Economist Explains How Government Wastes BILLIONS | Aaron meets Mariana Mazzucato | Downstream
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- čas přidán 25. 02. 2023
- The management consultant industry is worth around a trillion dollars, yet few people on the street could discern exactly how that money is spent. Much of it is spent by governments with the UK leading the charge in contracting out a huge range of services to these huge, opaque companies.
To discuss how we've ended up in this position, and what can be done about it, Aaron is joined by Mariana Mazzucato, co-author of 'The Big Con: How the Consulting Industry Weakens our Businesses, Infantilizes our Governments and Warps our Economies'.
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NHS waste millions every year on useless management consultants. I always considered that if you need management consultants then you should fire your managers as they are obviously not up to the job you are hiring them for?
management consultency in public services has been the biggest con in modern age. regardless of their utter failure in private companies as you just confirmed
Gotta oil the wheels of those donors eh???
Pushed by governments, yes? Public money to private hands type thing..?
I was thinking the same thing.
well you hire in lawyers rather than employing them in-house ... is management consulting that much different?
Mariana is so insightful. She speaks clearly and cuts through the BS.
No she's not. She's an arrogant generalist that manipulates people's perspective.
Thank you. I worked for a local authority who at one point called in management consultants. Their recommendations were, simply put, get rid of a large percentage of your staff (staff had already been cut back) and sell some properties (properties that had already been up for sale for several years). The general view was that they were a waste of (scarce) money, and the only (real) reason for calling them in was to be able to demonstrate that the local authority had fully addressed cost cutting measures. If they hadn't done so then Central Government would simply have ignored the requests from local government for assistance. (In the event Central Government pretty much ignored the requests anyway, but all the tick boxes had been checked...)
Well job done there then for a Tory Government that has no vision for this country except preserving the class status quo...
You often get a % of the money saved when you work as a management consultant firm.
Savingswhen you fire people are easier to calculate. Just saying.
Thank you for this woman who makes so much sense, clear and concise and intelligent. There is hope.
Oh yes she’s so smart so now we don’t have to worry about our own problems.
There are also consultancy groups who specialise in destroying company value, allowing hedge funds and banks to "short" (bet against) said company. BCG (Boston consultancy group) ALLEGEDLY had had a hand in many situations like this, and have also consulted nation's who ended up collapsing into a state that was easily sold off to American private industry. BCG ALLEGEDLY had a role in Brexit, and currently are ALLEGEDLY consulting Netflix trough their disastrous business decisions.
It's an error to see consultants as overpaid and incompetent when viewing consultants work on places like NHS. Quite often their whole job is to waste money and make bad decisions, in aid to devalue it. Especially if they are working for something that is owned by a nation.
Get her on with Gary Economics. That would be really interesting.
What a fascinating discussion that would be. Both of them present complex issues with clarity, and supporting case studies and evidence. Great suggestion.
@@jeremydavies1813 Yeah think it would be an excellent discussion. ♥️
a podcast featured a management consultant for 25 years (David Craig) who said ‘there’s nothing you can tell me about taking the money out of big corporations pockets or government pockets because I’ve seen the experts do it…it’s easier in fact to get big amounts of money out of governments than small amounts…most executives don’t even know what’s happening in their companies, they only mix with their own type in their clubs or whatever, they are quite happy to have someone else do the work that they are paid to do’
I'd like a live app with easy access Monitoring MP's performance , donors, policy choices, local satisfaction levels, income sources etc. to make MP's more accountable
@adamb4150
We just need a proportional voting system, one that means every vote actually counts. That would make our politions much more accountable to us the voters. Under that system if done properly the tories wouldn't have been ruining our country since 2010. We most likely wouldn't have had a referendum on EU membership either. And we most definitely wouldn't be in this appaling mess now, which was created by our tory government since 2010.
Should be a condition of office to limit corruption, the main economic impediment globally. Would alter the whole tone of politics and encourage better people. Then extended to corporations, public officials, charities ... (ps: stealing 'live app', my rants too long-winded - found people invariably agree after two minute think but unlikely to see reason to, need punchy slogan).
We should all have that as standard. I want to see fully independant mental analysis of all government members and that made publicly available for scrutiny.
