How to Point Out a Consulting Outfit Is Often Full of Beans
July 19, 2022
I read a write up in the UK online publication The Register. The article was “IT Departments Often Regret Technology Buying Decisions.” I immediately thought about Google’s mantra that organizations did not need information technology departments. I think the reasoning behind the statement was, “Let Google do it because we are smarter and have scaling, analytics, smart software, etc., etc.” I first heard this mantra in the 2002, maybe 2003 period. I wondered if the article was just recycling Google-type fluff-a-roo?
Yes because I have heard this before. Nope because the mid tier consulting firm is probably unaware of the world before checking TikTok in the last 10 minutes.
The write up pivots on a mid tier consulting firm which has “reinvented” the Google-type mantra with a bit of the rap music beat.
I learned:
Fifty-six percent of organizations said they had a high degree of regret over their largest tech-related purchase in the last two years, according to a new survey of 1,120 executives in North America, Western Europe, and Asia/Pacific.
Ok, almost 60 percent are faced with a persistent problem. This is not technical debt; this is here-and-now craziness.
I found this passage a slightly nicer way of saying what the Google-type mantra arrogantly implied:
… For anyone left picking up the technical pieces, 67 percent of people involved in technology-buying decisions are not in IT, which means that anyone could be a tech buyer for their organization. This is the so-called lines of business phenomenon where someone in marketing, for example, uses the corporate credit card to buy a product or service that IT admins then have to help manage.
Who is best qualified to make technology decisions for an organization? The answer is obvious:
- MBAs who can use Excel
- Accountants who can use a pencil and paper
- Lawyers who can use Word and maybe a time reporting system
- Marketing professionals who can use gym equipment, acrylic paints, and art museum audio tour gear.
The outfit creating this report is a mid-tier consulting firm.
Now here’s the way to put the obvious into a for fee report:
Whether anyone has experienced buyer’s remorse after shelling out thousands of dollars for a Gartner report is a question upon which The Register cannot comment.
Bingo. Very obvious report. An expensive mid tier report which could have been summarized by talking to a Googler more than a decade or more ago. And the remarkable inability of experts to perceive that their expertise is a reflection of the present technology environment. Score: Mid tier zero. Register one.
Stephen E Arnold, July 19, 2022
The Cost of Cyber Security Misconfiguration
July 18, 2022
The numbers tossed around about the cost of a security breach are interesting. I have formed the opinion that the cost estimates are a result of what I have called spreadsheet fever. Plug in numbers, make them flow, and go, baby, go. I read “Razer Seeks $7m from Capgemini for 2020 Data Breach.” The write up explains:
The Singapore-born gaming firm is seeking compensation of nearly US$7 million in damages, which also includes a US$2,000 reward to the security researcher who discovered the breach under the company’s bug bounty program.
What outfit is the target of the litigation? The write up says:
In its lawsuit, Razer alleged that the security breach was the result of a misconfiguration of the “ELK Stack,” caused by one of Capgemini’s employees.
The ELK is not the majestic animal. The ELK in the cyber context represents open source software glued together to deliver a range of security features. The trick is the configuration. Get a setting wrong, and the ELK is less healthy than some observers suspect. An unhealthy ELK can be problematic. This is not a big dead animal in the climate changed world. This creature puts revenue and others at risk of catching a bad disease themselves; for example, standing in the unemployment line, working the phone to reclaim their identity, and apply for a job at one of the booming cyber security vendors. Well, maybe not that particular angle.
The outcome of the lawsuit may provide some more data about the cost of a cyber screw up and details about the how of the alleged misstep.
Stephen E Arnold, July 19, 2022
Enterprise Search: Bold Predictions and a Massive Infowarp
July 12, 2022
Writing about enterprise search was a “thing” in the mid to late 2000s. There were big deals. Microsoft bought Fast Search & Transfer as an investigation in the firm’s financial methods. Then the Autonomy acquisition happened, and, as you may know, that sage continues to unfold. Vivisimo was acquired by IBM, and it’s rather useful clustering and metasearch system disappeared into the outstanding management environment of Big Blue. Enterprise search vendors flipped and pivoted: Some became customer support systems. Others morphed into smart news. A few from the Golden Age of Search hung in, and these firms are still pitching enterprise search but with a Silicon Valley, New Era spin.
