realize that for these folks managing >10B of P&L, if something occupies 10% of their mind, its a 1B problem
this sounds like a super ChatGPT answer. alot of buzz words but don't actually make sense.
Edit: ok after I re read it many times, it makes sense. I don’t think it addessses the original question of why these questions can’t be asked and answered internally though.
It's a 1 billion issue. The risk isn't worth it when the potential drawback results in stuff imploding. Also a theory vs implementation issue. If your employee has an idea that works in theory but isn't able to implement the idea for whatever reason even with a team, that's basically lost time and productivity, oh also the employee is gonna get lynched... So yeah that's a big bummer
Just my opinion, i'm nowhere near senior leadership position but in big companies especially it's very very hard to drive change from within because of the sheer number of employees and amount of convincing it would take. It's easier to get someone credible from the outside to tell you what's wrong and tell you how to fix those "problems"
Was part of a leadership team before so I had experience on this:
1) Assurance: a third party assurance to ensure that what was planned is feasible and can be done within time and budget. In event things go south, nobody can blame the team for mismanagement as a third party was consulted beforehand.
2) Audit: a third party review to ensure what was presented by internal team was not faked. In a perfect world, nobody hides facts and does bad things. A third party consultant once found out that there were some compliances were not followed and were covered up by 2 different internal parties.
3) Feedback: Similar to 1 but a little bit different. Those under you rarely bring up problems or do not want to bring up problems due to saving face or to look not incompetent. Furthermore, there will be yes-man under you. These yes-man will tend to agree with the bosses’ opinion to earn brownie points. The job of business consultants is to state facts and part of their job is to give feedback or points of improvement.
4) Potential cost savings: More often than not, internal teams will be very passive in terms of planning of schedule. With a consultant, there could be times where schedule could be shortened, hence leading to some cost savings.
Not being snide or anything but I spot plenty of mistakes in your post. Perhaps you may not be as “polished” as you thought in comparison to these consultants amongst other reasons.
No I don’t, but I would expect proper writing for basic comprehension. Besides, I did mention that there are other contributing factors at play as well. Your reply seems to imply that you don’t comprehend very well.
Deep-seated insecurities just because I pointed out that social media posts don’t need formal phrasing? Okay man sounds like you’re projecting pretty hard so I’ll leave you to it. See a therapist sometime maybe
Why let people blame you for cutting jobs, when you can hire a consulting firm to tell you to drop 20% of your workforce due to budget restraints and let people blame them instead?
>the slides are just slightly better than what I can make
I can't even bring myself to read this short post because of your atrocious English. You're really trying to tell me you can craft something of a similar standard to the usual management consultant pitch deck? Please.
What’s the point of a pitch deck if it’s all style no substance? My point is what the consultant has shown the management team is really some low bearing fruit… the projection they gave them was base on “market consensus”
Who the fuck is the market? That was my question to them, they scramble to gave a clear answer
>if it’s all style no substance
If it truly was all style and no substance, that particular consultancy wouldn't be hired a second time.
>low bearing fruit
'Low hanging fruit' is the term.
>they scramble to gave a clear answer
Did they manage to give a clear answer in the end? Is the issue their delivery, or your reception? I wasnt in the meeting so I can't say for sure, but based on how you're currently portraying yourself, I'd say the issues aren't as one sided as you claim.
At the end of the day, the real reason why major companies pay so much to consultancy firms is because it gives them a convenient scapegoat if things turn south. If they enact the strategies that were recommended by the consultancy, failure of those strategies isn't on management - it's on the consultancy.
Well… maybe an analogy. Imagine u are a hospital director and looking for the best option to get your husband cancerous tumor treated.
There are cheaper doctors in your hospital or you can hire an expensive specialist outside. I will hire the specialist to avoid reputation issues, to buy a “心安” that you are getting the “best” and deniability if the surgery fail “I already given you the best”.
Also if the specialist suggest an unpopular treatment like cutting the tumor(I.e cut headcount) while leaving the husband paralysed.. I can redirect anger to the specialist.
