Ex-McKinsey reacts to Steve Jobs on Consulting
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- เผยแพร่เมื่อ 30 พ.ค. 2024
- 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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My biggest takeaway from this video is that Jobs is correct.
Also u should speak english better than this guy if u want somebody to listen to you 🎉
Of course he’s correct. If consultancies had been great, then companies in trouble surely would’ve hired them and thrived, instead of going bankrupt
Mba and consultant are con artist. They only know to manipulate and fire people.
True. Lots of words and lots of B.S. from this one
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.
Consultants are more like advisors than they are teachers.
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.
I think coaching leaders to help them navigate the decision(s) and actually embed themselves w the firm through the implementation would be a good product AND a huge value to the implementation consultant as a leader and as a human.
Yeh, delivering the solutions is definitely harder
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!
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.
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.
And he is right. From my experience, all these consultants and MBA’s are basically just glorified administration workers on different levels (I mean, it‘s even in the name already). But you cannot get new shit done, if you‘re an administration person pushing more papers, as this is what most of these concepts and strategies really are.
Would be very interesting to hear Heinrich‘s opinion!
Thanks Farizal, yes have watched this video as well. Might pick it up in the future in a similar way :) Best, Heinrich
@@FirmLearning Please, would love to see more content related to Elon's business and his act as well
@@PSKuddel but Sam ovens saved the industry by improving it
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.
Excellent points, I knew both sides, when I still was an employee and execution is indeed by magnitudes more complex and valuable than writing concepts or „strategies“ and you need much better people for that.
@@PSKuddel Indeed. However, I think Heinrich is very bold in commenting on such a video. I would shy away from doing this, as Steve was just a genius. I talked to a number of McKinsey (also senior) consultants recently, and they told me about the impact they had on their clients. They are always very surprised when I argue their impact of their entire team is zero, why? because they write recommendations and PowerPoint. Is their work worth zero? By far not! Its an elite firm with a huge amount of very very good people.I think its just important to understand that writing a concept is only the "what to do". Impact is created when stuff is actually executed and "done".
@@KleinmeisterPang Once more, I agree. The thing about the most valuable and popular companies from the Googles, Apples, Teslas, Facebooks and so on is not, that they had a concept and a strategy nobody else could and has come up with, but that they are actually able to execute and not get lost in ever increasing complexity until nothing can be moved forward anymore.
I would say, virtually anyone with an IT or engineering background, who actually contributed to a few bigger projects for some years, will be able to relate to that. And I think, that‘s exactly what Jobs was saying.
Well written reply
yes execution is by far more critical than drafting a perfect (*decent) strategy.
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
Agree that this is at least part of the answer. Thanks for sharing! Best, H
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.
@@thearnav67 I respectfully disagree. I don't see how your reply at all nullifies or even appropriately addresses the points that I made. My example illustrated how a well-informed and well-meaning strategy can still fail because it failed to take into account the necessary approach in the implementation of that strategy. The success in keeping the trust and loyalty of the employees, which is usually important for long-term success, has nothing to do with a cold evaluation of what is feasible to execute and everything to do with having a human-centered vision of what you wish to achieve in the end and what kind of impact you want to have on your customers, employees, and colleagues. A leader lacking in vision and ethics will only see the end goal of cutting costs and will blindly ignore many possibilities for improving the company that a person who only understands money cannot fathom.
I have just started your season on your channel, specifically because I wanted to sharpen my presentation skills (find that we all need to sharpen our skills).... I wanted you to know that 1) great you are doing this and it shows in your enthusiasm; 2) your content is great and relevant; 3) KEEP doing it! I shared your sight to a number of younger college grads who are all making their way in the work place and I got so many positive feedback so again KEEP doing what you are doing and lastly MANY THANKS!..john
Thanks for your kind message John! Of course always super happy to hear the content is helpful. All the best to you! Heinrich
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.
Very nice content, Heinrich! I would like to share some thoughts on this topic. I did a few internships in consulting and other professional services (not MBB but the tier below) and I (and some of my colleagues as well) had that feeling of too less ownership of the result. I have figured out for myself that I really love to work for startups. For me it’s the perfect mixture of responsibility, salary, and learning opportunities. I can imagine to found my own startup or join a venture capital fund later on in my career and I think that startup experience is the best stepping stone for it.
