Consider a scenario where a bank (call it AnyBank) hires a consultancy (call it AnyConsultancy) to do some quant dev work.
An AnyBank quant (call her M) therefore passes on instructions to the quant dev consultants from AnyConsultancy.
Obviously, the project's success or failure hinges on the quality of the cooperation between the AnyBank quant and the quant
developers from AnyConsultancy.
The incentives of the developers from AnyConsultancy are clear. They want the project to go well which will lead to strong
feedback from AnyBank which will be good for their careers.
But what is the incentive for the AnyBank quant, M, to give clear instructions? If the project goes badly, M will
blame the consultants, the AnyBank managers will believe M, and the AnyBank quant can then make
a persuasive case that the way forward for the project is for AnyBank to hire quants, rather than rely on consultants,
and M is then likely to be a manager of a group of new quant employees and M will therefore gain in seniority.
M is therefore incentivised to give poor instructions so that the project fails, and so that she becomes a direct supervisor
of new AnyBank quant employees under her management.
In practice, M won't deliberately sabotage the project by giving obviously wrong instructions. M could simply refuse to
spend any time thinking about what she says, and never provide any written documentation. Such sloppiness will
lead to the project failing which will be good for M as she then argues (as above) for her to directly supervise
AnyBank's own quant devs which will be better for her career.
What can be done, and what is commonly done in practice to prevent the AnyBank project failing in this manner?
Many thanks for your responses.