We need to ensure we get people with empathy into power. 100 years of eugenics has left all the leadership positions in the hands of purebred psychopaths (tories, gop, republicans and even new labour "its just a from of eugenics" - sadiq khan). That isnt working for the country. Also i see a country as its people, not its resource value. And i think a government should work for its country not a third party collective. Especially one that would see us all dead.
Thanks, she is one of my favourite economists.
Great .. she’s a total lightweight
@@jsquire5pawho is a 'heavyweight' according to your opinion? 😏
@@gregorious123 Well Michael Hudson for one...and this woman is definitely a believer in our current market system ( which is fixed as f*ck ...)...
@@gregorious123 well economics is the dismal science so perhaps no-one ... having said that there are loads more highly technical economists than this woman. One may ccounter that the tendency to technical tractability is one of the major issues holding economics back but heterodox schools offer frankly no more accurate a picture than classical economics whenever they attempt predictions and to the extent they dont one may ask whether a generalised scepticism is not a better position to adopt: of that we do not understand perhaps it is better not to speak .... putting those issues to one side, I had a close friend who worked under this woman and whose views I fully trust. Her view was that she really was a lightweight ... very good at getting in fromt of cameras, sounding plausible, telling people what they wanted to hear, advertising herself but with no real brain or ideas ....... there are loads of people who can get ahead in non-measurable fields with these types of skills. Its more difficult in a pure technical field where you will be very quickly found out (maths, sports, things like that) but econ (certainly heterodox econ) is closer to the non-measurable where non-technical skills such as entitlement, likeability etc can prevail .. in any event dthis woman definitely nothign more than a middleweight
@@infoillness4222 Hudson is great but he doesnt come across as well as he has a tendency to drone on ..
Remove lobbying to politicians. Create a system where you need to lobby the public who then lobby the politicians. Also reform political donations to a central organisation which then assigns on a formula. Have ministerial code breaches ruled over by random jury of local councilors. You need to either remove the conflict through breaking the influence or setup appropriate conflict between organisations to ensure democratic accountability. The consultancy issue is a symptom of flawed/corrupt systems, resolve that and then all the other stuff falls into place.
I've worked in the corporate world for 20+ years and every single time I've come into contact with consultants my impression has always been they are long on performance from a theatrical point of view and very short on results from any measurable metric.
Workshops are the performances where they try and map a system they have no prior exposure to. Always they leave the workshop with less of an understanding than the organisation they are being paid to improve.
Consequently their recommendations are dogshit.
I just seen to remember them walking around the office, talking to people, writing everything down and reading it out. That was it.
I started on a project this time last year with a governmental body. They also had a 3rd party consultant who cost them a lot of money daily. This consultant provided a 'handover' and wanted to work concurrently alongside my team. A lot of the documents contained within the handover were wrong when I quizzed the organisation about them during discovery workshops, and the documents the contractor then provided to justify their pay day were copied and re-drafted versions of my teams' documents. They hung on like leeches for several weeks until the organisation eventually kicked them out for providing little to no value.
My point being that I absolutely agree with you. The pressure to deliver quickly in the UK means we often don't do anything properly. The attitude of "just good enough" means we rarely do anything outstanding or work proactively, instead always seeking to work in MVP's and then fix retrospectively, or work reactively, both of which are expensive and inefficient. It. Does. My. Head. In.
@@shiftystylin that definitely sounds about right.
I worked at a uni that brought in one of the big consultancies to tell it how to run a uni (given that they installed a whole senior team with minimal experience in education) - £1.5m later, a set of kpis and a load of ideas which had missed the boat ('China's going to send some students to study internationally, we should do something about that' - in the late 2010s) or weren't going to work. Then the management got found out, the uni was then left in debt... About £1.5m worth, so restructured, binned off loads of staff, but recruited more senior management... It would be hilarious if it weren't so grim to witness.
@@MD-cj4yh that sounds about right too.
When I was an undergraduate, studying systems analysis and design, we had a very gifted lecturer who said of consultants (and I guess many of us were being trained to be one) if you cannot make a quantifiable difference whilst "consulting" its just a name badge, not an actual role you are undertaking.
WOW! can't remember hearing so much truth and great analysis in such a short space of time. Thanks!!!!
Every time Mariana Mazzucato speaks or writes on a subject she has such a perfect, evidenced conceptualisation of the structural issues and expresses it in a really clear way. Excellent long form interview from Novara as always.
Well done, Novara Media; quality stuff.