Hi Marek, thanks for sharing your experience. Fully agree that working in a young company and really shaping the whole product and culture from the start can be extremely rewarding! Best, Heinrich
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
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
guess I take this as a compliment.. thanks :) Appreciate you watching! Best, Heinrich
This is not about owning the entire value chain. This is about owning the consequences of one's recommendations. Implementation may not be part of the consultant's job, but do you not think the consultant should take the responsibility if the implementation is done flawlessly but the campaign still fails due to bad ideas to begin with? Analysis should be done whether the problem was with the strategy or the implementation, and if it is the former, the consultant should take the blame. This is not about owning the entire value chain, but having skin in the game, and taking responsibility for oneself. If a sales team does not deliver on its sales targets, obviously it will face the consequences, as it should.
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.
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.
Consultants are good for support, starting point, 1st time implementations, due dilligence and that kind of work... But hes right, in My experience with consultants lack execution skills and deep expertise.
Main problem with this answer is that ultimately management consultants never really understand the process by which something is. done so they basically really do just four things:
1) Increase prices
2) Lower workers wages usually by mass lay offs and offshoring of the work force
3) Decrease the product (shrinkflation)
4) Asset strip the company.
I used to think that McKinsey, Bain etc were quite high level and then I watched some of the 'case' videos on here that new consultants have to solve to get jobs at these companies. Honestly the responses are horrific. They are actually talking about business processes they have zero understanding off and think that their superficial advice will work.
However due to most CEOs being nothing more than glorified accountants they will always get work and always earn big money.
yes they just follow standard practices - rinse and repeat. this is the business model and how they survive!
Hey firm learning! You should do a couple videos where you do cases with your viewers (they have to agree to be on video) and at the end of the video give them tips and feedback! I think it would be helpful for everyone. And also mention the level of difficulty of the case
Glad I found this channel!
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.
Hi,
I think there's a nuance you're missing in your first point.
Each role in the org. owns a part of the value chain, but they own it completely. The consequences of recommendations also lie with that role. Consultants don't face these consequences and that is what Steve Jobs refers to. Every role will earn that "scar tissue" specific to their profile, but consultants won't, since they would already be staffed elsewhere.
I have worked in two very large MNCs, and have closely seen all three (MBB) do projects with my or allied teams. What I can vouch for is - even though their work was thorough, it barely ever brought forth something that was new, something that senior leaders didn't know already. It was usually just better structured and had insights and references from competitive data, to which we did not have access.
Large organisations have an inherent problem, where managers doesn't expose top executives to real problems they are facing (obvious, since it reflects managerial failure and impacts their performance eval.). CEOs often have to employ external consultants to do this work, to get an unbiased and honest picture of their org (usually their own team already has more nuanced knowledge but doesn't share without caveats).
Outside of bridging this incentive mis-match (and temporary access to high performing smart folks) I don't see much value add.
Depends on the type of consultant too. I've been a SAP consultant in the past, and my work definitely included implementation. But I understand what you're saying.
You're missing the aspects of a responsibility, risks, and commitment and seriousness.
I don't mean all employees have 100% of these but consultants usually pretend, behave (and charge) as if they had 100% of these.
Owning/Doing in the context doesn't simply mean an execution and/or scope of the job.
Start off something new with uneasy feeling, repeat moving forward and backward with minor and major
issues including people's friction, organization's transition, legacies, psychological biases, political people, etc...
Companies usually have some "rock stars" in their orgs and they "own/do" things. (If you have owned something, you should know this)
You took general staffs as an example but it's not apple-to-apple comparison.
I've seen many consultants who (try to, and love to) behave like a teacher.
Again I don't mean all consultants are like that, but in my experience, humble consultants from famous consulting firms are the minority.
I 100% agree that "rock stars" in such a consulting firms are great great people, but rock stars are minority.
Steve seems to blame the majority of consultants at least for me.
i am a consultant (more leaning into the implementation side) and i totally agree...
Perspective. Some consulting roles are filling a seat. Others, a company will ask you how do other companies address this? Can you drive it from start to finish and assure success? So, your both right as long as the right role goes to the right person. But if you take a job at my company and expect me to train you, your out.
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
Hi Manish, appreciate your comment but let’s pls be respectful. I gave my reply to this argument („salespeople own something, consultants don’t“) in one of the other comment threads. Best, H
@@FirmLearning so where is the logic that Steve’s job comment is flawed ( or slightly flawed ). Are there any PowerPoint slides for the same ?
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!
The difference is sales people, engineers, cost controllers etc aren’t claiming to be experts on the whole of the business - consulting firms are. Further, you are making recommendations about core parts of the business (eg its overall strategy) to the person who IS responsible for that. So your argument is actually a cop out.
