Professor of Practice of Behavioral Economics
See the article over at BusinessWeek. Hat tip to Steve Rubel who comments, "The enterprise is afraid of letting go of the command and control structure."
Those interested in what another leading strategy consulting firm (Bain) is saying about blogs and use by companies may want to refer to my prior post on corporate blogs being added to Bain’s 2007 list of management tools.
Related link: Update On Management Consulting Blogs
Engineering and management consulting share a core aspect in that each discipline tends to be very problem-solving oriented. In engineering, one may be posed the problem of trying to figure out the optimal circuit or filter for removing or minimizing noise from a radio station transmission. There are structured, mathematical ways for doing this. As another example, management consultants may be posed the problem of trying to figure out the market opportunity and business strategy for a company to extend its product line for a portion of a client’s customer base. There are common business methodologies for addressing these types of problems too.
To pick on consulting for a moment, sometimes it’s very tempting to disappear and run off and solve the problem that’s been articulated in the statement of work signed with the client. But I think that it’s also important to have a good client relationship and regular communication structure that enable the problem statement to be adjusted and refined with the client. As an example for some of the engagements I oversee, I ask consulting teams to write down the problem statement in their own words near the beginning of the project (which may sometimes be a list of key questions in paragraph form that the customer has asked plus the objectives of the project) and refine the problem statement to a finer level of detail throughout the project. The end result of these efforts often culminate at the final executive presentation where the consultant can put the refined problem statement as either slide one or two of the slide deck. The problem statement reaffirms the need for the project and consultant.
So while at the beginning of an engagement, a problem statement might be something like, “Purpose of project will be to determine the technology strategy for XYZ”, in the end, the refined problem statement might be “Purpose of the project is to address the following: 1) determine the business attractiveness of A, B, and C services in XYZ market, 2) identify technology options for approaching the market and tradeoffs, 3) perform full financial assessment of options, including worst case/walkaway price for auction PDQ, which is prerequisite for one of the options, and 4) determine optimal business model for approaching market, which includes consideration of leasing and buy/own models with respect to CBA.
By both breaking the problem statement down to a lower level of granularity and repositioning the statement for accuracy, it becomes easier to determine whether the team is solving the right problem and to divide the problem in such a way so as to let numerous big brains attack the pieces.
Although I’m not much into social commentary, I was in part motivated to write this post based on what is going on in Iran with nuclear fuel and the interests of both Iran and the United States. From the perspective of the US (though I’m no expert) it seems as though some have articulated the problem statement as being, “how do we prevent weapons-grade nuclear fuel from getting into the wrong hands?”. Just for argument’s purposes (since this may not be the right problem statement), what if the problem statement was rearticulated to be, “how do we help countries to achieve their nuclear energy goals while preventing weapons-grade nuclear fuel from getting into the wrong hands”? With a refined problem statement, one might think of more tailored approaches for addressing each issue, such as supporting or even funding nuclear energy goals, while requiring monitoring for process control purposes.
The real point of all of this rambling is that rearticulating problem statements can often lead to better outcomes, stimulate creative ideas, and offer opportunities for teams to get around roadblocks.
Update (4/12/07): I wanted to elevate the visibility of an excellent point made below by Michael Stein. He writes “the problem statement is often different for different stakeholders, and to articulate a statement that encompasses the entire picture may be in itself a major step towards a solution.”
Update (6/13/2016): The other day I was just rewatching the movie Moneyball (original book by Michael Lewis). I think these two scenes from the movie are wonderful in terms of illustrating how people can focus on the wrong problem statement and how rearticulating problem statements can trigger new, valuable possibilities:
Note: I was motivated to write the following post based on interacting with a few ex-military people in the UK and getting a sense of their notions of loyalty in business.
In the late-80s, I took a college course on Business Ethics. I remember coming across a characterization of a type of employee that may be close to extinct in this world, the "Company Man" (or Company Woman). This is the type of person that is so dedicated to a firm that they breathe the company mantra, let the company guide both their professional and personal lives, and would fall on a sword to defend the reputation of the company. The reason why this type of employee may have come close to extinct (at least in the US) is in part due to the era of downsizing in corporations. Many companies let devoted employees down by laying them off without warning, without recognition, and without compassion. Some companies backed down from previously protecting their employees (which might have been ok), but then some companies went completely off the other end by being negligent and losing their employees pensions or retirement assets. Yet other companies squandered company resources at the expense of working employees and shareholders. All of these types of things rattled (if not completely shattered) the notion of loyalty from an employee to a company.
I can appreciate the notion of people being loyal to themselves before a company, but I struggle with that simple resolution a bit because I have seen a loyalty voids shatter business relationships. Legal contract asides, here are some areas where a lack of loyalty rubbed me the wrong way:
Whether a person is loyal to the business they work for is one thing, but I think that I have stronger feelings about whether a person should be loyal to others that they work with or that they work directly for. I think that loyalty, at a micro-level, helps to ensure that people are aligned to get actual work done. To me, a "new loyalty" in business lies between loyalty to oneself and loyalty to Big Brother.
A post for a Friday. Some things I really like about music are how different styles, multiple levels of thinking, team dynamics, international influence, art, classics, and musical influences and heroes play key roles. As much time as I focus on business, I sometimes find it hard to find the level of color, intensity, and beauty in the commercial world that I find in music. FWIW – Here are some really cool music works that I’ve discovered in the past year:
I am often asked by new consultants to describe some of the tangible instruments (as separate from methodologies like Five Forces, SWOT, 3-4Cs/STP/4Ps, Growth Share Matrix, etc.) that folks should become familiar with as core to practicing management consulting. Based on my personal experience in professional services, traditional consulting, independent, and vendor consulting environments, here’s a list of must-haves for regular consultants:
Somewhat annecdotally, I have observed that many folks that get into consulting and come from strictly corporate environments (without consulting experience) find it initially unnatural to tie all of these elements together over and over again. They also seem less familiar with the concept #8 relative to other items in the list. In any case, I see the list above as consulting bread and butter.
Independent consulting life can be an enviable position to be in. After leaving the consulting industry for a period of time, I returned to consulting life as an independent (for a little over a year). The pros of independent consulting life include more flexible work schedules (relative to traditional consulting firms), challenging work, and control over both what type of work one does and which clients one works for. But there can be some downsides and pressures that what needs to constantly work when working on one’s own. Below I list some of the pressures of working on one’s own (a subset of these reasons were primary factors for me to return to work within a larger firm):
All-in-all, I would say that independent consulting is a tough (albeit rewarding) route. As a general rule, I would probably recommend that only experienced persons and those that have attained the principal-level or higher within a traditional management consulting firm pursue the independent consulting path. The predominant reasons for my perspective here are that these professional milestones can often address or balance out (to some extent) issues related to customer references, size of professional network, and in-depth knowledge of sales processes involving complex services and emotional purchasing behavior.
McKinsey alum Paola Bonomo commented here (thanks, Paola) and points us to a wiki of McKinseyite and McKinsey alum blogs. To set some context, I noticed that she writes in an earlier post:
… many of my eBay colleagues and former colleagues are bloggers. No surprise here: we live and breathe the Web every minute of our lives …
I wonder, though, how many bloggers there are in the community of consultants and alumni from my previous employer, McKinsey. Fewer, I guess, since the Web isn’t the bread and butter of the profession; yet, there are many sharp and opinionated individuals for whom I imagine that hashing out ideas in the public domain would be enormously stimulating …
Although I had mentioned in the past that Accenture Netherland’s had started a blog podium for its employees, I recently discovered that Accenture now has a global corporate blog (apparently started January 23, 2007 after my updated post on management consulting blogs).