Here is my best story about business consultants...
I was contracting at a big three automaker and they had retained just such a firm, possibly even BCG, to "restructure" the IT department.
So they had a team of overpaid consultants come and perform an analysis. I won't even get into the pointlessness of all that. However, the leader of the pack, the alpha male of the consulting team, would physically walk his laptop over to a printer near the admin's desk to print because the information was too sensitive to print over the network.
In true hacker fashion a buddy and I had recently discovered that you could telnet into the printers and with a carefully crafted command actually set the text on the LCD readout on the printer itself. (The spot where is usually says "Load Paper") So we actually wrote a program that would allow us to send any text we wanted to any LCD of a printer.
So of course, this self important consultant became our first victim of the prank. He hooked up his laptop and we starting sending text like "Loading Virus" to the LCD. It actually became a little frustrating because he wasn't noticing the LCD.
Finally, he looked at the LCD and we starting sending text like "Downloading files from computer". This guy just went into an absolute panic and after the first few seconds of frantic inactivity he got his act together and closed the laptop. Of course, that didn't stop the printer from "Downloading files", so he finally ripped the cable from his laptop to sever the connection.
He was in a panic for what I'm sure were some of the longest seconds of his life, but by then we were doubled over laughing just a couple of desks away and he caught on.
I will give him credit for taking the joke well and he never tried to push it up the food chain or anything to involve any management.
Well, if you're looking for fodder for future fun and games, remind your mark that all sorts of interesting stuff can be recovered from the disks that are often resident inside mid- and upper-end printers. And remind your mark that printers actually can be infested with stuff; it's a good spot for malware to operate on a LAN, too.
Great description of burnout: "What I learned is that burning out isn’t just about work load, it’s about work load being greater than the motivation to do work."
This is so true. My father took on a nightclub all by himself. It was a stupid move, he lost a lot of money doing that. What he was missing was a partner. Not only to lessen his work load, but also to keep him motivated.
This is the reason you see musicians take 5 year breaks, or even quitting music. They are lacking in motivation. Look at the band Queen, They are still making music and touring, but half the band has quit. Freddie Mercury died and John Deacon quit music altogether. What did John Deacon lose? His motivation. Brian May and Roger Taylor both had a lot of say in the bands creative process, and that process motivated them to continue, even after Freddie had passed away. Now, Deacon, he wasn't as involved in that process, and he was the one who quit.
That sentence really stood out for me too, especially since I've been going through something close to that.
I always wondered what caused people to 'burn out' on jobs that you couldn't possibly call taxing by any stretch of the imagination, I think this is the key to the answer.
"At my salary level, and with my expected advancement path, I could comfortably retire in my thirties."
I've heard this or statements like it in quite a few articles over the years, but I've never actually met a retired thirties business consultant. Do they exist and am I just missing them? The only ones I know are well into their thirties, working 70+ hours a week, and looking forward to making even larger boatloads in their forties.
They think they will retire in their thirties, but they never have enough.
"At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch 22 over its whole history. Heller responds, "Yes, but I have something he will never have...
Their fixed costs keep rising. When you are 22, you think that $100,000 a year (rising with inflation) is heaps. But by 30, you buy your first yacht, and it takes $50,000 a year just to keep it in the dock.
LOL. There's a huge difference between a hedge fund manager and a management consultant. Perhaps the billionaire will never think he has enough, but the consultant will actually, in legitimate and reasonable terms, not have enough. They really don't make much money for the hours they put in. Factoring travel, they work as much as an investment banker and essentially earn what a banker would earn without his bonus.
Hedge fund managers are to management consultants what wolves are to sheep. Please don't compare the two. One is a master, the other nothing but a slave.
That actually undermines his main point -- that he stuck to his "morals" and forgone the "large" hush money check at the end. If he was making enough to retire by his 30s then $16k wasn't that significant of an amount. That means the didn't really lose a lot so his "moral" stance is more symbolic, and not the tough financial decision that article might imply.
I don't think that was his main point. He had, after all, just said that he was willing to compromise his morals to the extent of continuing to work with BCG despite the dishonesty it involved -- because the amount of money potentially involved was so large. "I think I’ve come to the conclusion that having a father who can pay for a top-notch education outweighs the disadvantage of being raised by a hypocrite. Sticking with the job for the sake of a paycheck passes the children test."
So I'd say his main point wasn't "look at me, I stuck to my morals" but "I'm corruptible but not infinitely corruptible". (The reason for mentioning the $16k in the title isn't to say "look how much money I turned down" but to say "look how much money they offered me for this".)
Eh, maybe. Numerologically, I think you're right, but you do have to keep in mind that a $16,000 lump sum has a lot more subjective value going out the door to an uncertain future and a zero income - at least, temporarily - than it does in the course of making six figures at a stable job.
I'm not saying he had any reason to suspect he wouldn't be able to find another job, and even quickly, but it probably wouldn't pay nearly as much and there was no guarantee of that. It's just the depressive state accompanying the sensation of having been fired, even if it's from something you hate in concrete terms.
The whole moral thing is questionable, if he would have taken his leave that would be one thing but the company initiated the termination, not the author.
Depends. If you are making $300,000 a year and live like you are making $15,000 a year (and save the rest), then you can retire at 30.
Most people aren't willing to be this frugal, however. It seems some people making this much even have trouble "making ends meet", because they buy so much crap that they can't afford. Ah, consumerism.
(In the interest of fairness, I am almost as bad -- I love buying stuff. I just stop when I don't have any more money... and I might even be able to retire before I'm 90 :)
The problem here is in the matter of status symbols. A quick tale for you: A consultant who gave me my start in the industry once had his car break down before an initial meeting with a client(Mercedes). He had to borrow his son's tricked-out VW boy-racer to get to the meeting on time. As he pulled into the meeting the clients were exiting their cars and saw him parking. He said the meeting never even really got started, as they had already pre-judged him.
> If you are making $300,000 a year and live like you are making $15,000 a year
It's possible if your employer is paying for your relocation. In 2004 (IIRC) I went on training teams for clients of ours continuously for about two months (with a brief stop at home in the middle). Not only I accumulated a respectable mileage, I spent about a third of what I usually spend in my home town (São Paulo, Brazil).
I'm 40, married for the second time, with a 14 year-old boy from the first marriage and would not be able to reduce my expenditures to that level, but it's quite doable if you are in your 20's.
To summarize in English: Stewart started an unnamed firm, and tried to exit mid-bubble four years later; his partners didn't want to buy his equity, so he sued them. By the time he got his shares bought three years later the firm had imploded.
After 10-15 years at one of the top consultancies you could have completed outright the major capital purchases of your life (e.g. a house or two, maybe a boat) and could downshift to something much less stressful but you certainly couldn't stop working altogether. And these houses would be nice, sure, but we're not talking mansions with helicopter pads and servants here. Basically you would be established in a solid upper-middle-class lifestyle, but you would still need to work to maintain it.
The consulting business pays very good wages, but you don't get to build any significant equity - what you need to retire on - until and unless you make partner.
"I got the feeling that our clients were simply trying to mimic successful businesses, and that as consultants, our earnings came from having the luck of being included in an elaborate cargo-cult ritual."
WOW that is dead on. I get the feeling half the world is like that.
The problem is that it is not that simple, because just doing what others do works very well in most cases and you don't have the time to start questioning _everything_ - why do you shower in the morning? Why eat three times a day?
I don't want to defend cargo-cults, but people copy because it works.
No, it's worse than that. I have seen this before. There is an entire portion of the business world that merely goes through the motions of being successful businesses rather than actually being businesses at all. It's really weird.
You could look at it as investment fraud with plausible deniability. Take money, hire consultants, look busy. The only thing is, I don't think it's that explicit or intentional. I think there's a breed of person out there in the business world who does not grasp the distinction between actually doing something and imitating the appearance of doing it.
I think these comparisons are a little off base. If i am not hungry at night, I normally skip the dinner. If I am on a lazy mood on a weekend, I skip my shower/shower in the evening. You don't have to question everything, but you shouldn't do anything that doesn't make sense to you. and that's barely the case in big business environment.
Interestingly, a google search for "This is the first in a four-part series on the author’s experiences as a consultant in Dubai." and "This is the second in a four-part series on the author’s experiences as a consultant in Dubai." (with or without the quotes) turns up the other two articles well enough.