I worked for Deere , BCG came and introduced smart industrial strategy . The entire direction of the company changed because of that. Even employees got fired , because they recommended downsizing .
Now tell me should how an 20 year experience employee would feel if some external random guy decides your fate.
I think one important thing I didn't hear you talking in the video about is the fact that this statement is decades old and hence based on experiences even older.
I am too young to say from my own eyes but what I get from my older colleagues is that in the 1980s and 90s in deed there was this attitude very common to enter a client, flood them with slides, concepts and a lot of BS just to leave and dump it on the next one. Today I perceive business consulting firms more as a strategic advisor where:
a) The personnel has a turnover, so they do have previous experience being on the client side before joining
b) While the individuals come and go, the consulting companies aim for consistent advice over years with a lot of internal effort to create this consistency.
Last but not least outcome-based compensation was not invented back then I believe so the consulting companies do own more of the client's the business result than in the past. What do you think?
More often than not, consulting is just a fancy term for sub-contracting line functions.
Having joined Consulting after first working in the industry for 5 years, really helped me a lot. Took a while to get used to the consulting way-of-working, but my career has took off ever since. I feel that some real tangible experience helps to be more concrete, realistic and also build stronger connections with my stakeholders... (yes, I play the card "trust me, i've been in your shoes" the whole time).
As I'm now an offering lead, i'm actually reluctant with junior hires. I only allow expert profiles to join as juniors, since I'm really focused on a niche.
Great stuff, as always!
While i don't completely disagree with your 1st point, i believe we need to review his background as an entrepreneur in which he got a chance to be a part of the entire cycle vs the exposure of a consultant. My comment is not a reflection of who's opinion is right but rather of an acknowledgment to the reason behind the two different perspective angles, yours and Steve Jobs'
That's a false comparison. The accountants and salespeople aren't making a recommendation to other divisions they aren't respobsbile for. It is true that they might interact and collaborate with other divisions, but they are never solving problems outside of their respective field.
Hi Andy, thanks for sharing your perspective! Would answer that actually there are many internal roles and teams in corporates working cross-/inter-divisions and making recommendations or working on projects in such an environment. The other point on solving problems "outside of their respective field" implies that the consultants are working outside of their area of expertise. Hold that this might be partially correct as most firms apply a model where at least parts of the work is done by junior colleagues who will likely not have all the required domain knowledge to solve the problems at hand. However, these junior colleagues are always paired with project leads and partners / senior partners who will in most cases indeed have deep industry / functional knowledge on the respective topics and it is their job to shape the solution. Therefore would claim that these people are very much working within their respective field. Best! Heinrich
I had just watched the video a few days ago 😮excellent timing
Hi Heindrich. Thank you so mich for the videos. I have learnt a lot. I do have one question, which might sound very stupid: if I want to apply for a consulting position at McKinsey for example in Netherland or Belgium, do I need to speak the local language, i.e. Dutch and probably French? Thanks so much.
Hi Viet, thanks for your kind comment - and supporting the channel as a member! :) Much appreciated! Indeed most offices will require you to be Business-fluent in the local language (in addition to English). But of course does not hurt to ask the HR department just to be sure, there might be exceptions! Best, Heinrich
I refused to engage consultants who could not tell me the results of their past strategies. It meant they were not interested. A strategy cannot be all that great if the client lacks the expertise or resources to implement effectively. A salesman is actually responsible for strategy through execution of his job scope, and his results directly contribute to his organisation's success.
Well, it depends on the kind of company that the person is working for, there are plenty of companies where their employees make important contributions but their leaders take all the credit for it (like S. Jobs), in contrast, being a consultant at least you get better paid for each contribution.
There are many consulting firms that provide end-to-end services. Some consulting clients prematurely determine they have benefited all they can from the consultants and then blame them when that turns out not to be true...then hire different consultant to repeat the process.
And here I thought, consultants were renowned experts. These videos are great! Thank you. What a channel!
Thanks for watching Andrew! Though was not my intention to claim that consultants are not knowledgeable practitioners. Trust there are many highly knowledgeable people in the profession, especially in more senior roles (project lead and above). Best, Heinrich
Thanks for this video !!
Thank YOU for watching Charlotte! Best, H
This world needs more people of action. I would consider getting an MBA enough of a broadening experience to say you’re a generalist. After graduating, you have the power and responsibility to take your knowledge and build something meaningful. It’s a waste of an MBA admissions seat to send students into consulting.
