Ex-McKinsey reacts to Steve Jobs on Consulting

Ex-McKinsey consultant Heinrich reacts to Steve Jobs' take on consulting in this video. During a talk at MIT, Steve Jobs shared his views on consulting. After some students revealed themselves as consultants, Steve Jobs told them "That's bad!". The video contains key insights on what consultants do, what a career in consulting looks like and what management consulting is in the first place. Watch this Steve Jobs speech to get motivation from Steve Jobs and advance your management consulting career.

Chapters
00:00 Is Consulting a "bad" profession?
00:40 Steve Jobs - "Consulting is not inherently evil"
01:55 Is consulting that different from other roles?
04:44 Steve Jobs - "Consulting is like a picture of a banana"
05:29 Are consultants competent?

#stevejobs #consulting #career

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[johnlee-dvcd]

My biggest takeaway from this video is that Jobs is correct.

[tomsullivan-kcfb]

Steve Jobs is spot on about consulting. There is a huge difference between business theory and real-life experience. Those who can't do usually end up teaching because that is all their degree qualifies them to do.

[rawrshegan]

My biggest takeaway wasn’t a knock on consulting itself; it was mainly that we elevate consultants to god-level prestige but don’t appreciate how much easier it is to tell people what they “should” do vs. owning the decision and being accountable for the result. The truth is both sides are needed and it isn’t either-or. Consultants come in as outsiders and can think of out of the box (for this client) solutions drawing upon generalist expertise across many diverse experiences. But ultimately we shouldn’t discount the difficulty of being in the position to make the final decision, where the buck stops.

[ConsultingHumor]

In a perfect world there would be no consultants. But the fact is companies struggle with bandwidth, talent, internal politics, etc which are just some of the common applications of consultants. A lot of times it's not that a client doesn't have the knowledge to do something themselves, but rather, don't have the time to assess and implement large changes

[KleinmeisterPang]

I was waiting for this video for years! This video is legendary when he addressed MIT students. I would actually argue execution is far harder than doing the concept and recommendation. However, I think you miss a very important point here as you argue a little bit too "European" here. You compared his reasoning with sales, accounting etc. However Steve founded Apple, and at Apple, at least until he passed away, the entire organization was organized with lots of independent small teams which were a mixture of many disciplines like PM, Software engineer, designers, etc. Apple was organized like a huge startup. Inside those teams no matter your "job role" you had a direct impact and you had to "own" things to the end, sometimes with billion-dollar revenue impact. This is what he is talking about here. Of course, his argument doesn't make any sense if he would be the Siemens CEO. I give you an example: A small team of people developed this magnetic power connector that avoided the laptop being thrown to the ground when someone stepped over the cable. This was designed, developed, and recommended to jobs by a small team and finally presented by Tim Cook to jobs. This is what he means! However, I totally agree with the T-Shape! In IT this concept is very well known as well as you need to get a broad understanding and only specialize later.

[Klorel]

Jobs is right on this topic. Sure a consultant may be able to create a strategy. But implementing it, dealing with the struggles of implementing it, adapting it to changes over time is a very different process. I think once you have gone through the entire process, it will dramatically change the way you approach the next strategy you com up with.

[ericzhang]

My interpretation of Steve Job's criticism is that the viewpoint of the consultant is limited in a critical way -- the consultant can see the bigger picture, but has a less intimate understanding of how things are implemented, what key technical/people considerations needs to be included in the high-level analysis, and what consequences will result on the ground floor when the recommendations are implemented. The danger with looking at things only from the high level view is that things that seem to make sense from the executive level can end up being disastrously wrong when applied because the plan didn't take into account the specific situations and people-related factors in that company.

However, I would say that his criticism is in fact an indirect indictment of the whole paradigm of management thinking, which looks down on details and overvalues high level concepts. When leaders only think about the high level and quantitative concepts and allow themselves to be too abstracted away from what's happening on the ground floor, it results in decisions that seem tone-deaf, out of touch with employees and customers, and often times excessively cold, short-sighted, and pathologically calculated. And in the long run, this is terrible for the company and will run it into the ground. Some critical low-level or non-monetary considerations that are harder to measure than the bottom line but are critical for long-term success like employee morale/loyalty/creativity, product quality/aesthetics, and customer perception/relationship can end up getting ignored in the implementation and strategy because they were not considered relevant to the analysis when the high level analysis was performed.

For example, a company may need to find ways to cut costs in order to stay afloat. A high-level decision that often makes sense is to cut headcount, as payroll is often one of the largest line items on the P/L statement. But that final analysis ignores how the implementation will affect the long-term prospects of the company. For one thing, any rumored or suddenly announced cut in jobs will automatically result in a huge decline in morale and productivity, as people will stop caring about innovating and start tunnel-visioning on preserving their livelihoods and preparing for the worst. Even years after the event, any people who remain will never forget how the executives at the top seemed to have no compunction laying off people, even though the company pays lip service to the idea that their people are their "greatest asset." That will forever cause them to lose trust in the leadership, which can result in undermining any future initiatives that the company wants to perform that needs internal buy-in.

