Beware Management Consultants

I smirk and laugh this little slideshow and then remember that my own work involves internal tools to promote governance and productivity while formalizing requirements to two outsourced developers.

I don't think I'm one of the red team's 7 captains, but I don't exactly have my hands on the paddle every single day. After all, I can find the time to lollygag on HN between 9-5.

The intentional bad UX made me read the whole thing, instead of skimming through.

In this day and age, bad UX is great for preventing ADHD users

Private firms are entertainingly idiosyncratic in ways only founder-powered public firms barely approach. The other big one I find entertaining is Dr Bronner’s soap which has a massive label full of dense text that is totally stream of consciousness sentences. Amazing.

Perhaps it’s a characteristic of closed groups. SQLite has its moral code that is the Ten Commandments++. Good stuff.

I think generalizations are usually bad. I genuinely am weirded out by management's fascination with consultants. It really is about incentives, and consultants usually do not have the right ones, at least the big ones. Also, there are management which feel like companies always need change, but really you have to examine the competitve position within the broader industry not just a vacumm. Things honestly stay the same for a long time. IBM had more revenue then Microsoft all the way up to the early 2010s. Switching costs are powerful - https://s-1.vercel.app/posts/why-dropbox-is-a-obvious-pe-tar...

I think a key takeaway is the human nature to constantly act, and not just sit and do nothing. Lot's of value in sitting around, especially in investing.

And then they came up with a brilliant term called "agile methodology". The word "agile" was a big selling point. Under the new methodology, there will be standup meetings and introspection every 5 minutes during the race.

I spent a few years on and off consulting working for two of the Big 4. I can’t speak for all the teams but the ones I worked with provided good value. Our job was to protect our customers from poor designs and lack of accountability. Some of the projects I worked with were very big involving dozens of suppliers. Our customers didn’t have the capability to coordinate so much work and they also lacked the know-how and expertise in many of the domains. Also many of the big engineering and tech companies out there can be very sloppy. Don’t think because they carry a recognizable name (I don’t want to name them but they are SP500) they always do good work. I have seen stuff that is really really bad, like unsafe bad. That’s where my team would step in and fill those roles on the customer side. Many of the projects I participated were also highly regulated, and that’s a whole additional layer of complexity for which you need people with experience in very particular areas. A bad design that leads to an environmental disaster or even a violation of regulations can be extremely costly.

Am I misreading something, or was it not in fact the corporate leaders who torpedoed the reorg suggestions they knew were coming, who were at fault?

This is a classic hierarchy-brain/ bureaucracy problem, where "leaders" think the top is more important to the org than the bottom.

That's why mums go to Iceland.

The antique illustrations on this are fantastic.

I see a disconnection here. Every once in a while we see a article criticizing management consultancy, yet the business is still booming and very powerful and sophisticated corporations still hire them. So, I'd assume that the consulting companies do offer some value, in fact billions of dollars of value. What are those values, then?

Not gonna lie, the website of a remarkably ordinary frozen food supermarket found on most UK high streets is not where I'd expect to find this kind of content :)

Funny because the tier list sub on reddit had a vote just a week ago about the UK supermarkets and Iceland only got a D https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fh... (not that it matters considering Tesco got an A)

"What would you say you do here?" - The Bobs

I’ll just point out that the management consultants don’t seem to be the problem in this story…

The entire section of the website about 'The Dark Ages' is priceless. They don't pull any punches: https://about.iceland.co.uk/our-story/the-dark-ages/

I think I'm missing a _lot_ of context here. Obviously management consultants are sycophantic but why post this now?

What is this? A picture book for adults?

In most cases, the bad application of Management Consultants is 'user error'.

Which is quite common.

'Good use' of management consultants are for things like M&A research, some structural issues etc.

Most companies are not full of smart people, and even when they do have very smart people, they're usually in narrow roles.

Companies can't afford to have 'a strategy team' internally that look at issues broadly. When they try, they end up in 'committee failure'.

It makes a ton of sense for a manufacturer to have consultants come in and look at supply chain issues - especially if those consultants are led by someone who just did that for 5 other companies.

$1M is 'nothing' to find the issues underlying a lot of nuanced things at scale.

The other 'positive magic' of the consultants, is that they are able to put in 'authoritative researched way' what the company might already know broadly but where the knowledge is scattered.

CEO wants to make a big change, the consultants can dig deep, scour the data, come up with plans.

That's very valuable.

