When company management wants to make a big change they hire consultants to provide cover and justification for it. The consultants role is to agree to and implement whatever the management's desired change is. The consultants exist to provide an air of authority behind the decision and to act as a smokescreen to the employees facing the change. If the plan succeeds, upper management takes the credit. If it fails, the burden can be shifted onto the consultants.
Companies like McKinsey will say whatever you want them to say, and there is no shortage of conflicting case studies to 'prove' their points.
> When company management wants to make a big change they hire consultants to provide cover and justification for it. [..] Companies like McKinsey will say whatever you want them to say, and there is no shortage of conflicting case studies to 'prove' their points.
Not really, there are plenty of cheaper companies you can hire to do this when you know the solution and just need to bring in someone to do something unpopular - McKinsey is expensive!
In my experience there are 4 key types of job. I've put my own percentages for what I have experienced, but different people in different companies will obviously vary dramatically.
* Problems where the client genuinely doesn't know the right solution, and wants you to help (30%-40%)
* Problems where the client knows a kind of half-baked solution, or has a load of ideas, and wants you to make a fully-baked solution (30%-40%)
* Problems where the client knows the solution, and you are assisting in implementation/further work because the client doesn't have resource or time to do it, or wants someone with specific skills that they don't have internally, for example procurement support, negotiating a merger/acquisition, time sensitive projects e.t.c. (20%)
* Problems where the client knows the solution, and just wants you to tell it to them in a report because that gives it authority or the consultants can take the blame (less than 10%)
> there are plenty of cheaper companies you can hire to do this
Isn't McKinsey like the IBM of their field, though? Hiring someone cheap makes it harder to pass the buck if it doesn't work out. "Nobody ever got fired for buying McKinsey" and all that.
I mean the pass the buck projects definitely exist, but they aren't as common as you might think in my experience. They can hire McKinsey for them if you want, it's just an expensive way to go. These projects are invariably ordered by companies that have toxic cultures anyway.
Far more common is a project where the client half knows what they want, but their thinking isn't detailed enough to implement it.
As an example that might happen in my field, let's say a company has three distribution centres, each with a general manager, and they report directly into a 'head of logistics'. The project is that they want to look at closing one distribution centre, they think they could probably get away with 2.
The client might know what they want, but probably wont understand the impact on transport costs, the capacity that exists at the other two distribution centres, likely delapse costs, how much they are likely to get for sublease as they have a long lease, the cost of redundancy, system changes required because some specific activity happens in the central DC, impact on the cost of goods sold, what are the inventory benefits, when according to their financial plan will they need the 3rd facility again. They are also unlikely to have an implementation plan and a cost estimate for making the change.
Even if the Head of Logistics can do all that, he has a full time job managing the network and working out all the impacts isn't a part-time job. It's also important to get right, so can be hard to delegate because the company probably doesn't have someone that has worked all this out before (e.g. do they know how to calculate inventory savings?).
So that's how a company can kind of know what they want to do, but consultants can still add value.
Aside: When this occurs, how do the C-suite look at themselves and think that they are the ones in charge? You'd think that they'd just have the ability to do it regardless, but an expensive whipping boy (almost literally) is the better fit. How political is your org such that this even becomes a possibility to contemplate? What terrible lack of communication and respect between layers causes this? (These questions are rhetorical, of course)
Imagine you're a VP, or even a C-Suite Executive...
Your employees get to make decisions based on what they think is best, what feels right. You don't have that luxury. Investors, the board, other managers who are vying for your position all demand numbers-based decision making and justification. So what do you do? You hire a well known consultancy to produce documents and data that supports your position. You can now justify your actions by pointing to what they've made for you. And, you have the added bonus of the sunken cost fallacy. "Well of course we took their advice, don't you know how much we paid for it?"
So the VP's job is to be disingenuous to everyone except the consultants? He's already made up his mind about what to do, knows he can't get buy-in from employees, so he hires an external firm to generate the data he has already decided is correct.
I feel like all the comments talking about a breakdown of trust seem even more poignant now after reading your comment.
Sometime (often in my limited experience) they do the same in order NOT to change. My employer before last Brough consultants in to see how they could improve. Employees listed the same things as we're listed 3 years previous when the same exercise came in. No action was taken, just lots of considering and discussions.
Companies like McKinsey will say whatever you want them to say, and there is no shortage of conflicting case studies to 'prove' their points.