House of Lies | Martin Kihn

Summary of: House of Lies: How Management Consultants Steal Your Watch and Then Tell You the Time
By: Martin Kihn


Ever wondered if companies truly benefit from the advice of expensive management consultants? In ‘House of Lies: How Management Consultants Steal Your Watch and Then Tell You the Time’, author Martin Kihn gives readers an insider’s perspective on the world of management consulting. The book explores the realities of the industry, questioning the true expertise of consultants, the relationships formed with their clients, and the intricate dynamics between colleagues in consulting. As you delve into the book summary, you’ll learn about the intriguing and oftentimes secretive subculture of consulting, the influence of Harvard and McKinsey on the consulting landscape, and the methods consultants use to impress their clients while evading tricky questions.

The Truth About Consultants

Get to know the inner workings of consultants, their purpose, and how they thrive in the business world.

Consultants are known to be expensive, knowledgeable, and expert problem-solvers in the business world. However, not all of them possess the expertise to solve the most complex corporate challenges systematically and rapidly. Rather, most of them are hired to investigate and study problems. A consultant’s aura is being considered authoritative, although sometimes it is just mere aura.

Consulting is essentially a transient business. Whereas most professions encourage professional employees to stay long term with a company, consultants are encouraged to stay in consulting firms for about two years. Generally, being a consultant is a means to an end, not an end in itself.

The highest echelon of college students, represented primarily by those who graduated from Harvard, tends to sail through the Ivy League school system to corporate America. Hence, McKinsey & Co. and Harvard become the intersection of power in the consulting world. Diplomas from both institutions together with McKinsey consulting experience signify a cream-of-the-crop status in the corporate consulting world. Companies such as GM, Home Depot and Toys “R” Us are well-known examples of companies that have benefited from the services of both Harvard-educated executives and consultants from McKinsey & Co.

Anyone can hire a guru of their own, albeit for a price. The most significant spenders on consulting services are industries such as telecommunication, healthcare, finance, and government or energy companies. Still, regardless of spending, they would undoubtedly be profitable and have comparable management teams and strategies even without consultants. The real reason companies hire consultants is that it is an acceptable corporate indulgence and an expense that accounts payable approves.

In conclusion, the purpose of consultants is not necessarily to be experts in any particular field rather, hired personnel to investigate and study problems. The business of consulting is transitive, and consultants are encouraged to move on to advance their careers. While a degree from Harvard and experience in McKinsey & Co. may not be necessary, some of the biggest companies in the world have reaped benefits from those who hold these dual pedigrees. Companies that can afford it, view hiring consultants as a notable expense, thereby giving their teams a break, even if consultants’ recommendations are often ignored.

The Secret Code of Consultants

Consultants are not born strategic thinkers, but they possess excellent analytical listening skills and quick mental calculations. They follow unspoken rules of engagement when visiting clients, including always being behind schedule, never gathering in the public eye, making friends with people at all levels, and avoiding overemphasizing travel and entertainment expenses. Consultants pride themselves on being an enigma and use jargon to communicate with each other. They have two techniques to dodge client questions: involving them in discussions and emphasizing their effectiveness. Industries that hire consultants are the ones that can afford them, but most companies do not need consultancy services.

Consultant Team Dinners

Consultant team dinners, often held in the city where work is being done, are an important but dreaded ritual. These dinners involve senior partners telling client-related or personal stories while the rest of the team listens, with lower-ranked members having little opportunity to speak. Although mandatory, these dinners do not serve any purpose other than providing a platform for senior partners to talk about their careers and are not conducive to group motivation.

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