Dangerous Company: Management Consultants and the Businesses They Save and Ruin [Paperback]

James O'Shea (Author), Charles Madigan (Author)

Book Description

Publication Date: September 1, 1998

Behind nearly every corporate merger and every downsizing or "re-engineering" effort of the last decade lurked a highly paid management consultant. Consultants promise results, but what kind of practices do they employ to achieve them? Written by two award-winning journalists, Dangerous Company tells the harrowing tale of a Fortune 500 company that spent $75 million on consulting contracts, only to see sales plummet from $1.3 billion to $319 million; explains how AT&T could spend half a billion dollars in consulting fees without any sign of progress; and exposes a consultant who provided government officials with information that helped send a former client to jail. You'll learn how Sears got turned around thanks to CEO Arthur Martinez's sophisticated and limited use of consultants, and how small, highly focused consulting firms are providing cost-effective, targeted advice and mounting a challenge to their larger competitors. Both a serious practical guide for any corporate citizen and a cautionary tale as exciting as a corporate thriller, Dangerous Company is certain to make the reader ask the critical question: What is the true price of advice, and who pays?

Editorial Reviews

Amazon.com Review

As the millennium approaches, management consultants have become ubiquitous--and extremely powerful. Often using secretive methods and usually drawing huge fees, they regularly make decisions that might affect thousands of people and cost billions of dollars. But are they ultimately worth the upheaval they can cause? In the first detailed examination of this incredibly influential industry, Dangerous Company: The Inside Story of the Great Consulting Companies, journalists James O'Shea and Charles Madigan offer a cautionary tale. --This text refers to an out of print or unavailable edition of this title.

From Library Journal

O'Shea, the deputy managing editor for foreign and national news at the Chicago Tribune, and Madigan, senior business writer at the Tribune, have written a fascinating account of the use of management consultants in corporations. They examine the politics surrounding consultants, who ultimately benefits, and the downfall of many companies following the implementation of various consultant theories. In essence, they describe "what separates the consulting success from the consulting disaster." The authors include an analysis of McKinsey & Co. and Gemini Consulting. Although certainly entertaining and well written, this book is unique in its realistic and objective treatment, and its annotated bibliographic notes are most useful. Highly recommended for all business collections.?Kathy Shimpock, Muchmore & Wallwork Lib., Phoenix
Copyright 1997 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.

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Product Details

• Paperback: 368 pages
• Publisher: Penguin Books; First Edition edition (September 1, 1998)
• Language: English
• ISBN-10: 0140276858
• ISBN-13: 978-0140276855
• Product Dimensions: 7.6 x 5 x 0.7 inches
• Shipping Weight: 8.8 ounces
• Average Customer Review: 3.8 out of 5 stars  See all reviews (34 customer reviews)
• Amazon Best Sellers Rank: #436,840 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

82 of 87 people found the following review helpful:

3.0 out of 5 stars Movie-style, Superficial Consulting Exposé, March 13, 2000

By 

Prof David T Wright (Vancouver, BC) - See all my reviews

This review is from: Dangerous Company: Management Consultants and the Businesses They Save and Ruin (Paperback)

`Dangerous Company' offers a glimpse of the sometimes limited substance behind the stellar hype and fees of the elite US consulting powerhouses. Unfortunately, the author's repetitive, colloquial, movie-script style (and lack of technical and management knowledge about the projects described) reduces the faith in the validity of their message, and makes it more difficult to learn anything of substance.

The book presents a range of representative cases of unrelated consulting engagements including:

* AT&T's $500 million (US) consulting spending spree with McKinsey, Monitor, and Andersen Consulting featuring- a lack of defined goals, AT &T buying whatever hype/philosophy available at time, inept AT&T managers not asking right questions, and not following through with the (occasional) worthy recommendation.

* Figgie International's $75 million (US) adventure towards bankruptcy in World Class Manufacturing (WCM) with Boston Consulting Group, Deloitte & Touche, Andersen Consulting and Price Waterhouse- where despite consultants writing a book on WCM, they didn't know what it meant (nor did the author's of this book- clue- read 1980s books by Wheelwright, Wild, Voss or Slack to find out!). These assignments featured- consultant-driven agendaless meeting mania, multi-million CNCs ordered without reference to Figgie's manufacturing/design staff, and MBAs/generalist consultants on assignments that required industrial/manufacturing specialists.

* Andersen Consulting's rapid growth through technological job-cutting assignments (some successful like Harley-Davidson) and technology-exemplars, and occasional resultant lawsuits for failure to deliver (e.g. O'Neal Steel, and UOP).

* Sears learning curve with consultants through failure and then success- McKinsey charging megabucks for basic use of decision trees for strategy and Boston-Matrix-like market analysis; honesty of AT Kearney (described as rare in consulting); and new consultant hiring guidelines (e.g. defined project goals, demonstrated skills, commitment, and intangible feel good).

* Boston Consulting Group's growth into healthcare via assignments with Deere & Co and Boeringer Mannheim- innovations including the statistically unproven Boston Matrix for market analysis (as often used blindly instead of with detailed analysis), and diabetes disease management.

* Gemini Consulting organizational transformation process at Cigna and Montgomery County General- tweaking the 12 corporate change processes (achieve mobilization, create the vision, build a measurement system, construct an economic model, align the physical infrastructure, redesign the work architecture, achieve market focus, invent new businesses, change the rules through IT, create a reward structure, build individual learning, and develop the organization) by Gemini's "4 Rs"- reframing corporate direction, restructuring , revitalizing, and renewing people.