It's very destructive when the CEO pays $1M to justify his own egoic delusions; which is common.

The consultants will be happy to take the money to find research to justify the delusions though.

They are overused, but they're useful when used properly.

Even when they are used properly, it can be too expensive.

The city of NYC deciding on exactly how to do recycling bins, I think famously cost a few million - but that's not entirely outrageous. You want to spend a lot of energy up front thinking through those, researching what happened in all the other cities, best practices, supply chains, operations etc.

NYC is 20 million dam people. It's way bigger than Sweden.

And city bureaucracies are not ready to do that kind of hard hitting research.

So - the right team, for the right cost (which can seem like a lot, but it might not be in context). But again, what would be a 'very valuable $1M spent' can end up being '$10M' kind of thing, so even when 'it was the right move' it could be disproportionate.

The "recovery plan" described elsewhere on the site:

https://about.iceland.co.uk/our-story/the-dark-ages/recovery...

...is analogous to the "Friedman unit of progress" during the second Iraq War. The context is that Thomas Friedman, New York Times tenured op-ed columnist, stated that "the next six months" were the most crucial for changing the direction of the Iraq War, justifying the US presence there. He cited "the next six months" repeatedly, over the course of about 10 years.

https://en.wikipedia.org/wiki/Friedman_Unit

This is nice big fat fuck you to the mercenaries that come and destroy companies. Well done Iceland.

Why is there still a single captain, why isnt he rowing, why are we rowing and where are we rowing to?

I mean, the movie "Office space" could have taught you that lesson almost 30 years ago.

PE turning a beloved brand into a soulless skin suit exhibit no. 63631

Isn’t this the same company that had the trademark dispute with Iceland the country?

https://en.wikipedia.org/wiki/Iceland_v_Iceland_Foods_Ltd

That last line: "...to demonstrate fiscal and HR dexterity for stockholders..."

Thats a good point of view of the traditional Managment consultants, now for the "AI era", this type of interventions will not exist Maybe now the Big coorp will finally get closer to real life solutions to the problems companies face

I won’t lie. I want to be Captain/Director, not the rower.

It’s very satisfying to get rich by doing pretty much nothing. And there’s some sadness when some rower does their best but doesn’t even come close to directors/captain positions.

Some excellent rowers can make it sure, but we all are not excellent. Oh well, I stop

I smirk and laugh this little slideshow and then remember that my own work involves internal tools to promote governance and productivity while formalizing requirements to two outsourced developers.

I don't think I'm one of the red team's 7 captains, but I don't exactly have my hands on the paddle every single day. After all, I can find the time to lollygag on HN between 9-5.

That's why mums go to Iceland.

The intentional bad UX made me read the whole thing, instead of skimming through.

In this day and age, bad UX is great for preventing ADHD users

Perhaps it’s a characteristic of closed groups. SQLite has its moral code that is the Ten Commandments++. Good stuff.

I think a key takeaway is the human nature to constantly act, and not just sit and do nothing. Lot's of value in sitting around, especially in investing.

Am I misreading something, or was it not in fact the corporate leaders who torpedoed the reorg suggestions they knew were coming, who were at fault?

This is a classic hierarchy-brain/ bureaucracy problem, where "leaders" think the top is more important to the org than the bottom.

What is this? A picture book for adults?

The "recovery plan" described elsewhere on the site:

https://about.iceland.co.uk/our-story/the-dark-ages/recovery...

https://en.wikipedia.org/wiki/Friedman_Unit

I mean, the movie "Office space" could have taught you that lesson almost 30 years ago.

PE turning a beloved brand into a soulless skin suit exhibit no. 63631

They may want to secure the services of a consultant.

Weird story ... Dr Bronner also appeared in the greatest unreleased movie ever made. With Bill Murray and Dan Ackyroyd and Liz Taylor's ex husband. And it was the only movie Dr Bronner appeared in according to imdb: https://www.imdb.com/name/nm0111462/

> Larry would do these big usability studies and demonstrate beyond any shred of doubt that nobody can understand that frigging website, but Bezos just couldn't let go of those pixels, all those millions of semantics-packed pixels on the landing page. They were like millions of his own precious children. So they're all still there, and Larry is not.

https://gist.github.com/chitchcock/1281611

I imagine that Dr Bronner's unhingedness is a net asset for the brand. I always prefer to buy things that seem less sterilized by corporateness.