This story is written with a wonderful naivete. Consultants like BCG exist only to lend credentials and competent temporary labor. The companies who hire these consultants are looking for affirmation and peace of mind -- most of them too mired in bureaucracy or incompetence to draw even the most basic conclusions by themselves.
Still, it's hard to believe that peace of mind is worth paying 5 kids graduated 6 weeks ago in Political Science from Stanford to come give Powerpoints on meaningless, vapid crapola billed to you each at $300/hr, even where such figures don't make much of a blip on the bottom line.
It does seem strange, but here are some reasons why this happens:
- When you hire BCG or McKenzie to (for example) value a business segment or recommend an acquisition, their feedback can be touted as expert and unbiased.
- BCG will do whatever it takes to deliver what's asked, even if it's a banal Power Point. So the person who decided to hire them is taking a minimal risk by doing so.
- In many cases it's a chance for the client company to get insights on how competitors have solved similar problems. Albeit in the story everyone's right out of school, I've seen cases where a pharma company will hire a group from a place like BCG because they've also worked for a competitor.
- Lastly, it's a chance to work with some talented folks who might make good permanent hires at the client company.
Bottom line, is that this type of consulting is usually a huge waste of money. But it's also one of the only ways huge companies can get a group of talented degree-toting individuals to work on important temporary projects with the assurance that company will get exactly what it wants.
In companies there are people who are paid to decide things. They also have budgets. Often they are called managers. There are consequences with decisions.
Managers learned a trick: Give the money of your budgets to consultants to make the decision your company pays you for.
If the decision was a good one: The manager was the one who hired the consultants!
If the decision was a bad one: Who could blame the manager, even the top consultants of BCG/Berger/McKinsey couldn't make the right decision, he hired the best!
Either way: The manager outsourced the work he was supposed to do but still gets paid and freed himself from the consequences. Heaven!
That's just how the managing partner described it when BCG came to do a recruiting talk. He called theirs one of the most improbable businesses in the world- companies pay a lot of money to have just-graduated kids work on their problems.
The thing is, on an individual level, consultants really do work like sled dogs. If you have something in mind that needs a dozen fairly smart people to go to North Dakota and work 90 hrs a week for 3 months, consultants can do that and your regular employees probably can't (or won't).
However it's up to you to actually have something like that in mind in the first place... I can't think of anything offhand myself!
"I wasn’t sure at the time, but having had enough free time of late to ponder such questions, I think I’ve come to the conclusion that having a father who can pay for a top-notch education outweighs the disadvantage of being raised by a hypocrite. Sticking with the job for the sake of a paycheck passes the children test."
I wonder how many children get sent to college by dads like that.
I was sitting next to Reg Braithwaite at the first startup school when one speaker (pg?) said something about startups being for young people so they can focus 100% on the company without worrying about kids. Reg stood up and said, paraphrased, "I'm starting a company _because_ of my kids, so they can say that their dad showed them how to follow their dreams instead of doing the safe thing like everyone else."
Respect.
My oldest is 7 now, and I hope he'll be able to say that his father showed him that living with a clear conscience is worth even more than a top-notch education.
I think it shows closed-mindedness on his part. They taught him analysis at MIT, but they didn't teach him to think properly.
You're a guy with a degree from the top technical school in the world and you've got one of the world's most prestigious consultancies on your resume: you don't think you could go on to find a job in which you could afford your kids' education AND not be a hypocrite?
I respect him for standing up after the fact and saying "I'm a wealthy hypocrite." But I don't respect him for going to work there in the first place. You'd have to have spent junior year of college buried in sand not to know it's a game, mostly dirty.
Well he was taking a double course-load and working, so that may count as being buried in sand.
But still, even if he didn't know beforehand, he figured it out very quickly upon arrival and then stayed for a long time for the money, so I agree with most of your point.
I don't know, but I think it's a horrible conclusion. He hated his job and felt he was making the world a worse place. If that's what his top-notch education got him, why did he want the same for his children?
Large consulting companies often tell their clients what they want to hear, which more or less negates the point of consultants but can often pay better. There are ethical concerns here.
I like the story, but the article itself has way too many metaphors that cloud the point.
Or maybe I'm just too used to having all my stories condensed into 140 characters...
There was another important point: a guy new to the consulting business and with no significant amount of relevant training or support wound up being marketed as an expert and became the senior person on each project he joined.
I've seen this in action, both from the client side (management brought in absurdly highly paid consultants to back up what they wanted when their own people wouldn't support it) and the other side (friends and friends of friends who went into consultancy firms; few of them have stayed there much longer than this guy).
What I don't get is why shareholders (for big companies) or government auditors (for government organisations) don't openly criticise the policy of wasting money hiring these completely unqualified people who either offer no real benefit or actively cause harm to the projects they join. Obviously a genuine expert could offer useful consultancy in their field of expertise, but that doesn't seem to be the MO of these big multinational consultancy shops.
Shareholder activists will usually argue how companies stupidly waste money on consultants. It's just that there aren't a lot of them.
In the past, Buffett has criticized consultants.
1995 Letter:
Concluding this little dissertation on acquisitions, I can't
resist repeating a tale told me last year by a corporate
executive. The business he grew up in was a fine one, with a
long-time record of leadership in its industry. Its main
product, however, was distressingly glamorless. So several
decades ago, the company hired a management consultant who -
naturally - advised diversification, the then-current fad.
("Focus" was not yet in style.) Before long, the company
acquired a number of businesses, each after the consulting firm
had gone through a long - and expensive - acquisition study. And
the outcome? Said the executive sadly, "When we started, we were
getting 100% of our earnings from the original business. After
ten years, we were getting 150%."
“I would rather throw a viper down my shirtfront than hire a compensation consultant.” -Charles Munger
I think shareholders might not widely realize how it works. Often, shareholders are actually the ones who demand bringing in outside consultants, because it's seen as getting an independent third opinion. It looks more self-interested for the company's executives to set their own pay, than it does for an executive-recruitment consulting firm to recommend what the going rate is. Of course, executives have gotten good at getting the right consulting firms to answer those questions, and consulting firms know that if they don't answer appropriately, they aren't going to be asked back.
Shareholders care only about relative performance. Absolute performance is irrelevant. So as long as all big companies in a particular sector waste X on consultants, that's fine for the shareholder. It doesn't even affect the dividend as you might think, because if everyone does it the cost can be passed on to clients.
Shareholders start to care once a lean competitor enters the scene. Someone who does away with all the fluff and is more profitable. These things happen. But my reaction as a shareholder is to become a shareholder of the better company and dump the stock of the inefficient one. I'm not trying to make the inefficient company more efficient. Some activist shareholders do that, but most don't.
There is one very important truth that too few people are considering: Shareholders are not entrepreneurs. Most shareholders have no interest in improving a particular company. Their interest is in choosing undervalued companies and selling them when they are not undervalued any longer, preferably at a higher price.
The distinction between investors and speculators is a lie. There is no difference between the two. The important difference is the one between owners and entrepreneurs.
Consultants are often brought in order be blamed later. In the article, the development company could always try and blame BCG when their shareholders wonder how come $1B was wasted. By that time, the CEO of the development company would have left deploying his golden parachute, and BCG would have been able to somehow cover their legal ass with some small print on a back of their contract agreement.
"I’m a free marketeer. I believe that voluntary exchange is not just a good method of incentivizing people to provide their labor and talents to society, but a robust moral system — goods and services represent tangible benefit to people, market prices represent the true value of goods in society, and wages represent the value that a worker provides to others. Absent negative externalities or monopoly effects, a man receives from the free market what he gives to it, his material worth is a running tally of the net benefit that he has provided to his fellow man. A high income is not only justified, but there is nobility to it."
Oh, man, it'd be awesome if we had that. But then, much of the Web 2.0 "industry" about which this site revolves would not exist.
I found that quote particularly hilarious given the article in which it is embedded. The article would make a good reference for the wikipedia article on cognitive dissonance.
He invokes Excel as an analytical engine several times in this story. I am trying to figure out if he actually considers it to be a powerful statistical engine, or if he is merely using it synecdochically for the benefit of non-technical readers, in order to represent statistical software more generally.