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)
I am a prospective consultant. What should I do when the Saudis call?
Wrong! He is not saying you should own E2E, but owning it for a long period of time, so you take responsibility of your recommendations through time.
I'm with Steve on this one.
I worked for a manager that was a consultant prior to being hired. They had ideas that seemed good in the short term. However, in the long term the execution was not in cohesive. Combining 17 different ideas you have offered to different companies is not a strategy.
If someone has a background with actual planning and executive - if they offer you a strategy, its safe to assume they considered the former too as part of it.
Thank you for your effort, but you know in this case Steve Jobs is right. You might say everything to defend your consulting services, however MBB does not own results. That's it! Steve Jobs and his team build a very great company in the world, so consultants should learn from them how to do and do not talk a lot.
Steve’s comment is definitely right, don’t try to defend by quoting sales, accounting, etc does not own the whole process, they at own something in the process and their pay and performance are evaluated based on what they owned and did. Consultant is paid……..sometimes with retainer fee where jobs have not started yet……
Having experienced the input/output of consultants on many occasions (mostly ex Malik), I always got the feeling Steve Jobs was really onto something. Conceptual input ok maybe (even then…), but the end result entirely depends on buy in, application and implementation. The greatest problem of all being that - having spent money on it and owned it - the senior leader(s) were often all too determined to cry “success,” no matter how obvious it was that wasn’t the case. Worse yet, they simply tried to use consultants to somehow validate their own world view and misinterpreted (by accident or design) what was being suggested..leading nowhere helpful. So…consultants fault? Sometimes perhaps (as in my view they should have seen this and stood up to it rather than be happy to take the money and the mutual congratulation). Not all consultants are bad of course. Equally, I witnessed many occasions where use of consultancy was along the lines of “we need to be seen to do something, getting a consultant in is something, let’s do that”…without much real intent or even desire to listen objectively. That’s a failure of management. Consultancy tended to work better when it was less grand ideas and more focused on filling a gap in internal knowledge and supporting a very specific well defined issue - but that rather more providing expert input or service than “consulting” perhaps. But even then, I practically never saw anyone actual deliver a bonafide ready to run solution..always just a toolkit and often left with feeling we ultimately knew more about it than them anyway (especially with just a bit of Googling).
In my opinion, SJ is not comparing Consultants with Accountants, Sales or other employees of a company - but with a founder. As SJ is a Founder character himself, I assume this a valid point. Therefore, I would argue that while he has a high opinion of consultants (but playing it cool), he thinks they lack entrepreneurial drive.
I think Jobs conflated two ideas: 1) Strategy Formulation vs Strategy Execution, 2) Business Results Ownership
The "recommendations" argument for his position on consulting is valid in the context of #1. With reference to his own experience, he uses the condition of "owning the results" to support the argument, and this is where the conflation with #2 presents. Just because you own your recommendations (i.e. you formulated the strategy AND you executed it) does not imply you are ultimately accountable for results the way he describes. This is largely the reason he was voted out of Apple. He developed the strategy and executed it, but Skilling, the CEO, was accountable for the results. If we're to apply Job's rationale, it should have been Skilling that did #1 with #2 his default, and Skilling in the appropriate position to provide this lecture given his demise not long after :) There can be various RACI configurations of people splitting or merging formulation and execution. There is only one person that can own business results and that is the CEO.
Tell me you work for consulting without telling me you work for consulting. And in classic consulting style, you have given an answer that will ensure good amount of billable hours.
sorry my friend but what use is a strategy if its just theoretical and doesn't help with bringing it to life? this is the core business model of consulting - promise a lot, but ensure fk all gets delivered. rinse and repeat.... this is literally the business model.
I would argue the best consultants are the ones who have built strategies and launched products within the field - as they have seen both sides.
I have been working in consulting for 20 years now and very often we are selected by the client to become the implementation partner with the objective of implementing the recommendation roadmap that came out of our initial strategic assessment; therefore, we do follow through our advisory services! I think this is why it can be more rewarding to work in a consulting company that perform services accros the entire value chain!
This is a fair point since your hands have to get dirty and highly likely will better recommend changes from an authentic perspective.
