The ongoing Crisis at McKinsey, BCG & Bain (2024)
ฝัง
- เผยแพร่เมื่อ 2 พ.ค. 2024
- If you follow the news, the consulting industry seems to be in crisis. We discuss what's actually going on in 2024.
*********************************************
🚀 CASE SIMULATION
Our interactive case interview simulation was developed by MBB (McKinsey, BCG, Bain) consultants. We offer a case interview experience as close to the real interview as it gets.
✅ Authentic cases
✅ Realistic pacing and rhythm
✅ Detailed solutions
Check out our website and try it for free (no strings attached):
www.caseinterviewhub.com/case...
*********************************************
🔓 CONSULTING INSIGHTS
As experienced consultants at McKinsey, BCG, and Bain, we give you an inside look into the industry.
✅ Industry insights
✅ Career tips
✅ Latest trends
Check our website and our blog:
www.caseinterviewhub.com/
Timestamps:
00:00 Intro
00:26 Context
01:51 The Hiring Spree
03:30 The Slowdown
05:25 The Effect on Young Consultants
07:56 Outlook
#crisis, #layoffs, #consulting, #mckinsey, #caseinterview, #consultant, #consultingfirm, #consultinglife, #case, #casestudy, #interviewquestions, #interviewprep, #bcg, #bain
![ถ้าเธอไม่รักทำไมไม่บอกฉัน - PAPER [ Musicvideo ]](http://i.ytimg.com/vi/pfeBhDda7m4/mqdefault.jpg)
What you often hear in relation to this crisis is the "up-or-out" policy of consulting firms. Check out our video in which we explain the concept in detail: th-cam.com/video/BabHZ7DgSJk/w-d-xo.html
Having worked for execs with backgrounds like McKinsey, my overwhelming impression is that they have a lot of stamina for meetings, long hours and an ability for public speaking. But no substance. Not sure a dip in consulting will actually affect the real world..
"BUT NO SUBSTANCE " rightly said . Meeting per se is non productive .. Nothing will emerge out of meeting -- Action only creates value -- Hence those long hours of meeting is counter productive -- I can give many examples.
they earned multi bilions dollars per year, that's what they affect the real world.
@@kira0992 You see - Unequal distribution of wealth leads to KARL MARK to emerge once again -- I have seen multiple Consultants whose salary in INDIA was in crores in 2010 .. They are common people like me perhaps less intelligent than us .. BUT they get undue importance of their so called intelligence and paid heavily .. Some people say all consulting assignment is MONEY LAUNDERING exercise for the company executive where in paid Rs 25 crores and got back 15 crores through Laundering .. Quite possible .. I know big Audit firms actually put some clauses in their audit report so that they get Consulting assignment .. This has been banned in India now .. Hence All that money they get they do not deserve .. Its exploitation of the world
If this entire industry were to disappear tomorrow, the only difference would be more money in the pockets of companies and governments to spend on things that actually matter.
@@sjg9887 I agree fully 100 %. These consulting firms DO NOT ADD VALUE at all .. They are costly people only interact with TOP officials perhaps due to thier support to Money laundering .. They charge say Rs 50 crore consulting assignment out of which Rs 25 crores comes back to the top officials individually privately -- Generally TOP OFFICIALS children foreign college fee is paid by consultants or top officials children gets top end car etc.. that is how money laundering happens .. It is known to all including Tax officials .. They can not take action as there is no LAW to curb such activities
MBB consultant here. 2023 was indeed a tough year pipeline wise. But 2024 seems to be very promising.
That's great to hear!
Do you think this is a general trend or do you think that's more restricted to the industry or region you're focused on? We're seeing slight improvements, but definitely not 2021 levels.
@@CaseInterviewHub it seems like it’s regional. Pipeline is full where Im at across different industries
Think its going to be bad all the way to 2026
They just use the current buzzword “ai” and get business
Why they are are not optimistic even for the next 9 month's?
I have been with an MBB from last 7 years, 2023 was the worst appraisal cycle
How it's 2024 looking like?
I'm an 85 year old retired aerospace engineer who "rode" the Cold War which lasted until 1991. My specialty began with combat aircraft and concluded with space satellites. I retired three times. The last time was an offer from Boeing Satellite in California and I remember asking my wife if I should take it. She said, I don't think that you should, so I said, okay, but you're gonna have to support me. (That was a joke.)