It actually is the de-facto-standard modeling engine in a lot of areas, even some scientific areas, but mainly economics/finance. There are some pretty nuttily complex simulations written entirely in Excel, with the visualization part of the simulation done by popping up a chart--- you can even make it animated by popping up a new chart at a certain time interval. There's even a market in commercial spreadsheets, which you buy and load sort of like libraries: http://www.palisade.com/RISK/
Not necessarily a good idea, but somehow it caught on. One possible reason is that it was one of the earlier widely available pieces of software for doing declarative, dependency-based modeling that auto-propagates updates: if box A and box B are linked by a "B = 2*A", then B auto-updates whenever A changes, without you manually writing a propagate-updates loop. You can now do stuff like that in a lot of languages, but it's relatively recent (e.g., it's one of the new features JavaFX variables have).
Spreadsheets are the most popular declarative (or zero order functional) languages in the world. There were even talks about spreadsheets on the International Conference on Functional Programming 2009.
You can now do stuff like that in a lot of languages, but it's relatively recent
Saying "Lisp had it X years ago" sounds perhaps a little weenish, but... that sounds a lot like the Cells library, and the even older Garnet KR. Granted, they're quite a lot less accessible than spreadsheet programs.
FRP seems to be modern take on it. It's being very actively researched in the Haskell community.
Twenty-plus years ago I wrote a complete blackjack game in a spreadsheet, all using 1-2-3 "slash" macro commands (not VBA or anything like that). It even did insurance and doubling-down. I was part of the team testing the product, and each of us on the test team built a different casino game -- one guy did craps, and found a bug in the random number generator.
Once you get your brain around the paradigm, it can be a powerful tool.
The 'Solver' (http://www.solver.com/) tool in Excel is widely used for many business optimization problems. If you have x & y quantities of two raw materials and products A and B consume different proportions of each raw material, then you can use the solver to determine the most optimal production strategy that maximizes your profit (or minimizes your labor requirements etc.)
I've seen Solver used by a number of accountants to say 'I need my profit to be this number, what figures do I need to change to hit that?'. Solver is a life saver for those looking to cook the books (sadly far too many people).
In high school there was a girl in my class that preferre to do everything in excel. And that included writing papers, because it made the formatting easy.
I think his point is that Excel is a powerful weapon in the right hands. Most people don't do much with it, but it's powerful none the less. If dollars were points, many trillions in commerce and complex decisions have been made on the result of analysis done by spreadsheets.
I'd never heard of it before. I too assumed that muting the sound was the idea, he mentioned he was staying at a hotel, so I guess screaming would have raised some serious suspicion. I wonder if the sound would travel down the drainpipe, though.
I don't think this is specific to business consulting, or to Dubai. I know several people who were hired by high-powered technical consulting firms here in the US; all of them were fairly bright, attractive young people with very little experience of any sort.
He even said that he decided that he would rather have a "hypothetical children" have a rich morally bankrupt father that could pay for college than one with integrity.
because he spent that entire article telling us how great he was at rationalizing selling out. he pretty clearly had enough practice that he could've handled one last rationalization.
as far as judgment, i don't consider attempting to predict someone's behavior a judgment. i didn't say "he is an awful person". that'd be judgment. i was implying, though, that you shouldn't be impressed by his turning down $16k. the only thing that tell us about him is that his price is above $16k, and below $200k/yr.
and, there was no giving up of his job, in the end. i quote: "I was not surprised the day I lost my job."
"Absent negative externalities or monopoly effects, a man receives from the free market what he gives to it, his material worth is a running tally of the net benefit that he has provided to his fellow man"
I'm not surprised that someone whose ideology makes him believe that Einstein's contribution to society was smaller than that of the bosses of Lehman or AIG would be disappointed by reality. Or is it that reality itself is a "negative externality"?
No, I think the issue is one of faulty interpretation of that ideology. It's a serious mistake that people make all the time. They mix up statistical probabilities and individual causality. The average efficiency of markets includes scams as well as geniuses. It includes people who contribute a lot but market themselves badly and it includes the exact opposite.
I'm not surprised that someone whose ideology makes him believe that Einstein's contribution to society was smaller than that of the bosses of Lehman or AIG would be disappointed by reality.
Would you care to clarify? I genuinely don't see where you are getting this from.
I guess Welcome the Real World, is the best response I can give. So sorry that the real world is so non-idealistic and disappointing to you, and that your wonderful skills and knowledge aren't being prized and utilized.
In other words, you're experiencing the reality shock _everybody_ experiences when engaging with, and learning about, the corporate world.
It seems you'd be happier in Academia, a research institute, or perhaps creating something on your own.
It's not the Real World, it's just a certain part of it. Not a small part, but not all of it either. There are a lot of places that offer a chance to do far more satisfying work.
(BTW I'm not sure I'd recommend academe for someone with his mindset. The politics are perhaps even worse and the monetary gains much lower. A startup - even though far from the Disneyland some HN posts paint it as - could be a good place for someone like that)
You're right. That youthful energy and talent are likely to be utilized best in a purely creative start-up. That was the idea with the creating something on his own suggestion.
“Find me a rock” problems sound dead simple, but in actuality have requirements that are poorly stated or unknown. You never know what you’re looking for; you only know that you’ll know it when you see it.
Even better perhaps: "you only know that someone else will know it when they see it".
What an amazingly insightful article. Props to the author for speaking up. Yet, slightly dissapointed that he did not leave out of his own accord, but waited to be laid off.
In his own reasoning "I’ve come to the conclusion that having a father who can pay for a top-notch education outweighs the disadvantage of being raised by a hypocrite."
Acting as if financial success equates to dishonesty.
While in the very same piece the author praises free market,
and money in exchange for true value does not compute. Does he believe, or not believe in the power of a free market,
or has he come to develop a disbelief in honest trading?
Something that leaped out at me: "I believe that voluntary exchange is not just a good method of incentivizing people to provide their labor and talents to society, but a robust moral system".
Voluntary exchange is not a moral system. A free market doesn't have morals.
The author of the submitted article may have more sense of history than most Americans. It is a historical fact that Adam Smith first wrote a book The Theory of Moral Sentiments
in 1759, pondering the issue of why people behave morally when they could simply guard their own self-interest. As Smith pondered the issue more, he wrote An Inquiry into the Nature and Causes of the Wealth of Nations
in which he discussed how free-market trade provides incentives to moral behavior. EVERYONE who is well educated should recognize this quotation:
"But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and shew them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages."
In other words, society can be structured so that people will help you or other people who need help while looking out for number 1.
Smith's overall conclusion on the relation between morality and free markets is a bit more mixed than that of someone like Hayek, though. He does say things like the excerpt you quote quite frequently, but he also has a number of comments lamenting the immoral behavior that profit motives cause, like an encouragement to fraud and collusion. He does worry that some attempts to solve the problem would be worse cures than the disease, but he doesn't think that no problem exists, or that self-interest always produces moral outcomes, or that government regulation to mitigate the immoral effects of self-interest is always wrong.
His policy proposals on that latter point are pretty pragmatic, and he endorses regulation when he thinks it has relatively large gains for relatively small downsides. For example, he proposes that the government ought to require employers to pay their employees in hard money, and not permit them to pay in promissory notes or in goods. His reasoning is that this prevents unscrupulous employers from tricking employees, either by paying them in goods whose value has been misrepresented, or by convincing them to work for promises of payment that the employer doesn't really intend to keep.
You have completely missed the point. Contrasting economic systems is completely irrelevant.
The choice here is not between different economic systems, but between different moral systems.
You cannot make a free market your moral system because markets are amoral. That is, it is not that they are not immoral and so should be replaced with something else; rather, they have no moral content - morality comes from somewhere else.
You can pay someone to punch a third party in the nose. You get the value of knowing that someone is going to get hurt. The other guy gets your money. The transaction, in the free market, by itself has no moral content, though. A free market just means exchanging value for mutual gain. It doesn't say that those values have positive or negative moral worth.
You are completely incorrect, the free market is a moral system because it does not rely on coercion or force to compel others to interact. All interactions in a free market system are voluntary and beneficial to all participants in the transaction. No other economic system can make those claims.
Firstly, 'The free market' can never be 'a moral system'. The first term refers to a system of trading, where goods and services are interchanged and relative monetary values are established. The second refers to sets of principles, reasons and motives for doing certain things. The first is at most a subset of the second, but that is only the case if you amend it with a philosophy that equates monetary value to moral value.
Secondly, your view of free markets is naive. Lack of transparency and the problem of monopolies are only a few of the many problems that completely free markets suffer from. We have an FTC, because markets need to be regulated. Leaving them completely free leads to morally unacceptable results.