What a great video, simple and precise to indicate what consultants should try after a few years in consulting
I think Steve Jobs specifically talks about consultants getting a position as a manager while having no clue about the service / product the company is selling. Still, a good engineer, salesman or accountant is not guaranteed to be a good leader, manager or organiser
correct - steve hired MBA folks to be managers. In the end he fired them all - he quickly realised the MBA badge means nothing for business results.
i think steve jobs is right here, consultants are obssesed in bringing value at any cost, and they often look unprofessional as they spend a lot of time working in useless admin work without understanding the full picture, and most of the time they are only interested in their career developement (which is fair) rather than offering valuable and sustainable solutions.
Stupid analogy with sales people. Sure they let other people do the work, but if they fucked up, they are still at the company and are held accountable...
Makes sense.
Have you heard of Sam ovens and Alex hormozi? Seems like they're doing a pretty good job in this field unlike most conventional and traditional people in this industry.
what you are saying actually echoes what Steve Jobs said.
your specialists vs generalists comparison makes CEOs like Steve Jobs sound like the specialist and they may need generalist perspective. but don't forget Steve Jobs was the generalist in his company and industry. he was not the designer nor an engineer. he connected the dots.
so consultants here are the "even more general" generalists giving advices to the generalists. that's exactly what Steve Jobs referred to as the only two-dimensional understanding and experience.
In engineering, if you are in the design stream and it fails and people die, you are held accountable judicially if negligence is found.
Makes sense to me!
I have seen many consultants come in a give great recommendations and strategy. However, they missed the mark because it wasn’t implemented. This is where consulting fails, by not owning the implementation they only theoretically know where it will have challenges.
I view it like a recipe book. The book is beautiful and the pictures look good, but when humans follow it, mistakes and substitutions are made for cause or by a result of environmental differences. It’s made in a vacuum and markets are constantly changing.
The consultant isn’t there to know what internal and external causes impact implementation and what adaptations need to happen and how to pivot.
Then a new set of consultants are hired to understand what went wrong and how to course correct. Thus the cycle repeats.
What if they pay consultants based on if the strategy works over 5-10 years in residuals then they have more skin in the game to understand implementation and where it goes wrong. Hint, it always goes wrong and we never see the beautiful recipes in the book consistently repeated with or without adhoc additions or replacements.
excellent video
How to show (don't tell) that consultants have actually no clue what they are talking about.
I think some of the general concerns emphasized about consultants are valid in many ways. However, as some common criticisms go, it's not the ideas of newly-minted college grads being bought by companies here. The young consultants are often simply executing the work by applying a set of problem-solving skills to work through large amounts of information and data. The higher-ups on the case are generally the ones applying their knowledge and expertise to the case. And to be fair, that's the model at nearly most companies, where the older, more tenured folk apply their deep knowledge and expertise and the younger ones execute and help apply it. If you still think consulting firms lack expertise, then that comes down to a separate argument about the competence of the partners and such. Nonetheless, it's a bit narrow and naive for people to think that thousands of companies, govts, and orgs are paying millions for the terrible advice of newly-minted college grads and have been doing so for decades. If it were that simple, consulting as an industry worth many tens of billions would not exist.
I think everyone just clings onto snap judgments of things without truly evaluating them from an objective view. Consulting has many flaws and weaknesses don't get me wrong, but so do a lot of things. There's no fix-all or perfect system in business. That isn't to defend consulting and relativize everything as being good and bad, but more so contextualize how things are. When used right, consulting can be a benefit to many companies and the like. I do agree with a lot of Jobs's criticisms that there's no ownership, but that's why a lot of consultants end up moving to industry or something similar. With their presumed problem-solving skillset and soft skills that they've acquired, they can then delve into a product or industry and develop that T-shaped expertise.
I think you are misinterpreting Jobs' critizism (which again proves him right). It is not about owning an entire value chain or execution as well as conceptualizing. He talked about "an extended period of time", because commiting yourself to stay on a journey for at least a few years is the point. It is the same reason for which writing PhD/doctoral theses is respected as a job qualfication: They are rarely related to the job or have a measurable impact on their field. But the candidate demostrated that he/she can spend around two years on a subject.
The journey that a sales person should stay on is selling the product portfolio of a company over 3 or more years, as it evolves, clients' expectations change, qualitiy fluctuates. The journey that a software developer should stay on is to develop v1.0 to v3.5 of the same software, with all the trouble of interoperability, grown code base, technological obsolesce. It cannot be compared to coming in, pressing a somewhat adapted, but fundamentally generic concept into the teams over three months and then fly away, maybe analyze the numbers one year later.
