I was working a private party yesterday for some rich consultants, and I was just thinking to myself that their whole industry seemed like bullshit. Your timing is incredible
Middle managers if they were an entire industry essentially. No talent, skills, or experience needed, just tell your clients to fire their workers and you get paid for it.
@@moosesandmeese969 Depends on what you mean by “middle managers”. In some organisations, middle managers seem to be the highest level of management doing any significant amount of actual work, as opposed to mainly/only telling other people to get to work and also fitting your “fire some workers” depiction.
We've had consultants come in to places where I work a few times over my career, they normally sub some 24 year olds with no experience, cause chaos, leave a 200 page report, fix nothing and invoice you a huge bill. The exceptions tend to be when the consultancy is hyper focussed on a specific discipline; and in those cases they can be very good at teaching your orginisation how to address an institutional blind spot.
yeah exactly, there absolutely is a place for hiring external expertise. But the useful ones are usually called "bob's fuel supply system consultancy" and are run by a few people in their 40s that have done this for decades. The graduate meat grinder of big 5 consultancies are just there for the finance equivalent of a handy men that fixes some random management disputes with reports that nobody will read to solve problems nobody cared about with solutions that likely don't work but make people feel good.
@@BS-jw7nf I'm getting old now and about to migrate into consultancy; i'll charge a lot of money on a daily rate which is fine - that can be budgeted for; my task is to identify the mess, figure out whats wrong and coach the staff in a way that they can offer value to the business. Wisdom as a service.
My local council employed a consultancy firm a few years ago to help them come up with a plan to fill in pot holes. Apparently they were paid several thousand pounds an hour to solve a problem the council used to solve by having a phone line you could phone up to report pot holes and some workmen in a van who’d go out and fill them. Whatever “action plan” the consultants drew up didnt seem to help in the slightest either. But they made a great deal of money so I guess that’s the important thing
@@BS-jw7nf One massive driver of consultancy business is what I call “management insurance”. This is where management wants to do something, but rather than shouldering the responsibility themselves, they hire consultants to write a report, framing the problem in the way that legitimate the decision management has already settled on and occasionally outright recommending said decision. This way, if the decision turns out to be bad, management can simply deflect criticism by pointing to the “external” consultants’ report, rather than having to take direct responsibility.
I work in environmental consultancy in Australia... a government department for the improvement of the environment would be nice... a government run asbestos buy back scheme would be nice... a government department for recycling waste would be nice... Each state has an EPA which is primarily a policing body which has parallels to the regular police services... and local and state governments do do some environmental improvement work but it's pretty small and sporadic... when young environmental engineers and scientists graduate there is no jobs that improve the environment directly because it's not a thing... it's all just managed destruction, whether it's the government or the private sector... the issue of vampirism in consultancy is not unique... Consultants, lawyers, brokers, traders, admin, insurance agent etc these industries are enormous and the inverse relationship between value generated and salary that currently exists across almost all sectors means this is not going away without radical economic reform... this is why I volunteer my free time for Basic Income Australia
Yeah frankly recycling is something I don't see being viable any other way other than as some kind of government agency since the venture will never be profitable given the requirements and the interface with the laws of thermodynamics. Some kind of alternative incentive structure is probably the only way it will ever work as a means of creating a closed resource use cycle. The lack of discussion of incentive structures and how to make them better and or more functional is a serious concern of mine. So much parasitic economics with each middleman inverting themselves lowering the maximum efficiency possible as required by the laws of thermodynamics and or information theory and computation which underpin them. Just look at the energy losses across the trophic levels of the food web the same sort of consequences apply to our invented systems like economies since everything there ultimately also ties back to energy information and work done. Good luck trying to change the system that is a tall task with organizing to fight for change and new ideas probably being the biggest challenge in the near term with how compartmentalized things and relationships have become.
Some kinds of recycling, such as metals are very popular (too much so in the case of copper theft). Plastics on the other hand are mostly environmental hazards which need management. Paper and glass are somewhat useful.
After having had to hire a few consultants over the years to do stuff, it would have made far more sense just to have those skills in-house. There's usually a bunch of reasons why those staff aren't in-house (hiring policies, staffing/wage caps, workloads, etc) but that is all cover for selling off everything to the private sector. I think Rosie and Marianna's points about the desperate need to reinvest in the public sector are spot on. Oh, and The Big Con is a fantastic read.