It can be beneficial to all "participants" but disastrous to society as a whole, can it not? Look at the current rage against free market instruments like CDOs and other complex unregulated derivatives.
Are you really claiming we dont need "coercion or force" from regulators like the SEC or FTC?
People can be coerced by their circumstances; but that's beside the point.
You can hire someone to murder someone else. Nothing wrong with that transaction in a free market. Similarly, you can be a credit card processor for child pornography - you take your cut, but since you don't do the deed, it's not your problem.
Do you see the problem?
(Hint: morality isn't emerging here. It comes from somewhere else.)
And I have no idea why you mentioned some "other economic system". I didn't. Why? Because I wasn't contrasting economic systems. I was contrasting moral systems.
But some moral systems are consequentialistic [1] and for its proponents, the means are justified by the ends. A free market could be seen as a means to reach the moral end. Thus, they are often mixed up.
I suspect (some) people misunderstood what I was trying to say.
I wasn't trying to say that I thought free markets were immoral, or that they were not moral. (And so we should find a different economic system, or something).
I was trying to say that you cannot replace your personal morality, your moral system, with a free market (whatever that even means). That is, I was trying to say that markets were amoral, without moral content.
I think some of it comes from confounding a moral system (i.e. a system for evaluating the morality of an action) with a system which acts in a morally correct manner.
Not at any of the small businesses I ever worked for, where the guys at the top probably decide these things themselves.
Not at a very, very large business I worked for, where the guys at the top probably didn't know the name of anyone in my building and everything was done by HR and Legal automatons.
And not at any medium sized businesses I have ever worked for, either.
The only time an agreement like this is standard is when you know you're doing something you shouldn't be, and you know you're about to lose your legitimate influence over people who could out you, so you try to buy their silence because to you the cost is cheap.
Hmm. What I meant to get at is that the clause seemed more likely to relate to the "we didn't discriminate against you in letting you go" thing, which he also mentions. In other words, not only will you not sue us for discriminating against you, you won't go around saying we did either.
Bottom line, I think it's much more likely that he's misinterpreted the document than that they're trying to silence him.
What are they afraid of, that he'll reveal big consultancies tell clients what they want to hear? That's not really a news flash, is it?
The only time an agreement like this is standard is when you know you're doing something you shouldn't be, and you know you're about to lose your legitimate influence over people who could out you, so you try to buy their silence because to you the cost is cheap.
What country are you in? In the UK this is pure boilerplate text.
It's pretty standard at both banks and large tech companies that when they make you redundant or fire you that they ask you to sign something similar. I'd be surprised if say Google or Microsoft didn't have something similar in their standard redundancy pay-out contracts.
In college, I used to debate with myself on which career was better, ibanking or management consulting.
In the end, I chose to pursue management consulting, which I've been doing for the last 2 years.
Now, I debate with my friends on which career is worse, ibanking or consulting because frankly, after sifting through so much corporate BS, I've come to realize that all these jobs need to be prestigious in order to get ivy league grads to pursue them. In reality, we're either glorified excel junkies, or overpaid powerpoint formatters.
I'm crossing my fingers now hoping that this start-up I'm working on takes off... I really do want to leave the corporate world for good. The realization that the preparation we had in college is absolutely useless in the real world, and that any semi-intelligent high-schooler could do our jobs is a depressing thought.
If by, "broken window fallacy in reverse" you mean "pointing out that the broken window fallacy is a fallacy", yes. He is troubled by the fact that he is earning money by breaking windows.
I thought this example was well chosen. Downloading mp3s is a familiar thing that's very easy to do, but may not be ethically defensible in the final analysis.
If you want to have a discussion about copyright though, you're poisoning the well by calling infringement stealing.
I interpreted this as meaning "it's obvious that it's wrong but since it's hard to directly connect with the victim the threshold for doing it is very low". I agree that it did come across a bit ambiguous as to his actual meaning. The perennial Simpsons quote "Shoplifting is a victimless crime...like punching someone in the dark" would've been a more direct illustration, at least if the author meant what I think he meant :)
I had a job like that. I was supposed to use my analysis and creativity to build models for client forecasting, but if they didn't confirm what the brand team wanted to hear, they'd be rejected. It sucked. I was fresh out of school and cared more about getting the right answer than appeasing clients.
I lasted 8 months in that job. No regrets about leaving.
Also, $16k is piss-poor for a severance package in a brand-name consulting firm like BCG. Given the economy and the likelihood of a necessary career change, OP should have asked for 6 months' base (including COBRA) and an "office firing" (you're terminated but can use office resources for the job search and retain the right to represent yourself as employed).
I think I missed the part where he had the leverage to make that kind of demand. Perhaps even the brand-name consulting firms have figured out that ridiculous severance packages don't make a whole lot of sense.
What I'm talking about isn't that ridiculous. Paying 6 months' salary is a small cost compared to the cost of a termination lawsuit or a negative article being written about the firm.
I'm guessing they gave him 2 months pay and nothing for the move back, from Dubai (which is a dangerous place to lose your job, by the way). They also seem to have given him nothing in terms of exit counseling.
To answer the question you raised: his article and the fact that it got published is the leverage he had. I bet it's circulating around BCG right now. It has the potential to be a morale and image problem, and not the Goldman Sachs style of image problem (where people hate GS but consider them good at what they do).
There are rational reasons for firms to pay decent severance packages. It's not just something they do to be nice.
It's the same everywhere. For example, people who are reselling SAP in, say, Russia, are doing exactly the same thing - tuning numbers and telling lies. The better you're able to lie the better SAP consultant you are.
There are no project with was completed on schedule and within budget.
Here is my best story about business consultants...
I was contracting at a big three automaker and they had retained just such a firm, possibly even BCG, to "restructure" the IT department.
So they had a team of overpaid consultants come and perform an analysis. I won't even get into the pointlessness of all that. However, the leader of the pack, the alpha male of the consulting team, would physically walk his laptop over to a printer near the admin's desk to print because the information was too sensitive to print over the network.
In true hacker fashion a buddy and I had recently discovered that you could telnet into the printers and with a carefully crafted command actually set the text on the LCD readout on the printer itself. (The spot where is usually says "Load Paper") So we actually wrote a program that would allow us to send any text we wanted to any LCD of a printer.
So of course, this self important consultant became our first victim of the prank. He hooked up his laptop and we starting sending text like "Loading Virus" to the LCD. It actually became a little frustrating because he wasn't noticing the LCD.
Finally, he looked at the LCD and we starting sending text like "Downloading files from computer". This guy just went into an absolute panic and after the first few seconds of frantic inactivity he got his act together and closed the laptop. Of course, that didn't stop the printer from "Downloading files", so he finally ripped the cable from his laptop to sever the connection.
He was in a panic for what I'm sure were some of the longest seconds of his life, but by then we were doubled over laughing just a couple of desks away and he caught on.
I will give him credit for taking the joke well and he never tried to push it up the food chain or anything to involve any management.
Well, if you're looking for fodder for future fun and games, remind your mark that all sorts of interesting stuff can be recovered from the disks that are often resident inside mid- and upper-end printers. And remind your mark that printers actually can be infested with stuff; it's a good spot for malware to operate on a LAN, too.
Striking fear into the heart of a self-important consultant?
Priceless!
This relevant how?
Great description of burnout: "What I learned is that burning out isn’t just about work load, it’s about work load being greater than the motivation to do work."
This is so true. My father took on a nightclub all by himself. It was a stupid move, he lost a lot of money doing that. What he was missing was a partner. Not only to lessen his work load, but also to keep him motivated.
This is the reason you see musicians take 5 year breaks, or even quitting music. They are lacking in motivation. Look at the band Queen, They are still making music and touring, but half the band has quit. Freddie Mercury died and John Deacon quit music altogether. What did John Deacon lose? His motivation. Brian May and Roger Taylor both had a lot of say in the bands creative process, and that process motivated them to continue, even after Freddie had passed away. Now, Deacon, he wasn't as involved in that process, and he was the one who quit.
"Not only to lessen his work load, but also to keep him motivated."
Advantages of doing http://c2.com/cgi/wiki?PairProgramming
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Actually, John Deacon wrote one of Queen's biggest hits, "You're My Best Friend."
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That sentence really stood out for me too, especially since I've been going through something close to that.
I always wondered what caused people to 'burn out' on jobs that you couldn't possibly call taxing by any stretch of the imagination, I think this is the key to the answer.
