BCG Story From Hell
The following article appeared in MIT's newspaper yesterday and it was written by an MIT grad who worked for BCG Dubai and lost his job.
The story explains that consultants at BCG Dubai force-fit analysis to conclusion, even when the conclusion was wrong. Some quotations from the article:
"What I could not get my head around was having to force-fit analysis to a conclusion."
"It wasn’t just that I lost all motivation for my job; it was also that it is much harder than one would expect to do unsound analysis."
"The conclusion may be wrong, but you still need to make it believable."
As someone who is going to work with MBB, this article made me more suspicious of the value delivered by consultants to their clients. I was wondering if you could help me with these questions:
- how widespread is this method of doing business at BCG?
- do McK and Bain work in the same way?
Thank you!
....
bcbunker1 - go troll somewhere else
op - this article is hilarious. This is clearly written by someone who had a fundamentally wrong understanding of what consulting is about. You are not the white knight in consulting - you are a contractor brought in to solve a problem. Sometimes, it's not the problem that would fix the business - it's the problem that will solve someone's career advancement issue.
I'll tell you this. I'm at one of the big three, and i have friends across my firm and others. what this guy describes is far, far beyond anything i have ever heard - I'm more inclined to believe that he did poor work, his manager had no faith in him, and as a result dismissed that $1B loss in NPV out of hand. It's also possible that, since consulting is a business, the partner or project manager saw that as a great opportunity to sell some add-on work later.
basically, this story should not affect your decision to enter consulting, unless of course you think that you're going to be saving the world or some silly bullshit. at the end of the day, you still work in corporate america - your job is to earn the firm money by doing the work they're contracted to do.
Do you think banking makes more logical sense? Why do companies pay bankers for M&A when 3/4 of mergers fail to generate any value?
To the OP, every company has disgruntled ex-employees and ex-clients.
oh, one last point. it's April 2010 - kid was at BCG from June 2009 and presumably left sometime in the last few months. not even a year of experience? spare me.
Welcome to the real world. I feel that this could probably be compared to the banking world as well. I know a few friends in banking that are working on models that they present to their manager and the manager doesn't care for the picture and tells the analyst to increase this number and that etc . . . to make a better picture. Of course this means that the analyst needs to change his underlying assumptions. So in many cases bankers are doing the same thing to create a better looking picture.
It's all about putting the client's interests first and making them look good.
X
@ rumplestiltskin - MIT students going into consulting tend to be largely mediocre academically/scientifically. However, their personal/leadership skills rock, they do have powerful brains (being average at MIT is not bad), and they are high achievers. These students are normally the leaders of big organizations at MIT and they are also necessary to make MIT the place it is. That's the reason why they get the job.
The MIT culture puts to much value on one's brain, and students only later realize that is not enough to do well in life.
bleedblue82 and K7691 - great consulting and banking insights. They helped me understand better the situation. I guess to understand what was really going on, it will be necessary to have the project manager's point of view too. In no way this will affect my decision to enter consulting. Now, I understand more than ever that join MBB => join corporate America => make client happy and get paid.
After thinking about this more, I realized that what I want to confirm is that MBB can afford some integrity. Otherwise, how could you be the best and drive real change if you can't say it like it is? I'm not being idealistic, and forget about the MIT kid. I just want to know that if we (as a project team) see the company going to hell or some great opportunity, we are going to be able to say it even if management doesn't like it. Look, I will take a post-MBA role at MBB, I'm old and I want to believe in the job/career. I don't want this to be just another building block in my resume. I want to feel proud of it.(...OK, this sounds a bit idealistic).
If you can, share your opinions and tell it like it is. Some quotations about integrity from MBB below. Thanks.
McKinsey: Tell the truth as we see it. We stay independent and able to disagree, regardless of the popularity of our views or their effect on our fees. We have the courage to invent and champion unconventional solutions to problems. We do this to help build internal support, get to real issues, and reach practical recommendations.
