The Big Con: How the Consulting Industry Weakens our Businesses, Infantilizes our Governments and Warps our Economies, by Mariana Mazzucato and Rosie Collington, is due to be published by Penguin, Allen Lane on February 23
There will soon be a consultancy touting for contracts on how not to hire consultancies.
Can you guess who I think will be running it?
Not Mazzucato and Collington. They are academics:
Most academics are out of touch with the real world and have little useful to say about it.
(This view, of course, is not conventional among academics, most of whom fancy themselves as possessing deep insight into, and special knowledge of, the workings of the economy and society. In addition to these absurd fancies, most academics also believe – even more absurdly – that they are of nobler and purer character than are the icky likes of entrepreneurs, investors, and other profit-seeking business people – people who are actually willing and able to be productive in ways judged as such by real-world consumers; ways that not one academic in 500 could possibly pull off. Academics, in general, – and like politicians – ought not be taken seriously. A shockingly large number of them are ignorant and officious fools.)
https://cafehayek.com/2015/02/some-links-514.html
“In an extract from their forthcoming exposé, the economists Mariana Mazzucato and Rosie Collington argue that the consulting industry is weakening businesses and warping economies”
No no no no no.
They prey on the weak. Large consulting firms are like lions in the Serengeti chasing the slowest in the herd. They get hired by the sort of wankers who are impressed with nice suits, degrees and Powerpoint presentations and their manager has seen some glossy ads and agrees. It’s the nearest thing in the software business to timeshare salesmen. But the net loss is minimal. Someone gets a crap website? Customers then shop elsewhere.
And no, there’s no “economic rents” because lots of companies don’t use them, won’t even talk to them. They use small, specialist consultancies with particular expertise instead who are 2/3rds of the price and staffed with people who know what they’re doing.
“A government department that contracts out all the services it is responsible for providing may be able to reduce costs in the short term, but it will eventually cost it more due to the loss in knowledge about how to deliver those services, and thus how to adapt the collection of capabilities within its department to meet citizens’ changing needs.”
So, government should print every leaflet? Run their own internet clouds? No, this isn’t actually a problem. Lots of large businesses successfully outsource bits of their service to other companies. it doesn’t matter if The Wine Society don’t know how to deliver wine to people. What does matter is that they are good at picking a courier to do the job. And if you’re shit at picking a good courier, why would you be any better at picking a bloke to drive the van for you? The nub of the problem here is how shit a lot of government is, and this is reflected in how much money they spend on large consultancies.
The nub of the problem here is how shit a lot of government is, and this is reflected in how much money they spend on large consultancies.
And, of course, the government started the ball rolling with the compliance requirements; ISO 9001 and such. Small specialist consultancies can less afford to keep up with all the ever changing crap.
Can the host hold the parasite load to a tolerable level or will it be eaten out?
A quick look at the CVs of Mariana Mazzucato and Rosie Collington not only tell what they are going to say, but also just how worthwhile it will actually be. Mazzucato is one of those socialists who claim they want to save capitalism from itself, and Collington appears to be her Mini-Me. Same crap, new package.
Expect to see their shit serialized in the Guardian.
I’ve some experience of government consulting contracts. My firm was on a list for a niche area of consulting and we received information about potential contracts every month. We also worked with other consultancies, which employed our expertise to pitch for contracts with the promise of a share of subsequent work.
In two decades we never landed a single contract on our own behalf, although we sometimes got to the final presentation at ‘The Ministry’. On the odd occasion, we knew who else we were up against. In two instances we lost the job to someone we knew and then they employed us to do the work because they couldn’t! We probably should have turned down the subcontract, but the money was just too good (£2k/day after the principal’s cut).
To this day, I’ve no idea how all this works and how you get the contracts. I do know that some consultancies we’ve worked with employ more people pitching for the government work than people who do the work. I remember walking through one such consultancy and there were more pitch files than actual work files.
Apart from the effort some consultancies put into pitching for government contracts, I also suspect there is a ‘not what you know but who you know’ going on.
One final thing: when we did get to the ‘final’, we were really unimpressed with the quality of the civil servants at ‘The Ministry’. Their lack of understanding was obvious from the questions they asked.
YAC,
“One final thing: when we did get to the ‘final’, we were really unimpressed with the quality of the civil servants at ‘The Ministry’. Their lack of understanding was obvious from the questions they asked.”