"At my salary level, and with my expected advancement path, I could comfortably retire in my thirties."
I've heard this or statements like it in quite a few articles over the years, but I've never actually met a retired thirties business consultant. Do they exist and am I just missing them? The only ones I know are well into their thirties, working 70+ hours a week, and looking forward to making even larger boatloads in their forties.
They think they will retire in their thirties, but they never have enough.
"At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch 22 over its whole history. Heller responds, "Yes, but I have something he will never have...
Enough."
http://www.johnboglemedia.com/component/content/article/1-la...
Their fixed costs keep rising. When you are 22, you think that $100,000 a year (rising with inflation) is heaps. But by 30, you buy your first yacht, and it takes $50,000 a year just to keep it in the dock.
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LOL. There's a huge difference between a hedge fund manager and a management consultant. Perhaps the billionaire will never think he has enough, but the consultant will actually, in legitimate and reasonable terms, not have enough. They really don't make much money for the hours they put in. Factoring travel, they work as much as an investment banker and essentially earn what a banker would earn without his bonus.
Hedge fund managers are to management consultants what wolves are to sheep. Please don't compare the two. One is a master, the other nothing but a slave.
That actually undermines his main point -- that he stuck to his "morals" and forgone the "large" hush money check at the end. If he was making enough to retire by his 30s then $16k wasn't that significant of an amount. That means the didn't really lose a lot so his "moral" stance is more symbolic, and not the tough financial decision that article might imply.
I don't think that was his main point. He had, after all, just said that he was willing to compromise his morals to the extent of continuing to work with BCG despite the dishonesty it involved -- because the amount of money potentially involved was so large. "I think I’ve come to the conclusion that having a father who can pay for a top-notch education outweighs the disadvantage of being raised by a hypocrite. Sticking with the job for the sake of a paycheck passes the children test."
So I'd say his main point wasn't "look at me, I stuck to my morals" but "I'm corruptible but not infinitely corruptible". (The reason for mentioning the $16k in the title isn't to say "look how much money I turned down" but to say "look how much money they offered me for this".)
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Eh, maybe. Numerologically, I think you're right, but you do have to keep in mind that a $16,000 lump sum has a lot more subjective value going out the door to an uncertain future and a zero income - at least, temporarily - than it does in the course of making six figures at a stable job.
I'm not saying he had any reason to suspect he wouldn't be able to find another job, and even quickly, but it probably wouldn't pay nearly as much and there was no guarantee of that. It's just the depressive state accompanying the sensation of having been fired, even if it's from something you hate in concrete terms.
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The whole moral thing is questionable, if he would have taken his leave that would be one thing but the company initiated the termination, not the author.
Depends. If you are making $300,000 a year and live like you are making $15,000 a year (and save the rest), then you can retire at 30.
Most people aren't willing to be this frugal, however. It seems some people making this much even have trouble "making ends meet", because they buy so much crap that they can't afford. Ah, consumerism.
(In the interest of fairness, I am almost as bad -- I love buying stuff. I just stop when I don't have any more money... and I might even be able to retire before I'm 90 :)
The problem here is in the matter of status symbols. A quick tale for you: A consultant who gave me my start in the industry once had his car break down before an initial meeting with a client(Mercedes). He had to borrow his son's tricked-out VW boy-racer to get to the meeting on time. As he pulled into the meeting the clients were exiting their cars and saw him parking. He said the meeting never even really got started, as they had already pre-judged him.
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> If you are making $300,000 a year and live like you are making $15,000 a year
It's possible if your employer is paying for your relocation. In 2004 (IIRC) I went on training teams for clients of ours continuously for about two months (with a brief stop at home in the middle). Not only I accumulated a respectable mileage, I spent about a third of what I usually spend in my home town (São Paulo, Brazil).
I'm 40, married for the second time, with a 14 year-old boy from the first marriage and would not be able to reduce my expenditures to that level, but it's quite doable if you are in your 20's.
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I forget his name at the moment, but the author of "The Management Myth" retired early from management consulting to write a book on philosophy.
To summarize in English: Stewart started an unnamed firm, and tried to exit mid-bubble four years later; his partners didn't want to buy his equity, so he sued them. By the time he got his shares bought three years later the firm had imploded.
http://paul.kedrosky.com/archives/2006/05/12/the_myth_of_the...
It's not true, is why.
After 10-15 years at one of the top consultancies you could have completed outright the major capital purchases of your life (e.g. a house or two, maybe a boat) and could downshift to something much less stressful but you certainly couldn't stop working altogether. And these houses would be nice, sure, but we're not talking mansions with helicopter pads and servants here. Basically you would be established in a solid upper-middle-class lifestyle, but you would still need to work to maintain it.
The consulting business pays very good wages, but you don't get to build any significant equity - what you need to retire on - until and unless you make partner.
To be able to afford something does not mean you can afford the upkeep of it.
If you live frugal a little goes a very long way.
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Which you should be within 15 years...
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Agreed. The only retired consultants I've met had white hair (most didn't even have hair).
"I got the feeling that our clients were simply trying to mimic successful businesses, and that as consultants, our earnings came from having the luck of being included in an elaborate cargo-cult ritual."
WOW that is dead on. I get the feeling half the world is like that.
The problem is that it is not that simple, because just doing what others do works very well in most cases and you don't have the time to start questioning _everything_ - why do you shower in the morning? Why eat three times a day?
I don't want to defend cargo-cults, but people copy because it works.
No, it's worse than that. I have seen this before. There is an entire portion of the business world that merely goes through the motions of being successful businesses rather than actually being businesses at all. It's really weird.
You could look at it as investment fraud with plausible deniability. Take money, hire consultants, look busy. The only thing is, I don't think it's that explicit or intentional. I think there's a breed of person out there in the business world who does not grasp the distinction between actually doing something and imitating the appearance of doing it.
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"I don't want to defend cargo-cults, but people copy because it works."
My definition of cargo-cult is when you copy everything except the parts that are hard or make you face unpleasant reality.
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I think these comparisons are a little off base. If i am not hungry at night, I normally skip the dinner. If I am on a lazy mood on a weekend, I skip my shower/shower in the evening. You don't have to question everything, but you shouldn't do anything that doesn't make sense to you. and that's barely the case in big business environment.
The author's first two articles on Dubai:
http://tech.mit.edu/V130/N16/dubai.html
http://tech.mit.edu/V130/N17/dubai.html
thanks for this, tried looking for them after the little footnote but their website had no links to them that i could find.
Interestingly, a google search for "This is the first in a four-part series on the author’s experiences as a consultant in Dubai." and "This is the second in a four-part series on the author’s experiences as a consultant in Dubai." (with or without the quotes) turns up the other two articles well enough.
Clicking on the author's name will also bring them up.
This story is written with a wonderful naivete. Consultants like BCG exist only to lend credentials and competent temporary labor. The companies who hire these consultants are looking for affirmation and peace of mind -- most of them too mired in bureaucracy or incompetence to draw even the most basic conclusions by themselves.
Still, it's hard to believe that peace of mind is worth paying 5 kids graduated 6 weeks ago in Political Science from Stanford to come give Powerpoints on meaningless, vapid crapola billed to you each at $300/hr, even where such figures don't make much of a blip on the bottom line.
It does seem strange, but here are some reasons why this happens:
- When you hire BCG or McKenzie to (for example) value a business segment or recommend an acquisition, their feedback can be touted as expert and unbiased.
- BCG will do whatever it takes to deliver what's asked, even if it's a banal Power Point. So the person who decided to hire them is taking a minimal risk by doing so.
- In many cases it's a chance for the client company to get insights on how competitors have solved similar problems. Albeit in the story everyone's right out of school, I've seen cases where a pharma company will hire a group from a place like BCG because they've also worked for a competitor.
- Lastly, it's a chance to work with some talented folks who might make good permanent hires at the client company.
Bottom line, is that this type of consulting is usually a huge waste of money. But it's also one of the only ways huge companies can get a group of talented degree-toting individuals to work on important temporary projects with the assurance that company will get exactly what it wants.
Consultancy is an easy business model.
In companies there are people who are paid to decide things. They also have budgets. Often they are called managers. There are consequences with decisions.
Managers learned a trick: Give the money of your budgets to consultants to make the decision your company pays you for.
If the decision was a good one: The manager was the one who hired the consultants!
If the decision was a bad one: Who could blame the manager, even the top consultants of BCG/Berger/McKinsey couldn't make the right decision, he hired the best!