If a public co CEO acts differently than others and then underperforms the market, shareholders then look at rhe idiosyncrasy as a bad thing. So they naturally all start to act like each other. Buffett had a similar idea he termed the institutional imperative.

If you’re the private owner/CEO you just get to be steered by the customer, and can even stop growing if you want.

Actually had no idea Dr. Bronner's was this weird. The guy started it as a tax-exempt religious organization!

Haha my friend buys that stuff and the label text reminds me of Timecube.

Dr Bronners is local to me and they are very active in the burner scene (I believe the founder is an OG burner). I have a few friends who work there and Bronners often has a presence at local burner events (and Burning Man) -- notable because these are environments where commercial expression is generally forbidden. Yet they sometimes get a pass, I think because they embody the burner spirit and often supply a needed service (showers) totally free and in a way that fits in with the culture. It is the most guerilla marketing you ever saw and I would not be suprised if that wasn't their intent -- rather its just the company gifting itself and embodying the spirit of the ten principles.

They remind me a lot of Valve in that they are able to chart their own path and find success.

Bronners certainly isn't without its problems as a company. But I find it to be very inspirational that companies can find success without having to devolve into the bland milquetoast mediocrity that feels like 95% of US business culture. We need more people being visibly, authentically, and unashamedly weird.

Dr. Bronner lost his family in the Holocaust and it seems to have broken his brain a little.

In my experience senior management hires management consultants to tell them to do what they wanted to do anyway but now they can blame the consultants.

The two consults in Office Space absolutely nailed it.

It seems that management in most organisations can't believe something unless they've paid vast sums for it. So they can't believe their own staff if they say X, even if it's right, because they haven't paid enough for it. Then the consultant comes along, interviews the staff, finds they say X, tell the client, charge buckets for it, and are believed. Weird human behaviour...

disclaimer: ex management consultant

> It really is about incentives, and consultants usually do not have the right ones

As a consultant myself, I don't get it, that might be true for management consultants, but not for technical ones.

As a software engineering one, there hasn't been a single time where I wasn't among the top performers after a month.

My incentive was always to do a good showing so they may call you for other projects in the future.

Generalizations are heuristics we build upon our experiences. Not 100% correct but a good mental model to adopt situationally. You are shooting down the whole notion of generationalizion without much backing.

You gotta provide why it's bad instead of whataboutism direction you took.

Generalizations can be bad, yes. Everyone knows about management consultants ruining companies and governments, contributing to the opioid crisis, etc. But what else do they do?

Let’s crowdsource examples of management consultants delivering a huge amount of value to a company or society in a way that the company couldn’t have accomplished without them.

I’ll start:

The work is important and mysterious

My interpretation of the parable is really just that management consultants are paid to tell you what you already know and give you the conclusions you want to hear - hence why their "solution" is non-specific and the retrospective analysis vindicates what upper management already wanted.

It's also a criticism of management-heavy offices who have lost touch with reality, but consultants are a byword for such things, so I guess the title is succinct at the cost of accuracy.

The antique illustrations on this are fantastic.

Not gonna lie, the website of a remarkably ordinary frozen food supermarket found on most UK high streets is not where I'd expect to find this kind of content :)

"What would you say you do here?" - The Bobs

The entire section of the website about 'The Dark Ages' is priceless. They don't pull any punches: https://about.iceland.co.uk/our-story/the-dark-ages/

I think I'm missing a _lot_ of context here. Obviously management consultants are sycophantic but why post this now?

In most cases, the bad application of Management Consultants is 'user error'.

Which is quite common.

'Good use' of management consultants are for things like M&A research, some structural issues etc.

Most companies are not full of smart people, and even when they do have very smart people, they're usually in narrow roles.

Companies can't afford to have 'a strategy team' internally that look at issues broadly. When they try, they end up in 'committee failure'.

It makes a ton of sense for a manufacturer to have consultants come in and look at supply chain issues - especially if those consultants are led by someone who just did that for 5 other companies.

$1M is 'nothing' to find the issues underlying a lot of nuanced things at scale.

The other 'positive magic' of the consultants, is that they are able to put in 'authoritative researched way' what the company might already know broadly but where the knowledge is scattered.

CEO wants to make a big change, the consultants can dig deep, scour the data, come up with plans.

That's very valuable.

It's very destructive when the CEO pays $1M to justify his own egoic delusions; which is common.

The consultants will be happy to take the money to find research to justify the delusions though.

They are overused, but they're useful when used properly.

