McKinsey director Arch Patton at one time was personally responsible for 10% of the large global firm’s billings. CEOs were lining up for expensive “studies” showing that they were severely underpaid. Over time, this phenomenon metastasized into the “Jack Welch-trained MBA” that ran many American corporations into the ground.
intercst
Really supply-side economics ran many American corporations into the ground. Because only the best and the brightest do not know what they are doing on such a grand scale.
How does a management consultant get hired? By telling management what it wants to hear.
The flip side of justifying soaring “JC” pay, is McKinsey has a reputation for it’s default cost cutting recommendation being reducing prole headcount. Some years ago, Volkswagen hired McKinsey to recommend cost cuts. The union was in an uproar, because of McKinesy’s rep for recommending production head count reduction. Even the union head suggested that VW eliminate some of the redundant brands and models instead.
My former colleagues and my gritted-teeth message to “senior managers” at our company who used to bring in PwC, Andersen, etc etc…
You need to spend hundreds of thousands on these 20 somethings to do basic process analysis in fancy slides to tell you data & recommendations you could have figured out with a couple of days of work yourselves? If you need help, we’ll do it - and keep the money for our measly annual bonuses!
As offered before, they hire the outsiders, because the check virtually guarantees the outsiders will tell management what it wants to hear: management’s compensation needs to be increased, while folks like you are a cost to be minimized.
Steve
my friend is going through this at his company at this very moment.
The summary slide is 50% forecasted head count reductions.
To support:
expensive software that does midlevel mgmt work
robots that do manual work
control systems that do all the work
actually merge your damn acquisitions!
Buy the stock. After they make all their fancy announcements about this, the stock will likely go up. Sell it a few weeks/months later. Wait a year or so. Short the stock because when all the delays start happening, and all the cost overruns, and all the people that need to be hired/consulted to make that software work, to make the robots work, to make those control systems work, etc happen, the stock will drop. Then after it drops, buy it to close the trade for a profit. You can also use options, but then you have less flexibility regarding timing.
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