> Eh. I'd argue while some of the objects have improved - I'm not sure my life has improved because of them.
This is exactly right. So many "improvements" are cool or interesting, but either provide no meaningful improvement to one's life (e.g. streaming vs. VHS) or actually detract from our lives on balance, e.g. smartphones.
Streaming TV shows means I can watch them at a convenient time for me, pausing at leisure, not having to waste time on adverts. In practice this means my wife and I can work through series 45 minutes a night, perhaps only one or two nights a week at whatever time it happens to be after kids are down.
Smartphones can be used in unhealthy ways for sure, but they are almost unreal when you consider how things have changed in the last few decades (looking at my own time):
90s: Shared house lines were the norm, long distance calls expensive-ish, international definitely.
Early 2000s: Personal cellphones pretty common.
Mid 2000s: Home VoIP becoming accessible through Skype, but not mainstream, generally requires a full PC, inconvenient, either for computer enthusiasts or family wanting to do free overseas calls. You would have to hope or arrange other person to be online with Skype at the same time.
Late 2000s: Smartphones are a thing, voip from your pocket is finally accessible, not everyone has smartphones yet, but you can use Skype credit to call anyone in the world at a reasonable cost.
Mid 2010s: smartphones are pretty much ubiquitous, FaceTime (and later equivalent on WhatsApp) mean that you can now talk to almost anyone with very high quality video anywhere in the world basically for free.
What does this mean for me? I regularly FaceTime my parents completely casually with my young children, sometimes just before sleep or in the afternoon or whenever, no ceremony or hassle.
My wife’s sister moved to New Zealand (we live in South Africa) 7 years ago and they FaceTime more than once a week on average with nieces and nephews.
I lived in Europe from 2006 to 2012, and I wish I had in 2006 what I have now in smartphones, maps for most everywhere always available), translation tools always available.
Having experienced the advent of cellphones in my lifetime, they are almost unbelievable to someone who grew up with the full sized PCs which were a lot less capable than a device which now fits in my hand.
Yeah, it's handy - and maybe my teenage years were an exception here, but for me the deciding change was internet access and not the smartphone. As long as you could coordinate with your friends online, the actual meeting up outside wasn't a big problem anymore. Talking late 90s, early 00s here - everyone had ICQ or at least email and as long as people were checking this after school/in the afternoon, the plans for the night were easy to mass communicate.
> Do people learn to be this way at business school?
Yup. I've found the the core material in the curricula for most business schools and MBA programs is a excellent resource on what not to do while working in business, or really anywhere for that matter. It's almost as if they've decided to round up all the worst ideas and put them in one place, so you know to avoid them.
Remember read a bit of a study 30 years ago that tested college students for sociopathy. They tested various majors as freshmen and again as seniors. And across the board seniors had lower sociopathy than as freshmen. Except Economics and Business where scores increased.
> I don't know that the prior situation was sustainable and would have lasted much longer anyway. Using China for manufacturing is like using Amazon for sales. You are required to give them everything they need to take your business away.
If if comes to pass that the 21st century is a Chinese one, it will be this long con that launched the whole thing: "We'll manufacture anything you want real cheap, just show us how to do it."
The U.S. outsourcing it's manufacturing to China is likely to go down as one of the biggest economic and political self-owns of the modern era.
Even though I 100% agree with you, the one piece of merit here is that the world is pissed shows that they recognize they lost something. They would not care if we were merely shooting ourselves.
Now if they are pissed and totally lost trust then we are totally fucked. But if they are pissed and willing to negotiate then maybe something can be salvaged out of this. It would be nice to have 20th century hong kong esque zero duty free trade between the US, EU, Mercosur, Canada, and all the other friendly nations as a result of us all learning how dumb this is. But I won't hold my breath.
> “Everything” may be a bit extreme, but seriously, have you already forgotten the lessons learned during the Covid supply shocks?
I don't why the mainstream media isn't focusing more on this angle. Five years ago the richest, most powerful, country in the world couldn't get basic medical supplies to its citizens during a public health crisis. That should have terrified us into making major policy changes, but instead everyone just seems to have shrugged it off and gone back to business as usual.
The US can barely get basic medical supplies to much of its population outside of a health crisis - not because of direct supply chain issues, but because the system is designed to put corporate profits over adequate service provision.
And in the not so general case, over national security.
Is manufacturing the real problem here? Or is it a symptom of decades of systemic mismanagement of opportunity by a culture that values short-sighted opportunism over strategy?
These cherry-picking arguments are a huge problem and we need to acknowledge that they are. So, we focus on one problem and ignore all the benefits that helped us in that time? The world-wide effort to understand the disease and rapidly develop a vaccine? The world-wide talent pool that feeds our hospitals and clinics? The supply chain that did kick in to fill the holes eventually? An economy that always 'makes its own masks' is not going to be able to do everything because everything is simply too much, even for the mighty US of A. It is easy to point at one thing that didn't go well and ignore the reality that the world that would have gotten that one thing right would have gotten so many other things terribly wrong.