Blunt integrity from Marvin Bower But he could be blunt. Jack Crowley, a retired director, recalls the time that Bower, in a client meeting with a CEO, "bellowed out, 'The problem with this company, Mr. Little, is you.' And there was a deathly silence. It happened to be totally accurate. That was the end of our work with that client, but it didn't bother Marvin."
BCG: Integrity at BCG also requires courage and accountability. We deliver work of the highest quality by our standards as well as those of our clients. We do not compromise our intellectual integrity for special interests. We share our objective findings with clients—even those that may be unpopular—in a manner that is both candid and respectful.
Bain: Accomplishing our mission requires that we navigate with a sense of "True North". Our True North is our focus on client results - even when it means recommending actions that senior management might not want to hear.
@ wontstick
I agree. The person in the article simply didn't have the necessary balance between soft and analytical skills for an intro level consulting job.
What do people on this board suggest as advice to someone in that situation?
B-School?
Wonstick, if your looking to create "change" or save the world, stay as far away from banking or consulting as possible and go feed the poor in Africa. To add more to my previous post, look at the conflict of interests with sell-side analyst equity reports. Do you really think buy side firms take the sell-sides research at face value? Sell side is completely reliant on companies for m&a and underwriting fees. If a certain bank is making a particular client (or even industry for that matter) look bad, the bank will probably be missing out on fee generation opportunities when that client is searching to do its next acquisition down the road. Look what happened with all the analysts covering Enron at the turn of the century, only 1 had the balls to go ahead the corporate conglomerate and raise a red flag for a sell recommendation.
With that said, the ability to maintain your integrity is entirely up to you and only you. As you move through life and your career, you'll have the opportunity to make decisions and you'll feel it in your gut when your pushing the envelope in reference to your personal belief systems. However where you draw the line will ultimately come down to yourself and how you look at yourself in the mirror each morning.
And are you really taking corporate mission statements to heart? Lol... Of course they're always going to be all peachy just like I could read an obituary of a murderer and believe that he was a saint.
He writes well.
That stuff happened when I was at MBB, albeit not on billion-dollar projects ;-)
The worst was when we were hired to replace another MBB firm that had failed to meet the client's expectations. They gave us the material the other firm had produced, which we simply repackaged with new acronyms and slightly different Excel sheets. Quite possibly one of the reasons I moved to finance: if I am to sell my soul, at least I'd like to get some bang for my buck.
A successful consultant once told me," You want to know.a secret? These firns tell us what they want to hear when we first take the job. We just say what they tell us,and bring in the $$$"
a lot of the projects simply originate with senior execs that want corroboration or greater weight added to a decision they want to make but can't because they don't have enough control of the company. MC is often used simply as a political force. in other instances, MC is used for analyses where there is no internal manpower, but often the management already know what they want to do, they just want the numbers and the data for confirmation or justification in front of the board.
K7691, maxc, fhurricane - good stuff. dagro - your explanation clarifies everything. Thanks guys.
As the original author, I feel compelled to offer some points in my defense.
To bleedblue82: I think I did good work on my cases, and in fact, on the negative $1b case, BCG had done work just a few weeks prior for a similar problem that came up with very nearly the same result. I second-guessed my own analysis up until the last few days of the case when a consulting report came out from an independent group that seconded most of my results.
I went into consulting not expecting to be a "white knight," but expecting that I would answer questions honestly and thus generate value for the client business. Of course my principal saw that a positive answer would mean future casework-- it was obvious to all of us that it would. But if you can't see the lack of morality in that, then we are operating on two entirely different planes.
To rumplestiltskin: 1) Thank you for your glowing review of me. I have no idea who you are, but clearly you know me (though my masters was in nuclear engineering, I merely TA'd in economics), so if you want to have lunch, email me up, I can talk more about things. 2) I don't know if a lack of soft skills was the problem. I'm positive that I lack soft skills, (hell, if you know me, you know that already) but I was also aware that I lacked soft skills, so during cases I plugged in a web camera and videotaped myself so that later I could go back and figure out how to improve myself. Of course, most of the meetings I had problems in they asked me to unplug the camera, but still, when I looked back over the video, I thought I was pretty good on average.