I read “Enterprise Search Market to Witness Massive Growth by 2028: IBM Corporation, Lucid Work Incorporation [not the well funded name of the outfit, however], Microsoft Corporation, Dassault System” [not the correct spelling of the firm’s name]. How much can one trust a write up which misspells the names of the companies subjected to an intensive analysis process?
My answer is, “Not at all.”
Let’s take a look at some of the information in the write up.
The list of vendors included in the report is:
Attivio Software Incorporation
Coveo Corporation
Dassault Systems S.A. [The accepted spelling is Dassault Systèmes]
IBM Corporation
Lucid Work Incorporation. [Wow, the name of the company is LucidWorks. Pretty careless.]
Microsoft Corporation
SAP AG
Oracle Corporation
X1 Technologies Inc.
Okay, the names of some of the companies is incorrect. Bad.
Second, I loved this passage:
The research covers the most recent information about current events. This information is useful for businesses planning to produce significantly improved things, as well as for customers gaining an idea of what will be available in the future.
I have zero clue what this quoted passage means. Current events to me and many others involves the financial crisis, Russia’s non war war, and assorted pandemics. Monkeypox. Boo!
Third, did you notice that the vendor providing search and retrieval to numerous companies and to many vendors is not included in the report. I am referring to Elastic, cheerleader for the widely popular Elasticsearch. Why omit the vendor with many installations. I can see skipping over Algolia, Sinequa, and Yext, among others. But Elastic? Yikes.
Here’s my take on this report:
- I am not sure it will be useful
- I don’t see an indication that the features of the specific search engines are compared, contrasted, and evaluated. Oracle has a number of search solutions. Will these be evaluated or will the analysts focus on structured query language, ignoring Endeca and other systems the firm owns?
- Misspellings are easy to make with smart software helpfully replacing words automatically. However, getting the company names wrong is a red light.
Net net: Enterprise search will indeed witness – that is, be an observer of rapid growth in certain software sectors – I just think that enterprise search is now a utility. More modern methods of fusing and locating high value information are available. Buying a report which describes ageing dinosaurs may not be a prudent use of available funds.
Stephen E Arnold, July 12, 2022
Allegations about McKinsey & Company: Blue Chip Black Eye or CRISPR-Proof Genetic Defect?
July 5, 2022
Fungible documents can be informative. “Documents Reveal McKinsey’s Role Increasing Opioid Sales Until 2019” – if the documents are “real” real—appear to illustrate what might be described as errors in judgment. What I call the opioid moment may attract like fly paper other names.
The write up states:
McKinsey & Company found opportunities to boost opioid manufacturers’ sales amid the addiction crisis from 2004 to 2019, new documents published by the University of California at San Francisco and Johns Hopkins University show.
The fact that the documents are in the hands of educational institutions and not “real” newspapers adds some risk to McKinsey. Academics have colleagues with specialized skills, computer resources, and those ever helpful graduate students. Some graduate students enjoy assisting senior academics. Others, like myself, wanted to either get paid or be exempted from often useless required courses. (Does anyone benefit from the student of economics? Answer this question whilst stepping over street people in San Francisco.
The write up notes that there are 114,000 pages of documents. McKinsey’s advice may have been the application of what I call billing logic. The idea is that one bills. If a blue chip consultant can offer advice which yields more billable hours, good things happen for the blue chip consultant. The client? Well, in this case, the alleged correlation of the death of “half a million people” as a result of certain actions by McKinsey and its clients. Cited in the article are the estimable outfits Purdue Pharma, Endo Pharmaceuticals, Johnson & Johnson, and Mallinckrodt.
McKinsey, according to the article, shifted gears and allegedly “recognized the terrible consequences of the opioid epidemic.” Yep, recognizing and taking action after the fact are interesting approaches to billing. The article also states that a McKinsey professional spokesperson who presumably did not have a child die of a synthetic opioid overdose, acknowledged “our role in serving opioid manufacturers.”
Not a peep about billing nothing about the incentives in place to allow certain engagements to be accepted and expanded over a period of years. Blue chips are unregulated. Some MBA and analytic types self regulated. Perhaps a different approach is needed? Would one of those killed by diffusion of synthetic opioids have been able to offer a new approach?
Not even McKinsey’s whiz kids can ask a dead person a question in an interview designed for fact finding.