My tool kit (resume) included that I was a Vietnam War Vet, I had high government security clearances, I was a certified engineer (my certifications were up to date), I began my career at a nuclear weapons research lab, I worked at major aerospace companies including at Edwards AFB, I was program mgr for projects worth up to 188 Million in 1992 dollars, I had excellent references, etc. Combat aircraft aerospace engineers were in short supply.
Bottom line, I worked in the field vs. having a desk job. (That meant that I didn't have to wear a suit, though I often earned more than my mgr.)
FWIW, in the seventies we were working on combat aircraft that didn't need pilots because pilots (humans) weren't quick enough, could not withstand the physical and psychological stresses imposed, and the life support systems were heavy, expensive, and humans were becoming obsolete, if truth be told. The writing was on the wall.
Cheap money enabled companies to outsource expertise that they would be able to achieve with their own resources. And in my opinion at better results. An extended consultancy business at this level is overrated and likely unnecessary. Demand decrease makes sense here.
You can argue about that. Building expertise internally isn’t for free either, so not only a question about cheap money. Fully agreed, though, you shouldn’t outsource your core competencies. But the bread and butter of MBB, strategic projects and large scale organizational transformation, that’s not easy to internalize. Who would do that? A ragtag team of HR people, accountants, sales people? No, you rather hire an outside team where the lead partner did that kind of project 20 times already in different settings for different clients.
@@CaseInterviewHubI disagree. Corporates have the people in them to innovate and strategize, it's just the way these companies are set up is to stifle it. Management almost never consults lower ranks about higher level strategy even though these workers know the business model better than anyone.
@@CaseInterviewHuband they spell the client’s name wrong in the slides.
@@CaseInterviewHubMaybe the management teams could come up with and implement new strategies and restructurings? You know, the people who actually know the company and the product? As it has been done since forever in good companies and governments? We end up doing most of the actual work that these consultants get paid for anyway.. Why pay millions for an inexperienced 28 yo to make a power point? While the project lead does politics? It is the local teams that have to give the consultant all the data and explain to them how everything works and then after the power point is made, they are the ones who figure out a way to actually implement that nonsense. Is the consultant really necessary? Especially given the cost? I think the world is catching on to the fact that no, they aren’t.
Career consultant here. I will weigh in. I agree with @caseinterviewhub on this one. A lot of the times a company hires consultants because it they simply do not have the skills to do it on their own ..nor does it make sense to hire the talent just for one project. Another reason (and less-known reason) is that the companies (ie mgmt) want to transfer the risk by hiring consulting firms so that they don't have to take the blame if something goes wrong but can take the credit if things goes well with the project. So their mgmt position is intact in the firm regardless of the outcome of the project. There will always be demand for consultants - the demand will vary based on economic cycles but simply won't just go away.
Going to fresh grads for advice never made sense. But the people with real advice may not have the most polished titles or resumes so don’t get sought out
How dense are you? The fresh grads just do the groundwork. The real advisors are the balding 40+ year olds. Idk why people actually believe a CEO is taking advice from junior associates.
Fully agree - one of our videos addresses exactly this topic. Feel free to check it out:
th-cam.com/video/5hcG1XB_HM8/w-d-xo.html
@@tenko5541People with experience in consulting don’t really have experience… Even the balding 40yo sometimes has never seen the implementation of any of these strategies through. If your experience is making PowerPoints and then leaving, I’m sorry but you don’t have experience… There are some very good clips of Steve Jobs making this point. In addition if there is only the project lead with “experience” most of the times they will be focused on politics and sales, it is the inexperienced guys doing all the analysis and work in the end.
I worked as a consultant for 2 years at Accenture, glad I left for start ups, not sure why people are still doing consulting lmao
Would you have/could you have landed in your current spot without the Accenture experience?
Accenture is a sweatshop, always is and always will be. It was a relief that I have left them. There are other companies that are better for freshers as well.
cause it was accenture lmao
@@CaseInterviewHub Some people eat all the fruit then chop the tree and say what a useless tree, no fruits at all!
@@CaseInterviewHub "Would you have/could you have landed in your current spot without the Accenture experience?"
Accenture has a very bad reputation amongst developers who actually know how to code.
Experience at Accenture is a negative on someone's resume.
this info is accurate, we already shifting from "consulting company" to "company that do consulting AND impementing". Fun fact, The new company that do consulting AND implementing principality is EX MBB. Sometimes, client hijack MBB principal to work for them directly.
Hello, do you use a market tool to build your videos? Seems really cool to use on corporate presentations as well.