I work in IT management and the predominant reason why I sometimes have to adjust paths that less experienced colleagues take with a project is, that they still lack the sense for long-term robustness. They come up with solutions that solve the current problem just perfectly. But in a certain way these solutions are "ugly" and with experience you can immediately see that, with with every demand and requirement that might come in the futrure and neither of us knows, this particular solution will be a technological liability and potential failure point. Only as these colleagues develop over time, they create not only solutions that solve an immediate problem but are also elegant and outlast multiple iterations of a software.
nice post
I love the accent.... really matches the true evil of Mckinsey... Im sure you fit right in. Congrats on helping a truly horrifying company
Did you work with a strategy consulting firm in the past? If yes, sorry to hear this was your experience.
@@FirmLearning Yes I have, with how much of my tax dollar gets wasted with McKinsey consultants. And I feel I've probably gotten the same value as other your other clients.... nothing. But you seriously can't defend the actual atrocities the McKinsey has inflicted across the globe. You're too smart not to know, but are you man enough to own it?
Very good video. Steve is only looking at part of the value. The knowledge in the vertical has value as well. Just like you said, the Accountant has the knowledge that brings value to the business.
oh well... consultants are like eunuch, they do know theoretical how to do it, but .............
you are the living proof that Steve was right on point
❤️
also the example you're stating regarding swe is very flawed...
as the tales go, a technology consultant//strategy consultant will draw a cake.. you don't see the underlying structure of the cake..
when people will have to actually "make" the cake, all the disgusting stuff becomes apparent, mixed in with the good idea..
From my perspective, a technology consultant is not really comparable to an SWE. The technology consultant is not tasked to create software, but might create some concepts or roadmaps to transform the IT system landscape of a company (of course depending on the individual project) and would be more comparable to an internal IT architecture team. The equivalent for an SWE would be an external temp worker supporting the software development. Is the person who writes the perfect recipe for a cake less important than the chef who executes the recipe? What about an engineer developing a new product in the office vs. the person building it on the production floor? These types of comparisons often seem quite arbitrary to me.
@@FirmLearning yes and no.. technology consultant are involved in implementation nowdays :)
"Is the person who writes the perfect recipe for a cake less important than the chef who executes the recipe"
yes, because if he actually isn't "owning" that cake, he's just able to "plan" a cake that won't be viable 99% of the cases..
sorry but it is what it is..
take architects for example.. whenever i read of architects (be it enteprise, solution or software) that aren't actually coding at all, i can safely bet that their architecture are just borderline useless.. nice on paper, completely unfeasible (or ineffective) when actually delivered according to their vision...
the comment from jobs was related to the issue that when you do the "consulting", unless you're the "lebron james" of consulting, your advice will be advice... not a viable roadmap, not a real strategy, just advices that might or not produce the expected results, and are simply based on advisory expertise, information gathering and rarely (if at all) on real experience...
as they say, a consultant will get payed to read the hour from the customer's silver watch.. nothing more, nothing less :)
personal experience right NOW... I'm serving as an external architect for the second banking institute in italy, covering the digital re-invention initiative of their internet banking solution..
in the governance team for the initiative there are
1 pm (customer employee)
2 analyst (customer employee)
3 functional consultant (all 3 are from pwc technology)
1 senior architect (me)
A mail arrives "Please Vito, review the technical needs of consumer finance , and update the planification if needed"..
I reviewed the material from consumer finance department, and I deemed un-necessary to provide any update to the plan in the respect of mocked//static resources to be made available by the implementation team..
I later explained to the internal analsts, and they both understood..
Then the colleagues from pwc technology (1 manager, 2 associates) started demanding why i didn't update the plan, and I gave them the same explanation I gave to the internal analysts..
They were totally unable to understand what I was saying.. I explained them that "the mocked resource have been explicited in the plan as a leeway that will be delivered on the SAME day that the components are released for *specific* area whose sub-component dependencies won't make the cut by mid july.. the planning for the subcomponent is still not available, so we cannot provide any update with a comfortable degree of certainty"
answer "but the customer asked to provide the plan, so we have to provide an excuse"..
And what crossed my mind was "I think you guys are just a ppt-slave without a concrete inkling about how what you're discussing works"......... But I politely said that "no further discussion is needed and the point has been already clarified and agreed with the customer. If they feel it unsatisfactory, discuss with the pm about the need for further re-evaluation"
I've worked with manager in the technology area from pwc, deloitte and kpmg.. at most they are glorified functional analyst with skills to "sell stuff" to customers... but if that's all it takes to be a good consultant in your book, Jobs was completely right... the added value proposition of a lot of consulting from big4 is debatable at best, unless they are "specialist" in an area (e.g. tax, actual technology and not "spoken technology", etc).