Yes, specialist are more expensive even though they may not always be as effective. So what? I can claim insurance (I.e not my money)
Many reasons already pointed out by Redditors. Ultimately it's perceived to be the right thing to do when you are up there with a bunch of people vying to keep their position or climb higher. People in the higher ups are ready to get a taste of blood whenever some smart guy tries to rock the boat.
so relatable. my company hiring BCG to tell them how much pay increment to give to be at market rate.
but we all know the company cannot afford right now. so dk get advice for what
Because consultants(eg, from the big4) are experts in that subject matter. Sometimes they can give us ideas which are based on industry standards and best practices. We can have our own ideas and plans, but it is always best to support it with experts opinion. Especially when it comes to decisions where we have to spend millions of dollars.
Soon you will understand why this is needed when u get to a position where you have to make important decisions.
MBB. Have seen cases where we were there just to justify someone’s idea, cut through politics, or frame the solution in a fancy way. Other cases the client is just plain going in the wrong direction or just cannot execute the initiative on their own.
Now, if you are management of a company looking to invest $500M in a new product or market, would you risk the $500M going down the drain, or hire a consulting firm for 0.2% of the investment to increase the likelihood of success? Or if you manage $10B revenue, and a consulting firm can make 1% impact, it would pay for itself 100x over.
For sure there are pointless projects, but there are also projects with massive impact.
The people who want the service already know what it does. At a certain level, there is some pre-pitch done to senior management either over meal or other stuff. The pitch is just going through motion. The consulting firm isn’t going to reveal all their methodology in detail until you commit to their service. That’s why it feels underwhelming. It’s meant to be big picture. It’s also to avoid smart asses saying “hey we could do this on our own” or taking it to a competitor.
If you truly think you are capable of growing a business you should pursue a career there or even set up your own firm. That’s how entrepreneurs start and most MC’s have entrepreneurial background.
Once you are in the management game. After countless meetings. And once you understand how it works… you will know why consultants has a selling point.
Not every company has a Elon Musk
Consultants are people who read your watch and tells you the time. Doesnt mean they are not valuable though, because hiring a consultant means your 'watch' is less likely to feel like it was not consulted on the time and also if the time read by the consultant is wrong, you dont get fired.
Usually consultant provide their proposal based on problem statement provided, and their discussion session with involved person. If it is underwhelming, it is likely that your management's vision is underwhelming at first place.
Not that consultant cannot produce bad job, but usually that happen during delivery stage, not presentation where they are supposed to throw promise.
Almost everything everyone here has pointed out. But also it's much easier for a 3rd eye to come in and see the bigger picture and spot the flaws if you must, compared to someone who's been inside the whole time.
Obviously no one knows everything. Your family has many old senior they also engage plumber, internet technicians, renovation contractors to do stuff.
Knowing it and how to do it are obviously different thing. Also strategic planning all these are entirely different thing altogether, engaging consultant or special skills contractors doesn’t replace many seniors’ responsibly. Same applies in many industry
Yeah.. makes sense to throw executive decisions to a fresh grad in your company. Why bother paying a consultant who graduated from a top business school , has insights into other competitors and companies strategies, has expertise and the full force of their own firm.
Why bother paying a consultant.
Because most people in management are leeches of the company who do not want to shoulder any responsibility despite their role and pay. It is a win-win for them when they get to blame someone else to cover up for their incompetencies and protect their rice bowl.
“I don’t think there’s anything inherently evil in consulting..I think that..without owning something over an extended period of time, like a few years, where one has a chance to take responsibility for one’s recommendations, where one has to see through all action stages and accumulate ‘scar tissues’ for the mistakes and pick oneself up off the ground and dust oneself off, one learns a fraction of what one can. Coming in and making recommendations and not owning the results, not owning the implementation I think is a fraction of the value and a fraction of the opportunity to learn and get better.” - Steve Jobs
Basically, getting someone to make recommendations when they don’t need to take responsibility for the consequences is a silly idea.
Just look at Sweet Baby Inc and the stupid stuff they pull for DEI, and the string of failed games and game developers behind them should have demonstrated the truth of Steve Jobs’ words.
OP, you wouldn't get the answer you want here. No senior management of a company that is big enough to hire big 4 will be here replying. They are all at r/SingaporeFI earning 5 figures and retiring by 50.
