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During that time, the Big Three and the Big Four have also been hired to help design smart cities, develop national net zero carbon strategies, propose education reforms, counsel armies, manage the construction of hospitals, draft medical ethics codes, write tax legislation, oversee the privatization of state-owned enterprises, manage mergers between pharmaceutical companies and govern the digital infrastructure of countless organizations.
every trend has been surfed by the Big Con.
The more governments and businesses outsource, the less they know how to do, causing organizations to become hollowed out, stuck in time and unable to evolve. With consultants involved at every turn, there is often very little “learning-by-doing.”
The consulting industry often provides legitimacy for controversial decisions. When a corporate senior manager wishes to convince their board of something, or when a government minister wants to win over others to their vision or stall meaningful action, a supportive report from a Big Three or Big Four firm can go a long way at the expense of other objectives—or even of labor agreements.
Konza City was the crown jewel of McKinsey’s Vision 2030 Strategy, which it developed on behalf of the Kenyan government in 2008. With promises of economic growth, job creation and technological innovation, Kenya’s Vision 2030 Strategy purported to offer a blueprint for attracting investment from multinational tech companies. But in 2021, thirteen years after construction began, Konza City remained deserted and devoid of investors—much like the McKinsey Vision projects that preceded it in Andhra Pradesh, Mumbai and Malaysia.
But that is part of the design. Few who have previously worked as a management consultant will have difficulty finding work once they leave, especially if they have been employed by a well-known consultancy. In 2013, more than seventy past and present CEOs of Fortune 500 companies were former McKinsey employees.[25] The hundreds of former management consultants now working across the most powerful companies and public sector bodies become the contacts who survivors within the consultancies reach out to when a contract is up for renewal. Indeed, a number of large consultancies have come to
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The thing—the thing—that you hear all graduates on these programs say is: “I’m not developing enough technical knowledge.” I cannot emphasize that strongly enough. A lot of people join because they want to build—this is literally the phrase—“technical knowledge.” But it is so secondary. It is basically nonexistent for the first couple of years that you work there, and it’s actually quite disillusioning.
consultants are contracted because doing so can help to legitimate the contracting manager’s decisions or improve their standing within an organization.
During the Apollo missions of the 1960s and early 1970s, NASA’s director of procurement, Ernest Brackett, recognized the importance of public sector capabilities in successful contracting and setting favorable terms of reference. He warned that if the agency stopped investing in these capabilities, for example by cutting R&D spending, it would no longer understand its own environment, not know who to collaborate with, or be unable to write the terms of reference for doing so. It would, in his words, be “captured by brochuremanship.”[56] The absence of internal digital capabilities and
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Using its MAC tool, McKinsey advocated the reduction of deforestation to be achieved through stopping what is known as “slash and burn” agriculture by indigenous communities, because this tradition was deemed to create low financial value, and so the communities would require less compensation for the loss of habitats and ways of life.[71] Large timber companies, in contrast, would require higher compensation because the costs of not cutting down forests for them were deemed high. The latter was of course a far greater contributor to deforestation.
Consultancies are often used by governments (as well as businesses) seeking to avoid blame for failures. Of course, the irony is that even if the reputational damage does land with the consultancy—which it often does not—the financial costs of failure remain the responsibility of the government, as cases from HealthCare.gov to Sweden’s Nya Karolinska Solna hospital show.
And the greatest cost of outsourcing is that in the end it is much harder to learn from failures when they are the fault of third-party actions—the blame may be outsourced, but so is the learning-by-doing.
