A story went viral recently on social media: it claimed that McKinsey charged Warner Brothers Discovery $155 million over three years to help them navigate a branding decision: rebrand HBO to HBO Max ($55M), then to Max ($37M), then back to HBO Max, then ultimately decide to separate the brands entirely ($63M). The story spread like wildfire across LinkedIn and Twitter before being revealed as likely satire. Yet millions of people, including seasoned executives, immediately believed it. Why? Because it perfectly captures the psychological patterns we all recognize in consulting engagements. The fact that this felt so plausible—that no one questioned spending three years and $155 million to end up where they started—reveals everything we need to know about the consulting industry’s business model and the psychology that enables it.

So here’s the real question: Why do people who built billion-dollar companies and other smart executives consistently make consulting decisions that feel this absurd? Leaders who can spot bad investments, poor hires, and market risks somehow get trapped in consulting engagements that would be laughable if they weren’t so expensive. It’s not about intelligence. It’s about psychology. This isn’t a consultant-bashing article. It’s a psychological deep-dive into why brilliant executives get trapped in predictable patterns, what the research says about the consulting “flywheel” business model, and how to break free.

The Flywheel Business Model: Dependency as Product

The reason that Warner Brothers Discovery story felt so believable isn’t because it was true—it’s because it represents consulting success, not consulting failure. The major consulting firms’ business model depends on creating client dependency through multi-phase engagements that generate more questions than answers.

Here’s how the flywheel works:

Phase 1: “Strategic assessment” reveals complexity requiring deeper analysis

Phase 2: Implementation support uncovers new strategic questions

Phase 3: Optimization requires additional strategy adjustments

Repeat indefinitely

Research on consulting psychology and consulting business models shows this pattern consistently. The average length of a management consulting engagement is approximately 4.2 months, but optimal consulting firms design projects so that follow-on projects are obvious and should aim for 40% of revenue from repeat clients. This isn’t because problems are complex, but because solutions are engineered to be incomplete.

The psychology behind this is sophisticated. Consultants reframe simple problems as complex strategic challenges using specific language patterns. This turns branding decisions into “comprehensive digital transformation strategies.” They make obvious solutions sound insufficient by introducing frameworks that require multiple phases to “fully realize value.”

In real consulting engagements, simple business decisions get presented as complex strategic transformations. Each phase creates justification for the next phase. The uncomfortable truth: consulting firms profit from prolonged uncertainty, not quick resolution. Their incentive is to make simple problems complex, not complex problems simple.

Social Proof in the C-Suite: “Nobody Gets Fired for Hiring McKinsey”

Executive decision-making is heavily influenced by social proof, especially when it’s under board scrutiny. Robert Cialdini‘s research on influence shows us this effect amplifies dramatically in high-pressure corporate environments. In fact, research consistently shows us that reputation drives hiring decisions. A study of MBA students from top business schools found that 96% said reputation was an important factor in their choice of potential employer. The psychology is simple: explaining a McKinsey failure is easier than explaining why you chose a boutique firm that failed.

This creates a psychological trap. Research on defensive decision-making tells us that executives choose “less effective but lower risk alternatives” rather than options in the best interest of their organization. They hire consultants they don’t necessarily trust because they trust their ability to defend the hiring decision. The brand name becomes a safety net for political survival, not business outcomes.

The psychology of deferring to “comprehensive analysis” over intuitive market knowledge shows how data visualization can make bad ideas look sophisticated. Consultants routinely present overwhelming slide decks that make questionable recommendations appear “strategic.” Board dynamics amplify this effect. Directors expect to see familiar consulting names in strategic presentations. The psychological comfort of recognizable brands outweighs the logical analysis of actual capability or track record. As industry insiders joke, “Nobody gets fired for hiring McKinsey.” It’s easier to hire the big brand and then blame them while keeping careers intact.

The Expertise Fallacy: When Smart People Outsource Thinking

High-achieving leaders often underestimate their own expertise while overestimating external “experts.” This is Dunning-Kruger in reverse; competent people systematically underestimating their own abilities. Research shows us that consultant credibility often correlates more with presentation skills than domain expertise. Studies on organizational reputation demonstrate that decision-makers rely heavily on brand recognition when evaluating professional services, even when internal expertise may be superior.

Here’s the psychological trap: leaders who built successful companies somehow doubt their strategic judgment when facing new challenges. The seductive appeal of “outside perspective” exploits impostor syndrome that many successful executives experience. The irony is striking. Most consulting recommendations come from analysts 2-3 years out of MBA programs. Leaders with 20+ years of experience defer to 27-year-olds with PowerPoint skills. Yet this feels rational in the moment because external expertise carries psychological weight that internal expertise doesn’t. Consider how many executives have decades of industry experience, understand customer behavior, brand equity, and market positioning intimately. But when consultants present the same insights in consulting frameworks, suddenly these become “strategic revelations” worth millions.

Analysis Paralysis and the Comfort of Process

Complex decisions trigger analysis paralysis. Barry Schwartz’s research on choice paradox shows that too many options leads to decision avoidance. Consultants exploit this by providing the comfort of extended process without the anxiety of quick decisions. Twelve-week consulting engagements provide psychological relief from immediate decision pressure. Leaders can say “we’re still gathering data” instead of making tough calls. The process feels like progress even when it isn’t.

But here’s the hidden cost: while analyzing, competitors are acting. Research on market timing shows that comprehensive analysis often leads to obvious conclusions, but six months too late. The psychological comfort of thoroughness creates real competitive disadvantage. When it comes to consultants, you could say that clients don’t pay them for answers, they pay them for confidence in decisions they’ve already made. The consulting process has become more about anxiety management, not strategic insight. In many real engagements, market research consistently shows what internal teams already knew. But the consulting process provides psychological cover for strategies everyone understands aren’t optimal.