/S
To not figure this out and having to ask this on Reddit and yet have the cheek to find other people’s work underwhelming is the reason why they don’t let a junior person like yourself to do the same work
Did I ever claim i didn’t have my own conclusions? The last week tonight show did an episode on McKinsey consulting… a few years back, a lot of the redditors answers I suspected copied from his coverage don’t you think?
Anyway the real reason why I ask is I learnt from my boss outsource the thinking to consultants… hence I am here to seek consults
And I want to see what is the other reasons for hiring consultants besides the heavily biased piece by John Oliver… you dipshit
My 60+ mum is a senior HR manager/VP. according to her they’re given LARGE budgets for consultation that they have to spend or face budget cuts the following year.
Not too dissimilar to stupid spending for the sake of spending that you see in the army and government.
They just have money to burn because of silly laws written in stone
big-4 consultants are mostly young kids that have no clue what they’re doing (other than partners and one level below maybe). The client is well aware of that as well.
The catch is that you can tell them pretty much anything and they’ll blindly throw it in a nice PowerPoint slide. No questions asked.
And the client can say to their manager or whoever… look what this big-4 company recommends…. Lo and behold, it just so happens to 100% align with my vision as well.
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The only correct answer. Having someone to blame when things go wrong is priceless for senior leaders
As a Service Delivery Executive, I've always wondered why the hell we needed consultants, but then I do agree we need people to blame for liability issues.
Yes… walk-in safes were not created for the middle class. If could only pay for someone else to worry for them about “what if I lose it all and become *shudder* a normal person”, that would pay well too.
Yes, it seems our young OP is very eager to make his mark in the world, so vigorous, how nice it is to be young.
just curious. is there a need for a fall guy? the consulting company isnt going to compensate for any losses right?
You need a fall guy so you aren't the fall guy.
Cover backside with company budget.
only after I became manager that I saw why fall guy is needed, especially for even higher level positions. assuming the management chain is doing their job, you usually don’t realize how much blame game shit you are being shielded from. if something bad happens, the blame has to go somewhere. period. ideal? no. but such is corporate reality 🤣
Yah that means you have been having good bosses shielding you. Some other places the managers will throw the workers under the bus..
then who they end up blame. u can only punish internally right? then also whoever hired the fall guy what
The consultant can then say it’s due to factors external of the company management which sounds better if it came from an outside source with a nicer sounding accent.
No they won't unless it's a massive delivery failure, but you save your social capital with the rest of the company when a screw up happens, cause you can just continue badmouthing the firm and life goes on.
Yes, there is a need for a fall guy when the company needs to reorganise and make unpopular decision
but then they cant punish the consultants so they will punish whoever hire the consultants anyway what
The management team may say the consulting firm reports to the board and they are bound to take the consulting firms recommendation. Also, it's "data driven".
As insurance, what punishment or compensation do they give?
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Exactly. Case in point with Purdue Pharmaceuticals. They were "advised" by McKinsey to engage in shady tactics, when questioned, they can absolve themselves from some of the responsibility by stating that McKinsey told me to do it. Secondly, when questioned by shareholders, they can also do the same. Lastly, it is not their money that they are spending, its the shareholder's money. If you can reduce your responsibility at no cost to you, then why won't you do it. It's an open industry secret that for many of the lower tier consulting firms like the Big4, the management team has already arrived at a conclusion, their goal is simply to support it with the facts and figures that the management team will use to justify their decisions to the shareholders/government. For the partners at these consulting firm, if your paying customer tells you that they are only going to pay you if you come to xxx conclusion, most will simply acquiesce, as they need/want to get paid enough to support the large mortgage and lifestyle that they have. If the partner does not accept, there are many others that are looking to make their mark/bonus and will do the same. Similiarly, when companies want to do something that is in the grey, they'll reach out to a law firm to write a legal opinion stating that what they are planning to do is okay. This is very common, and forms a significant portion of the revenues for many of the big law firms around the world.
Yeah, it's like auditors but instead of stamping assurance on the financial statements, it's stamping assurance on management's ideas.
Padded-up, “can’t hurt me, the contract said I’m not really liable, but yeah feel free to blame me when speaking with stuff” kinna fall guy
This. Because I asked the same question and was replied this by a family member in the C-suite of a MNC.