It's a mix between PowerPoint, Keynote, and Final Cut Pro. We are sure video editing pros will have more tips regarding tools as we are just a bunch of MBB consultants playing around with video editing. Hope this helps anyway.
Good.
Based off this video it seems that consulting isn’t determined by the overall economy, but instead by the amount of cheap/free money available. Pre-COVID we had low interest rates, during COVID we had even lower rates and PPP money and consulting has only taken a hit once the Fed raised rates. Meanwhile corporate profits are higher now than they were Pre-COVID so it’s not like they’re cutting back out of necessity. I don’t think we’ll have 3-4% loans back anytime soon so consulting may not return to its 2022 and prior glory for a while.
I think we never talked about interest rates, but mentioned the overall state of the economy right in the beginning. The interest rates don’t play a massive role, a 5$m consulting budget won’t be affected by that as much as a company’s billion dollar capex. You don’t take out big loans for consulting projects. The geopolitical uncertainty and other reasons we mention are probably more important. Some people here mentioned AI: we don’t think that’s so relevant yet. Or the firms have grown too fast and the pendulum swings back for a bit. But it’s not a 100% clear what caused it, it may be a combination of factors. Here’s another opinion in last week‘s FT: www.ft.com/content/89e8de5c-7a98-4033-a757-14c703139cfb
@@CaseInterviewHubwhat geopolitical uncertainty?
It's simple supply vs demand. Each time in history, a different thing triggers a boom in demand. Last time it was a combination of cheap money, high market confidence and huge disruptions in the global economy (read: geopolitics). Next time it will be something else inflating demand, and consulting firms will continue playing catch-up. History never repeats, but it sure rhymes.
MBB in Middle East,
The local pipeline is ok but not spectacular, there are a lot entry level people on the beach,
Though Europe is much worse, some friends in Milan are sitting without a project for 3/4 months
The biggest problem is over-hiring in 2021/2022, a lot of people came September-December 2023 and don’t have a single project or have only one under their belt
Sounds like a spot-on description. This matches our observations
The consulting industry's current challenges highlight the importance of adaptability and resilience. As the industry navigates this downturn, young consultants can focus on upskilling and building a strong professional network to stay competitive in the evolving landscape. 💼
Would be great to see the big 3 go down
Would be interesting to better understand your perspective on this take. What do you think would change if the MBB firms were to go down?
That will not happen but BCG might overtake McK. QB produces low quality output relative to BCGx.
Yes I wish for the day when consulting firms are gone. Personally see two companies ruined by McKinsey
@@jasxteo McKinsey is the worst of the three. If it is finance you want Bain. If it is strategy or data science you want BCG
@@DrEhrfurchtgebietenddatascience is just lying with computer math and strategy is what a business should already understand
Do not underestimate the uptake of AI in those firms creating efficiencies that require fewer consultants, coupled with governments spending less.
All these firms are definitely working on improving their interntal as well as external AI capabilities. If you are interested, we discussed what the latest AI tool at McKinsey is capable of in this video:
th-cam.com/video/KoQ_siNMNck/w-d-xo.html
I would only partially agree that a strong economy is good for consultants and a weaker one is bad. Speaking as an ex-consultant (Anl-Dir, Big 4), consulting work is more a function of 'need for change' than of strength or weakness. Sure, that can be in a booming market, where you get the organisational equivalent of ‘keeping up with the Jones’ - every CEO feels they need to do everything to stay ahead of their competitors, but it's scarcely less true in a bear market, where there’s a steady flow of projects focused on understanding the uncertainty and, in the worst cases, Restructuring. The worst kind of market for consulting in my experience is a ‘gentle bull’, where companies don’t feel particularly threatened, there’s little motivation to change the status quo, and consultants just look very expensive on the bottom line, which I think is essentially what you’re describing as the ‘slowdown’, but maybe with slightly different reasons. Better gauges to overall Consulting market activity (not specific types of Consulting) might be the level of technological and regulatory change in an industry. Just my take.
This is great except the fact Companies first reduction in cost is the cost of change, so unless you are like Alvarez and Marsall doing restructuring and litigation work you will suffer, the way all the big 4 have had to do mass redundancies which doesn’t happen in good times.
Here in the Netherlands more and more companies are starting internal strategy teams. I work in one myself at a major foodretailer. This seems to be a trend at least in the Netherlands. You see this anywhere else or does this just catch my eye more often now since I switched from agency to client strategy?
yes, that happens when there is enough aggregate demand for consultancy within a firm...I have usually seen it happen with large banks and public sector here in Canada. It is not a new trend.