Well China made its own masks and also managed a staff a fully operational medical system and pharmaceutical industry ad the same time. So clearly a single country can do all of this. Furthermore I think most countries would look at how China managed the pandemic and be impressed by the results.
The masks are not a singular item. They generalize to a whole slew of critical components that a functioning society needs like pharmaceuticals (and their precursors), or half the global electronics supply chain. These resources exist in a time of peace but in a crunch they will disappear.
> I thought this would go without saying, but once SWE jobs are automated by AI (if it were to happen), then every job can be automated.
I think this is exactly right, and possibly a good thing relative to the alternative. If AI were able to automate 20% of office-type jobs, you'd have a lot of people out of work, but likely not enough for anyone to do anything about it at a societal level. Those people would just be given some platitude in the same way out of work coal miners or assembly line workers were snidely told to "learn to code".
If every or nearly every office-type job gets automated, it would force us to address the issue in a meaningful way.
I don't think AI will have much of an impact on management consulting, since it's really just executive insurance. If anything, management consulting might be the perfect use for generative AI in its current state.
If you're a CEO running a company, you can go out and hire McKinsey and tell the board, "I'm a great CEO, that's why I brought in McKinsey. They're the BEST". McKinsey then proceeds to charge you a bunch of money and leaves you with some very slick powerpoints containing a bunch of advice, roadmaps, org charts, and action items.
If your company has a few good quarters after that you can say, "Look at what a great CEO I am, I brought in some best in class consultants and now our stock price is through the roof!". If on the other hand your company struggles, misses earnings targets, etc., you can say, "It's not my fault we're doing badly, I brought in a team of best in class consultants and even THEY couldn't help us turn things around yet - it must be the macro economy, industry headwinds, etc. Imagine how much worse we'd be doing if I didn't bring McKinsey in!"
Ok... you got me. Can you unpack this a bit? Are you saying the consulting services, like, launder techniques and IP from their clients and reuse it other clients or...?
Yes. Part of why you use a consultant like McKinsey is because they are talking to everybody else. So when they tell you "best practices" they are telling you what everybody else is doing.
In a way that cover's everyone's ass legally* of course. But that's what they're doing.
EDIT: * - by "legally" I mean allow information to be shared in a way that precludes legal repercussions but I do not necessarily mean adherence to the law.
Private equity firms and large management consulting firms gain extreme visibility and influence into an entire sector. If mckinsey recommends raising prices, its likely everyone in your sector is raising prices. If everyone in the sector does the same action, then no one loses out.
I wouldn’t call it collusion but, of course, they’re aggregating what leading companies find to be best practices—although they presumably don’t share individual company IP. Not much different really from when tech folks go to conferences.
Companies benchmark and consider industry best practices all the time. If they don’t they’re idiots.
Im not a huge fan of management consultants generally, but consultants and analysts can provide useful third party perspectives, in part because they talk to a lot of companies that you may have mess directly with access to.
Yum Brands is at ~20% profit margins, Shake Shack is at 3% or less profit margins, and QSR is at 10% to 15% profit margins.
There must be a reason McDonalds earns so much more. As far as I understand, McDonald’s has a significant real estate component to its business (which is technically selling its brand/real estate to franchisors, not selling food), bolstered by its very strong brand with loyal customers (that the others don’t).
> The cost of running a business, especially a restaurant, can really eat into its profits. At the end of the day, McDonald's only keeps around 16 percent of the revenue its company-owned stores make, but it keeps 82 percent of the revenue franchisees pay out to it.
That’s what excellence looks like. I think chik-fil-a has similar net margins. QSR is more typical for their industry. I think Starbucks is down around 10-12% net margins too.
Yes their libraries are their most valuable asset. They also collect benchmarking data across companies to help you gauge how you are doing. You cannot ask aws about their practices but you can ask McKinsey about the market leader benchmark practices
There's a market. Almost everyone is a market taker.
For instance, a company has to figure out how much to pay people. If McKinsey comes in and says "pay them less and we'll tell everyone else to pay them less" that just doesn't work. Why would any company that is 1 of N decide to pay them less when they can just pay them slightly more and attract the talent from all these other places. There is an incentive to cheat and without a legally binding agreement all collusion services will collapse. And this even ignores new entrants. You can have individual (illegal) agreements between companies like Google and Apple where they agree to not hire their employees, but those break down and have nothing to do with consultants (why would you want a middle man in an illegal activity?)
The reality is there is a market for most things. To hire an analyst it'll cost you X. McKinsey and other try to discover that and tell their clients. But they can't change the nature of the market as much as someone installing an HVAC unit can change your temperature but giving you a rigged thermostat.