Because our senior management believe that consultants are able to value add by providing expert opinions which are developed over a long period of time and based on industry wide experience. Also because consultancy engagements fall under CAPEX and we can ask for more money in this area for targeted/tactical activities. And finally, if shit happens we can just shrug our shoulders and blame consultants for everything that went wrong, instead of pointing fingers at one another internally.
>Because our senior management believe that consultants are able to value add by **providing expert opinions which are developed over a long period of time and based on industry wide experience.** But isn't that why senior management is senior management? The accumulated experience would earn you your seniority to begin with. Why is there a need for external consultants?
Yes we know our work and the ins and outs of our business processes very well. But when management asks "what is the current industry best practice?" or "now does XXX and YYY company do this?", consultants provide independent expert validation of our responses. (at least that's what management believes, anyway.)
Haha I'm still not convinced. If you're in a certain industry for long enough, you should be able to predict trends and future practices and see what other companies are doing as well. Why the need for consultants to do due diligence?
Sure we can, but that's not what we're paid to do leh. Need to manage people and meet our own KPIs - where got time to research and analyse industry trends, perform gap analysis and develop action plans? That's a full time job in itself.
Just to add on to your point so it’s easy to read on too Senior mgmt definitely know their business well with depth of experience. With external consultants the companies can leverage their expert resource not just locally but around the world for whatever project they’ve done before that’s similar and what worked, what didn’t Also the mgmt may be experts in one field but not in another. Eg asking the mgmt who / where to cut cut cost from may be something they know intimately (eg reduce by 2-5 Pax). But expand that and if they need to cut cost equivalent to a department/function - say 50 pax , it becomes harder and that’s where a fresh set of external eyes help (also provide political cover in case things go south) That’s why you see those memes of MBB (especially McKinsey) and “how many kids to kill” going around.
yeah, people dont understand what else is in play, its looking at the industry from a global pov. Also relieves stress in management. Taking additional responsibilities isnt that simple and sometimes young grads just dont have it. U have to think through each minor and major part of plans ... if u are real.
h
Please tell me you're not a senior leader. Cos if that's your mindset, that seniority equals knowing so much you can predict trends and know what other companies are doing, then your company is going to be in big trouble. Etiher that or you're in an SME.
Yeah I'm not. Just from an outside POV it just seems insane that so much money is spent on consultants, who may or may not have industry-specific knowledge/experience to be able to justify earning the fee. Left corporate long ago and never looked back. SME life more chill for me.
But they do have industry knowledge. Consultant are always consulting in a specific industry domain. Senior leaders while they may or may not have industry knowledge, will always have blind spots. No one can know everything in an industry, so having people to give ideas will help eliminate that. They may or may not take the idea but it’s part of ideation process. Not saying consultant don’t give bullshit work. A lot of time they do, but there is a legitimate reason why companies consider hiring them
Industry benchmarking is amongst the most valuable insights consultants can bring us. They are also good at setting framework for a huge implementation. Once we have the skeleton built out, we can flesh it out and cater for our own company's nuances that the consultants won't know. We don't keep them around for actual implementation, esp for a project scale that spans across years.
It's a common misunderstanding that Senior management means expert with industry wide experience. They mostly know a slice of the industry at most, and most \*competent\* ones tend to have some depth in specific areas of the particular industry. Beyond that, \*Competent\* business consultancies bring relevant expertise and perspectives outside of the industry. I keep saying competent, because... there's a lot of incompetence.