The staffing/wage cap is among the more stupid (but nevertheless prevalent) reasons for hiring consultants, since they tend to cost more than having in-house skills (after all, the consultants need their “cut” on top of the wage costs). The fact that fees for consultants are not seen as labour costs and are thus accounted for by a separate budget/account really makes no meaningful difference to the overall costs for the organisation. Other reasons for hiring consultants have to do with management and power dynamics: - Management can hire consultants to legitimate decisions management has already settled on. This gives coverage, because it means that management can’t as easily be seen a directly and completely responsible (but merely acting on “external, expert advice”). - If the experts are in-house, this can act as a countervailing (knowledge/expert) power base to management, whereas external consultants are dependent on management for further business.
@@DebatingWombat agreed. But I know a lot is made of the consultants externalising blame, risks, etc, but my experience of consultants has been much more around deliberate under-resourcing to create a subsidy to private industry. This subsidy is not just reliable contract work for consultants, but it is also in training and experience for their future employees on the public sector dime (since a lot of consultants, particularly senior consultants, have been in the public sector).
1) Regardless of the problem and/or area, consulting companies always send "business" people. This should tell you everything you need to know about what the real objectives are. 2) All of these discussions about profit sicken me, especially when related to the environment. It's only worthwhile to save the planet we live in and prevent mass death if it's profitable for those at the top. How we live in a world where this is considered normal by most people is beyond comprehension for me.
A friend of mine worked in a big 4 firm for a while. They asked him to speak with authority on things he had an undergraduate or less knowledge of, but little experience with.
thanks for your work, the both of you! What's the upside of being disillusioned at a young working age? You have the chance to change and enough energy left to do it. Imagine this happened primarily after 15 years in the industry, two children and a mortgage...
A consultant got rid of my position in my last company despite not fully understanding the dynamics of my team. Last I heard they are still scrambling and I am happily reemployed.
I think scale and scope 8:10 is part of the issue too. Like I've worked with consulting firms, finding short term work for experts who did get paid just a ludicrous amount but also are stepping in for 3 months after someone else with high level expertise on a subject pulled out
For the comment on people within these firms trying to resist and change things internally, such as for the goal of a green transition. Personally, I am not interested in the continued power seeking these companies are engaging in, as private and public firms are increasingly centralizing and becoming almost openly undemocratic. Considering the education many of these people who work in firms get, I don't believe they are qualified to transition anything.
This is a serious problem which ultimately seems to be related to the comparable hollowing out of our educational institutions into focusing people into being prepared for narrower compartmentalized career options.
One criticism I do have is that it doesn't really touch on the religious nature of modern capitalism. To me consultancy is kind of the ultimate example of that, of how capitalism is seen as a religion and people desire agents between themselves and the divine just like the priests of old.
The free market is quite literally a secularized god, a perfect entity which we can only imperfectly try to approach through blind devotion to policies recommended by the economist priesthood
And the leftist worship the state. Sorry but capitalism relies on voluntary choices and freedom. The left requires government force and the seizure of others private property. If the choice is between big business and big government I'll take big business every time, with them I can tell them to get fucked, that is not the case with big government as they have the monopoly on violence, you tell them get fucked men with guns come and put you in a cage
@@michaelevans-z8k NO, it is putting polies in jail - 'smaller government' is many many more consultants. :(. Better governance via less government maybe! note: it is the consultants that get the polies elected...
They are successful at extracting wealth, not delivering projects. My degree is in econ and worked for 35 years in tech. The bulk of that consulting and working on these kinds of projects. Now i work for a non-profit healthcare group and beat the crap out of any consultancy leadership brings in.
As someone with experience. You're not wrong. But it's a critical vulnerability. You can't just expect leadership to be all, wow! We were so wrong. How do we help. Still. I encourage your journey. Ping if you want details. ;)
nah, it's not that. if that were the case, then when party B takes over after party A has a disastrous deal with a consulting company they could very easily end and even use it to gain popularity "we got rid of that wasteful contract". Yet they never do. These systems are all intertwined and it's for personal gain of those at the top, it's not because they're too proud to admit they were wrong.
Nationalization will never happen for many reasons, chief among them being that Americans never nationalize anything. But also, these Big 4 are international, not national--what do you do with all the existing money and contracts on the table with foreign companies and nations like Saudi Arabia, who won't want to be paying consulting fees directly to the US government?
I was working a private party yesterday for some rich consultants, and I was just thinking to myself that their whole industry seemed like bullshit. Your timing is incredible
We have eyes and it is. Just like finance.
Middle managers if they were an entire industry essentially. No talent, skills, or experience needed, just tell your clients to fire their workers and you get paid for it.
@@moosesandmeese969
I reckon skill in bullshit is required. Have you seen the management speak they invent? Shameless
@@moosesandmeese969 Depends on what you mean by “middle managers”. In some organisations, middle managers seem to be the highest level of management doing any significant amount of actual work, as opposed to mainly/only telling other people to get to work and also fitting your “fire some workers” depiction.