This was amazing! Im so fascinated by the topics covered in this interview and will definitely be looking into more of Marianas work who comes off as an incredible speaker.
Her book Mission Economy was really good
Great interview, Aaron and Novara really growing as a serious source of information.
I suppose it's pretty straight forward to guess that employing these so-called consultants is a proactive move when in reality it's nothing but paid for blame when any project they undertake is akin to an abject waste of public money! What do PWC, Deloitte, Capita and others know about when it comes to specialist fields such as science, health and industry etc? They are nothing short of glorified accountants!
In the U.S., the issue is less reliance on consultants and more a wholesale issue of the privatization of government services and functions. e.g. policy is driven by think-tanks that are funded by the private sector. Thirty years ago in Congress there were publicly funded, in-house policy think-tanks -- the Office of Technology Assessment and Advisory Commission on Intergovernmental Relations. As part of the Gingrich "revolution" in the 1990s, both these agencies were effectively cut. Effectively this state capacity was destroyed for the benefit of private, for-profit interests. How did these agencies come into being in the first place? What kind of political coalitions brought these organizations into existence in the first place? Is it even possible to re-recreate those coalitions without mass politics?
Ex-Big Four here... lowly manager level not partner... Mariana Mazzucato makes complete sense and maps my experience accurately. Thank you for this interview Novara - it has been very helpful and I will read her book. Plus check her courses. 1T$ industry!!! That is a whole lot of profit... consulting operates on the "A third, a third, a third" basis - A third for overhead, for salaries and for profit.
Mariana is a somewhat refreshing voice and raises sound arguments about the capture of states by the private sector, globally actually. It is also interesting to note how she contradicts herself a number of times, for example, when it comes to her China vs the West critique. It's actually fascinating to see how both Aaron and Mariana while espousing radical positions still fall into the trap of wanting to be politically correct, at least to a some extent, i.e., dissenting voices but still within the broader neo liberal construct.
You are astutely correct. On other occasions both are more edgy when not concrete in their radical tendency. They seem to be mutually conceding down ---- but she is a catch for the show with a book to market. Or maybe the caffeine was wearing off
The trap 😂. Cmon m8 its called natural evolution of society. The thing eugenicists hate most as empathy has been bred out of them so they dont see the need. Which in itself is a severe mental disability.
Can't tell you how much I really enjoy this interview!
Informative and forward, genuinely productive conversation. Definitely continue these kinds of conversations!
Wonderful. I love this woman. She nails what we need to see from our government if we are to believe Labour are serious.
What a great episode, breath of fresh air. Convinced me to buy the book.
Thanks! Another good one. Keep 'em coming!
Love the convo and content, appreciated, cheers!
Brilliant interview. Mariana is fascinating.
Really refreshing to hear someone speak with such clarity and insight on public policy issues. Might have to read the book.
This was such a good episode. Excellent and engaging guest with very thoughtful and intelligent questions.
Will definitely try to get my hands on a copy of the book.
Brilliant episode. Thanks so much Novara Media.
excellent, informed and insightful orator. A gem of an interview, thank you.
Such an extraordinarily captivating and perceptive speaker. Aaron, you are nailing these interviews.
Management consultant : Someone you bring in to make decisions that you don't want to make so that when the shit comes down you don't get the blame.
Doesnt pass with me. You take the role of leader of a nation you accept the responsibility for it all. No passing the baton. The system is broken and riddled with eugenicists.
Brilliant!! Thanks again, novara. Awesome interview.
Fascinating interview. Thank you.
Aaron your dad must be so proud of you.
That was fantastic! So logical and clear.
The bits about infantalisation of government matches my own observation. For me, it's key in how we've ended up with useless politicians that we're more used to seeing creating problems rather than solving them.
This was another great interview by Aaron. Great guest. Great discussion.
It’s mind boggling that politicians have to be spoon fed on how to do things. Take the big four out back and put them down like a sick dog, biggest grifters out there
Another great Downstream interview. Thanks Aaron.
Really well done. Thank you!
This is excellent media discussions.
That is an absolutely fantastic interview...you're correct to say that this is really radical stuff. A more capable state! There's alot to be said for it. I hope this book is the beginning of a movement towards developing this capability such that there can be better outcomes for everyone. It's badly needed! In terms of renewables roll out, this transition will require so much training of workers to install the capacity but also focused mission led initiatives to develop the grid and storage we will also need. This is the Boring stuff that makes the exciting stuff possible. This could improve the world for everyone, and I hope Marianna has lit a fire under people with her book.
