Transcript for:
Overview of Management Consulting Industry

Consultants. They live among us in our cities, our suburbs, and in fancy airport lounges that look down at poor people. But what does a consultant actually do? Today we investigate. I'm here in front of 10 Hudson Yards, which houses the offices of BCG. BCG is one of the so-called Big Four management consulting firms alongside Bain, McKinsey and Deloitte. In total, these firms receive nearly 200,000 applications a year, but accept only 1.5% of them, making them more selective than Harvard and Princeton. But even with all this prestige, fame and exclusivity, society is still unsure what the hell consultants do all day. What is it that management consultants actually do? What the fudge is management consulting. What is management consulting? Clearly, these people are not sure what a consultant does, actually. So to answer this question, I went to Tick Tock the place young people go for wisdom and mental health problems. Maybe I can find my answer there. Cha cha ching. You know, this is what a big I could not. So then I went to the Bureau of Labor Statistics, which states that management consultants recommend ways to improve an organization's efficiency, which to me sounds boring. I had to go deeper. It was time for me to speak with somebody who had been inside the belly of the business beast and lived to tell the tale. My name is Tyler Cook. I live in New York and I work as a research assistant at Columbia University. Tyler Cook is a research assistant at Columbia University, Man with an Earring and former employee at Boston Consulting Group. What does a consultant actually do and why does a consultant actually do? I would say go to meetings. Go to meetings and prepare for meetings. Jesus Christ. It was worse than I thought. I was beginning to fear that talking to a consultant was actually pushing me farther away from my answer. So to try and clarify things, I asked Tyler to walk through a hypothetical case study with me in which I am a struggling business owner selling a fake product called Widgets. And he, my big daddy consultant. What do we do with our widget company? Well, you know, first of all, like, what's the problem with the widgets? Are they not selling or does it cost too much? They're exploding and kids face exploding and kids face faces really bad. That does sound bad. So are you an expert in which and here's the consulting thing is even if you're not you, the answer's always yes. So here's what we'll do. Sounds like that's going to be a big case. I think we'll probably need at least three, three or four teams. One team will be on a PR management for that. Another team will be looking at manufacturing practice and making sure that you're manufacturing them safely and according to plan. Okay, this all sounds good and how much is this going to cost me? You know, probably some on the order of like for like for teams for like when a six week project is a six week project. Yeah. Let's say probably 10 to 15 million, I think. God, what it was in this moment that I finally realized what consultants do make money and lots of it. You know, there's a lot of people who deride consultants say they're, you know, useless. And, you know, they're basically regurgitating information that's been given to them. You know, that's one thing that and that does happen. But there's a lot of other work that consultants do. They can go into a company and change things or they can go into a government and change things. And what I mean is they can change a structure. You hire McKinsey, McKinsey goes in and says, You know what, you need to cut staff. And then the CEO can say, you know, these smart guys at McKinsey, you know, they took a look at our company and they told us we have to cut staff. That's a very common use of consultants, but it does go way beyond that. Mike Forsyth and Walter Bogdan are two reporters for The New York Times. Together they wrote a book called When McKinsey Comes to Town. In it, they profiled McKinsey and Company, the most prestigious consulting firm in the world. The book is extensive detail of the firm's more toxic partnerships from big tobacco to Jewel, Purdue Pharmaceuticals, the Pentagon, and somehow the Chinese government and from their years of covering the biggest name in the industry, they were finally able to boil down exactly what a consultant does all day. I would say, you know, just for a buzz word there, their brains for hire, brains for hire by companies. Wait, that's it? Why did that take us so long to figure out their entire business models based on secrecy, All their consultants, all their new employees, their new recruits are told never to disclose names of clients, how much they're paid. And so cracking that corporate veil piercing it, I guess, was extremely difficult. Okay. It seems like we ask the question, what does a consultant do? For two reasons. One, because it's unclear. Mike and Walt's reporting came out decades after McKinsey had already been working with the opioid and tobacco industry because the company deliberately doesn't disclose who they work with. And that seems to be the industry standard amongst big consulting firms. So when you see a tick tock of a consultant just chilling on their laptop, all day and you're like, What the hell are they doing? That's kind of why they're not going to tell you. But people also ask, what do consultants do? Because in some ways the job seems pretty awesome. You get to travel, learn about other industries, meet other young, smart people, and you get paid so much money. And consulting firms promoted that way. McKinsey likes to use a phrase and you know, this phrase is insecure overachievers, and that's the people that are attracted to management consultancies like McKinsey. You know, these people were at the top of their game in high school, you know, valedictorian. They went to maybe often, very often an Ivy League school. They're facing the first time in their lives. They're going away from an institution and into the real world. And they want something that's an institution that's just as prestigious as the Harvard or Penn, you know, mom and dad and all their friends. We very proud of the fact that they got a job at McKinsey. It was very understood, very much understood that, you know, you'll come you'll work here for a few years. Not most people will not stay to become partners, but you'll get your skill set. And then along the way, you'll have fond memories of your time at BCG. You'll still have connections and hopefully when you are at your C suite, whatever your big corporation, you'll hire BCG consultants to do projects for you, which is how we get here, I guess, to where management consulting is one of the most influential industries in the world. The only industry that could somehow work with tobacco and the FDA that regulates tobacco at the same time and charge so much money for it. It's an everything job, but it can also be a nothing job. The ideal place for someone that's well-educated but kind of directionless to work on secret projects all day that may or may not help the world, but will certainly help a firm make a lot of money. And add to that person's private network of connections, a network that would most certainly not include me. How am I doing here? I just spent 6 hours ranting about people that will forever make more money than me. Oh, God. And now I guess the only question I have is how can I apply? Tyler's answer Boil down to an orgy of meaningless buzzwords. Align PR project leader, unlock use as a noun. It's like, Oh, there's going to be really big unlock for the client. Boil the ocean. Let's not boil the ocean circle back. Oh, another one is double click parallel process and then also turn into a pumpkin. I don't know if that's a consulting word or just Are you making these up?