To wontstick: To answer the original question you posed with your post: Even I'm not sure that what I saw at BCG was typical, either of BCG or of BCG Dubai. I have friends in other consulting firms and at BCG who have told me everything from "I can't believe what you're telling me" to "It is exactly like that here." I ran into project managers and partners in Dubai that seemed very serious about uprooting the yes-man, say-what-the-client-wants to hear mentality, and it could also be claimed that because many of the principals and partners in Dubai came recently from other consulting companies (it's a young office) what I saw/experienced was imported from the organizational culture of other consulting firms. I also read things on Knowledge Management (these days I think they call it "Knowledge Team," BCG's internal database of experts and reports) that contained amateurish, factual errors. One case from a U.S. office made blatant mistakes and made them in such a way that created exactly the conclusion their client wanted to hear. The lead partner even gave testimony to Congress. Maybe it was a coincidental accident that they got things wrong in the way that they did, maybe it was on purpose, who knows. If one wants to see a connection, it's easy to do.
My personal assessment? Bullshit like what I saw happens to some extent at all consulting firms at all levels of the firm. If you work long enough in consulting, you'll see it-- it even seems like bleedblue82 has internalized some of it. I don't have enough data points to say anything conclusive about the frequency of bullshit, but in any case, if you go into consulting, be prepared for it.
Vindictive, self-righteous, and "earth-shattering" exposes crafted by former entry-level employees at large investment banking or consulting firms are by no means uncommon.
If the author's conclusion deviated to such an enormous extent from that of his client, was it more likely that errors in the analysis were made by the client or the author himself? After all, as the author points out, he received virtually no preparation during "training" and it seems safe to assume that he has not worked in the industry for a period longer than one year. Considers this: if an objective third party were brought into this situation and asked to nominate the more credible source for an accurate assessment of a business proposition, would that third party (being a reasonable human being) be more likely to believe in a recent college graduate or a client whose analysis is presumably based on years of experience in the industry itself? Perhaps the matter being considered was less "clear and unambiguous" than the author himself initially judged.
^ I am suprised by the negative reaction to this article. Most of you are quick to dismiss the author's opinion/intelligence/value system/etc.. He was there, you weren't. It doesn't take someone with "years of experience" to know when people are speaking bs, especially if you work with them.
And reallycoolguy what the hell are you talking about? Wanting to do honest work and writing about what you perceived to be dishonest is not vindictive and self-righteous. It's called being a whistleblower, and as far as I can tell this guy isn't getting paid for it (he gave up 16k).
This doesn't surprise me. This shit describes about 99% of all corporate work. Isn't limited to consulting. Internal analysis within companies follows the same pattern. The top guys have a story that they want to present. The execution guys, come hell or high water, write that fucking story. This is the way it is.
So true..
@NakedCapitalist - thank you for the answer and all the extra details; they help a lot.
To NakedCapitalist:
I enjoyed your article as well as your writing style (I even went on to read several other of your pieces). Similar to yourself, after 4 years in banking and doing things that were complete bullshit, I became disenfranchised and left (now I work oversees in development). I've come to realize that in banking, or consulting for that matter, no one really knows what the fuck is going on. And how can they really. Basically ever project is forward looking; no one is able to definitively know what will happen in the future. You can use financial knowledge and analysis to make a strong judgment call, but not matter how sophisticated your analysis is, at the end of the day you are still trying to predict the future. Bankers and Consultants get hired by clients to deliver results based on models they create. These models are so complex and contain so many assumptions. Yet, all you really do is back you model into the end result you want. They key is to have defensible assumptions within a logical framework. Its easy to have bullshit answers for why certain assumptions were used while sounding extremely intelligent. All you hear is we using the analysis to tell a story. Sadly, the whole financial melt down has proven this to be all too true. Ultimately, finance and consulting are just a bunch of smart people, who probably didn't have the drive to study medicine or engineering (I'll be the first the admit I did econ because it was easier and less time consuming than engineering) taking their best shot at fortune telling.
