Steve Shu – Page 10 – Stephen Shu, PhD

June 29, 2007January 15, 2016

In Consulting The Process Is An Essential Part Of The Deliverable

Situation for consultant #1:

Client needs help in determining business strategy and writing business plan for its Board
Consultant follows traditional MBA frameworks by performing 3Cs (Customer, Competition, Company), Porter’s Five Forces and competitive advantage, etc. to research and analyze the best way for client to move forward
Consultant uses structured frameworks for outlining and documenting the tactics and logistics for pursuing the business (e.g., marketing 4Ps, traditional business plan outlines)
Consultant prepares full financial proformas (balance sheet, income statement, cash flow statement, and notes)
Consultant writes business plan to spec
Consultant delivers written business plan to client
Consultant invoices $40,000
Client ends up being lukewarm about the deliverable.

Situation for consultant #2 (differences in bold):

Client needs help in determining business strategy and writing business plan for its Board
Consultant sets up engagement timeframe and governance structure with consulting team and client leads, extended resources for all key workstreams, and steering/approval committee
Consultant follows traditional MBA frameworks by performing 3Cs (Customer, Competition, Company), Porter’s Five Forces and competitive advantage, etc. to research and analyze the best way for client to move forward
Consultant sets up workshops and strategy sessions with the executive team, key functional managers, etc.
Consultant uses structured frameworks for outlining and documenting the tactics and logistics for pursuing the business (e.g., marketing 4Ps, traditional business plan outlines)
Consultant sets up regular review meetings and working sessions with client to review best practices, evaluate options, and refine and revise strategy
Consultant prepares full financial proformas (balance sheet, income statement, cash flow statement, and notes)
Consultant sets up working sessions to familiarize client with models, align financials with chart of accounts for client, get client input, and educate client about industry benchmarks
Consultant writes business plan to spec
Consultant involves client with interim drafts and presentations and gets organizational buy-in
Consultant delivers written business plan to client (largely same as before)
Consultant invoices $250,000
Client is very happy and ends up getting multimillion dollar business moving forward through Board and project launched.

Vanilla business plan $40,000. Client buy-in … priceless.

June 12, 2007

Interesting Observation That Project Management Is Something You Won’t Learn In Business School

First saw this post at Virginia Postrel’s site. The originally referenced post is by her other half, Dr. Steven Postrel here. Dr. Postrel writes:

A peculiar fact about business schools (at least in the USA) is that project management is not part of the regular MBA curriculum. Why is this peculiar? Only because a huge percentage of the work managers do is organized into projects, the success or failure of strategies often rests on the quality of execution of projects, and many of the principles and techniques of good project management are not immediately obvious. But hey, if anyone needs to know about this trivial stuff they can always go to a two-day workshop and get a certificate (probably from an engineering department). Or learn it on the job, which in this context often means screwing things up and trying to guess what you did wrong.

I guess on the one hand, I would agree that core management "science" topics (a bucket in which project management perhaps fits into) should be covered in business schools. That said, similar to a somewhat controversial post I wrote here on ethics courses in business schools, my perspective (from the vantage point of an MBA alum rolling back time and putting himself in an MBA student’s shoes) would be that I would not have wanted to shovel out top dollar for that type of course as a customer of the business school product. Project management is a knowledge base and skill set that many people pick up on the job, regardless of whether effectiveness of process, tools, and outcomes are measured systematically. At least I would not have wanted to pay for a project management course in a naked form. The topic could be combined with some other product, such as a product development/management, consulting methods, change management, operations, or governance course. Although I am clearly biased, I think it could play well in a consulting course, especially since projects and engagements are related (but different animals).

May 30, 2007

Where The Engagement Manager Position Embodies The Essence of Management Consulting

Between different consulting firms and practices, the job responsibilities and experience levels of engagement managers vary widely, but there is one characteristic of the position that I like because it captures the essence of management consulting better than do characteristics of other typical consulting positions (e.g., principal, partner, director, associate, manager). By understanding the central function of "engagement management", one can better understand the essence of management consulting.

Engagement managers own the problem statement from the perspective of the customer, and thus, have the responsibilities to ensure that consulting team both structures the problem solving methodology correctly and executes on the problem solving methodology.

Thus as an example, a problem statement may be to help figure out whether a client should enter a wireless business, identify under what circumstances it makes sense, define the strategy and plan for how it should be done, and get cross-functional buy-in from the management team and Board of Directors. In this case, the engagement manager may need to work with the consulting team to synthesize primary and secondary marketing research from end users and distributors, construct financial analyses, develop technology scenarios and architectures, conduct client workshops on various subjects to gain insights and share best practice perspectives, perform gap analyses between present methods of operations and desired future states, or perform competitive analyses and forecasting.