We've had consultants come in to places where I work a few times over my career, they normally sub some 24 year olds with no experience, cause chaos, leave a 200 page report, fix nothing and invoice you a huge bill. The exceptions tend to be when the consultancy is hyper focussed on a specific discipline; and in those cases they can be very good at teaching your orginisation how to address an institutional blind spot.
yeah exactly, there absolutely is a place for hiring external expertise. But the useful ones are usually called "bob's fuel supply system consultancy" and are run by a few people in their 40s that have done this for decades. The graduate meat grinder of big 5 consultancies are just there for the finance equivalent of a handy men that fixes some random management disputes with reports that nobody will read to solve problems nobody cared about with solutions that likely don't work but make people feel good.
@@BS-jw7nf I'm getting old now and about to migrate into consultancy; i'll charge a lot of money on a daily rate which is fine - that can be budgeted for; my task is to identify the mess, figure out whats wrong and coach the staff in a way that they can offer value to the business. Wisdom as a service.
My local council employed a consultancy firm a few years ago to help them come up with a plan to fill in pot holes. Apparently they were paid several thousand pounds an hour to solve a problem the council used to solve by having a phone line you could phone up to report pot holes and some workmen in a van who’d go out and fill them. Whatever “action plan” the consultants drew up didnt seem to help in the slightest either. But they made a great deal of money so I guess that’s the important thing
@@BS-jw7nf One massive driver of consultancy business is what I call “management insurance”.
This is where management wants to do something, but rather than shouldering the responsibility themselves, they hire consultants to write a report, framing the problem in the way that legitimate the decision management has already settled on and occasionally outright recommending said decision.
This way, if the decision turns out to be bad, management can simply deflect criticism by pointing to the “external” consultants’ report, rather than having to take direct responsibility.
I work in environmental consultancy in Australia... a government department for the improvement of the environment would be nice... a government run asbestos buy back scheme would be nice... a government department for recycling waste would be nice... Each state has an EPA which is primarily a policing body which has parallels to the regular police services... and local and state governments do do some environmental improvement work but it's pretty small and sporadic... when young environmental engineers and scientists graduate there is no jobs that improve the environment directly because it's not a thing... it's all just managed destruction, whether it's the government or the private sector... the issue of vampirism in consultancy is not unique... Consultants, lawyers, brokers, traders, admin, insurance agent etc these industries are enormous and the inverse relationship between value generated and salary that currently exists across almost all sectors means this is not going away without radical economic reform... this is why I volunteer my free time for Basic Income Australia
Yeah frankly recycling is something I don't see being viable any other way other than as some kind of government agency since the venture will never be profitable given the requirements and the interface with the laws of thermodynamics. Some kind of alternative incentive structure is probably the only way it will ever work as a means of creating a closed resource use cycle.
The lack of discussion of incentive structures and how to make them better and or more functional is a serious concern of mine. So much parasitic economics with each middleman inverting themselves lowering the maximum efficiency possible as required by the laws of thermodynamics and or information theory and computation which underpin them. Just look at the energy losses across the trophic levels of the food web the same sort of consequences apply to our invented systems like economies since everything there ultimately also ties back to energy information and work done.
Good luck trying to change the system that is a tall task with organizing to fight for change and new ideas probably being the biggest challenge in the near term with how compartmentalized things and relationships have become.
Some kinds of recycling, such as metals are very popular (too much so in the case of copper theft). Plastics on the other hand are mostly environmental hazards which need management. Paper and glass are somewhat useful.
It would be really nice to have those things, and hardly make a dent in the federal budget.
After having had to hire a few consultants over the years to do stuff, it would have made far more sense just to have those skills in-house. There's usually a bunch of reasons why those staff aren't in-house (hiring policies, staffing/wage caps, workloads, etc) but that is all cover for selling off everything to the private sector. I think Rosie and Marianna's points about the desperate need to reinvest in the public sector are spot on. Oh, and The Big Con is a fantastic read.
The staffing/wage cap is among the more stupid (but nevertheless prevalent) reasons for hiring consultants, since they tend to cost more than having in-house skills (after all, the consultants need their “cut” on top of the wage costs).
The fact that fees for consultants are not seen as labour costs and are thus accounted for by a separate budget/account really makes no meaningful difference to the overall costs for the organisation.
Other reasons for hiring consultants have to do with management and power dynamics:
- Management can hire consultants to legitimate decisions management has already settled on. This gives coverage, because it means that management can’t as easily be seen a directly and completely responsible (but merely acting on “external, expert advice”).
- If the experts are in-house, this can act as a countervailing (knowledge/expert) power base to management, whereas external consultants are dependent on management for further business.