That's a part of it. The other part was the federal government not enforcing anti trust law for decades, enabling consolidation. Matt Stoller writes extensively about this at https://www.thebignewsletter.com/ and in his book "Goliath: The 100-Year War Between Monopoly Power and Democracy." Consolidation and monopolies are good for shareholders and management, competition is good for consumers and labor, broadly speaking.
Business consultants exist for a purpose that can be described as "how can we squeeze this enterprise or deal for as much as we can?" Sometimes that's squeezing your customer base through anti competitive practices. Sometimes thats offshoring (labor arbitrage). Sometimes it is M&A (realizing "efficiencies"). Sometimes it is squeezing your existing labor pool as hard as you can. Or a combination of the above.
Competing on price is something all business do anyway, at least as long as there is competition.
What McKinsey and the rest of the scumbags have taught CEOs is to be aggressive, cheating and ruthless at cutting costs no matter what. That's how we ended with almost all manufacturing and associated know-how getting shipped over to China (sometimes literally - they bought an entire steel manufacturing plant in Germany's Ruhrpott, tore it down and reassembled it in China [1]!), that's how we ended up with the clown show that is Boeing, that's how we ended up with "employee loyalty" not being a thing any more in either direction.
> Competing on price is something all business do anyway
Not if none of the competitors do, that was the point of the comment if they all think the competitors aren't competing on price then it becomes an informal price fixing scheme.
Exactly, and there are plenty of examples within the tech industry. Apple/Android app store fees didn't end up at 30% because of ruthless competition that drove margins down to almost nothing. If a market is controlled by a duopoly the two parties can easily keep prices absurdly high and everyone else has to just deal with it.
> I don't think AI will have much of an impact on management consulting, since it's really just executive insurance. If anything, management consulting might be the perfect use for generative AI in its current state.
I think your second point is actually the reason why this will have a big impact on the industry, since McKinsey et al generally operate on a billable hours basis, and automation / AI will exert significant downward pressure.
Initially, I imagine they will staff smaller teams at a higher hourly rate (mostly by replacing some number of analysts and associates with automation/AI). Long term, I can imagine some firms will attempt to make up for the loss of revenues by expanding into SMBs ("Own a struggling Plumbing business? Get help from McKinseyAI!") or by dramatically reducing the size of their staff (as you noted, their product is mostly executive insurance, and for that you really only need the Partners).
Totally agree - the industry will thrive (unlike some others that could be totally obsoleted in an AI-powered economy), but it will need far fewer paid humans to run it.
The retention of accountability and access to otherwise-inaccessible information will continue to be among the hottest commodities.
If you’ve ever wondered what makes “shady data brokers” so powerful in cyberpunk stories, it’s not their collections of stolen credit card numbers - it’s insider knowledge of what your trillion-dollar competitor is doing.
But now you just need 2 associates instead of a team having you as part of their portfolio of clients. The fact that many the consultants are going "AI won't come for us" has me betting against the consultants lol.
This is such a meme on Hacker News. How much evidence is there really for this? There might be some, but saying its the primary reason CEOs hire consultants is an even stronger claim that needs justification.
> executive insurance
> It's not my fault we're doing badly, I brought in a team of best in class consultants and even THEY couldn't help us turn things around yet - it must be the macro economy, industry headwinds,
its unreliable insurance, since board may not buy this excuse.
Did you even read the article? You might have missed the main point entirely. It’s not discussing the job security of management consultants, but rather the job satisfaction.
Particularly for junior professionals, the expectations placed on them have suddenly increased tenfold, while the expectation to utilize generative AI for the most intellectually and creatively demanding tasks has diminished the mental reward. As a result, the most unsatisfying manual tasks are only ones left to be done - needing most of their attention.
The very prominent statistic they use close to the beginning of the article is both confidently and spectacularly incorrect in a way that should have been obvious even to someone doing a cursory skim of the text:
"For instance, there was the National Public Data (NPD) breach in 2024. This catastrophic incident exposed the sensitive personal information of nearly 2.9 billion US, Canadian, and British citizens. "
If you sum up the populations of those three countries, you don't even get to 500 million people, never mind 2.9 billion.
So it turns out the numbers are all valid. With or without AI they just misinterpreted the data. But indeed 2.9 billion records were stolen, whoever wrote this just clearly misunderstood that an individual could have more than 1 record associated to their person.
no, they have one record, of 2.9 billion records bieng stollen.
It is absolutely true that many records that are stolen, are not recorded, as such.
There is no record of what, is recorded.
This has the possibility of becoming, a record for ,well deserved, adsurdity
> in the abstract, governments are indistinguishable from any other collective of people.
Sure, but in reality they have a legal monopoly on the use of violence, which is a very big deal and makes them qualitatively different from any other collective of people.
This is exactly right. So many "improvements" are cool or interesting, but either provide no meaningful improvement to one's life (e.g. streaming vs. VHS) or actually detract from our lives on balance, e.g. smartphones.
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