Another problem statement might be, "figure out the root cause of declining customer satisfaction and fix it because my internal management team is giving me mixed messages". Yet another one might be, "how do I transform my business from doing lots of low margin X to doing more high margin Y". (As a quick digression, one should note that setting up the problem statement properly is very key to selling consulting engagements and solving them – do not take it for granted that the problem statement is articulated properly).

In essence, the role of the engagement manager is to help the client to solving their problems by synthesizing the work of smart people and subject matter experts in different functions and areas from throughout the firm.

In closing, I find that people frequently confuse the role of project managers with that of engagement managers. There are definitely some overlapping functions, but the essence of project management is more to ensure that things are accomplished on time, on budget, and according to customer specifications. On the other hand, the role of the engagement manager is to own the client problem statement as if it were their own. At risk of sounding like I am diminishing the importance of the function, project management becomes more of an execution detail in the greater scheme of things.

May 16, 2007

Thoughts On Job Changes And Job Interviews

There are many variations on interviewing people, but practically across all methods I have used whether case study or more traditional "walk me through your resume" style, I find myself examining two areas very closely. I don’t know if they match up with other interviewers’ experiences, but in any case here are the two areas:

Has the person succeeded in the past with skills and responsibilities that are needed for this job, and how many degrees of separation are there between the old job and the new job? For example, a person that needs both sales and consulting skills for a new job and comes from a sales background may only have one (potentially large) degree of separation from a new job. On the other hand, someone that has performed sales in one job and consulting in a separate job, well in that case, the degrees of separation may be viewed as smaller. It may not be too hard for the interviewer to envision the person being able to handle a new job that incorporates both functions. On the other hand, someone that has a background in R&D only, well there may be at least two degrees of separation from the new job because that person may neither have sales, consulting, nor extensive customer-facing experience.

Just because someone has greater degrees of separation from the job they are applying for does not mean that they should be precluded from being hired. However, when that person is selling me on whether they are appropriate for the job, they need to recognize that they may need to either sell me on other skills that I value or try to frame their background in such a way so that the degrees of separation seem as small as possible. Drawing similarities between work done in the past with work needed for the new job is one potential way of doing this (e.g., "I performed competitive analysis of product offerings as a product manager – these types of tasks likely share a number of similarities with competitive analysis performed by consultants").

As another approach, some people may want to view career changes as a continuum. If the degrees of separation for one job change are too large, then perhaps that person should seek an immediate job position that is closer. Such a step may make it easier to change to the other job at a later point in time.

What is the overall career path that this person is seeking? It is nice to see some logic behind why a person changed jobs, in a large part to figure out whether the new job fits into a logical pattern that is aligned with both the candidate and company (hiring people can be an expensive proposition and mistakes are not good). Although somewhat of a contradiction to my first point above where I like to see how a person’s past experiences can map into those required for a new job, I am not a big fan of functional resumes that organize a person’s job experiences into skill clusters but that cut across individual jobs and timeframes such that chronology is convoluted. I have seen some people use this resume style to grab people’s attention, but I think there are better ways of driving home the point of skill match while still preserving the importance of chronology of job experiences. One method that I prefer to see is a one-line blurb that paints a picture of how one’s past experiences together match a new job’s requirements in a deft way. For example, the blurb might be "experienced sales executive and consultant seeking consulting practice leadership role" or "experienced telecom product line manager seeking wireless strategy consultant role".

In closing, I will say that have deviated from these two frames in some circumstances because there are blind spots. For example, it is possible to simply wind up finding someone that is energetic and can excel at the job. Some people may simply want it enough. In these cases, I may prefer to set up some sort of trial environment, inspect past deliverables/work products, and/or do deeper digging with background checks (e.g., checking customer references).

May 9, 2007

On “Busyness” In An Increasingly Global And Technology-Oriented World

It’s results that matter – not activities.

That statement encapsulates a "widely-held" management perspective that managers should evaluate workers based on the effectiveness of output produced and not by how much they are working. But is it such a widely-held belief? Dr. Andrew McAfee writes in an older post (and in the context of E2.0 technologies such as blogs, wikis, etc.):

Companies that are full of knowledge workers and that have built cultures that value busyness face a potentially sharp dilemma when it comes to E2.0. These companies stand to benefit a great deal if they can build emergent platforms for collaboration, information sharing, and knowledge creation. But they may be in a particularly bad position to build such platforms not because potential contributors are too busy, but because they don’t want to be seen as not busy enough.