@@DebatingWombat agreed. But I know a lot is made of the consultants externalising blame, risks, etc, but my experience of consultants has been much more around deliberate under-resourcing to create a subsidy to private industry.
This subsidy is not just reliable contract work for consultants, but it is also in training and experience for their future employees on the public sector dime (since a lot of consultants, particularly senior consultants, have been in the public sector).
@@tim290280 I agree, and my comment was addressing the general use of consultants, not just that found in the public sector.
1) Regardless of the problem and/or area, consulting companies always send "business" people. This should tell you everything you need to know about what the real objectives are.
2) All of these discussions about profit sicken me, especially when related to the environment. It's only worthwhile to save the planet we live in and prevent mass death if it's profitable for those at the top. How we live in a world where this is considered normal by most people is beyond comprehension for me.
Without profit there is no money to put toward the environment. I'm assuming you get paid at work as everyone else should.
Super interesting. I always wondered what consultants actually did.
A friend of mine worked in a big 4 firm for a while. They asked him to speak with authority on things he had an undergraduate or less knowledge of, but little experience with.
Glad i stumbled across this talk, great insights with some info i didnt know about consulting firms!
another great talk
Great video thumbnail
thanks for your work, the both of you!
What's the upside of being disillusioned at a young working age? You have the chance to change and enough energy left to do it. Imagine this happened primarily after 15 years in the industry, two children and a mortgage...
A consultant got rid of my position in my last company despite not fully understanding the dynamics of my team. Last I heard they are still scrambling and I am happily reemployed.
excellent interview
I think scale and scope 8:10 is part of the issue too. Like I've worked with consulting firms, finding short term work for experts who did get paid just a ludicrous amount but also are stepping in for 3 months after someone else with high level expertise on a subject pulled out
For the comment on people within these firms trying to resist and change things internally, such as for the goal of a green transition. Personally, I am not interested in the continued power seeking these companies are engaging in, as private and public firms are increasingly centralizing and becoming almost openly undemocratic. Considering the education many of these people who work in firms get, I don't believe they are qualified to transition anything.
This is a serious problem which ultimately seems to be related to the comparable hollowing out of our educational institutions into focusing people into being prepared for narrower compartmentalized career options.
0:17 as an aussie im hoping you touch on the debacle here- big consulting firm playing both sides re tax advice
Good video
One criticism I do have is that it doesn't really touch on the religious nature of modern capitalism. To me consultancy is kind of the ultimate example of that, of how capitalism is seen as a religion and people desire agents between themselves and the divine just like the priests of old.
The free market is quite literally a secularized god, a perfect entity which we can only imperfectly try to approach through blind devotion to policies recommended by the economist priesthood
@@idonnow2 Indeed and just like a god appeasing it matters more than your material reality.
And the leftist worship the state. Sorry but capitalism relies on voluntary choices and freedom. The left requires government force and the seizure of others private property. If the choice is between big business and big government I'll take big business every time, with them I can tell them to get fucked, that is not the case with big government as they have the monopoly on violence, you tell them get fucked men with guns come and put you in a cage
Consultants and its Industry exist (primely) to get around government regulation.
The big firms also seem to mess up the public service.
So the answer isn't fewer consultants the answer is smaller government
@@michaelevans-z8k NO, it is putting polies in jail - 'smaller government' is many many more consultants. :(.
Better governance via less government maybe!
note: it is the consultants that get the polies elected...
As an employee for what this video is prob about, lets see with an open mind!
Well that was interesting, have a lot to say but will first read the book (big three employee)
They are successful at extracting wealth, not delivering projects. My degree is in econ and worked for 35 years in tech. The bulk of that consulting and working on these kinds of projects. Now i work for a non-profit healthcare group and beat the crap out of any consultancy leadership brings in.
As someone with experience. You're not wrong. But it's a critical vulnerability. You can't just expect leadership to be all, wow! We were so wrong. How do we help. Still. I encourage your journey. Ping if you want details. ;)
Ping
nah, it's not that. if that were the case, then when party B takes over after party A has a disastrous deal with a consulting company they could very easily end and even use it to gain popularity "we got rid of that wasteful contract". Yet they never do. These systems are all intertwined and it's for personal gain of those at the top, it's not because they're too proud to admit they were wrong.
Nationalization will never happen for many reasons, chief among them being that Americans never nationalize anything. But also, these Big 4 are international, not national--what do you do with all the existing money and contracts on the table with foreign companies and nations like Saudi Arabia, who won't want to be paying consulting fees directly to the US government?
Consultants is like someone who cannot ice skate, but think they can coach a hockey team