However, such a situation can be mitigated, even if the layoffs cannot be avoided, if the strategy also pays attention to the "low level" fact that employees want leaders that seem to care about how their decisions are affecting them. They want to be notified in a timely manner (the earlier the better), be talked to in a transparent, honest, and sincere manner, and feel that even if the company had to make this decision, the leaders are willing to also suffer with them and they feel the burden of having to make such a terrible decision that will impact so many people in the company. Such an approach might result in the leaders announcing a drastic pay cut for themselves (who would trust a leader who lays off hundreds of people and then gives himself a bonus?), offering transition support for any people who don't make the cut (e.g., getting job referrals/letters of recommendations from their managers, getting some temporary financial help, getting time to prepare their resumes and interview before their job disappears, etc.), and holding a company-wide meeting for people to ask questions and express their frustrations and concerns. Such implementation-level details can result in a huge shift in how the rank-and-file view their leadership and in fact preserve or even bolster their credibility. It creates a very positive perception that the people at the top are listening to the people under them and care about more than their stock options and million-dollar bonuses.

This kind of approach to management, which is often completely lacking in a high-level corporate strategic plan, can do more for the long-term success of the company than any efficiency optimization scheme that a consultant could dream up.

[farizalpratama]

I think Elon Musk said something about MBA. If I'm not mistaken, "Too many MBAs ruining companies", he said. I have read something about "MBA graduates make worse managers" as well. I would love to hear your take on that.

[rahulchandrawanshi]

With respect to owning the recommendation.
Is the comparison of different roles in corporate with consultants fair?

I agree that each role at corporate has a specific area of expertise and not everyone is involved in execution. However, these roles/department stay with the company throughout this process and continue to support.

Building something is an iterative process. We need to test ideas in real world and learn from our mistakes. I believe that was the essence of the discussion.

[Tom-zxjx]

Ok. Don't get me wrong. I know quite a few very talented and smart guys who worked at top mgmt consulting companies and I respect most of them. Nevertheless I have a pretty negative view about strategy only consultants.

Though I must add I very much like Bain's approach of investing in companies they consult and thus have some real skin in the game - though I am not sure how much money they really invest and for how many percent they really do that or of if its just a marketing gimmick.

To me the problem with consultans only producing high level PPTs is not so much not owning delivery in regards to defending their presentations and concepts in front of client management - to me they do that really well and sureyl have skills that exceed mine.

The problem I have is that many of those concepts I saw in my time have little to no basis in reality and since they quit after concepts are done they never expiernece that and as Steve Jobs says never get the scare tissue for it. Good point here is a quote of Mike Tyson "Everybody has a plan until he gets punched in the face" (by reality). Probably that's also a reason why most management consultants are pretty arrogant in my eyes - cause they don't experienc that punch of reality crushin their nice little concept. And I wonder if top mgmt consultants are so good at evaluating what is a good strategy/business model etc why do they work mostly in some little projects (in regards of revenue of each project or man days) for some big coorporations and do not use their insights to do venture capital - where they would have way better leverage applying their insights if they really had an advantage? They sure as hell would be rich way faster... Aslo how come that even the best venture capitalists fiond it really hard to predict what will work out and what not whereas McK/BCG etc in my experience come across quite different and a lot less humble in what they propose? In my eyes tat confidence is less rooted in facts and assessement accuracy and more in the humand tendency that we tend to trust those who seem confident more than those who dont and that thus is a key thing mgmt consultants learn since its vital to their clinets accepting thier work.