That being said, one thing that I can't quite get my head around is why someone with your credentials would even take a job in management consulting. It seems like such a waste of your talent. How could someone capable of double major, double minor, masters, whatever, at MIT no less, have possible been intellectually stimulated by management consulting. Did you just decide to sell out and make some cash? Why not do something engineering related? I'd be curious to hear your though process on this.
Consulting in general is full of bullshit artists. In Trading you can't bullshit around, eventually your mistakes will cost you. In IBD mistakes are also very quantifiable, especially at the PE level. Results from consulting are never measurable, it's just a good way to get into MBA school.
To EnteringRealLife:
It depends on how you are using the term bullshit. I think finance is bullshit, thank includes trading, banking, pe you name it. Banking is probably the most guilty of the three and the one I'm most familiar. You are selling M&A deals, you are selling financing deals. You job is to close those deals and you get paid well if you doe so. However, as such you job is to create forward looking model that show how great you client will be. Clearly your analysis is not biased no? Or how about fairness opinions. You get hired to say the deal is fair. End of story. You know the result before you even open excel. You just use justifiable assumptions to prove your case, whether you believe it or not. Trading is bullshit too. As you pointed out you are punished in trading. However, you state its mistakes that cost you. Mistakes are mathematical errors. Traders don't make mistakes so much as they guessed wrong. Really you are just making very sophisticated bets. They fact that you can not prove the outcome undermines the entire premise. There is no proof, just very advanced educated guessing. You can have two harvard mba betting on opposite sides of the coin. Again look at the financial crises. How can you have the "smartest" people blow it so hard. If it were for the government there would be no wall street anymore.
Take a step back and compare finance to engineering. Imagine if one day every sky scrapper came crashing down because all the engineers made mistakes in their stress assumptions. It wouldn't happen. Engineering is fact driven. Finance is not. Finance is about making analysis on past events to "predict" and "assume" future ones. Thus bullshit.
How is participating with unknowns "bullshit"? It's hilarious that you define bullshit as anything not concrete. You have to take risks every day - I guess we're all full of shit then huh?
A successful trader will always be profitable in the long run. Yes, they place bets, but it is risk management. The reason why two traders may be on opposite sides of the coin is because their strategies might be entirely different... even if one of them loses that trade they will eventually be profitable.
Its one of the least bullshit jobs out there
Fine, everything is bullshit.
The bottom line is someone is hiring you to do an analysis. How satisfied they are with your analysis will determine the quality of the relationship you establish and the propensity for them to hire you again. So if its a BOD hiring you to shake things up... will they want to hear that everything is perfectly fine the way it is? And if its the C-Level Offices hiring you to "gut check" their work, will they want to hear you telling them that their analysis looks like it was done by someone on peyote?
Thats what it comes down to. Its common sense, I dont know why people are so surprised. Has anyone in M&A on this message board ever seen MBB report back on a synergies analysis that management is way fucking off and completely off their rocker? I haven't. But I have seen management miss their synergy targets by a long shot. How do you reconcile that?
Who's hiring MBB to do these analyses? Is it in MBB's best interest to tell their client they are full of shit? Its mostly just window dressing. Management is supplying MBB with company specific "expertise" and is providing them with pieces of info they deem necessary... what type of conclusions do you think they're going to come up with? Even auditors are guiltu of not having the truth seeking zeal they are expected to have. You think a consultant is going to live up to that standard... seriously.