* Bain & Co's extremely close relationship with Guinness PLC during it's takeover of Distillers leading to lawsuits against Bain, and prison sentences for the clients due to evidence presented by Bain. Bain's strength at data gathering, and weaknesses at interpretation & implementation are described.

* McKinsey's network, and focus on access to the ear of CEOs (often ex-McKinsey consultants) , and consultants with boldness, character, and intellectual vigor and a tendency to be honest with clients.

Based on these cases, it finishes with a proposed hiring checklist for successful engagements: 1. Define goals 2. Consider hiring an MBA directly (or an industrial engineer for someone with deeper technological AND business skills) full-time rather than pay expensive consulting fees 3. Demand consultants with relevant expertise 4. Demand specific rather than open-ended contracts 5. Retain control of assignment 6. If unhappy with progress, demand rectifying action 7. Insist on bespoke rather than generic assignments; if buying from a book-methodology ask for the author to be on project 8. Value employees and keep morale high 9. Critically monitor consulting engagement progress 10. Only use consulting to address critical problems/ bottlenecks.

Other points presented include:

* The lack of standards for consultant ethics despite existence of professional organizations (e.g. CMA, IOD, IAM, IEEE, RSA, IEE etc..).

* The marketing approach of consulting- newsletter/journal publishing, trade papers in the popular generalist Harvard Business Review, CEO conferences, publications of new-fad business books, "think tanks", press releases of successful projects, and out-of-court settlements for lawsuits.

* The partners, project managers, and consultants pyramid of fees and staff encourages the use of many young (arrogant) MBAs on assignments to maximize consultancy profitability.

* James O Mckinsey, the "father" of US consulting stating in the 1930's that `businesses do not need action-men but scientific planners' (ironic that today most consultants are charismatic action-people rather than knowledgeable expert analysts).

Strengths of `Dangerous Company' are that it is a genuinely easy-to-read book, presenting business and historical context for the US consulting industry, and offering a good selection of representative cases.

Weaknesses include: the repetitive, colloquial, cliché-ridden, movie-script style; long length of book for content; needs a list of defined of acronyms; authors demonstrate clear lack of knowledge about subject matter; superficiality of supposed "analysis"; 50%+ of book could be better communicated through charts, illustrations, tables or sidebars (but perhaps that would be too much like the MBA/Consulting presentation-style for the authors?); and the US-bias in a much larger global industry and marketplace

Overall, despite the weaknesses, recommended reading for consultants, clients and interested parties particularly for balance against business-fad consultancy books. `Dangerous Company' also offers between-the-lines guidance for those wanting to start-up a (better) consulting firm.

12 of 13 people found the following review helpful:

5.0 out of 5 stars A Damaging Exposure of Management Consulting's Dark Side, June 30, 2002

By 

James Hunt (Australia) - See all my reviews

This review is from: Dangerous Company: Management Consultants and the Businesses They Save and Ruin (Paperback)

James O'Shea and Charles Madigan have written an exceptionally informative text. Not only is it packed with well researched material, its gripping narrative style makes it very exciting to read as well.

This book contains material that should be regarded as essential reading for all serious-minded professional managers. It is the ultimate thinking manager's book, filled with compelling case evidence of managerial indecision (and how to avoid it). It is arguably the best business book to be published between 1980 and 2000.

Most negative reviews of this book suggest that it is either unbalanced, biased, or too superficial in its coverage of the management consultancy industry. Such claims should be accepted with caution, predominantly because they appear to be written by the very consultants whose feathers the book has obviously ruffled. Several of the chapters contain case studies that are anything but superficial.

Ultimately the book shouldn't be taken as a modern-day Spanish Inquisition targeting consultants and their methods (although it is, in parts, a damaging exposure of management consulting's darker side). Instead, Dangerous Company's most salient message is really directed towards inept managers (at all organisational levels) who all too readily seek to mask their own ineptitude by relying on expert advice that they are often incapable of comprehending. The gripping Chapter 2 on "Figgie International" is the best example of this. It can be read as a stand-alone case analysis of strategic confusion, and is perhaps the book's most revealing segment. It's narrative style is particularly compelling.

The book's underlying message (which is perhaps being missed by those who are quick to criticise the text) is that highly paid senior executives who readily abrogate their managerial responsibilities by blindly placing faith in the advice of external experts, are the "real dangers" to their companies. The authors make this clear in the final pages of their book, where they provide a checklist of 10 rules to follow when engaging management consultants. Rule 5 is "never give up control."

The concluding lines of "Dangerous Company" are perhaps the most revealing of all: "Good advice depends upon the shrewdness of the person who seeks it." In the final analysis, the authors are not suggesting that managers shouldn't use consultants. They're merely suggesting that managers seek advice wisely rather than blindly.

6 of 6 people found the following review helpful:

4.0 out of 5 stars Good inside view, May 18, 1999

By A Customer

This review is from: Dangerous Company: Management Consultants and the Businesses They Save and Ruin (Paperback)

This book provided a good inside view insider several large consulting firms. Another good resource I found was the "VaultReports.com Guide to the Top Management Consulting Firms" which had detailed insider profiles of the top firms w/ some hilarous (and disturbing) employee quotes!