It's more of a corporate level trend than geography. Seeing it in my industry for the MNCs.
Makes sense since in-house team is much cheaper, greater accountability and keep talent and knowledge within the company. Any knowledge gap can be bridged by tapping on internal experts (in MNCs you ought to find someone who has the functional knowledge)
@@sagara1609 Aight, yeah here in NL its the larger corporates that start strategy teams lately. I like this trend since it give the opportunity to switch industry after a while. At an agency I felt like I was not really a part of the succes. Even though I had good impact. Rather build on the succes for one company for a longer time.
@@spaghettiravioli1470 fully agree. They do pay well, but McKinsey etc. pays better.
Job cuts in every sector that chatgpt and AI can affect
Remove MBB Consultants and insert any tech job titles other than the CEO, there you have the state of the current tech industry.
Some roles are more at risk than others.
To some extent, many technical roles will be more secure than BS “project management roles” with no skills, or HR admins.
Do you see AI reducing the demand for consulting firms?
Not really. We’ve discussed this here:
th-cam.com/video/KoQ_siNMNck/w-d-xo.html
Shouldnt it be bench not beach?😅
We had this discussion somewhere in the comments :)
Pretty much what happened in Capgemini for the past 3 years
An oversupply of consultants!
Maybe there HR team should hire their own people to work on their dilemma.
You should do a video on how many more women are given opportunities to progress than men. DEI quotas hurt people at MBB.
MBB Consultants should have created a strategy for this crisis prevention, in a way that they shouldn't do what they aren't supposed to do.. I don't know how, but they're pretty good at it, aren't they?
I mean, isn't this the reality for pretty much ALL industries?
Great video
Nothing's more useless than a consultant. Got invited to interview after I graduated. The little ecosystem game was cool and all, but just actually read into it and fuck no. They can keep their buzzwords and shitty deck pitches. Now I'm in tech as data engineer, was hard to get into as an economist but all good now rhankfully
There’s at least one thing more useless than a consultant: a non-consultant watching a video about consultants and then showing off his ignorance in the comments ;)
Oh, and if you wanna pass the interview next time around, check our website for useful resources (www.caseinterviewhub.com)
@@CaseInterviewHub AI. EFFICIENCY. LOW HANGING FRUIT.
You seem to have a deep understanding of the business. You must’ve watched many consulting memes
@CaseInterviewHub i dont get how everyone is just blaming AI when many of the laid off workers found work in other corporations and the job market is still hot. I agree with you this is a reaction of a natural higher inflation rate environment. Companies are higher but keeping capital expenditure low.
My fortune 500 company keeps hiring brain dead consultants so I think the business of telling companies what everyone else is doing will be fine
Bench*
By the way it’s called “bench” not “beach” 😂 otherwise video is solid work
We’ve discussed this already several times in the comments here, you can refer to those discussions 😊
Boss bist du österreichisch?
Shed a tear for the McKenzie boys and their Porsches and Manhattan apartments. These are Cinderella laptop jobs. Cry me a river LMAO. If Your 6 figure job gets axed during a recession you have a vanity job.
We’re glad that your fragile ego feels a little better now. The juniors who’s jobs are on the line are by the way not the ones with a Porsche and a Manhattan apartment. If you want to know more about the salary, check out our video: th-cam.com/video/N1GX8rAlTTY/w-d-xo.html
@@CaseInterviewHub consulting is a trip, because from what I've seen, half of the time, consultants give really bad advice, and the consultants do not possess the necessary competencies to meaningfully help. I work in software and engineering, I've seen this happen now multiple times in my career.
Consultant is hired, who does not understand the profit center of your business, much less the salient details of your industry, or what's going on technically. Consulting firm promises the world to Management. Consultant's suggestions appear to be a mix of very creative rent seeking, and suggestions to manage your business more like a financial firm.
Career engineers and PMs balk. Management is in thrall to the consultant. Career engineers warn management that surreptitiously strip mining your own workforce/customer base/assets/product for value could cause reputational harm, or poses a risk to the companies core service/product. People have real concerns that the consultants promises about financialization are as not nearly as low risk as they say. Management does what the consultant says anway.
The company then makes big money in the next year or two, by stripping out wealth/value from somewhere in the system, and funneling it up. However, the company suffers costs along the way, costs the consultant either glossed over or totally neglected, that end up harming the companies' ability to make a profit. In some cases, it's years later before all the negative consequences of that consultants plan actually roll in.