Anyone who talks about them as “Rolls-Royce” is just repeating the lie they’ve been told by another ignoramus. They’re mostly quite nice people, a few are really good. Most just want an easy life (and no-one is giving them the required kicking to stop that).
I was a City management consultant with one of the big boys in the 1990s. Clients in the public,voluntary and private sectors often hired us for cover. The CEO or management team often knew what they wanted to do but they wanted an external,’independent’ report to justify it – to staff, unions, trustees, the board etc. So the informal brief was rather different to the formal brief. Often, we would suggest recommending changes management didn’t need or want, which could then be negotiated away as ‘concessions’ to give the staff, unions etc the feeling that a compromise had been achieved. Clients in Whitehall were the most devious and Machiavellian…and they would not hesitate to blame us, the consultants, if their byzantine plots began to unravel.
There are two types of ‘consultancy’. One is useful if you want to do something you’ve never done before – it can make sense to hire somebody who’s got track record of doing it and (ideally) can train your staff in how it can be done. Or maybe it’s something that you’re too small scale to be able to have the necessary resources in house; or maybe you have the resources but there’s a big rush on and they’re committed to other things. This all makes sense. As BoM4 points out, competent organisations will be able to judge who’s competent and hire a smaller outfit who can do the work. The incompetent hire someone like Crapita, who will charge double and probably cock it up – but then nobody got fired for hiring …
Then there’s ‘management’ consultancy, which seems to consist in saying “I don’t know how to manage, please do it for me”. In which case, the question arises: Why are you being paid as a manager, then? Of course, in reality, the first question any management consultant needs to understand is what the people hiring them want the answer to be. They’re often used as cover for decisions that have already been taken, but if they can be wrapped up in “McKinsey’s say …” that makes them easier to sell to the board, and perhaps the staff.
It’s the safe bet approach, big consultancy that’s done govt work before means any failure won’t be the fault of the civil servants who awarded the contract.
It’s also very much a tick box exercise where knowing how to game the procurement scoring system pays dividends.
@ Chris Miller
Yes, I know a HR consultant who spends the vast majority of her time making people redundant: saves the in-house HR team from recriminations from people that they know (also she knows all the multiplicity of regulations on how to fire people legally).
Also 30-ish years ago I worked for a Consultancy that specialised in teaching East Europeans (and others feed from Communism) how to cope with stock markets. Most of our work was teaching the locals how to do it and we were delighted every time we worked ourselves out of a job! [The Chairman regarded making money secondary to freeing people from the shackles of state planning and the rest of us tended to agree with him after seeing how it impoverished countries].
“ Most just want an easy life (and no-one is giving them the required kicking to stop that).”
As we can see from the witch-hunt against Raab for the heinous crime of demanding high standards.
I’d say the same about consultants as I would about teachers. If you know so much about the subject, why aren’t you doing it & making lots of money rather than telling other people how to? So I would presume they don’t & they’re bullshitting.
Only experience is Sheffield Uni Students Union in the mid-1980s when gigs they promoted at the Octagon often got more city visitors than actual students. A consultant was hired, who could see the value in only students being able to see sold out acts e.g. Sisters of Mercy there as it was the Uni’s venue, but also in students mixing with non-students from the wider city for lesser names.
However:
It was up to the Union to decide what it wanted to be, a student music promoter or an inclusive music promoter, and that was a decision only the Union could make.
Top consultancy to hire that guy.
@ bis
Answer: Read my last sentence.
Albeit I’ve often had to restrain myself from asking that question when the “expert” betrayed a lack of knowledge of the subject.
Doesn’t make sense John. If it didn’t make money what would be the purpose of freeing people from the shackles of state planning ? Objections to Soviet realist art?
I’d say the same about consultants as I would about teachers. If you know so much about the subject, why aren’t you doing it & making lots of money rather than telling other people how to?
– Work/life balance (and in particular because I like to alternate working hard with slow periods, a feature industry does not provide). Most people would dream of getting as many holidays as I get.
– I want to live by my parents, and the sort of job you are talking about doesn’t exist round here. No chemical industry.
– I came back from overseas, and needed to retrain, and wasn’t interested in it taking years.
– actually, it pays almost as well as industry round here. Certainly close enough to not matter.