47:20 superb
Clear concise and gripping…
More of this please
48:08
This was really great. On so many so many levels.
Excellent discussion, thanks.
Fantastic insightful interview 👍👍
Really enjoyed this speaker and discussion - v in depth analysis - another must read book
This is exactly what's happened with PWC in Australia. They were brought in by the Australian Govt 9 years ago to close tax loopholes. Consult they did, but behind the govt's back they used insider information to garner new business with Big Tech to help them avoid the tax restructure.
Exactly! Too much power to government will always end up profiting the rich elites.
I love this woman! Thank you, Aaron ❤️
Excellent discussion - thanks!
Someone i worked with was completely incompetent and jumped a day before he was pushed. Where did he go? Straight in to a consultancy! I pity those who get his "Expertise".
Love her! Great work
This is an awesome interview, but I keep saying this and will continue to say it until it happens. He needs to interview Roberto Unger on his book The Knowledge Economy.
Wonderful interview, thankyou
Enlightening ❤❤❤👏🏾👏🏾👏🏾
This woman is brilliant
Great discussion. Vivid, especially for a simpleton like me.
great answers, thank you!
Good stuff - I noticed her recent interview in the FT was top trending on their site a few weeks back. Lots to say for people who can build bridges.
I could not agree more. In my time in gov we spent too much time managing contracts with consultants while staff and community expertise was ignored. The results were never better than what we could have done, but boy did we get a lot of flashy power points!
Very good interview!
When I worked as head of alliances for a leading US education company, I did some work engaging with some big consultancy firms in the Middle East. They were quite open about their work in “security” at the time and their own military / intelligence backgrounds. This work did not strike me as benign. Novara might also take an interest in international aid NGOs and their activities in “Civil Society”. At the time I just thought this focus was odd and patronising but over the last 10 years or so I have become more aware of the malign role they play in fermenting western-backed colour revolutions / regime change / coups in the global south (and Europe).
Divide and conquer, covert colonialism, charity….
Should be said Mariana plays a heavy role in UCL Partners which does consulting work in the public sector
She does mention that her shtick isn't to totally denounce consultants. Its all good if you have expertise and can demonstrate cumulative added value post input. She also emphasises the importance of a mutual relationship between consultants and gov rather than a parasitic one.
Cutting the mustard there mate...
worth saying this is not me dismissing her perspective, I actually completely agree with her, I work for a think tank that does a lot of work with UCLP and they are great. She is obviously talking about the hyper-commercialised consulting that Deloitte et al do, but worth mentioning because I think she'd agree that consultants that work with the public sector to develop capacity and bring in expertise have a place in her vision of public sector led development. This isn't a call for a total ban on the state paying for consulting services...
@@tomyoxon5901 agreed
I worked in the outsourcing/management consultancy "industry" for 16 years. I led some of the biggest IT projects in Europe for both public and private organisations. The guilt for letting us in was nearly always the massive failure of those at the top of the company - no faith in their managers and other employees. Little or inappropriate training. A desire for a quick result, a way to sack workers. We used to joke about the incompetence, remoteness and ignorance of the highest management that our due diligence would reveal. The fish rots from the head down and this has produced the "infantilisation" of Government and companies that have sold out their core business. In the past we often did not improve matters but sometimes did at least provide a sewn on head to get some work completed. As time has gone by this "service" has deteriorated as the main brains have rotted. Often "business reporting" is seen of highest importance, and has become a service within a service. Oceans of reports and KPIs but no real point if the head is a numskull. We do indeed need to go back to the Nasa of the 60s and in the words of JFK do things that are difficult with direction and organisation.
We had PWC in to do a time and motion study at my old company which was had sights all over the country. The company paid millions for the service but soon after it was finished the MD resigned and the information from the study was never used. The only winners were PWC!
But isn't that like a drowning man blaming the life jacket when he does not use it. The consultancy work may have been really good
@@smotala11 It was a sham, companies like PWC are there to find ways of cutting staff and saving wages only!