Either way: The manager outsourced the work he was supposed to do but still gets paid and freed himself from the consequences. Heaven!
Or simply "Cover my ass" jobs.
Before middle management makes a big decision, they need to prepare the ground work of excuses they will use if the project fails.
Expert report is an excellent tool to show your boss and shift the blame. (And hey, the company is paying for it).
They don't want anyone that has a clue and might therefore threaten them! (sadly seen this in my work)
Edit: many of the other cynical explanations further down in the thread are quite valid too (scapegoat theory et al)
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That's just how the managing partner described it when BCG came to do a recruiting talk. He called theirs one of the most improbable businesses in the world- companies pay a lot of money to have just-graduated kids work on their problems.
The thing is, on an individual level, consultants really do work like sled dogs. If you have something in mind that needs a dozen fairly smart people to go to North Dakota and work 90 hrs a week for 3 months, consultants can do that and your regular employees probably can't (or won't).
However it's up to you to actually have something like that in mind in the first place... I can't think of anything offhand myself!
"This story is written with a wonderful naivete."
Exactly. Another case of idealism colliding with reality. It's refreshing and makes me sigh at the same time.
"I wasn’t sure at the time, but having had enough free time of late to ponder such questions, I think I’ve come to the conclusion that having a father who can pay for a top-notch education outweighs the disadvantage of being raised by a hypocrite. Sticking with the job for the sake of a paycheck passes the children test."
I wonder how many children get sent to college by dads like that.
I was sitting next to Reg Braithwaite at the first startup school when one speaker (pg?) said something about startups being for young people so they can focus 100% on the company without worrying about kids. Reg stood up and said, paraphrased, "I'm starting a company _because_ of my kids, so they can say that their dad showed them how to follow their dreams instead of doing the safe thing like everyone else."
Respect.
My oldest is 7 now, and I hope he'll be able to say that his father showed him that living with a clear conscience is worth even more than a top-notch education.
I think it shows closed-mindedness on his part. They taught him analysis at MIT, but they didn't teach him to think properly.
You're a guy with a degree from the top technical school in the world and you've got one of the world's most prestigious consultancies on your resume: you don't think you could go on to find a job in which you could afford your kids' education AND not be a hypocrite?
I respect him for standing up after the fact and saying "I'm a wealthy hypocrite." But I don't respect him for going to work there in the first place. You'd have to have spent junior year of college buried in sand not to know it's a game, mostly dirty.
Well he was taking a double course-load and working, so that may count as being buried in sand.
But still, even if he didn't know beforehand, he figured it out very quickly upon arrival and then stayed for a long time for the money, so I agree with most of your point.
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> I wonder how many children get sent to college by dads like that.
Given the amazing human capacity to rationalize everything, I would guess -- a lot.
I would guess a lot, too- because human beings are by nature hypocrites.
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I don't know, but I think it's a horrible conclusion. He hated his job and felt he was making the world a worse place. If that's what his top-notch education got him, why did he want the same for his children?
The tl;dr version:
Large consulting companies often tell their clients what they want to hear, which more or less negates the point of consultants but can often pay better. There are ethical concerns here.
I like the story, but the article itself has way too many metaphors that cloud the point.
Or maybe I'm just too used to having all my stories condensed into 140 characters...
There was another important point: a guy new to the consulting business and with no significant amount of relevant training or support wound up being marketed as an expert and became the senior person on each project he joined.
I've seen this in action, both from the client side (management brought in absurdly highly paid consultants to back up what they wanted when their own people wouldn't support it) and the other side (friends and friends of friends who went into consultancy firms; few of them have stayed there much longer than this guy).
What I don't get is why shareholders (for big companies) or government auditors (for government organisations) don't openly criticise the policy of wasting money hiring these completely unqualified people who either offer no real benefit or actively cause harm to the projects they join. Obviously a genuine expert could offer useful consultancy in their field of expertise, but that doesn't seem to be the MO of these big multinational consultancy shops.
Shareholder activists will usually argue how companies stupidly waste money on consultants. It's just that there aren't a lot of them.
In the past, Buffett has criticized consultants.
1995 Letter:
Concluding this little dissertation on acquisitions, I can't resist repeating a tale told me last year by a corporate executive. The business he grew up in was a fine one, with a long-time record of leadership in its industry. Its main product, however, was distressingly glamorless. So several decades ago, the company hired a management consultant who - naturally - advised diversification, the then-current fad. ("Focus" was not yet in style.) Before long, the company acquired a number of businesses, each after the consulting firm had gone through a long - and expensive - acquisition study. And the outcome? Said the executive sadly, "When we started, we were getting 100% of our earnings from the original business. After ten years, we were getting 150%."
“I would rather throw a viper down my shirtfront than hire a compensation consultant.” -Charles Munger
I think shareholders might not widely realize how it works. Often, shareholders are actually the ones who demand bringing in outside consultants, because it's seen as getting an independent third opinion. It looks more self-interested for the company's executives to set their own pay, than it does for an executive-recruitment consulting firm to recommend what the going rate is. Of course, executives have gotten good at getting the right consulting firms to answer those questions, and consulting firms know that if they don't answer appropriately, they aren't going to be asked back.
Shareholders care only about relative performance. Absolute performance is irrelevant. So as long as all big companies in a particular sector waste X on consultants, that's fine for the shareholder. It doesn't even affect the dividend as you might think, because if everyone does it the cost can be passed on to clients.
Shareholders start to care once a lean competitor enters the scene. Someone who does away with all the fluff and is more profitable. These things happen. But my reaction as a shareholder is to become a shareholder of the better company and dump the stock of the inefficient one. I'm not trying to make the inefficient company more efficient. Some activist shareholders do that, but most don't.
There is one very important truth that too few people are considering: Shareholders are not entrepreneurs. Most shareholders have no interest in improving a particular company. Their interest is in choosing undervalued companies and selling them when they are not undervalued any longer, preferably at a higher price.
The distinction between investors and speculators is a lie. There is no difference between the two. The important difference is the one between owners and entrepreneurs.
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Consultants are often brought in order be blamed later. In the article, the development company could always try and blame BCG when their shareholders wonder how come $1B was wasted. By that time, the CEO of the development company would have left deploying his golden parachute, and BCG would have been able to somehow cover their legal ass with some small print on a back of their contract agreement.
Perhaps because they have connections? A lot of their almumni go on and have jobs as managers, who then hire consultants.
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tl;dr version:
Consultants suck.
It was TL, I DR it.
"I’m a free marketeer. I believe that voluntary exchange is not just a good method of incentivizing people to provide their labor and talents to society, but a robust moral system — goods and services represent tangible benefit to people, market prices represent the true value of goods in society, and wages represent the value that a worker provides to others. Absent negative externalities or monopoly effects, a man receives from the free market what he gives to it, his material worth is a running tally of the net benefit that he has provided to his fellow man. A high income is not only justified, but there is nobility to it."
Oh, man, it'd be awesome if we had that. But then, much of the Web 2.0 "industry" about which this site revolves would not exist.
I found that quote particularly hilarious given the article in which it is embedded. The article would make a good reference for the wikipedia article on cognitive dissonance.
He invokes Excel as an analytical engine several times in this story. I am trying to figure out if he actually considers it to be a powerful statistical engine, or if he is merely using it synecdochically for the benefit of non-technical readers, in order to represent statistical software more generally.
It actually is the de-facto-standard modeling engine in a lot of areas, even some scientific areas, but mainly economics/finance. There are some pretty nuttily complex simulations written entirely in Excel, with the visualization part of the simulation done by popping up a chart--- you can even make it animated by popping up a new chart at a certain time interval. There's even a market in commercial spreadsheets, which you buy and load sort of like libraries: http://www.palisade.com/RISK/
Not necessarily a good idea, but somehow it caught on. One possible reason is that it was one of the earlier widely available pieces of software for doing declarative, dependency-based modeling that auto-propagates updates: if box A and box B are linked by a "B = 2*A", then B auto-updates whenever A changes, without you manually writing a propagate-updates loop. You can now do stuff like that in a lot of languages, but it's relatively recent (e.g., it's one of the new features JavaFX variables have).
Spreadsheets are the most popular declarative (or zero order functional) languages in the world. There were even talks about spreadsheets on the International Conference on Functional Programming 2009.
