In most cases, the bad application of Management Consultants is 'user error'.

Which is quite common.

'Good use' of management consultants are for things like M&A research, some structural issues etc.

Most companies are not full of smart people, and even when they do have very smart people, they're usually in narrow roles.

Companies can't afford to have 'a strategy team' internally that look at issues broadly. When they try, they end up in 'committee failure'.

It makes a ton of sense for a manufacturer to have consultants come in and look at supply chain issues - especially if those consultants are led by someone who just did that for 5 other companies.

$1M is 'nothing' to find the issues underlying a lot of nuanced things at scale.

The other 'positive magic' of the consultants, is that they are able to put in 'authoritative researched way' what the company might already know broadly but where the knowledge is scattered.

CEO wants to make a big change, the consultants can dig deep, scour the data, come up with plans.

That's very valuable.

It's very destructive when the CEO pays $1M to justify his own egoic delusions; which is common.

The consultants will be happy to take the money to find research to justify the delusions though.

They are overused, but they're useful when used properly.

Even when they are used properly, it can be too expensive.

The city of NYC deciding on exactly how to do recycling bins, I think famously cost a few million - but that's not entirely outrageous. You want to spend a lot of energy up front thinking through those, researching what happened in all the other cities, best practices, supply chains, operations etc.

NYC is 20 million dam people. It's way bigger than Sweden.

And city bureaucracies are not ready to do that kind of hard hitting research.

So - the right team, for the right cost (which can seem like a lot, but it might not be in context). But again, what would be a 'very valuable $1M spent' can end up being '$10M' kind of thing, so even when 'it was the right move' it could be disproportionate.

Beware Management Consultants