Dangerous Company: Management Consultants and the Businesses They Save and Ruin

Rating:
Summary: Movie-style, Superficial Consulting Exposé
Review: 'Dangerous Company' offers a glimpse of the sometimes limited substance behind the stellar hype and fees of the elite US consulting powerhouses. Unfortunately, the author's repetitive, colloquial, movie-script style (and lack of technical and management knowledge about the projects described) reduces the faith in the validity of their message, and makes it more difficult to learn anything of substance.

The book presents a range of representative cases of unrelated consulting engagements including:

* AT&T's $500 million (US) consulting spending spree with McKinsey, Monitor, and Andersen Consulting featuring- a lack of defined goals, AT &T buying whatever hype/philosophy available at time, inept AT&T managers not asking right questions, and not following through with the (occasional) worthy recommendation.

* Figgie International's $75 million (US) adventure towards bankruptcy in World Class Manufacturing (WCM) with Boston Consulting Group, Deloitte & Touche, Andersen Consulting and Price Waterhouse- where despite consultants writing a book on WCM, they didn't know what it meant (nor did the author's of this book- clue- read 1980s books by Wheelwright, Wild, Voss or Slack to find out!). These assignments featured- consultant-driven agendaless meeting mania, multi-million CNCs ordered without reference to Figgie's manufacturing/design staff, and MBAs/generalist consultants on assignments that required industrial/manufacturing specialists.

* Andersen Consulting's rapid growth through technological job-cutting assignments (some successful like Harley-Davidson) and technology-exemplars, and occasional resultant lawsuits for failure to deliver (e.g. O'Neal Steel, and UOP).

* Sears learning curve with consultants through failure and then success- McKinsey charging megabucks for basic use of decision trees for strategy and Boston-Matrix-like market analysis; honesty of AT Kearney (described as rare in consulting); and new consultant hiring guidelines (e.g. defined project goals, demonstrated skills, commitment, and intangible feel good).

* Boston Consulting Group's growth into healthcare via assignments with Deere & Co and Boeringer Mannheim- innovations including the statistically unproven Boston Matrix for market analysis (as often used blindly instead of with detailed analysis), and diabetes disease management.

* Gemini Consulting organizational transformation process at Cigna and Montgomery County General- tweaking the 12 corporate change processes (achieve mobilization, create the vision, build a measurement system, construct an economic model, align the physical infrastructure, redesign the work architecture, achieve market focus, invent new businesses, change the rules through IT, create a reward structure, build individual learning, and develop the organization) by Gemini's "4 Rs"- reframing corporate direction, restructuring , revitalizing, and renewing people.

* Bain & Co's extremely close relationship with Guinness PLC during it's takeover of Distillers leading to lawsuits against Bain, and prison sentences for the clients due to evidence presented by Bain. Bain's strength at data gathering, and weaknesses at interpretation & implementation are described.

* McKinsey's network, and focus on access to the ear of CEOs (often ex-McKinsey consultants) , and consultants with boldness, character, and intellectual vigor and a tendency to be honest with clients.

Based on these cases, it finishes with a proposed hiring checklist for successful engagements: 1. Define goals 2. Consider hiring an MBA directly (or an industrial engineer for someone with deeper technological AND business skills) full-time rather than pay expensive consulting fees 3. Demand consultants with relevant expertise 4. Demand specific rather than open-ended contracts 5. Retain control of assignment 6. If unhappy with progress, demand rectifying action 7. Insist on bespoke rather than generic assignments; if buying from a book-methodology ask for the author to be on project 8. Value employees and keep morale high 9. Critically monitor consulting engagement progress 10. Only use consulting to address critical problems/ bottlenecks.

Other points presented include:

* The lack of standards for consultant ethics despite existence of professional organizations (e.g. CMA, IOD, IAM, IEEE, RSA, IEE etc..).

* The marketing approach of consulting- newsletter/journal publishing, trade papers in the popular generalist Harvard Business Review, CEO conferences, publications of new-fad business books, "think tanks", press releases of successful projects, and out-of-court settlements for lawsuits.

* The partners, project managers, and consultants pyramid of fees and staff encourages the use of many young (arrogant) MBAs on assignments to maximize consultancy profitability.

* James O Mckinsey, the "father" of US consulting stating in the 1930's that 'businesses do not need action-men but scientific planners' (ironic that today most consultants are charismatic action-people rather than knowledgeable expert analysts).