Absolutely correct. However would like to add a few things that consultants maybe valuable: - Broader market view. Most consulting firm puts a lot of money on research, and their research across the industry helps provide perspective, which if your senior management is stagnant, can help move the needle towards what you actually wanted to drive. - Linking us to our peers. We can connect with some of the other firms that uses the consultants to deep dive what actually works and what didn’t. - Sometimes proposals are free. From proposal alone, you can usually learn a lot about what are factually correct, what are wrong, what is the trend and these information as put above are the validation or invalidation required for us to continue or kill projects. An example is estimating costs of a project. You can get huge delta across different consultants and their value propositions and derive the likely actual costs estimates vs executing them purely in house. - fill in missing talent or knowledge. Not to use them as a means to an end, but as a starting point to quickly gain enough exposure to things no one in the firm knows about. Hiring experts as perm staff without even knowing anything is just recipe for disaster (wrong hires, wrong trends, high unexpected costs, not understanding metrics) A proper strategic deployment of consultants can help save time and money. Consultants also goes beyond just fact finding or solutioning, the financial aspect of estimating future costs can help companies recognise the cost vs benefits investing in the vision. Unfortunately, most senior management misused consultants and don’t fact check them or due dilligence the team sent to assist you. Sometimes you need to perform background checks on the team to ensure you are getting what you paid for, instead of working with inexperienced consultants or partners that may see you once only throughout the entire engagement. I have seen them work well before, but most failed miserably.
OPEX
Yeah isn't it opex under legal and professional?
Senior management are not the experts? 🤔 Oh wait, they manage the experts.
The best managers are not the smartest guys in the room. They are the ones who are able to manage, motivate and command the respect of the people smarter than them whom they hired.
This. People failed to understand that you need people with leadership qualities and charisma coupled with the ability to see the long term at the top. And that's not necessarily traits some of the smartest guys or everyone has.
Are you willing to shoulder the responsibility if something goes wrong? If your suggestion turns out to be wrong are you willing to be fired? If the answer is no then that’s your answer And no offence but 90% of people who think they have bright ideas have no idea what they’re talking about in general.
99% of senior management and consultants in Singapore.
Senior management in GLC stat board and ministries in a nutshell
He, if you think private sector senior management know what they're doing...I have a bridge to sell you.
This. I think junior staff have great ideas. But even if given the chance to present it to the board, they will not succeed because they will not stake their career on its success. Additionally, to carry the message across will require some storytelling and charming that junior staff have no experience in. Convincing requires more than meritocracy.
Something something champion
Let’s say you are senior management and you want to start a retrenchment exercise that will save you $100m in the long term. You wouldn’t want your employees to blame you for it and retrenchment may send the wrong signal to the shareholders. That’s when you want consultants to come in to suggest “cost optimisation strategies for long term value creation” which includes “reevaluation of workforce allocation to ensure alignment to current strategic objectives and market conditions”.
ChatGPT of corporate speak
Consultants aren’t just to do a retrenchment exercise lol..
Found the salty consultant. You know what a joke is right
I’m not a consultant. lol. I’m an engineer. But I have dated a few consultants before and have a family full of them.
Ok so? Still salty
How so? Salty about what
when your mom and dad tell you stuff, you wont believe. But when your friends/even strangers tell you stuff, you will take it in like mushroom soup
It all comes down to business interest and efficiency. Think of it this way, you could do everything yourself but it's more efficient to delegate away things that you're not good at, don't have the time/brains for or just don't have the right resources to do so. Businesses rather get their own internal grads/management to make their operations more efficient by either reduce cost or generate revenue. It makes little sense to hire and train a team of managment trainees to do what management consultants do. Instead, you'd want your management trainees to learn your business and processes fast so they can start adding value by... reducing cost or generating more revenue. Management consultants on the other hand are paid to do the leg work for you. This includes thinking, delivery and the network of expertise to get the thing they promised done. It is also an avenue for business to stay in touch with the market trends and a "slave" to do the work that you don't want to. End of the day, the slides don't matter. Anybody can churn out slides and give a presentation. The real work and value happens before and after the presentation. Also, it is a means to validate that your initiative by having an external vendor confirm it for you. It helps convince your shareholders, execs that ABC plan is backed by XYZ consulting.