I found myself, years after the super genius consultant had advised us to gut our workforce and burn our government agency clients, taking minutes for a meeting with regional managers and VP's. They were literally wondering aloud why none of our clients want to work with them anymore, why they have lost all their key staff, and how these slam-dunk prestige projects are losing so much money.
But by then, the consultant, and the manager who used them, are long gone. They left, and they got a promotion while they were at it. The Boeing-fication of the engineering industry.
I saw this happen when I was at a medium sized supplier in aviation, I saw it happen at a fortune 100 engineering firm in their structural engineering/public works dept, and I saw it again when I was doing staff augmentation contracting for a big defense firm.
And I'm still a ways off from retirement. I am expecting to see at least one more consultant destroy a successful business, before I retire.
but muh added value 😢
You have no idea how things really work, do you?
Even at a minimum wage these consultants would be overpaid.
Blabblablablabla, not even touched the point. ........is it not because we have ChatGPT, so we don't need so many consultants for brainstorm anymore?
Maybe you’re not clear on the day to day job of a consultant and you can find more info in other videos on our channel. But we also discussed the specific impact of GenAI here:
GenAI: The End of Consulting? (feat. Lilli by McKinsey)
th-cam.com/video/KoQ_siNMNck/w-d-xo.html
So.. you mean AI eating jobs? What else is new?
It’s more of a general economic slowdown coupled with uncertainty in the markets. AI will not fundamentally change consulting, and we have an entire video on this topic: th-cam.com/video/KoQ_siNMNck/w-d-xo.html
@@CaseInterviewHub Past economic slowdowns did not look like this. No top executive will admit to firing because of AI so "economic downturn" is the perfect excuse. Look into it a bit further. You will find content for another video.
Talking about the economy as a whole:
Why wouldn’t executives admit to downsizing because of AI? That seems to be something many CEOs would be extremely proud of. Deploying cutting edge technology at scale, thereby increasing shareholder value…that’s a story that most management teams would love to be able to tell. It’s just that they can’t because so many established companies can’t even upgrade their legacy IT, much less become an AI champion. You hear the buzzword a lot, but very few companies actually figure it out.
It remains to be seen if GenAI really leads to massive shifts in the market, or if it turns into an „overhyped game changer“ (like VR/AR, or blockchain). Right now there are some cool use cases, but it’s still not at that point where it makes entire job categories obsolete.
@@CaseInterviewHub
I am a computer science student.
-Just working on a bachelor of science degree. (I don’t claim to hold any authority on the subject)
Still in my opinion, generative AI, is like an Industrial Revolution.
I have been using ChatGPT for 1-2 hours daily since launch.
I use GitHub copilot.
I try to come up with ways to use the API.
From my standpoint this technology is even underhyped.
It can be easily integrated. From my experience it just works. There is a lot of stuff, that you could currently create with it. There is even more stuff in the future.
Whatever money I spend on it, probably has a really good return.
Never liked crypto. VR will work eventually.
@@CaseInterviewHub
There are different phases to the current developments:
2022
-ChatGPT was successful
2023
-huge investment followed
-some new applications
2024
-models get huge
2025
-energy problems
-generated movies
-companies get more efficient
-potentially automated bureaucracy(good regulations with fast response)
-maybe personal au media
-automated scientific research
-maybe a chance to develop technology to fight climate change (scientists and engineers in a can)
There is no unrealistic promise in these guesses. Those scenarios sound realistic and scientifically grounded.
No „to the moon“ and other dumb quotes.
Consulting is the most useless and shit stuff in this world, totally useless and scam
The bench* not the beach
Both terms exist, but we encounter beach more frequently
My company says bench and I have never hated a word so much. When i was starting i was on the bench for 4 months.
Bench is the correct term, it comes from soccer, when you don't actually get to play but have to sit on the bench. Beach is not an analogy and if you're hearing it a lot, most likely spread by mistake.
@@CaseInterviewHub definitely depends on where you encounter it but most consultants say bench. I was one of
In all my years at McKinsey I've never personally heard bench. Every single person there, from juniors to partners to PD manager called it beach. Only once someone said bench. It was a guy who switched over from a Big 4. He quickly stopped.
It's clear where the bench analogy comes from. But whatever the reason, beach seems to be more commonly used. It could be a regional thing, but even a bit of googling makes it seem beach is more common.
Maybe we should make a video about this...
This guys voice is like a SLEEPING PILL! I almost fell asleep… I forgot I was trying to watch this video. Monotone voice 👎🏼