You can now do stuff like that in a lot of languages, but it's relatively recent
Saying "Lisp had it X years ago" sounds perhaps a little weenish, but... that sounds a lot like the Cells library, and the even older Garnet KR. Granted, they're quite a lot less accessible than spreadsheet programs.
FRP seems to be modern take on it. It's being very actively researched in the Haskell community.
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Twenty-plus years ago I wrote a complete blackjack game in a spreadsheet, all using 1-2-3 "slash" macro commands (not VBA or anything like that). It even did insurance and doubling-down. I was part of the team testing the product, and each of us on the test team built a different casino game -- one guy did craps, and found a bug in the random number generator.
Once you get your brain around the paradigm, it can be a powerful tool.
The 'Solver' (http://www.solver.com/) tool in Excel is widely used for many business optimization problems. If you have x & y quantities of two raw materials and products A and B consume different proportions of each raw material, then you can use the solver to determine the most optimal production strategy that maximizes your profit (or minimizes your labor requirements etc.)
The joys of linear optimization. Do you know if it also supports integer optimization? (Doing that fast enough would be a feat in pure Excell.)
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I've seen Solver used by a number of accountants to say 'I need my profit to be this number, what figures do I need to change to hit that?'. Solver is a life saver for those looking to cook the books (sadly far too many people).
Its fairly common for programmers to dislike excel (at least in my experience). However, it provides a lot of benefits:
1) Its actually pretty powerful. Since the cells update in real time it provides a nice way to do "what if" analysis pretty quickly.
2) The solver is pretty good.
3) Most people in business can read excel so it provides a good common ground.
4) Since all the intermediate steps in a calculation are in a cell somewhere, its pretty easy to trace through logic.
I certainly wouldn't use excel to handle huge amounts of data, but its a good tool as long as your computational requirements aren't that big.
Mostly off-topic anecdote:
In high school there was a girl in my class that preferre to do everything in excel. And that included writing papers, because it made the formatting easy.
I think his point is that Excel is a powerful weapon in the right hands. Most people don't do much with it, but it's powerful none the less. If dollars were points, many trillions in commerce and complex decisions have been made on the result of analysis done by spreadsheets.
I couldn’t sleep at night. I’d fill up a bathtub and scream into it.
Eh, what? Do (normal) people do this? Is it because it absorbs the sounds or something?
All replies to the parent are interesting speculation as to whether the author was screaming at, into or under the water, and what the water was for.
The key thing to notice, though, is that the author screamed. I have screamed, and life is bloody awful at those points in life.
Maybe he meant that he got into the bathtub and then screamed underwater?
I also think this is the correct interpretation.
Maybe he needed to scream out loud to bring a bit of relief to his abused up moral.
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hmm... while I was backpacking on the PCT the term 'scream into a lake' was used (for when you got really mad).
Ever talk or scream in a pool? Muffled, distant sound, but is still there.
Don't people hike the PCT because they've taken a break from the "scream into a lake" lifestyle?
I'd never heard of it before. I too assumed that muting the sound was the idea, he mentioned he was staying at a hotel, so I guess screaming would have raised some serious suspicion. I wonder if the sound would travel down the drainpipe, though.
I have never heard of it before, but it seems pretty damn obvious to me what he is saying. Not really worth a discussion.
I don't think this is specific to business consulting, or to Dubai. I know several people who were hired by high-powered technical consulting firms here in the US; all of them were fairly bright, attractive young people with very little experience of any sort.
i have the feeling, children or not, that we wouldn't have been hearing this story if the $16,000 offer had been a bit larger.
As Calvin and Hobbes put it, the disturbing thing is not that everyone can be bought, but that the price is often so low.
Exactly.
He even said that he decided that he would rather have a "hypothetical children" have a rich morally bankrupt father that could pay for college than one with integrity.
edit: oops this is pointed out above.
Can you tell me Why?. How can you morally judge a person without knowing him?,If his story is true, he gave up a $200,000/Annum Job.
because he spent that entire article telling us how great he was at rationalizing selling out. he pretty clearly had enough practice that he could've handled one last rationalization.
as far as judgment, i don't consider attempting to predict someone's behavior a judgment. i didn't say "he is an awful person". that'd be judgment. i was implying, though, that you shouldn't be impressed by his turning down $16k. the only thing that tell us about him is that his price is above $16k, and below $200k/yr.
and, there was no giving up of his job, in the end. i quote: "I was not surprised the day I lost my job."
"Absent negative externalities or monopoly effects, a man receives from the free market what he gives to it, his material worth is a running tally of the net benefit that he has provided to his fellow man"
I'm not surprised that someone whose ideology makes him believe that Einstein's contribution to society was smaller than that of the bosses of Lehman or AIG would be disappointed by reality. Or is it that reality itself is a "negative externality"?
No, I think the issue is one of faulty interpretation of that ideology. It's a serious mistake that people make all the time. They mix up statistical probabilities and individual causality. The average efficiency of markets includes scams as well as geniuses. It includes people who contribute a lot but market themselves badly and it includes the exact opposite.
I'm not surprised that someone whose ideology makes him believe that Einstein's contribution to society was smaller than that of the bosses of Lehman or AIG would be disappointed by reality.
Would you care to clarify? I genuinely don't see where you are getting this from.
He's saying that since Einstein wasn't a rich man, by the author's logic, he couldn't have contributed much to society.
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I guess Welcome the Real World, is the best response I can give. So sorry that the real world is so non-idealistic and disappointing to you, and that your wonderful skills and knowledge aren't being prized and utilized.
In other words, you're experiencing the reality shock _everybody_ experiences when engaging with, and learning about, the corporate world.
It seems you'd be happier in Academia, a research institute, or perhaps creating something on your own.
It's not the Real World, it's just a certain part of it. Not a small part, but not all of it either. There are a lot of places that offer a chance to do far more satisfying work.
(BTW I'm not sure I'd recommend academe for someone with his mindset. The politics are perhaps even worse and the monetary gains much lower. A startup - even though far from the Disneyland some HN posts paint it as - could be a good place for someone like that)
You're right. That youthful energy and talent are likely to be utilized best in a purely creative start-up. That was the idea with the creating something on his own suggestion.
Fine, but even then he does a wonderful and passionate job articulating that 'universal' reality shock.
“Find me a rock” problems sound dead simple, but in actuality have requirements that are poorly stated or unknown. You never know what you’re looking for; you only know that you’ll know it when you see it.
Even better perhaps: "you only know that someone else will know it when they see it".
What an amazingly insightful article. Props to the author for speaking up. Yet, slightly dissapointed that he did not leave out of his own accord, but waited to be laid off.
In his own reasoning "I’ve come to the conclusion that having a father who can pay for a top-notch education outweighs the disadvantage of being raised by a hypocrite."
Acting as if financial success equates to dishonesty. While in the very same piece the author praises free market, and money in exchange for true value does not compute. Does he believe, or not believe in the power of a free market, or has he come to develop a disbelief in honest trading?
Something that leaped out at me: "I believe that voluntary exchange is not just a good method of incentivizing people to provide their labor and talents to society, but a robust moral system".
Voluntary exchange is not a moral system. A free market doesn't have morals.
The author of the submitted article may have more sense of history than most Americans. It is a historical fact that Adam Smith first wrote a book The Theory of Moral Sentiments
http://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments
in 1759, pondering the issue of why people behave morally when they could simply guard their own self-interest. As Smith pondered the issue more, he wrote An Inquiry into the Nature and Causes of the Wealth of Nations
http://en.wikipedia.org/wiki/The_Wealth_of_Nations
in which he discussed how free-market trade provides incentives to moral behavior. EVERYONE who is well educated should recognize this quotation:
"But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and shew them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages."
In other words, society can be structured so that people will help you or other people who need help while looking out for number 1.
Hayek
http://en.wikipedia.org/wiki/Friedrich_von_Hayek
is good author on contrasting economic systems, showing how they can be actively immoral.
Smith's overall conclusion on the relation between morality and free markets is a bit more mixed than that of someone like Hayek, though. He does say things like the excerpt you quote quite frequently, but he also has a number of comments lamenting the immoral behavior that profit motives cause, like an encouragement to fraud and collusion. He does worry that some attempts to solve the problem would be worse cures than the disease, but he doesn't think that no problem exists, or that self-interest always produces moral outcomes, or that government regulation to mitigate the immoral effects of self-interest is always wrong.