Stephen E Arnold, July 5, 2022
Blue Chip Opioid Advisers Turn Their Attention to Designers
May 2, 2022
The world of blue chip consulting is intensely competitive. High fliers can go to work and be terminated before lunch. Reason? Often pretty vague if the wife of one nuked blue chipper is to be granted credibility.
McKinsey & Co., a firm which has been associated with some non life threatening interactions with people allegedly involved in opioid distribution, has turned its attention from Big Pharma to the art and craft world of “designers.”
“McKinsey Report: Designers Are Critical to Business Performance, But There’s a Big Catch” reveals:
McKinsey also found that companies that have successfully integrated their design teams don’t simply see financial rewards, including revenue growth, increased share price, and overall profitability; they also score better in trickier metrics, such as employee satisfaction, environmental and social impact, innovation, adaptability to COVID-19, user-centricity, and innovation. Designers who are closely integrated with corporate functions also are far more likely to stay at a company for more than five years.
Imagine, please, individuals with pottery residue on their hands and books about Victorian wallpaper in their backpacks contributing to product engineering at a nuclear weapons manufacturing company. I can see these hard working, serious professionals contributing to miniaturized proximity detonators for use with microdrones in war zones.
My take on this type of study and the references to millions of designers and “100,000 design departments” is to laugh. Having worked for a big blue chipper, the notion of millions and hundreds of thousands requires lots of cash or hundreds of interns.
It will be easier to hit one’s sales and revenue objectives if the blue chippers focus on the Fortune 1000, preferably those with deep pockets. Convincing some firms to include a person who worked a year in the Vatican museum to leave the realm of Photoshop and think munitions is downright onionesque.
Stephen E Arnold, May 3, 2022
Consultants and Conflicts of Interest: Fast Action
April 7, 2022
My recollection is that a Northwestern graduate named Edwin Booz cooked up big chunks of modern consulting. Was this a year ago? Maybe three years? Nope. Mr. Booz helped Sears become a high-value resource in 1914. Eddie had a master’s in psychology, not business. Think about that. What modern consulting has become began in the climate wonderland of Chicago. You remember. The city with big shoulders.
Flash forward to 2022. “Citing ProPublica’s Reporting on McKinsey, Senators Propose Bill Addressing Contractors’ Conflicts of Interest” stated, after patting itself vigorously on its / thems back:
Yet the consultancy [McKinsey], which is known for maintaining a veil of secrecy around its client list, never disclosed to the FDA that other McKinsey consulting teams were simultaneously working for some of the country’s largest pharmaceutical companies. McKinsey’s commercial clients at the time included companies, such as Purdue Pharma and Johnson & Johnson, that were responsible for manufacturing and distributing the opioids that decimated communities nationwide. In some instances, McKinsey consultants working for drug makers even helped their clients ward off more robust FDA oversight.
McKinsey is one of the heirs to Eddie’s insight that clueless outfits would pay big money for reports written in summary format with lots of bullet points, horizons, and snappy aphorisms. BCG, another blue chip consulting firm, must be credited for taking General Eisenhower’s quadrant diagram and pioneering the era of easy to understand graphics and simple words like “dog” and “star” and “cash cow.”
From pop psychology to snazzy charts, the blue chip consulting business has been roaring along for more than a century. Now the opioid thing combined with the blue chip consulting firm “we’re special” thing may result in meaningful regulation.
Note I wrote “may.” Does anyone believe that government agencies can regulate the firms upon which the very same government agencies depend for advice, guidance, and a reason to have meetings.
Get real.
Here’s the wrap up to the article:
Jessica Tillipman, an assistant dean and government procurement law expert at George Washington University Law School, called the legislation a welcome development. As government contractors have merged in recent decades, the industry has grown more concentrated, increasing the risk of conflicts of interest, and the federal contracting industry, Tillipman said, could use clearer guidance on disclosure requirements tied to the private-sector work of government contractors. “Any attempt to address these growing problems is a good thing,” Tillipman said, “and important to ensuring that we reduce these risks in the government procurement system.”
What? Fix procurement? Let’s see. I estimate that another century will pass before draft regulations emerge from joint meetings between an executive branch agency and Congress. That time estimate may be too optimistic.
Think of the consultants needed to work on the issues related to regulating consultants. Think of the meetings. Think of the revolving door opportunities. Think of the inputs from law firms and accounting firms which must be obtained.