Dr. McAfee’s post made me back up and think more generally about busyness and cases such as the following:

where managers use instant messaging and presence to monitor whether employees are at their computers (as a proxy for work activity)
how those in Western cultures may tend view someone just sitting at their desk and thinking as being lazy and unproductive whereas those in Eastern cultures may potentially view such people as being productive
where consultants or analysts generate tons of paper or analyses (and which may vary by geography), but fail to tie things together into a set of cohesive key learnings or recommendations
how some workaholics may criticize or think less of the Levis 501 worker types (those that line up at 5:00pm and leave at 5:01pm)
where salespeople are viewed as wasting their time by sending cute emails to people or talking constantly about non-work matters with colleagues in their network

So I dunno. It seems plausible that busyness might be valued both to the detriment of productivity and with insufficient respect for technology limitations and global cultures. Are times and contexts changing?

May 2, 2007

Professional Services and Consulting Sales

Ford Harding has some of the best sales books I have ever seen for those in professional services and consulting. I find that many other books in the marketplace focus either too much on product-oriented businesses or sales attitude to the exclusion of understanding why certain sales and marketing processes work for some business situations but not for others.

Ford’s books are especially a must-read for management consultants with traditional firms and independents. Ford recently started a blog, and he’s got an excellent post on cross markets and cross selling here.

May 2, 2007

Article On Wealth, Income, and IQ

Folks may have seen this already, but I saw this article in The Times while on assignment in London last week. My very loose takeaways at the time were that that IQ and income are somewhat correlated but that IQ and wealth are not (may need to check out links below and trace academic paper[s] to find the precise statistical findings). Also interesting was this piece of text from The Times article:

Most of the richest people in Britain, for example, are not salaried, but rather have amassed their fortunes as entrepreneurs or by inheritance.

Related posts: Paul Kedrosky via Paul Brown hat tip.

April 30, 2007

An Illustration Of Where Clients Look To Management Consultants For Value-Add: Quantitative Analysis and Polish

I’ve seen a number of posts around the internet that question the value of management consultants and really beg the question of in what situations can consultants add value better than managers within a company. Rather than answer that broad question, I thought that I would take an opportunity to illustrate an area where I have seen a lot of clients get value and where they would have struggled to structure the analysis given the resources they had available. The gap area is quantitative analysis.

Such a gap is often related to organizational structure. Companies often organize themselves to produce products and services efficiently. One company may be organized to produce PCs at the lowest cost while another may provide construction services with high customer satisfaction rates. Such companies may not always be optimized for solving specific problems related to entering new lines of business, making strategic shifts, etc. Additionally, in many companies there is a limited number of either finance people, financially-trained managers in non-financial roles, project-based financial analysts, database analysts, or statistics specialists. And in cases where such skilled people are more numerous, often they are either unavailable or essentially unavailable to focus on solving specific problems raised by the business.

Management consulting firms often have a lot of financial and numerically-trained people – it would not be unusual for every consultant assigned to a project to have in-depth quantitative skills. At risk of sounding like I am drinking my own Kool Aid, some gap-plugging and value-add consulting exampes I have seen include:

providing not only an qualitative assessment of offering a new set of telecom services but also a quantitative assessment of how much shareholder value is built by offering the services (e.g., NPV analysis) and a quantitative rank ordering of cost areas that affect each service (e.g., NPV waterfall analysis)
constructing a business plan to enter a new market and also providing full financial statement benchmarking against publically available financial statements of existing pure players and multiplayers within the industry to shed light on the business economics required to succeed (or fail) in the current world
providing both a qualitative assessment of why backoffice clearinghouse started to slip on their service level agreements with customers and a quantitative analysis of how more than 70% of the problem statistically had to do with Little’s Law in operations where increases in inventory mapped directly into average cycle time (and then showing how the components of operations throughput failed and could be made more fault-tolerant for the future)
providing a operations process flow for renegotiating commercial real estate properties and also a per property financial analysis template coupled to a real estate database to identify the most important negotiating parameters and the money at stake for each parameter.

So I guess my observation would be that the areas of financial and numerical analysis are commonly recurring patterns where consultants provide value-add (or at least polish and high-touch) to solving client problems. Often the quantitative analysis goes even one step further, e.g., to help the client build committment and resolve to either enter the new business, take on the development project, or move on to something else with no regrets.