Consulting Isn’t About Advice

An extended anecdote by MIT alum Keith Yost, paid $200,000/yr. straight out of school by Boston Consulting Group to consult in Dubai:

I was regularly advertised to clients as an expert with seemingly years of topical experience relevant to the case. … Even my very first case .. I was the most senior consultant on the team. …

Analytical skills were overrated, for the simple reason that clients usually didn’t know why they had hired us. They sent us vague requests for proposal, we returned vague case proposals, and by the time we were hired, no one was the wiser as to why exactly we were there.  I got the feeling that our clients were simply trying to mimic successful businesses, and that as consultants, our earnings came from having the luck of being included in an elaborate cargo-cult ritual. In any case it fell to us to decide for ourselves what question we had been hired to answer, and as a matter of convenience, we elected to answer questions that we had already answered in the course of previous cases – no sense in doing new work when old work will do.  …

Most of my day was spent thinking up and writing PowerPoint slides. …  What I could not get my head around was having to force-fit analysis to a conclusion. In one case, the question I was tasked with solving had a clear and unambiguous answer: By my estimate, the client’s plan of action had a net present discounted value of negative one billion dollars. … But the client did not want analysis that contradicted their own, and my manager told me plainly that it was not our place to question what the client wanted. … “Change the numbers, but don’t change the conclusion.”

Hat tip to Kevin Burke.

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  • Kevin Dick

    This rings true to me. I was an independent consultant for about 10 years. I was in the IT space, so there were actual technical obstacles by which to measure success or failure.

    Nevertheless, I still developed my “First Rule of Consulting”: Your job is not to solve the client’s stated problem. Your job is to make the client feel better. Sometimes they are the same. Sometimes they are not. (And the client is the specific person or people who control whether and how much you get paid.)

    This turned out to be the best advice I could give to friends who started consulting. Proven over many years. The corollary is to pick clients whose measure of happiness you can live with.

    • nazgulnarsil

      isn’t this a specific case of the general rule that efficient deals are simplest to make between parties that already share values?

  • Michael Sterling

    It’s about having a plausible fall guy. The incentives for managers to pay for this kind of pseudo-analysis is fairly straight-forward. When things go wrong, you fire the consultants and bring in new ones.

    Imagine that there are only two styles of consultants: lawyerly and judicial. The lawyerly consultants’ job is to argue your case, while the judicial consultants’ job is to evaluate it. When managers (rather than owners) are able to choose their consultants, they will want to hire lawyerly consultants and present them as judicial consultants.

    This type of consulting is likely to be a growth industry thanks to the fact that the growth of the availability of data exceeds the growth of our analytical tools for evaluating that data. There will be many industries that suddenly have access to reams of data that was previously unavailable. This provides those industries with new opportunities to improve their decisions, but also gives managers new ways to justify their non-data driven choices with confabulated metrics.

    I think online marketing and the consulting industry that has grown up around it is a good example of this (think SEO consultants).

  • Doug S.

    “The correct advice to give is the advice that is desired.” – Putt’s Law of Advice

  • Doug S.

    Let me make a hypothesis: For those that hire consultants, the real reason for hiring one is often so that they can avoid responsibility for any negative consequences that come from making a specific decision.

    This is a book that Robin Hanson absolutely has to read.

  • Someone from the other side

    As a consultant with one of the leading strategy consultancies, I take serious issue with that – well except the part about spending your day drawing slides, that sound way too familiar. In fairness, slides are a good reality check, if you cannot put it on one or two of them, it is probably not synthesized enough.

    Furthermore, I have seen some serious analytical firepower (maybe not always with quite the rigor of an academic paper but for sure at several orders of magnitude the pace those are developed at) being thrown at what originally seemed like simple problems – generally things turn out to be neither simple nor elegant in the end. The art of the trade is to come up with a coherent story in light of that.

    And while there might occasionally be the client who does not really know what they want, it is part of a consultants mission to find out.

    And I have never fit an analysis to what the client expected. If anything, the opposite rings more true – painting darker scenarios than what the client expects (even then, within what I could honestly believe)

    Let me make a hypothesis: For those that hire consultants, the real reason for hiring one is often so that they can avoid responsibility for any negative consequences that come from making a specific decision.

    I fear there is a lot of truth to that. But it honestly reflects more on them than on the consultants.

  • Russell Wallace

    My father was a management consultant, and he said the most difficult part of his job was finding ways to express important and true conclusions so that clients would find them acceptable. His clients tended to be companies that had already run into problems that clearly weren’t going away of their own accord and needed an outside perspective; perhaps companies just looking for a rubber stamp on a plan they already like, are more likely to look for a different kind of consultant.

  • ChrisA

    While I am no fan of management consultants, while reading the link I couldn’t stop thinking “sour grapes”.

    For instance the author complains about his advice not being taken. I would say the blame for this lies in his lack of persuasion skills. He failed to realize that this is part of his job, in fact in business and real life, you can’t just come up with the analysis, you also have to find ways to get people to implement it. From his story he obviously could not do this, his example proves this, I mean why would anyone want to lose $1bn if they really understood this was the real risk? Probably this was the first time the author had failed at anything, hence his sour grapes at the whole experience, he is blaming the system rather than examining why he failed.

    I have come across quite a few smart people like the author (actually disproportionately now I think about it from MIT) who are bitter about their advice being ignored all the time, yet they never think about their role in this.

    • Proper Dave

      why would anyone want to lose $1bn

      Well it can be a case of corruption, after all this is allegedly happened in a petro-state/monarchy.
      So the 1bn is not a “loss”… all happened as it should have.

      I red the article, talk about naive… this guy actually thinks the world of business is pure and productive all the time(apparently by the wonderful invisible hand…), delusional is a better world.

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