Even when they are used properly, it can be too expensive.

NYC is 20 million dam people. It's way bigger than Sweden.

And city bureaucracies are not ready to do that kind of hard hitting research.

This is nice big fat fuck you to the mercenaries that come and destroy companies. Well done Iceland.

Why is there still a single captain, why isnt he rowing, why are we rowing and where are we rowing to?

Isn’t this the same company that had the trademark dispute with Iceland the country?

https://en.wikipedia.org/wiki/Iceland_v_Iceland_Foods_Ltd

That last line: "...to demonstrate fiscal and HR dexterity for stockholders..."

If you’re the private owner/CEO you just get to be steered by the customer, and can even stop growing if you want.

They may want to secure the services of a consultant.

I imagine that Dr Bronner's unhingedness is a net asset for the brand. I always prefer to buy things that seem less sterilized by corporateness.

Haha my friend buys that stuff and the label text reminds me of Timecube.

They’re a set of clip art provided with Microsoft PowerPoint called ‘Screen Beans’.

You have to think of it like the nutritional supplements industry. They make mountains of money because people have certain misgivings or insecurities or unrealistic goals (or all of these things) with regard to their health. Would life go on just fine without the entire supplements industry? Sure. But that wouldn’t do anything to assuage the health concerns that people perceive themselves to have.

The same is true of the consulting industry. Because companies _also_ have certain misgivings or insecurities or unrealistic goals with regard to their health.

I've always suspected that at least some of it is information laundering.

I used to work in engine development and calibration. There aren't many people who know how to do engine cal and it's incredibly important to get your engine emissions certified to sell in a market like the USA. The problem is that most people who know how to do it work for a car manufacturer (OEM). So when I had that on my LinkedIn I would get pretty regular messages from some consultancy or another offering hundreds of dollars per hour to chat with me about my expertise. Of course I couldn't go talk to a competitor but I'm sure a lot of engineers were happy to make a few hundred bucks chatting with some generic consultant who was writing a general industry report with anonymous data and background info.

Well the customer was usually a competitor or a foreign automaker exploring entering the US market. Everyone who could help them understand the timelines, cost, and process worked for their competitors. So the critical info got passed through consultancies into sanitized anonymized reports; laundering.

Note: I'm not sure whether talking to a consultancy would have violated my employment contract at the time but I never took the calls so I had no reason to look it up. I know that coworkers did and just called it a gray area. I pass no moral judgement one way or another.

My working theory is that in many cases, it's one of those absurdities that are actually necessary because the world isn't always rational.

If you're the CEO, maybe you know exactly how your org should be restructured. But maybe it means stepping on a lot of toes and hurting people you have close relationships with.

If you get the blessing of management consultants you can at least say it's not personal.

Scapegoat as a service. You hire them to put a stamp of approval on any silly idea you have, implement it, etc. Then, if it turns out badly, well...it wasn't your fault.

Management consultants exist as a liability shift. Boards or exec management pay them money, the consultants interview them in private, the consultants give them their ideas back. This provides two things: cover, and political lubricant. Worth every penny when the alternative is completely dysfunctional management teams, or when it is your reputation or job on the line.

1. When I was 8, my mom told me that people got paid what their work was worth to society. When I was 12 she told me not necessarily. She said this: "You were only 8. I was trying to make it simple for you."

2. Management consultants get paid by shareholders to outsource blame for decisions made by management.

It's self-propagating nonsense. In the immediate post-dotcom crash, I worked for a company that was run by a bunch of young HBS grads, who all had management consulting backgrounds, (and a few minor dotcom successes). They regarded themselves as geniuses. They couldn't make a decision on anything.

Their preferred working style was to not make decisions, and to hire consulting firms to make the decisions for them. So they hired these even younger consultants, who would work for a few weeks, and make their recommendations, and then those recommendations would not be put into action. No. Instead, more consultants were hired to review and then discard the work of the previous consultants. Rinse and repeat for a few cycles.

I cannot resist one story. The initial HBS/management consulting CEO was replaced by a new CEO, someone who had run one of the early search engine companies, and had a similar background. He turned out to be no better. What I found very entertaining about CEO2 was his business past. He was known for two decisions. 1) Declined to buy the very early Google for high six figures, when he had the chance. 2) Decided to buy Blue Mountain -- think Hallmark cards but online -- for $780M. Greeting cards. 3/4 of a billion dollars. 1000x the cost of Google at the time.

