This column is directed at those students who are thinking about going into finance or consulting. And, according to a 2013 UCS report, that’s a lot of you — 13.8 percent of the class of 2013 went into consulting, while 9.2 percent took jobs in finance. When I began writing this piece, it became clear to me that the finance/consulting juggernaut was simply too big to address in one column. So I’ve decided to split it into two: This one will consider management consulting, while next week’s will dwell on Wall Street. Enjoy.
My plea is a predictable one: Don’t go into consulting straight out of college. I call this predictable not just because I’ve repeated some version of this argument to innumerable annoyed acquaintances, but also because it’s hardly an original one. It was made most eloquently in these very pages by the late Marina Keegan, who wrote in 2011, “Of course this is my own opinion, but to me there’s something sad about so many of us entering a line of work in which we’re not (for the most part) producing something, or helping someone, or engaging in something that we’re explicitly passionate about. Even if it’s just for two or three years.” Keegan critiqued the lazy excuses offered by kids willing to trade creativity or passion for good pay and the feeling of validation.
Yet to me, the problems with consulting are bigger than the opportunity cost. The problems extend to the work itself.
In theory, and often in practice, there is nothing wrong with management consulting — helping organizations improve their efficiency and performance. But the immediate question that springs to my mind is: How are graduating college seniors qualified, in any way, to tell businesses how to change their structure or practices? Frankly, they aren’t. Rather, as many have chronicled, large consulting firms just recruit the brightest kids with the shiniest degrees, train them for a few weeks, teach them the buzzwords and set them loose.
“We could take somebody straight off the street, teach them a few simple tricks in a couple hours and easily charge them out to our clients for more than £7,000 per week,” former British consultant Neil Glass (pseudonym David Craig) wrote in his memoir, “Rip-Off!”
There are devastating consequences to such a system. More than three quarters of the world’s largest companies use the services offered by consulting firms. Yet in a study — discussed in Glass’ book — conducted by Britain’s Cranfield School of Management, 170 companies were interviewed about their use of consultants. Just 36 percent of these companies expressed happiness with the consultants; in contrast, two-thirds found the consultants to be useless or actually harmful.
Keeping those numbers in mind, consider that, according to journalist Duff McDonald, there may be no company in history responsible for more layoffs than McKinsey & Co., the most prominent of the consultants.
Because the efficacy of big-time management consulting is notoriously difficult to study — so much of the advice doled out is proprietary business information — it’s important to consider some history. “Enron has built a reputation as one of the world’s most innovative companies,” read a McKinsey report mere months before the company’s implosion. But this is old news. More recently, McKinsey told a British railroad company, Railtrack, to “reduce spending on infrastructure”; this plum advice led to a number of fatalities and the company’s own death. Many individuals, as well as the state of Louisiana, have filed lawsuits against McKinsey because it told insurance companies that they could save money by paying injury victims considerably less than they were due. Remember, please, that McKinsey is “the most prestigious consulting firm of all,” as journalist David Leonhardt wrote in a 2011 news analysis entitled, “Consultant Nation.”
Still, I’m not here to argue against the entire existence of the management consulting empire. In theory, consultants can be very helpful. But we don’t live in theory, and I don’t think it’s going out on a limb to assume that most Yalies entering consulting aspire to work for McKinsey, Bain, BCG or their mammoth ilk. The idea that, every year, more than 100 of my classmates, possessing no business experience, decide to enter this industry and learn buzzwords and then use Excel and PowerPoint for two years, or blindly tell companies to fire their employees, is terrifying. I revise what I wrote above: There is an opportunity cost. These Yalies are kids who have been given tremendous advantages, kids who could be trying to save the planet or combat discrimination or eliminate hunger — literal hunger. Instead, they’re choosing the easy, albeit well-paid, way out.
The whole situation, wrote Keegan, is “super depressing. I don’t understand why no one is talking about it.”
Next week, we’ll talk about Wall Street. See you soon.
Scott Stern is a senior in Branford College. His columns run on Mondays. Contact him at scott.stern@yale.edu.