– I’m actually quite good at it, which provides a sense of satisfaction that endless testing of chemical samples does not.
– my experience of industry is that other than a few hot shots at the top, they’re not harder working or smarter, and I don’t want the stress and hassle of fighting my way up any greasy pole.
I don’t even get off on the human aspect of teaching, which is a prime reason why many become teachers.
Another salient point – if teaching is so damn easy, why do so many people leave it having failed or stressed out? Other than PE there is a massive shortage of teachers in NZ. So it can’t be that cushy.
O/T but FFS Telegraph
Protesters clash at Tate Britain over drag queen event for children
One person arrested after Right-wing protesters demonstrate outside event hosted by performer Aida H Dee
How far right do you have to be to think having a geezer in frock hosting an event for children at a museum isn’t in the best of taste? Get a grip on your collective selves. What’s the point of you if you want to be the Guardian?
if teaching is so damn easy, why do so many people leave it having failed or stressed out?
The words ‘bunch of pussies’ springs immediately to mind.
bloke in spain,
“I’d say the same about consultants as I would about teachers. If you know so much about the subject, why aren’t you doing it & making lots of money rather than telling other people how to?”
So, a lot of those “consultants” are actually doing things. It’s a lump term for people outsourcing to Accenture et al. The people building the software for a government project are called consultants.
Beyond that, a big thing is what Chester says. I’ve met some guys who spent decades running IT operations, retired and don’t want to do it any longer. They do 1-2 days per month of management consultancy advising younger managers what not to do. Most of them don’t even care about earning much for doing it.
In the farming business its a standard ‘joke’ that all the ‘agricultural consultants’ are people who failed at actually farming themselves. The real joke being, its true.
So, a lot of those “consultants” are actually doing things. It’s a lump term for people outsourcing to Accenture et al. The people building the software for a government project are called consultants.
With the government’s record on IT projects, I would have thought you just proved my point.
I’m a consultant these days (technology) and did the hard yards working my way up through technical jobs and then into management. In the end I got tired of being in the trenches every day.
People pay me to pass on those hard won lessons so they maybe don’t have to. They pick my brains to run their own businesses better, because unlike the big four consultants straight out of uni, I’ve been there and done it.
In the farming business its a standard ‘joke’ that all the ‘agricultural consultants’ are people who failed at actually farming themselves. The real joke being, its true.
The farmers I’ve known (admittedly not many) genuinely valued their drainage, irrigation and crop storage specialists, agronomists, etc.
“The farmers I’ve known (admittedly not many) genuinely valued their drainage, irrigation and crop storage specialists, agronomists, etc.”
I’m not talking about specialists, I’m talking about the management consultant types. The ones who come and look at the entirety of the business and tell you where you’re doing it all wrong. They are the ones who invariably have failed at doing the job for themselves. After all if you were any good at managing a farm, you’d still be doing it. Either for yourself, or as a paid employee of a large estate.
And agronomists aren’t consultants, they are largely salesmen for the chemical companies. As they they only get their commission when they advise putting some product on your crops, guess what they advise you to do all the time?
BIS,
“With the government’s record on IT projects, I would have thought you just proved my point.”
I’ve done this work, so I’ll explain the problem.
The problems with government IT aren’t generally because the software people don’t know what they’re doing. It’s about things like government overspecifying and making things really complicated, then, changing their minds again and again and again. And eventually, either the project runs out of money, or the minister gets replaced and a new minister decides that it’s not a good idea and cans it.
It’s a whole different mindset to working with business people. Business people care about a return on investment. So, they’d much rather have a simple solution that only works for 80% of easy cases and have it done in a month, so it starts recouping money. They don’t sweat the 20%. And there’s a focus around that delivery. You fail to deliver, it gets addressed because it’s costing someone money. How much does Raab, Schapps, Rishi etc actually give a fuck if a project is late? Are they going to lose the house, their wife leave them, drink worse wine? It’s inconsequential. The press are more concerned with £500 duck houses and 4* hotels than £10m blown on IT.
@ bis
OK: for those who didn’t find it clear enough – the Chairman was more interested in freeing those formerly opressed by Communism fromthe shackles of central planning than in making money *for himself*. [He did earn *some* money but IIRC more from his consultancy work than from his share of the profits]