Yes, hindsight and all, but still. If I had made both decisions by flipping a coin, my expected value would far exceed what this business genius accomplished.

The people criticizing use of management consulting are not usually the same people who make the decision to use management consulting.

There is no disconnect and your comment does not attempt to explain why this is some sort of contradiction.

Malcolm Walker, the founder and his son Richard Walker the current chairman are (for such an ordinary seeming supermarket) surprisingly progressive and have often spearheaded sustainability and corporate responsibility campaigns. Malcolm Walker was an active member of Greenpeace and Iceland worked with Greenpeace on several campaigns over the years.

I wish I new of more gems like this. Company sites that go into detail where they went wrong and how they turned things around make for both amazing reading and great educational material.

Never thought I'd see them posted on here, but I honestly have a lot more respect for them after seeing this.

and here I thought it was from the Nation of Iceland and was very impressed by the volume of their anti-management consultant stance.

They got a D in "willingness to pay for a certificate for their shopfront"..

Icelands products are legit trash. Tesco is marginally better.

The best supermarket in the UK is Waitrose but the price premium is excessive compared to the quality.

Office Space[1], for those who somehow haven't seen it yet.

[1]: https://www.imdb.com/title/tt0151804/

The operating profit chart too, oof:

https://about.iceland.co.uk/our-performance/

I can't get that to load at all. Hug of death, maybe?

Score-settling by the ousted (and then returning) CEO Malcolm Walker. After Iceland merged with Booker in 2000, Walker was pushed out and a new management team led by Bill Grimsey took over. Sales declined, head office staff ballooned and they hired a lot of McKinsey types. Walker's point is that they'd overcomplicated what was basically quite a simple business.

someone saw this comment: https://news.ycombinator.com/item?id=49350677

and thought it was interesting enough to submit on its own

They saw it commented on another thread.

scary shit is this is out there for people to read & learn.

but the same thing keeps happening.

top heavy organizations.

> Why is there still a single captain

Because he beat up all the other captains.

> why isnt he rowing

Because he’s the Captain and he doesn’t want to.

> why are we rowing, and where are we rowing to?

The Captain knows. Don’t you trust the Captain?

> The ruling stated that the supermarket chain founded in 1970 "cannot reasonably trademark the name of a country that has been around since the 9th century"

amazing

This is a great read thank you.

> Iceland Foods' managing director Richard Walker said the supermarket will "vigorously defend its intellectual property rights"

Some people have no shame at all. This is so absurd it read like a comedy sketch.

>HR dexterity

Well that's cursed

I wish.

My company is "AI native" in the sense that even though we are not a tech company we are using it heavily to build a bunch of tech that makes us more efficient.

Think building better SaaS products around our actual process rather than whatever bespoke niche SaaS product provides. this has yielded real savings in both software costs and efficiency. Compared to our peers, we are light years ahead. Even the supposed "leading AI readiness consultants" hired by the group board agreed.

our board have still hired kpmg[1] or some other vague merchant to come and help us deliver "efficiencies"

[1] its not them, but I want to keep some level of mystique about where I work

Nope. Everyone has their strengths and should avoid some types of work. AI doesn't change this.

Many consultants and entrepreneurs are too shameless to do that. AI only amplifies their dysfunction.

What most businesses are doing instead is squeezing their middle management to do more with less. No consultants. AI is cheaper. This squeeze happens every time the economy stagnates, and adding AI as "help" is irrelevant.

I won’t lie. I want to be Captain/Director, not the rower.

It’s very satisfying to get rich by doing pretty much nothing. And there’s some sadness when some rower does their best but doesn’t even come close to directors/captain positions.

Some excellent rowers can make it sure, but we all are not excellent. Oh well, I stop

I'm not sure how serious you are with this comment, but I'll give you another perspective.

You don't know what other roles that try-hard "rower" has outside of your imagined scenario. There's nothing even stopping them from being the "captain" of another more impressive boat when he's not on yours. Sure he's not the best, but he's doing the job and you're not. He has more experience than someone who never gets their hands dirty. More experience always makes better leadership. You'd be surprised how easy it is for someone else to steal your little hat and how often it can happen. It's definitely easier than the rowing, which I guess was your point?

I really don't mean this in a sour grapes kind of way. I'm totally serious. You'd never know that until it's too late if you're being disrespectful to the rowers. Don't let ego squander opportunities.

“Liz Taylor’s ex-husband” is extremely vague…