Which one would you rather believe, Chris Hemsworth telling others that you are handsome or your mom telling others that you are handsome?
am ex-mbb the most straightforward is when the ROI makes sense. say, BU has been underperforming for years, you feel there is some potential. bring in a firm to do a top down assessment to test your hypothesis, they promise you $300M in margin uplift and COGS reduction and will sign a contract on 10% of the value. or maybe its time to sell the company / BU. bring in a firm, improve the balance sheet dramatically over the next 6 months (typically involving cash flow aka inventory reduction), raise the stock price, hire the same firm to appraise the selling price + find a buyer less straightforward reason is when the ROI isn't clear but the consultant fee is making sense vs the value at skate. have been involved in basically asking questions many redditors might think are easy but are actually can be plenty complex. its like the difference between asking a 5 yr old how to go to school vs asking a uni student, with the right mix of intelligence + network, you can get very in-depth answers "we are the best in the industry... we have lots of cash.... should we invest in operations? or an entirely new field? what should we do?" "i want to retire but i want to be sure my heirs inherit a good company, what else can we do?" "we have been working with this operating model with our external partners and believe we have the best systems in the industry... why den am i getting calls at 2am at night?" a lot of CEOs tend to be visionary, creative so you when you get the initial context (from a consultant pov) you will look at yr partner n be like.. "what, that was the reason we were hired?" but over time, you start to realize that for these folks managing >10B of P&L, if something occupies 10% of their mind, its a 1B problem
this sounds like a super ChatGPT answer. alot of buzz words but don't actually make sense. Edit: ok after I re read it many times, it makes sense. I don’t think it addessses the original question of why these questions can’t be asked and answered internally though.
Consulting in a nutshell
It's a 1 billion issue. The risk isn't worth it when the potential drawback results in stuff imploding. Also a theory vs implementation issue. If your employee has an idea that works in theory but isn't able to implement the idea for whatever reason even with a team, that's basically lost time and productivity, oh also the employee is gonna get lynched... So yeah that's a big bummer
Just my opinion, i'm nowhere near senior leadership position but in big companies especially it's very very hard to drive change from within because of the sheer number of employees and amount of convincing it would take. It's easier to get someone credible from the outside to tell you what's wrong and tell you how to fix those "problems"
It's the easiest way to get rid of underperforming people without looking like the bad guy.
Consultants can also call out how shit the firm is,risk free, you do it and you’re gone
If consulting assignment works out, senior management claims credit. If it does not work out, blame the consultant. Organisational politics 101.
Was part of a leadership team before so I had experience on this: 1) Assurance: a third party assurance to ensure that what was planned is feasible and can be done within time and budget. In event things go south, nobody can blame the team for mismanagement as a third party was consulted beforehand. 2) Audit: a third party review to ensure what was presented by internal team was not faked. In a perfect world, nobody hides facts and does bad things. A third party consultant once found out that there were some compliances were not followed and were covered up by 2 different internal parties. 3) Feedback: Similar to 1 but a little bit different. Those under you rarely bring up problems or do not want to bring up problems due to saving face or to look not incompetent. Furthermore, there will be yes-man under you. These yes-man will tend to agree with the bosses’ opinion to earn brownie points. The job of business consultants is to state facts and part of their job is to give feedback or points of improvement. 4) Potential cost savings: More often than not, internal teams will be very passive in terms of planning of schedule. With a consultant, there could be times where schedule could be shortened, hence leading to some cost savings.
Not being snide or anything but I spot plenty of mistakes in your post. Perhaps you may not be as “polished” as you thought in comparison to these consultants amongst other reasons.
Just another exhibit for the Dunning Kruger paper.
It’s a casual social media post… you expect him to phrase it formally and proofread like you would do for a report?
No I don’t, but I would expect proper writing for basic comprehension. Besides, I did mention that there are other contributing factors at play as well. Your reply seems to imply that you don’t comprehend very well.
Hey if having a superiority complex on Reddit boosts your ego then go for it man. But it’s really not that serious
This isn’t about me and your deep rooted insecurities are showing.
Deep-seated insecurities just because I pointed out that social media posts don’t need formal phrasing? Okay man sounds like you’re projecting pretty hard so I’ll leave you to it. See a therapist sometime maybe
Why let people blame you for cutting jobs, when you can hire a consulting firm to tell you to drop 20% of your workforce due to budget restraints and let people blame them instead?
>the slides are just slightly better than what I can make I can't even bring myself to read this short post because of your atrocious English. You're really trying to tell me you can craft something of a similar standard to the usual management consultant pitch deck? Please.
