Consultants rule the Earth

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It’s one of those businesses that’s everywhere, shapes everything, but feels weirdly invisible outside of, say, Office Space. Consulting — once a niche service for struggling companies — has become a multi-hundred-billion-dollar global industry that quietly dictates how Fortune 500s, governments, and nonprofits operate. The industry sells “expertise,” as well as ways to outsource judgment and stamp complex or unpopular choices with the sheen of “best practices.”

Born in the early 20th century out of “scientific management” principles and stopwatches, the profession boomed after World War II, when companies and bureaucracies apparently grew too large for their own leadership to grasp. By the 1980s, firms like McKinsey and Bain had become global power brokers, turning corporate strategy into an export business. Today, consultants advise on everything from AI ethics to the Pope’s Quickbooks.

Critics call it a shadow government. Defenders? A shortcut to expertise. Either way, consultants have achieved something remarkable — convincing the world their advice is literally worth billions. And now I strongly advise you to scroll down below for more.

By the digits

7 figures: Annual compensation for McKinsey’s top partners, according to third-party estimates — a reminder that “advice” can be an extraordinarily profitable product.

70%: Share of large-scale corporate “transformations” that fail to meet their goals, despite (or because of) the consultants guiding them. The figure comes from McKinsey & Company’s own marketing materials.

$200,000: Entry-level salary for some consultants joining the largest firms, including Deloitte and PwC.

1.4 million: Employees across the Big Four firms (Deloitte, PwC, EY, and KPMG), roughly half of whom work in consulting and advisory.

$157 billion: Market cap of publicly traded consulting firm Accenture. 

The PowerPoint priesthood

What began as a small-scale trade in efficiency hacks has become a kind of corporate priesthood. And who are the priests? Well, the major consulting firms recruit overwhelmingly from elite universities and top MBA programs — Harvard, Wharton, Yale, London Business School, and the occasional Stanford engineer who can also speak bullet points. The big firms’ associate classes are often indistinguishable from the Ivy League’s graduating classes.

 Still, the playbook hasn’t changed that much since proto-management guru Frederick Taylor timed steelworkers with a stopwatch back in the 1890s: distill complexity into models, benchmark competitors, and of course, recommend restructuring. What’s changed is the sheer scale. Following the 1980s deregulation wave, consultants spread worldwide. In the 2000s, they pushed into tech implementation and outsourcing. Nowadays, they’re marketing themselves as translators between businesses and AI bots — or agents, as the case may be.

Certainly demand shows no sign of slowing. Now as ever, leaders crave the illusion of certainty, and consultants will provide that — for a hefty fee. One might be tempted to think AI would disrupt the advice business more, given that various models were built on the sum total of human intelligence. But then there’s the AI integration itself to consult on, isn’t there? This would suggest Accenture’s — and its fellows’ — future is assured, even as AI is encouraging these same firms to cut down their consultant counts. 

Quotable

“Management consultants: They waste time, cost money, demoralize and distract your best people, and don’t solve problems. They are people who borrow your watch to tell you what time it is and then walk off with it.”

—Robert Townsend, in his 1970 book Up the Organization.

Brief history

1886: Arthur D. Little, a chemist-turned-entrepreneur, founds what’s widely considered the world’s first consulting firm, advising companies on technical innovation.

1911: Frederick Winslow Taylor publishes The Principles of Scientific Management, introducing his gospel of the stopwatch across workplaces — and creating the philosophical blueprint for consultants everywhere.

1926: James McKinsey launches his namesake firm, which will eventually redefine management as a science and “strategy” as a product.

2001: Accenture spins off from Arthur Andersen, nimbly dodges the Enron fallout, and becomes the world’s largest consulting brand.

2020s: Facing AI disruption and ethics scandals from opioids to Saudi mega-projects, the consulting industry begins its awkward pivot from PowerPoint to prompt engineering.

Fun fact!

House of Lies, the Showtime series about cutthroat management consultants, was based on a real memoir by former consultant Martin Kihn. Star Don Cheadle won a Golden Globe for playing a character inspired by Kihn — but Kihn later joked that he was never as cool in real life as Cheadle’s Marty Kaan.  

Watch this!

A day in the life of a management consultant? Seems depressing! At least according to this one-minute video made by a real, live one in the de rigueur button-down and Northface vest.