Wednesday, July 2, 2014

If you don't believe me, ask Dilbert

[OK, technically it should be "go ask Alice" but I'm trying to cut back on obscure allusions.]

A while back, we had a popular post (thanks, Mike) on the business model of consulting firms like McKinsey.
This is, by no means, a matter of luck. Rather it reflects just how good McKinsey is at their core mission: winning over high-level executives and spinning compelling narratives for the press. As long as the C level executives like the consultants and the consultants make them look good, the executives will happily hand out shocking sums of money.

One of the challenges that management consultants often face is trying to sell a very expensive product or service to a company that is capable of providing something similar internally at a much lower cost. For this reason, firms like McKinsey are very good at driving a wedge between top level management and the rest of the company. If you can convince high level executives that the people two or three tiers below them are incompetent and/or untrustworthy, you can justify charging exorbitant fees for things could that which can be done cheaply and quickly in-house.
My explanation relied heavily on the consultants' ability to charm top-level executives. Scott Adams has another theory.

I cover some related points here. It's arguably a weaker post but I really like the title.

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