This prompts me to take deeper read of her books. Thank you for the video
Another toxic side effect of this whole trend is the MBA-ification of a whole range of other organisations. I worked at an English college and the manager had done an MBA and who kept trying to bring in his 'big' management ideas into our little school. It was like he was trying to live out his fantasy of being a CEO at a big company. Let's just say he wasn't very popular.
Thanks!
When managers are not up to the task they call in management consultants to do their jobs for them while collecting a paycheck. Want to save money, fire governments and or corporate managers who are not educated enough or qualified to do the jobs they are paid for.
Love Mariana!
Excellent information
Well done
On the money! Great interview.
Mariana could be an independent 'consultant' to our government! I hope members of parliament read her books!
Does Mariana have a podcast or channel. She is so well spoken, I genuinely think she would reach more people, if she spoke as much, if not more, than she writes!
An excellent and informative interview! It appears that governments have gained little or nothing from management consultants. Why then do they spend so much public money on them? What’s the motive behind the 'crime'?
Because their approach to government is cowardly, too worried about tabloid reaction
@@lisaglaze250 also revolving door issues
Brilliant woman !
Saying China *isn’t* democratic is slippery because of what you mean by democracy. Is the UK government really doing anything for the public?
WHAT AGREAT VIDEO, THANKS
very good
@42:20 if nobody hated it, then it wouldn't be as relevant as it is. Massive fan. Thank you for this fantastic interview.
Aaron, we had significant experience in test and trace within the NHS. It’s used to contact potential STI carriers.
Exactly right The difficulty is garnering capital to enable public goods, when money, at the maco level tends to flow to profitable but malign ends
Nailed it! :)
"Outcome oriented?" Isn't this just another fine product of business think? The MEANS we use to reach those ENDS are very important. If the means keep being wrong wrong, then the ends need to re examined. I'd say focusing on outcomes like 5% growth 50% less down time and 20% less labor etc..... is what got us to this place. Why 5% growth? For what? For whom? How? What collateral damage is missed in our equations and "outcome oriented" approaches? Who decides which and how many outcomes should be pursued? Who are the ones evaluating the outcomes?
Even if you call it a "Mission Oriented" approach, how do you avoid many of the same blind spots? How mission oriented is described seems to me is simply an outcomes oriented approach with different outcomes being measured. How is this really any different?
I was in HMRC when Thatcher hired the head of Marks and Spencers, at great cost, to look at efficiency etc. I believe he came up with a rejigged p45 form. It's admittedly a long time ago but this interview remindedcme of it. For years staff, ie those actually doing the work, had been coming up with ideas to improve efficiencies and any that saved money would be rewarded with a modest sum.
I shall get a copy of her book. Infantalising is a good word. I see it everywhere these days. If you ring HMRC you get someone reading from a crib sheet ,not someone with any real.knowledge.
Sustainability and growth! All at the same time. All within a finite system! People ARE amazing!
Its not wasted, its funnelled to their own pockets.
Great story in FT this morning posing the question as to why the American state is so much more disposed to supporting affluence than it is to alleviating poverty.
Not that the US is unique of course, simply the most extreme example, but the brutal truth is that the trickle down myth is alive and well despite dishonest claims to the contrary.
The dichotomy between diversification and potential for optimal productive work from combinations of good work and economies of scale, needs to become a well understood and constantly talked about part of these conversations. These are things that all can understand, and the constituency doesn't tend to because "consultants" and "experts" instead build language to keep these kinds of concepts to themselves to hold onto their implicity or explicit situations and positions.
Brochuremanship - such a good phrase.
Great interview, more should listen to this. Concerned she's not already in dialogue with Starmer - fingers crossed something can happen there
Starmer wouldn't understand what she is saying.
@@patcampton7163 Correct. Looking to Starmer for positive change is a dead end.
2000th like! Woohoo! Nice interview.
The NHS websites crashed at first I recall. They were private deliveries but the NHS got blamed. Actually it was the government and management consultants.
The Test and Trace you refer ti is not that of the UK, but of England - Wales and Scotland were done by coordinated action between local authorities and the Health Services in Scotland and Wales with a great deal of success.
If you have a problem hire a management consultancy, now you have two problems so hire a third management consultant. Rinse and repeat 🙃
I’m a ex local government officer, worked in youth service, social services, and housing and council tax benefits. The council wastes the publics money.
Hence artillery to erode as much as etc etc etc and the monarch sets ther in front center with the target aside .