You have to understand why they are employed though - somebody stands to gain from doing some thing, so the way they get to justify doing that thing is to hire these people, so they come in, deliver a report that says the thing is the best thing to do with graphs that go up, and it happens, McKinsey gets paid, the beneficiary gets what they want and life goes on.
That plus there’s a massive incentive for overpaid executives to farm out any actual decision-making to consultants. They could lose their cushy jobs if they did something unpopular that made the news and hurt stock prices. But if the decision was promoted by an expensive consulting firm, that launders the blame. It hurts the business in a fundamental way, obviously, but publicly traded companies have not been very focused on fundamentals up until lately. Tighter monetary policy should have changed this, but the paradigm has been slow to shift for many.
“Certainly Sir! Money well spent!”
You have to understand why they are employed though - somebody stands to gain from doing some thing, so the way they get to justify doing that thing is to hire these people, so they come in, deliver a report that says the thing is the best thing to do with graphs that go up, and it happens, McKinsey gets paid, the beneficiary gets what they want and life goes on.
That plus there’s a massive incentive for overpaid executives to farm out any actual decision-making to consultants. They could lose their cushy jobs if they did something unpopular that made the news and hurt stock prices. But if the decision was promoted by an expensive consulting firm, that launders the blame. It hurts the business in a fundamental way, obviously, but publicly traded companies have not been very focused on fundamentals up until lately. Tighter monetary policy should have changed this, but the paradigm has been slow to shift for many.