His policy proposals on that latter point are pretty pragmatic, and he endorses regulation when he thinks it has relatively large gains for relatively small downsides. For example, he proposes that the government ought to require employers to pay their employees in hard money, and not permit them to pay in promissory notes or in goods. His reasoning is that this prevents unscrupulous employers from tricking employees, either by paying them in goods whose value has been misrepresented, or by convincing them to work for promises of payment that the employer doesn't really intend to keep.
You have completely missed the point. Contrasting economic systems is completely irrelevant.
The choice here is not between different economic systems, but between different moral systems.
You cannot make a free market your moral system because markets are amoral. That is, it is not that they are not immoral and so should be replaced with something else; rather, they have no moral content - morality comes from somewhere else.
You can pay someone to punch a third party in the nose. You get the value of knowing that someone is going to get hurt. The other guy gets your money. The transaction, in the free market, by itself has no moral content, though. A free market just means exchanging value for mutual gain. It doesn't say that those values have positive or negative moral worth.
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You are completely incorrect, the free market is a moral system because it does not rely on coercion or force to compel others to interact. All interactions in a free market system are voluntary and beneficial to all participants in the transaction. No other economic system can make those claims.
Firstly, 'The free market' can never be 'a moral system'. The first term refers to a system of trading, where goods and services are interchanged and relative monetary values are established. The second refers to sets of principles, reasons and motives for doing certain things. The first is at most a subset of the second, but that is only the case if you amend it with a philosophy that equates monetary value to moral value.
Secondly, your view of free markets is naive. Lack of transparency and the problem of monopolies are only a few of the many problems that completely free markets suffer from. We have an FTC, because markets need to be regulated. Leaving them completely free leads to morally unacceptable results.
It can be beneficial to all "participants" but disastrous to society as a whole, can it not? Look at the current rage against free market instruments like CDOs and other complex unregulated derivatives.
Are you really claiming we dont need "coercion or force" from regulators like the SEC or FTC?
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People can be coerced by their circumstances; but that's beside the point.
You can hire someone to murder someone else. Nothing wrong with that transaction in a free market. Similarly, you can be a credit card processor for child pornography - you take your cut, but since you don't do the deed, it's not your problem.
Do you see the problem?
(Hint: morality isn't emerging here. It comes from somewhere else.)
And I have no idea why you mentioned some "other economic system". I didn't. Why? Because I wasn't contrasting economic systems. I was contrasting moral systems.
He explains his reasoning in the next sentences.
True.
But some moral systems are consequentialistic [1] and for its proponents, the means are justified by the ends. A free market could be seen as a means to reach the moral end. Thus, they are often mixed up.
[1]: http://en.wikipedia.org/wiki/Consequentialist
I suspect (some) people misunderstood what I was trying to say.
I wasn't trying to say that I thought free markets were immoral, or that they were not moral. (And so we should find a different economic system, or something).
I was trying to say that you cannot replace your personal morality, your moral system, with a free market (whatever that even means). That is, I was trying to say that markets were amoral, without moral content.
I think some of it comes from confounding a moral system (i.e. a system for evaluating the morality of an action) with a system which acts in a morally correct manner.
I can recommend this book - it covers the same topics but is written by someone who spent decades in consulting rather than a few months:
http://www.amazon.co.uk/Rip-off-Scandalous-Management-Consul...
Isn't the headline offer he's talking about, which he goes into at the end, really just a very standard clause in a layoff agreement?
No, it really isn't.
Not at any of the small businesses I ever worked for, where the guys at the top probably decide these things themselves.
Not at a very, very large business I worked for, where the guys at the top probably didn't know the name of anyone in my building and everything was done by HR and Legal automatons.
And not at any medium sized businesses I have ever worked for, either.
The only time an agreement like this is standard is when you know you're doing something you shouldn't be, and you know you're about to lose your legitimate influence over people who could out you, so you try to buy their silence because to you the cost is cheap.
Hmm. What I meant to get at is that the clause seemed more likely to relate to the "we didn't discriminate against you in letting you go" thing, which he also mentions. In other words, not only will you not sue us for discriminating against you, you won't go around saying we did either.
Bottom line, I think it's much more likely that he's misinterpreted the document than that they're trying to silence him.
What are they afraid of, that he'll reveal big consultancies tell clients what they want to hear? That's not really a news flash, is it?
The only time an agreement like this is standard is when you know you're doing something you shouldn't be, and you know you're about to lose your legitimate influence over people who could out you, so you try to buy their silence because to you the cost is cheap.
What country are you in? In the UK this is pure boilerplate text.
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It's pretty standard at both banks and large tech companies that when they make you redundant or fire you that they ask you to sign something similar. I'd be surprised if say Google or Microsoft didn't have something similar in their standard redundancy pay-out contracts.
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In college, I used to debate with myself on which career was better, ibanking or management consulting.
In the end, I chose to pursue management consulting, which I've been doing for the last 2 years.
Now, I debate with my friends on which career is worse, ibanking or consulting because frankly, after sifting through so much corporate BS, I've come to realize that all these jobs need to be prestigious in order to get ivy league grads to pursue them. In reality, we're either glorified excel junkies, or overpaid powerpoint formatters.
I'm crossing my fingers now hoping that this start-up I'm working on takes off... I really do want to leave the corporate world for good. The realization that the preparation we had in college is absolutely useless in the real world, and that any semi-intelligent high-schooler could do our jobs is a depressing thought.
Isn't the "billion dollars destroyed" argument he makes just the broken window fallacy in reverse?
If by, "broken window fallacy in reverse" you mean "pointing out that the broken window fallacy is a fallacy", yes. He is troubled by the fact that he is earning money by breaking windows.
I'm so sorry for pointing this out, I loved the article, but was surprised that no one else raised issue with:
"Like downloading MP3s, it was a victimless crime."
After all these years we know better than to say this carelessly. Is stealing code from a hardworking programmer a victimless crime?
I thought this example was well chosen. Downloading mp3s is a familiar thing that's very easy to do, but may not be ethically defensible in the final analysis.
If you want to have a discussion about copyright though, you're poisoning the well by calling infringement stealing.
I interpreted this as meaning "it's obvious that it's wrong but since it's hard to directly connect with the victim the threshold for doing it is very low". I agree that it did come across a bit ambiguous as to his actual meaning. The perennial Simpsons quote "Shoplifting is a victimless crime...like punching someone in the dark" would've been a more direct illustration, at least if the author meant what I think he meant :)
I think this is the reason why MBAs find it difficult become entrepreneurs.
Should be required reading at every business school in America.
His description sounded about the same as my time doing consulting at Deloitte. It didn't leave me with a good impression of consultants.
sounds like what I did at accenture
confessions of an economic hitman
I had a job like that. I was supposed to use my analysis and creativity to build models for client forecasting, but if they didn't confirm what the brand team wanted to hear, they'd be rejected. It sucked. I was fresh out of school and cared more about getting the right answer than appeasing clients.
I lasted 8 months in that job. No regrets about leaving.
Also, $16k is piss-poor for a severance package in a brand-name consulting firm like BCG. Given the economy and the likelihood of a necessary career change, OP should have asked for 6 months' base (including COBRA) and an "office firing" (you're terminated but can use office resources for the job search and retain the right to represent yourself as employed).
I think I missed the part where he had the leverage to make that kind of demand. Perhaps even the brand-name consulting firms have figured out that ridiculous severance packages don't make a whole lot of sense.
What I'm talking about isn't that ridiculous. Paying 6 months' salary is a small cost compared to the cost of a termination lawsuit or a negative article being written about the firm.
I'm guessing they gave him 2 months pay and nothing for the move back, from Dubai (which is a dangerous place to lose your job, by the way). They also seem to have given him nothing in terms of exit counseling.
To answer the question you raised: his article and the fact that it got published is the leverage he had. I bet it's circulating around BCG right now. It has the potential to be a morale and image problem, and not the Goldman Sachs style of image problem (where people hate GS but consider them good at what they do).
There are rational reasons for firms to pay decent severance packages. It's not just something they do to be nice.
It's the same everywhere. For example, people who are reselling SAP in, say, Russia, are doing exactly the same thing - tuning numbers and telling lies. The better you're able to lie the better SAP consultant you are. There are no project with was completed on schedule and within budget.
My prediction: "The version number finally equals Pi. No more changes to the software are possible, because it's now perfect."
Wrong thread.
One of the pitfalls of tabbed browsing.
Unfortunately.