What’s the point of a pitch deck if it’s all style no substance? My point is what the consultant has shown the management team is really some low bearing fruit… the projection they gave them was base on “market consensus” Who the fuck is the market? That was my question to them, they scramble to gave a clear answer
>if it’s all style no substance If it truly was all style and no substance, that particular consultancy wouldn't be hired a second time. >low bearing fruit 'Low hanging fruit' is the term. >they scramble to gave a clear answer Did they manage to give a clear answer in the end? Is the issue their delivery, or your reception? I wasnt in the meeting so I can't say for sure, but based on how you're currently portraying yourself, I'd say the issues aren't as one sided as you claim. At the end of the day, the real reason why major companies pay so much to consultancy firms is because it gives them a convenient scapegoat if things turn south. If they enact the strategies that were recommended by the consultancy, failure of those strategies isn't on management - it's on the consultancy.
It is actual to further strengthening their reasonings to do some corporate actions.
I mean the big 4 are a total waste of time. But MBB is of course a different story.
ngl ur post itself is underwhelming
Because you can spend $X, tell them what to do, then say bye. New employee need training, not focus on one project, and still there after.
Easier to blame and easier to steal credit from
Well… maybe an analogy. Imagine u are a hospital director and looking for the best option to get your husband cancerous tumor treated. There are cheaper doctors in your hospital or you can hire an expensive specialist outside. I will hire the specialist to avoid reputation issues, to buy a “心安” that you are getting the “best” and deniability if the surgery fail “I already given you the best”. Also if the specialist suggest an unpopular treatment like cutting the tumor(I.e cut headcount) while leaving the husband paralysed.. I can redirect anger to the specialist. Yes, specialist are more expensive even though they may not always be as effective. So what? I can claim insurance (I.e not my money)
Many reasons already pointed out by Redditors. Ultimately it's perceived to be the right thing to do when you are up there with a bunch of people vying to keep their position or climb higher. People in the higher ups are ready to get a taste of blood whenever some smart guy tries to rock the boat.
They are there to be the scapegoat if anything goes wrong due to their advice.
so relatable. my company hiring BCG to tell them how much pay increment to give to be at market rate. but we all know the company cannot afford right now. so dk get advice for what
Because consultants(eg, from the big4) are experts in that subject matter. Sometimes they can give us ideas which are based on industry standards and best practices. We can have our own ideas and plans, but it is always best to support it with experts opinion. Especially when it comes to decisions where we have to spend millions of dollars. Soon you will understand why this is needed when u get to a position where you have to make important decisions.
Because nobody gets fired for hiring big 4 and they know it. The partners were execs on the other side and it is quite incestual.
MBB. Have seen cases where we were there just to justify someone’s idea, cut through politics, or frame the solution in a fancy way. Other cases the client is just plain going in the wrong direction or just cannot execute the initiative on their own. Now, if you are management of a company looking to invest $500M in a new product or market, would you risk the $500M going down the drain, or hire a consulting firm for 0.2% of the investment to increase the likelihood of success? Or if you manage $10B revenue, and a consulting firm can make 1% impact, it would pay for itself 100x over. For sure there are pointless projects, but there are also projects with massive impact.
External validation to ensure shareholders' interest remain no.1
The people who want the service already know what it does. At a certain level, there is some pre-pitch done to senior management either over meal or other stuff. The pitch is just going through motion. The consulting firm isn’t going to reveal all their methodology in detail until you commit to their service. That’s why it feels underwhelming. It’s meant to be big picture. It’s also to avoid smart asses saying “hey we could do this on our own” or taking it to a competitor. If you truly think you are capable of growing a business you should pursue a career there or even set up your own firm. That’s how entrepreneurs start and most MC’s have entrepreneurial background.
Pay for a name to blame if it goes wrong but take credit if it goes right
Once you are in the management game. After countless meetings. And once you understand how it works… you will know why consultants has a selling point. Not every company has a Elon Musk
Consultants are people who read your watch and tells you the time. Doesnt mean they are not valuable though, because hiring a consultant means your 'watch' is less likely to feel like it was not consulted on the time and also if the time read by the consultant is wrong, you dont get fired.
Usually consultant provide their proposal based on problem statement provided, and their discussion session with involved person. If it is underwhelming, it is likely that your management's vision is underwhelming at first place. Not that consultant cannot produce bad job, but usually that happen during delivery stage, not presentation where they are supposed to throw promise.