Think of the meetings. Psychology, not business acumen, fuels consulting as it did from the git go. What did that unusual poet say in “Chicago”? This sticks in my mind:
And they tell me you are crooked and I answer: yes…
Proud of it too.
Stephen E Arnold, April 7, 2022
Blue Chip Outfits: Clumsy Cheaters?
March 1, 2022
I read that one of the big blue chip accounting / consulting firms revealed the jib of its ethical sails. The information appears in “PwC Fined Over Exam Cheating Involving 1,100 of Its Auditors.” [You will have to pay to read this interesting “real” news report.] I learned from the odd orange newspaper:
PwC Canada has been fined more than $900,000 by Canadian and US accounting regulators over exam cheating involving 1,100 of its auditors. The watchdogs found that the Big Four firm failed to spot that staff were sharing answers in exams between 2016 and 2020 because of shortcomings in its internal standards and test supervision.
What does this suggest about the notion of “quality,” “oversight,” and “integrity” when these words are applied to a blue chip outfit like PwC? PwC says on its About Us page:
Our values define the expectations we have for working with each other and our clients. Although we come from different backgrounds and cultures across the firm, our values are what we have in common. They capture our shared aspirations and expectations, and guide how we make decisions and treat others—they’re what makes us, us.
Does this mean this is the logic used at PwC: We cheat and obviously are likely to perform just about any action because of “shortcomings” in standards? Is the logic, “Well, McKinsey did the opioid work, so we help 1,100 whiz kids ace an examination.” Is this the lesser of two possible inappropriate blue chip thought processes?
Keep in mind that when PwC “discovered” the cheating, the company “immediately opened an internal investigation.” So it is now 2022 and the question, “How long has PwC been cheating?” remains unanswered.
Stephen E Arnold, March 1, 2022
Stephen E Arnold,
Blue Chip Firm May Have Put Its Finger on the Roulette Wheel
February 18, 2022
The Financial Times, protecting the orange newspaper’s content with a paywall, published an interesting item about McKinsey & Company. The outfit is allegedly the big dog of consulting firms. Its super sharp consultants, however, engineered the firm into a corner, if the orange newspaper’s report is accurate.
“US Appeals Court Reinstates Racketeering Claim Against McKinsey” recounts an allegation made by Jay Alix, whose AlixPartners competes with the Blue Chip Big Dog. The article works in references to McKinsey’s advice to purveyors of opioid variants, but McKinsey was betting on bankruptcies to generate revenue.
The Alix matter,
alleged that McKinsey violated the Racketeer Influenced and Corrupt Organizations (Rico) Act, accusing the firm of filing misleading disclosure statements to the bankruptcy court in order to secure consulting appointments worth tens of millions of dollars. AlixPartners lost business as a result, he alleged.
McKinsey, acting in the optimal precepts of agile management, has ousted its managing partner. Kevin Sneader uttered a pithy truism in 2018:
Sorry.
Does this story have legs? Not for those outside the rarified atmosphere of the Blue Chip consulting firms. PR mastery? Money can’t buy love, but it can buy some things. Compare the news coverage of Facebook’s quarterly zuck up or the NSO Group’s software. McKinsey, which may be a far more impactful series of actions, is not of much interest. That’s too bad. Ethical compasses have to be manufactured somewhere.
McKinsey asserts that Alix’s allegations are untrue. Okay.
Stephen E Arnold, February 18, 2022
Want to Be a Consultant? No Problemo
December 2, 2021
Everyone claims to be an expert in a topic these days. People advertise themselves as experts in order to garner a clients, jobs, and a positive reputation. ReadWrite explores how the term “expert” has lost its meaning in: “Expertise Is Dead: How To Stand Out When Everyone’s An Expert.”
Claiming to be an expert is about marketing strategy. It is similar to how Google searches rank higher quality content ahead of lesser content. People need to post quality on top of quality to reach the top of searches. One way to do that is to claim to be an expert. After all, we prefer experts compared to novices. Not everyone can actually be an expert, so it diminishes the meaning of “expert.” It also creates an echo chamber:
“The nature of the internet incentivizes echo chambers and misinformation. The internet contains practically unlimited access to information and connective potential with everyone in the developed world. While this can be a tremendous strength, it also leads people to develop their own echo chambers – and makes it easy to find misinformation. Whatever your opinion is, you’re only one quick search away from finding a so-called “expert” who agrees with you, and a full community of people (along with intelligent bots) who will regurgitate your own opinions back to you.”