As someone who can see kind of where the guy is coming from in his story, especially his science background, I have the following comments:
To start with, he faced a bad conspiracy of location, industry, and colleagues. For someone coming out of such a focused science background, it would've been better to ease into a challenge one at a time. 1) He got staffed (or asked to be staffed) in a foreign (to him) environment, where he probably felt isolated. 2) Then he got put in a high pressure industry or project that challenged his ideals too soon. 3) And finally, his colleagues weren't properly looking after his training or acclimatisation to the culture well enough.
But also, in the face of these challenges, I feel a combination that he wasn't patient enough (to give it a try in multiple projects to find something he liked or see that it could be different), and that he didn't have the initiative to go find opportunities or tell people that he wasn't satisfied. My uninformed feeling is that he approached it in a typical scientific way, just coming to the conclusion that he wasn't right for it/it wasn't right for him, rather than trying to make it better.
On the specific topic of the $1B loss for their client that they were unwilling to advise against, that may be particular to his project or people involved, but I also think he probably could've taken the mindset of presenting it in a more constructive manner (and I'm in no way familiar with what happened of course), so that it was like he was being a real advisor to the client, rather than a critic and pointing out flaws. Such as, "We know that you (the client) are committed to this action, and here are just some things we feel obligated to point out, as partners and advisors to you."
I think there's the possibility of this sort of thing happening in many consulting companies, but that this story is a bit extreme. Especially if you realize this is happening, most of the companies have colleague/mentor structures available for you to air these issues, and more importantly figure out how to change it and make it better, if not for the company, then at least for yourself.
Overall, I feel bad for the guy, because if he'd been a little more flexible and open to learning, he probably could have succeeded. As it was, his ideals and youth probably set him up for an unavoidable clash with consulting industry norms, regardless of being $1B or $1M.
My friend, at MBB it's up or out. Buddy systems are just an HR façade.
Sure, I understand that. But if he had been, say in the Boston office, with a less crazy industry, with more colleagues around him to reach out to and talk to about his issues, I think the outcome could have been very different.
To be honest this guy was in Dubai... In the US making up numbers wouldn't fly, in Dubai I'm not even sure the client cares.
You know this how?
And you know THIS how?
You obviously have no idea how things work. You have to be completely stupid to 'make-up' a number considering you can somehow craft just about any number you want based on some shaky albeit arguable assumptions. Just about anything is defensible in someway.
Obviously there is much more neopotism in places like Dubai which stomps out whistle blowers and the like, but you're vastly mistaken if you think there is some sort of moral code upheld by US companies or that this type of stuff doesn't happen here and everywhere else every day.
They live and die by the dollar everywhere.
great thread. some good points on both sides.
I was selected for all consult interviews. That's top 4% of a world renowned college. They all have a buddy system to help out in interviews. Two shocking straight facts: 1. Many consults have pre-decided whom to select. That is in this part of the world, at least. OK exceptions, but mostly. 2. Buddy system is a fraud scheme of things. They say its not evaluated and informal, BUT, all case studies, interaction, doubts, dinners, clothes, are evaluated and 12 page report is made.
These are few of the black truths.
And to me, I felt like what the hell, I am 22, and full of power and energy. I never enjoyed a pseud-life. I went on to pursue my passion and do innovative things, and contribute to the world.
That being said, nobody likes wat they do, other than ppl like me who follow their passion.
I have absolutely no idea what you're actually saying. Can you communicate in real words and sentences?
Short summary:
1) Bragging about getting an interview from all consulting firms, at one of the best colleges 2) They are always evaluating you, even if they say they aren't 3) He said "screw you, artificial psuedo-living monkeys" and went on to pursue his passions and change the world. Only people like him enjoy their life.
That being said, I highly doubt that people in any world renowned college are able to mangling english so badly.
As for the thread, I found it a little bit disturbing, but a lot of the explanations offered make sense. I have never thought that consultants are saints in any shape and form, but I don't think ( that the MIT guy's experience is common (or at least, I hope it isn't).
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