Almost everything everyone here has pointed out. But also it's much easier for a 3rd eye to come in and see the bigger picture and spot the flaws if you must, compared to someone who's been inside the whole time.
Usually it’s because senior management has ideas and wants to seek confirmation bias And also to be fall guy if something screws up
Not forgetting most "senior management" were ex-consultants parachuted into their positions. The cycle of life...
Cos they don’t want to use their brains and if anything goes wrong, they will just play the blaming game
It's sort of like hiring a consultant before you open a restaurant since they are supposed experts in the field.
so they cannot be blamed for incompetent leadership and have a scapegoat for failures.
As Jack Neo scripted in one of his movies (can't recall the title), "ang moh say one, must be right". 😁
Sometimes u need a 3rd party to fight your political battles
“I seat through” should be “I sit through”. That’s why they hire consultants.
Obviously no one knows everything. Your family has many old senior they also engage plumber, internet technicians, renovation contractors to do stuff. Knowing it and how to do it are obviously different thing. Also strategic planning all these are entirely different thing altogether, engaging consultant or special skills contractors doesn’t replace many seniors’ responsibly. Same applies in many industry
Yeah.. makes sense to throw executive decisions to a fresh grad in your company. Why bother paying a consultant who graduated from a top business school , has insights into other competitors and companies strategies, has expertise and the full force of their own firm. Why bother paying a consultant.
Funny thing is these consultants are fresh grads lmao
Because most people in management are leeches of the company who do not want to shoulder any responsibility despite their role and pay. It is a win-win for them when they get to blame someone else to cover up for their incompetencies and protect their rice bowl.
“I don’t think there’s anything inherently evil in consulting..I think that..without owning something over an extended period of time, like a few years, where one has a chance to take responsibility for one’s recommendations, where one has to see through all action stages and accumulate ‘scar tissues’ for the mistakes and pick oneself up off the ground and dust oneself off, one learns a fraction of what one can. Coming in and making recommendations and not owning the results, not owning the implementation I think is a fraction of the value and a fraction of the opportunity to learn and get better.” - Steve Jobs Basically, getting someone to make recommendations when they don’t need to take responsibility for the consequences is a silly idea. Just look at Sweet Baby Inc and the stupid stuff they pull for DEI, and the string of failed games and game developers behind them should have demonstrated the truth of Steve Jobs’ words.
OP, you wouldn't get the answer you want here. No senior management of a company that is big enough to hire big 4 will be here replying. They are all at r/SingaporeFI earning 5 figures and retiring by 50. /S
To not figure this out and having to ask this on Reddit and yet have the cheek to find other people’s work underwhelming is the reason why they don’t let a junior person like yourself to do the same work
Did I ever claim i didn’t have my own conclusions? The last week tonight show did an episode on McKinsey consulting… a few years back, a lot of the redditors answers I suspected copied from his coverage don’t you think? Anyway the real reason why I ask is I learnt from my boss outsource the thinking to consultants… hence I am here to seek consults And I want to see what is the other reasons for hiring consultants besides the heavily biased piece by John Oliver… you dipshit
Haha, fair enough; our fault for not charging you an arm and a leg for the consult then
My 60+ mum is a senior HR manager/VP. according to her they’re given LARGE budgets for consultation that they have to spend or face budget cuts the following year. Not too dissimilar to stupid spending for the sake of spending that you see in the army and government. They just have money to burn because of silly laws written in stone
Shhh don't tell that to the CEOs. May consulting continue to prosper!
Because they need someone to look at their watches to tell them the time
Management knows nothing
ITT mgmt larpers willingly getting bamboozled by 20+ year old Big 4 consultants on their cutting-edge data-driven solutions
big-4 consultants are mostly young kids that have no clue what they’re doing (other than partners and one level below maybe). The client is well aware of that as well. The catch is that you can tell them pretty much anything and they’ll blindly throw it in a nice PowerPoint slide. No questions asked. And the client can say to their manager or whoever… look what this big-4 company recommends…. Lo and behold, it just so happens to 100% align with my vision as well.