The Sunk Cost Flywheel: Why Bad Consulting Engagements Become Expensive Addictions

The viral Warner Brothers Discovery story perfectly illustrates escalating commitment psychology, even if it didn’t actually happen. The pattern it describes, each phase justifying the next phase indefinitely, is psychologically accurate. Here’s how the psychological progression typically works:

Phase 1: “We need to fully understand the strategic implications”

Phase 2: “We’re close to breakthrough insights, just need implementation support”

Phase 3: “We’ve invested too much to stop now, let’s optimize the approach”

Research on sunk cost fallacy in corporate settings shows us this mathematical progression of justification. Each dollar invested makes stopping feel like admitting failure of the previous investment. Consultants understand this psychology and engineer it into engagement structures. Each phase produces partial solutions requiring “next phase” completion. The more complex the consultants make it seem, the more indispensable they become; creating confusion protects their revenue stream. Client switching costs increase with each phase, not just financially, but psychologically. The most successful consulting partners are expert at reading client psychology and introducing just enough uncertainty to justify continued engagement. They’ve mastered the art of being almost finished, but never quite done.

Breaking the Psychological Trap: What I’ve Learned Watching Companies Spend Millions on Obvious Solutions

Having worked inside organizations during major consulting engagements (and having worked at McKinsey), I’ve witnessed the psychological dynamics that make smart leaders make expensive mistakes. From Fortune 500 transformations to mid-market “strategic initiatives,” the patterns are remarkably consistent.

What I observed repeatedly:

• Internal teams who already knew the answers sitting silent in consulting presentations
• Executives nodding along with recommendations they’d rejected months earlier from their own staff
• The psychological relief leaders felt having “experts” validate what they already believed
• Post-engagement regret cycles: “We could have done this ourselves”

The Psychology of Better Decisions

Before making any executive consulting decision:

• Challenge the assumption: “What if we solved this internally first?”
• Challenge the consultant selection: “What psychological need are we really filling?”
• Define specific, measurable outcomes before engaging anyone
• Ask the crucial question: “What would we do if consulting wasn’t an option?”

During any engagement:

• Demand weekly outcome check-ins, not process updates
• Maintain psychological ownership and decision-making authority
• Practice intellectual honesty: acknowledge what your team already knows
• Resist complexity creation: demand simple solutions to simple problems

The psychology-first approach recognizes that the “consulting need” is often actually:

• Confidence in decisions already made
• Political cover for difficult choices
• Anxiety management during uncertainty
• Validation of internal expertise

A Research-Based Alternative Framework

Unlike traditional consulting that starts with business analysis, a psychology-informed approach starts with understanding why leaders feel they need external validation:

• Psychological Assessment: What’s driving the perceived need for external help?
• Internal Capability Audit: What do we already know and what can we already do?
• Bias Check: What cognitive traps might be influencing this decision?
• Outcome Definition: What specific, measurable result do we need?
• Resource Reality: Can we achieve this with internal resources plus targeted expertise?

Even in the fictional Warner Brothers scenario, this framework would have revealed:

• Psychological Assessment: Need for validation of difficult brand decisions
• Internal Capability: Deep media industry expertise and customer research
• Bias Check: Sunk cost thinking from previous streaming investments
• Outcome Definition: Unified brand strategy that reduces customer confusion
• Resource Reality: Internal team plus focused consumer research

Result: Better decisions, millions in savings, retained internal expertise.

The Uncomfortable Truth About Smart Leaders and Expensive Consultants

The reason millions believed that Warner Brothers Discovery story is that it feels true to our experience. Most business problems are execution problems, not strategy problems, and internal teams usually know the solutions already. Consulting success correlates more with client psychology than consultant expertise.

So ask yourself the uncomfortable questions: What are you really buying? Analysis or anxiety relief? Are you hiring consultants or hiring courage? What would happen if you trusted your own expertise? What decision would you make if board approval wasn’t a factor?

At Mind Media Tech, we apply psychological research to business challenges, starting with understanding why leaders feel they need external validation rather than jumping into business analysis. The result: better decisions, retained internal expertise, and leaders who feel more competent rather than more dependent.

Because the most expensive consulting engagement is the one that makes you doubt what you already knew was right.
Think you’re ready to break the consulting dependency cycle? We’re here to help.

Key Takeaways: Consulting Psychology Research

• Average consulting engagement: 4.2 months, with 40% revenue from repeat clients
• 96% of executives cite reputation as primary consulting selection factor
• Defensive decision-making drives “lower risk” consulting choices over optimal solutions
• Sunk cost psychology keeps failed consulting engagements running indefinitely
• Most business problems are execution issues, not strategy problems requiring external consultants
• Viral consulting stories feel believable because they reflect real psychological patterns in executive decision-making

Frequently Asked Questions

Why do smart executives make bad consulting decisions?

Psychology, not intelligence. Social proof, defensive decision-making, and expertise undervaluation create predictable traps that lead to expensive consulting theater.

Did McKinsey really charge Warner Brothers Discovery $155 million?

This viral story was likely satire, but millions believed it because it perfectly captures the psychological patterns we recognize in real consulting engagements—multi-phase projects, escalating costs, and circular solutions.

What is consulting psychology?

The study of psychological factors that influence executive decision-making when hiring external consultants, including social proof, defensive reasoning, and the expertise fallacy.

How can executives avoid consulting psychology traps?

Start with psychological self-assessment, audit internal capabilities, define specific outcomes, and question what psychological need is really driving the consulting decision.

What makes consulting engagements become expensive and ineffective?

The “flywheel” business model creates dependency through engineered complexity, partial solutions requiring follow-up phases, and sunk cost psychology that makes stopping feel like failure.