In my area - Tech - lets take for example 2 pieces of McKinsey BTO (not sure if that still exists or has been renamed to soimething more Digital for marketing's sake) from ~ 2017 at a big German telecommunications provider in which some internal IT projects got fucked up I saw from a distance the BTO advise. They took the very classic appraoch of going for the good old quality gates, distinct phases, good old RACI matrices with clear responsibilties etc etc. - i.e. a polished waterfall methodology as if that by then hadn't been disproven enough in 2017, Theory X thinking etc, completely missing points like cycle times, test automation, psychological safetfy etc.. Also at same client because of that first proejct McK sold another project to develop some architecture roadmap or whatever which resulted in a ~200 slides of fancy looking PPT of shit for the next years that of course never saw the day of light.
And now lets be real - everybody with a somewhat decent knoweldge of modern IT knows both of that is bullshit for reasons rooted in complexity (e.g. cynefin complex vs complicated) theory and pure plain fucking experience in doin shit and seeing what works and what doesn't. But well what can you expect from a company that - when I as a student in 2005 at an McK BTO event claimed that essentially IT hadnt changeg in the past 15 years from a mgmt perspetive... Needless to say after that that event I never applied at BTO after that but enjoyed the free drinks getten really drunk instead.
Also e.g. if an engineeer does crappy work he most likely is faced with it after some time like a users complaining intensively about bugs and he having to work his ass of to fix tit, or as a product manager customer complaining about your shitty product etc... unlike consultants that are gone by then...
Also the way McK and BCG etc think is problematic in my eyes and pretty conventional and arrogant. E.g. I went to an event of another top consulting company event as a student in a very nice and exclusive vineyard - temperature was 33° Celcius and I was the only one who dared to show up in shorts. Man - where those dudes of that company passive aggressive to me... I personally like the style of e.g. Pual Graham/Sam Altmann of Y-Combinator or Ray Dalio of Bridgewater or Warren Buffet/Charlie Munger a lot more - very humble people - quite unlike most of the McK, BCG, ATKearney, Berger and Bain guys I experienced in my career. (retired last year in my early 40s cause i was bored of coorporate and cause i can afford it)

Also I feel u miss the point regarding lack of expiernce. Surely I agree that a T-shaped profile is helpful in the beginning fo your career. However one has to wonder if sb who never wrote a line of code in their lives suideently wants to advise why IT projects fail or in similar cases. If you dont even have some basic knowledge of today's IT how do you want to adive an IT organization? However if you have a T shaped profile in the IT industry you can do that.... LIkeweise I presume in manufacturing, logistics or whatever other area

[clinomaniaciznogood]

Amazing, I love how you bring us 'behind the scenes' . I would like to tell you all of these videos for us who are at the start of our careers, help us develop our mindset. I have been listening to you after the 1st year of my undergrad degree for a couple of years and listened to another youtuber in the business field also. Listening to both of you for a couple of years and after graduating. My mindset developed so much more. You both have contributed to my career step up soon after. I moved up from staff to first line manager. What I am trying to say is, the stuff I listen off you both was food for the brain. Thank you Heinrich!

[mahamannu]

You answered this like true consultant .. especially MBB types. Really not answering anything . Bullshitting your way for 5+ min.. with illogical reasoning
sure a sales person ( or any other functional discipline ) doesn’t own the product end to end, but they own what’s their responsibility end to end. A mbb consultant doesn’t but outrageously gets the chance to do so across all functions for a hefty fee.
You may be out of MBB but the coolaid still runs hot in your blood

[Mondballer_]

4:31 However, these Engineers, Software Developers or even Salespeople are working in the exact company they get the instructions from compared to Mgmt Consultants coming from outside (which doesn't necessarily mean it's a disadvantage)

[captainmichaelj]

The thing is we can rethink about the purpose of consulting, because it's Steve Jobs (entrepreneur, founder) who says this. If it was someone else, possibly less popular and credible figure, people will just dismiss their comments. Normally, consultants don't own the product/services, not because of the work they do, BUT because their career/success aren't determined by client's success/failure. In most cases, consultants' career/job are not affected, whether or not the implementation was success or failure. That's the point Steve is trying to make, not really about the job scope. The creator's argument about Sales/Accounts, etc are not really true, because the in-house departments might simply get downsized/affected depending on the success/failure of the execution, but consultants are always paid once they finish their paperwork.

[speedy_gunzalez]

Steve jobs is 100% correct, he gave alot of lectures like this before he shifted to becoming this marketing persona, that's the time period where he provided the best/unfiltered insights into business-IT. Also fyi, your analogy is not apples vs apples, there are repercussions for underperforming when you're employed at a company but consultants still take their money and find more new clients even if they stuff up and the people who are employed at the company end up cleaning their mess.

[roberthodges]

I am a consultant but I have 30+ years of operating experience at both a global company and as COO of a startup. I did define strategy, hire and fire people, and was held accountable for results and I made the mistakes and learned from them and corrected them. That is what gives me the knowledge and experience and the credibility with clients to really help them.

[kelvinlam]

I am a prospective consultant. What should I do when the Saudis call?

[paulh]

I think I have to agree with Steve Job for a large part. But consultants can accelerate change and help management when done right. But I have seen a lot of instances when advice was given based on Fayol management principles from the 1900 doing more damage then good. Being a software engineer I can also state that most software engineers do own the result of there work with current devops methods. I worked a while for a consultancy firm and I would not have missed the experience. As an engineer you learn to analyse, present and sell your ideas. That is very valuable. I am not going into consultancy again. But I still learn from this channel thanks!

[chadlift]

Haha! I like how he is breaking things down into issues, drilling down then back up to the main point again as if he was in a case interview - definitely a consultant speaking