@@witchedwiz Thank you for sharing your experience, appreciate it!
I don’t fully agree. Sure a sales person doesn’t own it end to end but when you’re talking about changing things there IS a difference in the amount of skin in the game. Additionally even if you have like internal operational excellence teams which don’t own the end-result you get very similar problems. That doesn’t mean that this is the be all and end-all. Not everyone needs to have 100% skin in the game, but at least an important part of the team needs to have skin in the game and it *is* a relevant thing to keep in the back of your mind when making decisions.
I.e you shouldn’t throw away advice of a consultant because he has no skin in the game but it is something to think about when contextualising this advice. It might help in taking the parts that work and throwing away those that don’t fit the particular organisation or current political climate.
It also works the other way around though. Sometimes not having personal incentives can make proposals more credible. For example when local management wants to keep their informational advantages because it benefits them even though it’s detrimental to the company and transparency would increase performance.
When it comes to business, Steve is always right. Except hiring the right CEOs
Really appreciate the last comment around depth vs breadth - still in the early years, and have been having an inkling towards not specializing too soon e.g. going into the depth of coding, however I feel there is more fun to be had with new and varied tasks. Some say the devil is in the detail, so I'm guessing that's probably not where you'd get the best company.
I opted to take a PMO role first as it was such a broad remit and was involved in the programme at every stage, and engaging at every level of the client company. This is a generalist role
I think you shouldn’t take it to serious. It’s like with everything. There are lots of greys and only a few black and white situations.
You confirmed what Jobs said.
Not sure this was the message ;) Thanks for watching!
You completely misunderstand his point and this alone shows, how much of a typical consultant you are!
Owning something doesn‘t mean to own the whole product and processes, but just getting actual real life results on the thing, you are accountable for!
So the sales guy needs to sell something, period! No matter, what supposingly the best concept or strategy for the sales process is, he just needs to actually sell a unit, no matter how, and then another …
That means owning something!
And there people, who get shit done (in this example: they actually sell the units) and there are people, who supposingly know in theory how it should be done (in this example: don‘t actually sell shit) and these are called professors, consultants, …
Also, being more of a generalist doesn‘t mean, you can‘t own something! A McKinsey consultant is not a generalist, just because he has no expertise in actually getting something done!
Hi Roger, thanks for sharing your view. Though why are consultants not creating something? Depending on the project, a consultant might create a new pricing framework, or a new R&D process, or a new Business Unit strategy. The consulting team will of course be held accountable for creating these deliverables they are contracted to create. In the end a senior leader will sign-off these end products and decide on their implementation, but this is very similar to many internal roles as well (an engineer creates a suggestion for a new product and management needs to sign it off / decide on the implementation). Best, H
@@FirmLearning Well, that‘s the point. They are creating anything! But they don‘t own something and only that was the whole point!
It‘s a very different animal to produce a real life result (visible from the outside, e.g. selling a unit, implementing a change, fixing a defect, bringing something live into mass production, …) or to only create some internal deliverable in the sense of some piece of paper with concepts, strategies and recommandations, where it‘s still doubtable, if it will be possible to execute on them and it needs someone to find out, if and how to actually execute on them, to fill the gaps, to enrich it with all the details and in general to execute under uncertainty and also under changing circumstances and conflicting other plans and concepts.
It does not mean, that an internal role also has to make this kind of internal deliverables. And it especially does not mean, that all internal roles (actually it‘s often more bound to actual people than to specific roles) get according to their profile at least some shit done. Especially in big corporations, there are a whole lot of internal people and roles, who also more or less only push paper, create concepts and plans etc.
So I also didn‘t say, that everyone, who is not a consultant for these types of companies automatically owns something. It‘s actually one of the first things I was looking for, when I did freelance work helping corporations in bigger IT projects. I always tried to make up my mind, which persons in the team are the ones, who get shit done no matter how and no matter their role or their level of hierarchy, and which ones are the ones only pushing papers and making plans etc.
If consulting is so great, why is he an EX-Consultant??
steve thinks consultants are not enough vs. consultants think consultants are enough
I have to agree with Steve for the most part. I ran a small data science/tech consultancy for a time and so I ended up working alongside MBB+ quite a bit. They are always very bright people, but tbh I came to the idea that strategy is one of the least important things in a company. A great strategy badly delivered will usually fail. By contrast a mediocre strategy well executed will often be good enough. And to quote Peter Drucker, “culture eats strategy for breakfast”. If you get culture right, you can evolve the right strategy without a need for external help.