Strengths of 'Dangerous Company' are that it is a genuinely easy-to-read book, presenting business and historical context for the US consulting industry, and offering a good selection of representative cases.

Weaknesses include: the repetitive, colloquial, cliché-ridden, movie-script style; long length of book for content; needs a list of defined of acronyms; authors demonstrate clear lack of knowledge about subject matter; superficiality of supposed "analysis"; 50%+ of book could be better communicated through charts, illustrations, tables or sidebars (but perhaps that would be too much like the MBA/Consulting presentation-style for the authors?); and the US-bias in a much larger global industry and marketplace

Overall, despite the weaknesses, recommended reading for consultants, clients and interested parties particularly for balance against business-fad consultancy books. 'Dangerous Company' also offers between-the-lines guidance for those wanting to start-up a (better) consulting firm.

Rating:
Summary: A Damaging Exposure of Management Consulting's Dark Side
Review: James O'Shea and Charles Madigan have written an exceptionally informative text. Not only is it packed with well researched material, its gripping narrative style makes it very exciting to read as well.

This book contains material that should be regarded as essential reading for all serious-minded professional managers. It is the ultimate thinking manager's book, filled with compelling case evidence of managerial indecision (and how to avoid it). It is arguably the best business book to be published between 1980 and 2000.

Most negative reviews of this book suggest that it is either unbalanced, biased, or too superficial in its coverage of the management consultancy industry. Such claims should be accepted with caution, predominantly because they appear to be written by the very consultants whose feathers the book has obviously ruffled. Several of the chapters contain case studies that are anything but superficial.

Ultimately the book shouldn't be taken as a modern-day Spanish Inquisition targeting consultants and their methods (although it is, in parts, a damaging exposure of management consulting's darker side). Instead, Dangerous Company's most salient message is really directed towards inept managers (at all organisational levels) who all too readily seek to mask their own ineptitude by relying on expert advice that they are often incapable of comprehending. The gripping Chapter 2 on "Figgie International" is the best example of this. It can be read as a stand-alone case analysis of strategic confusion, and is perhaps the book's most revealing segment. It's narrative style is particularly compelling.

The book's underlying message (which is perhaps being missed by those who are quick to criticise the text) is that highly paid senior executives who readily abrogate their managerial responsibilities by blindly placing faith in the advice of external experts, are the "real dangers" to their companies. The authors make this clear in the final pages of their book, where they provide a checklist of 10 rules to follow when engaging management consultants. Rule 5 is "never give up control."

The concluding lines of "Dangerous Company" are perhaps the most revealing of all: "Good advice depends upon the shrewdness of the person who seeks it." In the final analysis, the authors are not suggesting that managers shouldn't use consultants. They're merely suggesting that managers seek advice wisely rather than blindly.

Rating:
Summary: A Damaging Exposure of Management Consulting's Dark Side
Review: James O'Shea and Charles Madigan have written an exceptionally informative text. Not only is it packed with well researched material, its gripping narrative style makes it very exciting to read as well.

This book contains material that should be regarded as essential reading for all serious-minded professional managers. It is the ultimate thinking manager's book, filled with compelling case evidence of managerial indecision (and how to avoid it). It is arguably the best business book to be published between 1980 and 2000.

Most negative reviews of this book suggest that it is either unbalanced, biased, or too superficial in its coverage of the management consultancy industry. Such claims should be accepted with caution, predominantly because they appear to be written by the very consultants whose feathers the book has obviously ruffled. Several of the chapters contain case studies that are anything but superficial.

Ultimately the book shouldn't be taken as a modern-day Spanish Inquisition targeting consultants and their methods (although it is, in parts, a damaging exposure of management consulting's darker side). Instead, Dangerous Company's most salient message is really directed towards inept managers (at all organisational levels) who all too readily seek to mask their own ineptitude by relying on expert advice that they are often incapable of comprehending. The gripping Chapter 2 on "Figgie International" is the best example of this. It can be read as a stand-alone case analysis of strategic confusion, and is perhaps the book's most revealing segment. It's narrative style is particularly compelling.

The book's underlying message (which is perhaps being missed by those who are quick to criticise the text) is that highly paid senior executives who readily abrogate their managerial responsibilities by blindly placing faith in the advice of external experts, are the "real dangers" to their companies. The authors make this clear in the final pages of their book, where they provide a checklist of 10 rules to follow when engaging management consultants. Rule 5 is "never give up control."