With everyone on jumping on the expert track, there are still ways to be noticed and be on top of the pile. To do that it is best to understand your competition, focus on your niche expertise, show and do not tell how you are great, and have the proof I the pudding.
This is great advice! It is nothing new however, because it has been repackaged and sold in job advancement books for decades. It still works, though.
Whitney Grace, December 2, 2021
Blue Chip McKinsey Stomped, Criticized, and Misunderstood by Silicon Valley Experts
November 29, 2021
I remember the good, old days. Books like “Other People’s Business: A Primer on Management Consultants” and the interesting newsletter “Consultants News.” The big dogs were McKinsey, Bain, BCG, Booz, Allen & Hamilton, and maybe SRI and Kearney. The world was ordered, secretive, elite, and lucrative. What has happened since the 1970s?
Well, discount consulting has boomed. The sector has many manifestations from the Colemans to the GLG Group, from online dog psychologists to 24×7 psycho-business experts. Because there are no government agencies paying attention to consultants, the sector remains wonderfully unregulated. Anyone can become a consultant. LinkedIn promotions are either free or low cost. Search systems like Google make it possible for anyone to know anything with a single search. Don’t believe me? Just think about how much you know as long as you have a smartphone and an Internet connection.
Enter the new breed of real news. What’s this sort of news like? The easiest way to answer the question is to check out “McKinsey Taught Big Pharma How to Price Gouge.” The “key words” in the article’s url provide some insight into the mindset of this approach to information. Forget the history when the blue chip consultants were untouchable. Forget the overt words in the title. Here’s the lingo of the url:
strikesgiving/#cool-story-pharma-bro
The agenda is a bit more clear because Big Pharma may be a “pharma bro”, or Big Pharma could be McKinsey consultants.
I think there are four points which the article and the alleged actions of McKinsey illustrate:
- The idea that firms and individuals conduct themselves in an ethical and appropriate manner when discussing business methods has evolved. Now it is anything goes. Blue chip, overpaid blue chip consultant? Now we have you? Journalistic methods which are more than links? Hey, this recycled information is gold, and it’s solid information gold, right? Both “sides” are guilty.
- Blue chip consultants do work for hire. That means that if a client pays and agrees to a proposal, the bright employees will figure out angles. Clever is not confined to the virtual cubes and imaginary Foosball games of Big Tech employees. Clever is king today. In the 1970s, as I recall my experiences at the Boozer, societal norms, common sense, and decorum were important. Today, maybe not so much.
- Certain types of information — like confidential client reports and internal memoranda — were tough to get. Today one can download several hundred hot new open source intelligence links and have a go at finding sensitive information. Finding factual dirt is wonderfully easy today. Ease facilitates clever and greases the skids for what I call Silicon Valley journalism or “real” journalism as I term it.
- There is a great deal of glee. Now the glee is public and broadcast, pushed, and discovered quickly and possibly globally if one knows where to look. The glee, however, is not the wry observations of a William Penn Adair Rogers; it’s the jokes of a high school science club member who knows how to get a laugh from the people who count in a comparatively small, hermetically sealed room.
Did McKinsey do a bad thing? I don’t know. Smart people do “smart.” Less smart people, who do not understand the context of work in a blue chip consulting firm, may not understand why projects evolve a certain way. That’s what happens when universities foul up in cultivating ethical and socially appropriate behavior. Who believes a professor at MIT who talks about ethics when the institution itself was Jeffrey Epstein’s best bud for years?
Did the “real” journalist do a bad thing? I am not sure. Recycling links and suggesting via a misleading title and a skewed url that there is an agenda at work lights up my suspicion radar. Can “real” Silicon Valley reporting take down McKinsey? I doubt it. But, who knows, maybe some day.
To sum up, it is a very, very short step from McKinsey to another high paying job. And it is almost stupid easy for a “real” Silicon Valley journalist to proclaim oneself an expert, hang out a shingle, and collect money solving problems.
What’s different is that we have one nickel and it has two sides. Both are on display in this write up about Big Pharma, bros, agendas, and incentives.
Stephen E Arnold, November 29, 2021
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