Grindin' Consultant

The world often seems awash in people with hazily-defined "consultant" jobs of various sorts, so I was fascinated to read this (emphasis added) in Tyler Cowen's review of Sudhir Venkatesh's Gang Leader for a Day:

His, subject, too has moved on. J.T. grew tired of running a gang, particularly when the crack trade dried up and with it a lot of the business. He tried managing a dry cleaning business and then started a barber shop, which failed. For a while, he tried to market himself as a consultant for higher-ups in the drug economy. Right now he seems to be living off his savings. The two men see each other every now and then, but they don't seem to have established their previous rapport.

It's interesting that it didn't work out. I wonder if that was due to some specific failure on J.T.'s part or if the world of drug distribution just shows an admirable ability to resist the consultantification that's sweeping over the rest of the economy.

Comments

Its probably the difference b/w self-owned business and a public enterprise. If it's your own money you're paying out, you are much more likely to eliminate unnecessary shisters.

Posted by mpowell | January 9, 2008 1:24 PM

Re "I wonder if that was due to some specific failure on J.T.'s part or if the world of drug distribution just shows an admirable ability to resist the consultantification that's sweeping over the rest of the economy"
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Unlike our politicans and news pundits, the drug lords know the difference between selling drugs and TAKING drugs. I.e, they may lie to their buyers but they don't lie to themselves.

Posted by Don Williams | January 9, 2008 1:28 PM

Matthew,

Are you really sure this is the kind of post that will pull in your target demographic?

I'll send you a bill.

Posted by Petey | January 9, 2008 1:37 PM

"Right now he seems to be living off his savings ..."

In other words, he not only lives with his mom, he steals money from her purse.

Posted by Alan Vanneman | January 9, 2008 1:38 PM

Don Williams brings up a good point-- one of the uses for consulting is to pay someone to tell the clients something that they already know but need an outside third party to tell them before they can move on the information. There's probably a lot less of this institutional sclerosis in drug distribution than there is in larger, legal corporate enterprises.

Posted by Tyro | January 9, 2008 1:38 PM

Re Tyro's "one of the uses for consulting is to pay someone to tell the clients something that they already know but need an outside third party to tell them before they can move on the information "
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Known as believing your own bullshit.

Because you find someone who will recite it to you if you pay them a lot of money to do so.

Actually, the purpose of consultants is to be designated scapegoats. They can be blamed later when the CEO steps in shit.

"The consultants MISLED me. It's THEIR fault".

"CIA Analysts" serve the same purpose in the Bush Adminstration.

Posted by Don Williams | January 9, 2008 1:54 PM

Also, my guess is that "consultants" in that particular field who over-promise and under-deliver should have invested heavily in life insurance...

I suspect this sort of direct feed-back approach would have done wonders for the financial services industry as well. Instead, we get that Merill Lynch CEO who (maybe) has bankrupted his gigantic firm but nonetheless walks off with $150M in severance and bonuses...

Posted by RKU | January 9, 2008 1:58 PM

He's setting his sights too low. He should be shooting for a vice-presidency, or some fake deal like that, where he can scoop a lot of cheese.

Posted by demisod | January 9, 2008 2:33 PM

Are consultants really necessary when you can pick up a bootleg Clipse CD that tells you all you need to know?

Posted by SK | January 9, 2008 3:00 PM

Matt seems very sure in his opinions about the value of consultants. Has he ever worked in a business? Why does he think he knows the answer to such a complex question? Are all his opinions this poorly founded?

Posted by ed | January 9, 2008 4:18 PM

ed: Matt is no doubt under-informed about the evidence on the value of consultants. However, the majority of academic studies suggest that despite his ignorance he has made a correct assessment of their value and of the fact that their spread is largely a case of mimetic isomorphism.

Posted by Meh | January 9, 2008 5:11 PM

We use consultants because the government gives us hazy regulations and it's up to us to figure out what they mean, and how to meet them. When it's unclear, we hire consultants who are typically people with experience in the relevant field or ex-inspectors. It's either that or hire somebody like this full-time, but that'd cost a lot more money and we don't need their expertise on a full-time basis.

Consultants have their place, especially for work that requires specialized knowledge that many companies don't need to have around on a full-time basis.

Posted by JordanT | January 9, 2008 5:33 PM

JordanT, I don't think this is what Matt was talking about. There's nothing controversial about hiring contractors for specific, defined tasks: meeting government regulations, writing a custom piece of software, fixing the air conditioner, and so forth. Many businesses find it more efficient to hire contractors for these kinds of things than to keep a full-time staff in something that isn't really their core competency.

What Matt was talking about was "hazily-defined "consultant" jobs" — in other words, general business consulting of the sort done by McKinsey, Accenture, and so forth. The problem with this should be obvious. Why would an outsider know your business better than you yourself do? And if that's the case, aren't you really in deep shit? In most cases, the outside consultant (who may be quite intelligent, but may also be right out of college with very little real-world experience) has nothing new to say.

Best-case scenario, the consultant will tell you the same things your employees have probably been telling you for years, with the difference being that you might actually listen to the consultant. In this case, the consultant at least acted as a catalyst to get something done, but it would have been much less expensive to just listen to the suggestions in the first place rather than paying a six-figure sum to hear what you should have paid attention to sooner.

Worst-case scenario, the consultant will run the business into the ground and collect a fat paycheck while you and your co-workers all lose their jobs. Or the consulting firm will take advantage of its privileged position to poach your company's business. I've personally seen this happen.

Posted by Josh G. | January 9, 2008 5:57 PM

Re Josh G's comment "Or the consulting firm will take advantage of its privileged position to poach your company's business "
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Yep. A dream job for an industrial spy --foreign or domestic -- is as a consultant.

Another bizarre stupidity is the US Congress pontificating about how we need to "Maintain US industrial competiveness" -- and then giving US corporations a million HIB visas to import short term foreign workers.

Actually, I should say "SELLING corporations a million H1B visas" -- since they are bought with campaign donations.

Of course, members of Congress focus mainly on their own competiveness -- defined as finding several rich patrons and burying their nose up the butts of said patrons. And fuck the national interest.

Posted by Don Williams | January 9, 2008 6:20 PM

I forgot to add, this doesn't work in the illegal drug business because there are no hazy government regulations that need to be met.

Posted by JordanT | January 9, 2008 6:51 PM

Perhaps because a business where your customers die isn't so good at generating repeat business. It's not easy to have to do a sales job every time you need a customer.

Posted by bhagavathy | January 9, 2008 8:30 PM

"Are all his opinions this poorly founded?"

You must be new here.

I find this post amusing because I'm in the process of trying to figure out how to become MORE of a "hazily-defined consultant" since apparently doing straight-up tech support doesn't pay reasonable rates as everyone wants it for dirt cheap - or free if they can get it that way.

If you look at most consultant Web sites, it's impossible to tell what they actually do in terms of steps 1, 2 and 3.

Go back and read Robert Ringer's "Winning Through Intimidation". He only made a living in real estate after fooling people into thinking he was NOT a "real estate broker" but instead a "development consultant" or some such crap. He had a whole plan based around nobody being able to tell exactly what he did for a living.

It's a smart move.

Posted by Richard Steven Hack | January 9, 2008 10:49 PM