The concluding lines of "Dangerous Company" are perhaps the most revealing of all: "Good advice depends upon the shrewdness of the person who seeks it." In the final analysis, the authors are not suggesting that managers shouldn't use consultants. They're merely suggesting that managers seek advice wisely rather than blindly.

Rating:
Summary: Over-Sensational and Not very Fair
Review: One day someone will write a good book on the weird child of the neo-liberal revolution, management consulting - this is not it.

The business is a fascinating one - and though some firms, like McKinsey, date back to the early 20th century it is really a very modern creation. Hard to get a job in, highly-paid (second only to investment-banking), very, very secretive, and very, very, very profitable (most firms typically enjoy net income of around 20% or more). Full of smart, driven and ambitious people, who frequently go on to major executive roles in business or politics. An increasingly global force, as even smaller firms set up offices from Sao Paulo to Shanghai. And, most importantly, you increasingly find consultants at the right hand of chief executives during the execution of every major new business venture. CEO's who refuse to employ consultants, like Rupert Murdoch, are rare indeed.

So the workings of this business are worthy of a great deal of public scrutiny, particularly since so many of their actions influence the value of our 10Ks. However, the industry has been notably reluctant to provide any information about itself, its clients, and its failures - so as a result books like this tend to rely largely on gossip and disgruntled ex-employees. 'Dangerous Company' tells some familiar stories reasonably well - the huge sums AT&T wasted on consultants like McKinsey, the involvement of Bain in the Guiness insider-trading case, some of the (rare) larger-than-life personalities, like Bruce Henderson and Ira Magaziner of BCG. These are fun reads.

But it adds little you couldn't learn from a search in the Business Week archives, has no real analytical bite, and gives no real idea of what it is like to work within one of these firms. Most of the stories it recycles are at least a decade old, and largely from the US. Finally, the book has a pretty obvious axe to grind - which would be OK, but it doesn't even grind it that well.

Rating:
Summary: Armed with advice and Dangerous
Review: This book is a look by two journalists who have sifted thru lots of cases to bring to the front examples of management consultants bringing ruin (and in one case prosperity) to their clients. It also tries to chart the future of consulting industry and where it takes the rest of corporate world.

Written in a racy style it takes a look at the firms which defined consulting, right from people like James Oscar mcKinsey to Bain and the companies they started...their differentiators etc.

The authors come to the conclusion that giving a carte blanche job to a consulting firm will only make them more dangerous :-) They suggest that to manage a firm you need to understand the strengths and weaknesses of the firm and therefore need to focus them.

But undoubtedly this book is great information on the persona and history of the specific consulting firms like McKinsey, Andersen Consulting (now Accenture), Bain & Co., Gemini Consulting, BCG etc.

Rating:
Summary: A bit long in the middle, but probably worth the read
Review: This book was recommended to me by one of my peers as we were finishing up our IT-grad job search process - if only I had read it a semester earlier!

Some of the content gets a bit long, but the book is most valuable as a history of the big strategy consulting firms and their off-shoots (BCG, Andersen, McKinsey, Bain, Monitor, etc...), with special emphasis on what they did wrong, and how to avoid disasters at your own company.

I think the intended audience of the book was more for CEO's and upper management (as opposed to consultants themselves), and as such, it could be titled: "How Not to Get Screwed by the Big Boys."

The authors offer lots of stories (and tips) on how to manage the consultant/client relationship (keeping control, scope creap, budget escalation, etc...) and do so through lots of disjointed seemingly unrelated "case studies."

If you're in the consulting job search process, this book will give you an interesting perspective and some real meaty issues to talk about during interviews. "Old-timers" would probably find they already know most of the "stories," but for new managers and those of us just entering the big game, it's definitely worth the read. - DAN

Rating:
Summary: Movie-style, Superficial Consulting Exposé
Review: `Dangerous Company' offers a glimpse of the sometimes limited substance behind the stellar hype and fees of the elite US consulting powerhouses. Unfortunately, the author's repetitive, colloquial, movie-script style (and lack of technical and management knowledge about the projects described) reduces the faith in the validity of their message, and makes it more difficult to learn anything of substance.

The book presents a range of representative cases of unrelated consulting engagements including:

* AT&T's $500 million (US) consulting spending spree with McKinsey, Monitor, and Andersen Consulting featuring- a lack of defined goals, AT &T buying whatever hype/philosophy available at time, inept AT&T managers not asking right questions, and not following through with the (occasional) worthy recommendation.