I would also just point out that your answer to SJs second point focused quite a bit on the value to you and your career (and I’m sure you’re correct), but not a lot on the value to the client company. Again, I would say SJ is correct.
I’ve heard studies that consultancies tend to be used by less profitable firms (which makes sense, why would industry leaders need external advice), and that they tend not to improve performance over time (which presumably they should if strategy consulting works). Before you ask, I have much the same view on technology consulting, a lot of it adds no value :)
"A third party can view the situation in a much clearer perspective than the involved parties."
Is much true in case of consultancy.
But I dont disagree - that a consultant never has a skin in the game -
Real business experienced consultants are invaluable but theory based or advise based consultants are barely touching the surface of business problems and their solutions. Opinions are like buttholes; everyone has one.
the question of the interest of consulting must remain unanswered. It is present at each mission and this is undoubtedly what makes it possible to remain humble. The HBR, from memory, published a study on this subject, by focusing the analysis on an industry in India, the results were satisfactory: the companies having called on the consultant were on average more efficient. Great topic thank you so much
yet the causation on whether the companies were on average more efficient because of consulting remain unanswered. It could just be that those companies that were already more efficient and had surplus money to spare, hired consultants.
No body respect consultant like 20 years ago.
jobs was right and consultants were offended
Team Banana Picture here :
Why would anyone pay millions of dollars in fees to a group of 20 years olds with no business experience?
Let's be honest ,that's the million dollar question (pun intended) .
Cheers !
I think some of the general concerns emphasized about consultants are valid in many ways. However it's not the ideas of 20 year olds being bought here. The 20 year olds and young consultants are simply executing the work and applying a set of problem-solving skills to work through large amounts of information and data. The higher-ups on the case are generally the ones applying their expertise to the case. And to be fair, that's the model at nearly most companies, where the older more tenured folk apply their deep knowledge and expertise and the younger ones execute and help apply it. It's a bit narrow and naive to think that thousands of companies, govts, and orgs are paying millions for the terrible advice of newly-minted college grads and have been doing so for decades. If it were that simple, consulting as an industry worth many tens of billions would not exist.
I think everyone just clings onto snap judgments of things without truly evaluating them from an objective view. Consulting has many flaws and weaknesses, but so do a lot of things. That isn't to defend it and relativize everything as being good and bad, but more so contextualize it. When used right, consulting can be a benefit to many companies and the like.
@@rayvinjamuri3913 I agree, consultants are in business for a set of reasons, but somehow, these reasons seem to be elusive .
And I don´t know well enough anyone who has hired a big firm who can explain me the ins and outs in blunt terms , so I have worked out a couple of theories that work well for me , but it all seem very mysterious.
I appreciate your comment , Ray.
I wouldn't trust anything coming from a McKinsey consultant. In the best scenario, you might as well use a magic 8-ball. In worst case scenario, you might have support Saudi Arabia with cracking down on dissidents.
Yeah i was too amazed how toxic Steve Jobs statement was.
Ok now it’s confirmed what Steve jobs said was correct
🙌
Consulting brings a fraction of total value - well said
I am coming from a well established oil and gas company I and I fully understand what Steve Jobs was saying. He is kind of preferring industry generalist with experience in operation with feeling the results of their decision, rather then strategy consultants or generalist who rarely faced with the outcome of their suggestion. I could clearly see the difference in mindset between manager who got fired for delivering under business plan by 2% and Mckinsey strategy consultants who never faced with the outcome of their proposals. Car sharing program delivering 100% loss of income after 2-3 it should become profitable according to excel plans, no problem. On the other hand managers in operation got fired because few percent underperformance compared to peers. Additionally for the same reason these consultants only see opportunities and undervalues risks or their proposals.
Even Jobs has to mention he is a vegeterian ;)
Steve was smart...also bold. In my experience working with consultants form big 4, I found they tend to regurgitate popular SME opinion you're hirer/management wants to hear in colorful presentation and non value adding spreadsheets...I often wondered how miserable they must be feeling inside, after all they are very smart people..
Steve might as well comment on investment banking too😆
Mc Kinsey devilsd GOD will get them Beastar5ds
Very poor arguments supporting the antithesis.
Sorry to hear you did not enjoy it Mike. Still thanks for watching!