Steve Jobs had a famously dim view of consultants, and it appears that some of the brightest thinkers in Silicon Valley still seem to think along the same lines.
Peter Thiel, the co-founder of PayPal and one of the earliest investors in Facebook, calls pre-eminent consulting firm McKinsey “a total racket”. He believes that consultants were once valuable because of how badly many companies were run, but are little more than a scam now.
“McKinsey was a real thing in 1985 in the United States,” he had said in an interview in 2023. “If you hired a consultant, they actually helped you improve your company because the companies were badly run at this point. The Reagan-Thatcher administration, they empowered McKinsey because they allowed more companies to be acquired and more mergers and acquisitions activity to happen. It was a somewhat brutal but very powerful reorganization of society, and that was possible.” he added.
“(But now) McKinsey is a total racket. It’s just all fake. At this point, McKinsey’s not ever going to be anything other than a super corrupt fake racket in 2023,” he declared.
Peter Thiel isn’t the only tech leader who doesn’t think highly of consultants. When addressing a graduating class several decades ago, Steve Jobs had admonished people who’d said they were from a consulting background. “Oh that’s bad,” Jobs said told them, as the audience laughed. “You should do something!” he’d told them.
Jobs then explained why he thought consulting was ‘bad’. “I don’t think there’s anything inherently evil in consulting,” Jobs said. “(But) I think that without owning something over an extended period of time, like a few years, where one has a chance to take responsibility for one’s recommendations, where one has to see one’s recommendations through all action stages, and accumulate scar tissue for the mistakes and pick oneself up off the ground and dust oneself off, one learns a fraction of what one can coming in and making recommendations and not owning the results. Not owning the implementation, I think, is a fraction of the value and a fraction of the opportunity to learn and get better,” he said.
“And so consultants do get a broad cut at companies, but it’s very thin,” Jobs continued. “It’s like a picture of a — I’m a vegetarian, so I won’t use steak — but it’s like a picture of a banana. You might get a very accurate picture, but it’s only two dimensional. And without the experience of actually doing it, you never get three dimensional. So you might have a lot of pictures on your walls, you can show it off to your friends, you can say, look, I’ve worked in bananas, I’ve worked in peaches, I’ve worked in grapes, but you never really taste it. And I think that’s what I think,” he’d said.
Silicon Valley does have some right to be dismissive of consultants. Unlike Wall Street, most startups in the valley end up becoming large companies without ever needing consultants, and Silicon Valley doesn’t seem to think highly of their abilities. But Peter Thiel seems to go a step further — he calls them a corrupt racket. While the jury is still out on whether consultants add any value, it’s clear that some of the best thinkers in Silicon Valley don’t seem to have a very high opinion of them.