* Figgie International's $75 million (US) adventure towards bankruptcy in World Class Manufacturing (WCM) with Boston Consulting Group, Deloitte & Touche, Andersen Consulting and Price Waterhouse- where despite consultants writing a book on WCM, they didn't know what it meant (nor did the author's of this book- clue- read 1980s books by Wheelwright, Wild, Voss or Slack to find out!). These assignments featured- consultant-driven agendaless meeting mania, multi-million CNCs ordered without reference to Figgie's manufacturing/design staff, and MBAs/generalist consultants on assignments that required industrial/manufacturing specialists.

* Andersen Consulting's rapid growth through technological job-cutting assignments (some successful like Harley-Davidson) and technology-exemplars, and occasional resultant lawsuits for failure to deliver (e.g. O'Neal Steel, and UOP).

* Sears learning curve with consultants through failure and then success- McKinsey charging megabucks for basic use of decision trees for strategy and Boston-Matrix-like market analysis; honesty of AT Kearney (described as rare in consulting); and new consultant hiring guidelines (e.g. defined project goals, demonstrated skills, commitment, and intangible feel good).

* Boston Consulting Group's growth into healthcare via assignments with Deere & Co and Boeringer Mannheim- innovations including the statistically unproven Boston Matrix for market analysis (as often used blindly instead of with detailed analysis), and diabetes disease management.

* Gemini Consulting organizational transformation process at Cigna and Montgomery County General- tweaking the 12 corporate change processes (achieve mobilization, create the vision, build a measurement system, construct an economic model, align the physical infrastructure, redesign the work architecture, achieve market focus, invent new businesses, change the rules through IT, create a reward structure, build individual learning, and develop the organization) by Gemini's "4 Rs"- reframing corporate direction, restructuring , revitalizing, and renewing people.

* Bain & Co's extremely close relationship with Guinness PLC during it's takeover of Distillers leading to lawsuits against Bain, and prison sentences for the clients due to evidence presented by Bain. Bain's strength at data gathering, and weaknesses at interpretation & implementation are described.

* McKinsey's network, and focus on access to the ear of CEOs (often ex-McKinsey consultants) , and consultants with boldness, character, and intellectual vigor and a tendency to be honest with clients.

Based on these cases, it finishes with a proposed hiring checklist for successful engagements: 1. Define goals 2. Consider hiring an MBA directly (or an industrial engineer for someone with deeper technological AND business skills) full-time rather than pay expensive consulting fees 3. Demand consultants with relevant expertise 4. Demand specific rather than open-ended contracts 5. Retain control of assignment 6. If unhappy with progress, demand rectifying action 7. Insist on bespoke rather than generic assignments; if buying from a book-methodology ask for the author to be on project 8. Value employees and keep morale high 9. Critically monitor consulting engagement progress 10. Only use consulting to address critical problems/ bottlenecks.

Other points presented include:

* The lack of standards for consultant ethics despite existence of professional organizations (e.g. CMA, IOD, IAM, IEEE, RSA, IEE etc..).

* The marketing approach of consulting- newsletter/journal publishing, trade papers in the popular generalist Harvard Business Review, CEO conferences, publications of new-fad business books, "think tanks", press releases of successful projects, and out-of-court settlements for lawsuits.

* The partners, project managers, and consultants pyramid of fees and staff encourages the use of many young (arrogant) MBAs on assignments to maximize consultancy profitability.

* James O Mckinsey, the "father" of US consulting stating in the 1930's that `businesses do not need action-men but scientific planners' (ironic that today most consultants are charismatic action-people rather than knowledgeable expert analysts).

Strengths of `Dangerous Company' are that it is a genuinely easy-to-read book, presenting business and historical context for the US consulting industry, and offering a good selection of representative cases.

Weaknesses include: the repetitive, colloquial, cliché-ridden, movie-script style; long length of book for content; needs a list of defined of acronyms; authors demonstrate clear lack of knowledge about subject matter; superficiality of supposed "analysis"; 50%+ of book could be better communicated through charts, illustrations, tables or sidebars (but perhaps that would be too much like the MBA/Consulting presentation-style for the authors?); and the US-bias in a much larger global industry and marketplace

Overall, despite the weaknesses, recommended reading for consultants, clients and interested parties particularly for balance against business-fad consultancy books. `Dangerous Company' also offers between-the-lines guidance for those wanting to start-up a (better) consulting firm.