Consulting. Cover is the product.
An Australian department paid Deloitte $440,000 to review a machine that cut 350,000 people's benefits. It already knew the answer. What it was buying was someone else's name on the cover.
THE GIST ON CONSULTING: "Cover Is the Product"
What did the Australian benefits computer do?
There's a computer in Australia that stops people's benefit payments. No human looks at it and nobody signs it off. In three months, it cut 350,000 people's payments.
The department that runs it wanted to know whether it was fair, so it paid Deloitte $440,000 to find out. But it already knew.
What did Deloitte find?
Defects all the way through it. Rules that couldn't be traced to the law it was enforcing, and a machine built on the assumption that the people it was judging cheat.
All of which the department could have got from its own staff.
What went wrong with the report itself?
The court judgment it quoted was invented. The judge's name was misspelled because the judge didn't exist. There were 12 references from a book that a real professor never wrote, because Deloitte had used AI, hadn't said so, and ended up giving back their final payment.
But the department kept every recommendation, which tells you evidence was never holding it up. The one thing it couldn't produce in-house was someone else's name on the cover.
So what is consulting actually for?
Cover. Once cover is for sale, it looks reckless not to have it. A report from an outside firm survives a committee meeting, and one you wrote yourself doesn't.
Judgment only comes from owning a call that went badly, and ownership left the building a long time ago. Meanwhile the computer is still running, and the report saying it's broken has been paid for and filed. Everyone who touched it did their job properly. It's better to have a good process and a bad outcome than a bad process and a good outcome, because you're buying cover, and it works. Does it work for you?
Do outside consultants add insight or just cover?
Your take. One tap, then see how everyone else voted.
Quick answers
What did the Australian department pay Deloitte for?
$440,000 to judge whether an automated system that cut 350,000 people's benefit payments in three months was fair.
What was wrong with the Deloitte report?
It quoted a court judgment that was invented, and cited 12 references from a book a real professor never wrote. Deloitte had used AI without saying so and gave back their final payment.
What is the point of consulting, according to Huw?
Cover. Once cover is for sale, it looks reckless not to have it, and an outside name on the report survives a committee meeting.
See you on the next one.
What should the next one be? Suggest a topic for Huw to explain
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