I Am a Cat That Knows Behavioral Economics

Information Reframing: Which is more appealing? A black cat with a white belly or…
…a white belly with a black cat?
Active Choice: Would you rather prepare for your PhD viva or pet me?
Choice Overload: Do you find it difficult to choose given all of these books?
Behavior and Technology: Daniel Kahneman intimates that technology may eventually be better than humans at decision making, so I am going to be wary of this robot for cat welfare worldwide.

Repost Which Explains Management Consulting Using Layman’s Terms

This is a repost from an answer I wrote a couple of years ago on Quora.

I usually fail miserably at explaining this for some reason.

Probably the most common definition out there is that management consultants are like doctors for companies (instead of doctors for people).

This analogy probably works for most cases. However, in the spirit of consulting analogies used by guru David Maister, there are probably sub-analogies. For example, there are some management consultants that are more specialized like brain surgeons. Brain surgeons work directly with patients, but possibly for shorter periods of time and using more specialized skills (and hence, brain surgeons charge higher rates). There may also be management consultants that operate more like pharmacists. In that regard, they may be more in the backoffice doing specialized work, interacting with patients less frequently.

Where the doctor analogy doesn’t always quite sit with me is that I usually think of going to the doctor either when something is wrong or for maintenance purposes. While it is true that a large bulk of consulting is about fixing company problems (e.g., unprofitable company, poor customer service, divisions not working together well, technology systems a mess), there are also management consultants that are more like life coaches or entrepreneurial partners that help with opportunities. These management consultants are not fixing things like doctors do. Instead they are helping companies build new capabilities (e.g., new line of business, new product) like a personal trainer helps a person develop more strength or cardio capacity.

Will Hiring Happiness Consultants Ever Become a Trend in Big Companies?

This post is based on a question that I answered previously on Quora.

I’m not sure it will become a big thing at companies, but here are some observations that could feed its growth or at least support a niche market:

  • The business schools (particularly in the behavioral science areas) have increasingly added courses that incorporate the science of happiness, and the b-schools feed consulting companies and increasingly entrepreneurial endeavors. Here’s an example of an applied happiness course at the UCLA Anderson School of Management: If You Want to Be Happy for the Rest of Your Life, Optimize It with Scientific Design
  • Addressing areas like financial wellbeing, connections to overall wellbeing, and antecedents to both have started to spread into organizations whether in thought leadership or applied settings. If happiness efforts are tied into mainstream issues related to HR, marketing, or product design, then it might be able to ride on familiar value propositions where consulting engagements could be justified. For example, think about various “random acts of kindness” campaigns that some companies have run (some better, some worse).
  • There appears to be a growing generation of people who are concerned about excessive materialism and consumerism. Leveraging the science of happiness could potentially be a good ingredient to capitalize on. Innovators will figure out how to provide better customer experiences and products to these segments and take some share away from incumbents.

Nudging Democratized: A Guide to Applying Behavioral Science

Inside Nudging has been re-released as a special edition book published by The Decision Lab, entitled Nudging Democratized: A Guide to Applying Behavioral Science. Many thanks to my brilliant co-author, Andrew Lewis, for collaborating with me on this release. Also, special thanks to Sekoul Krastev and Dan Pilat at The Decision Lab for making the publication possible and keeping things moving on this project.

Podcast Interview on 401(k) Plans and Behavioral Finance Trends

Thanks to Rick Unser for having me recently on his 401(k) Fridays podcast. This interview is geared toward defined contribution plan sponsors and those closely related with this segment of the market (e.g., advisors, consultants, recordkeepers, investment only). I do draw from some insights and activity that is occurring in other areas of the financial services market (e.g., retirement income, wealth management). The podcast may be found at:

Apple Podcasts – https://apple.co/2EAsw5J
GooglePlay – http://bit.ly/2Hfsgfa
Stitcher – http://bit.ly/2Uj08eT

Additionally, some references that I allude to on the podcast which may be of interest to folks include the following:

Do Consulting Firms Rely On Hiring Salespeople to Sell Work?

Many consulting firms (especially management consulting firms) rely on prior consultants in terms of selling work. Why? Mostly it is because people are the product. In consulting sales, you are selling yourself and your team. More specifically, you are affirming the problem statement, the problem-solving approach, and your team’s experience with solving similar (or comparable) problems in comparable situations. It is hard for external, non-consultant salespeople to do this.

Suppose the problem statement is to develop a new product. People who have experience in the relevant consulting area will know how to refine unstructured problem statements like this, design an engagement to solve the problem, and get the right people staffed on the project. Hiring people from the outside to sell unstructured consulting work (say professional salespeople who do not have consulting experience) may not work very well, although success of this type of approach usually depends on the type of work. For example, some large professional services firms do have more dedicated business development people in cases when the realm of consulting is more focused (e.g., HR consulting, accounting) and solutions are more regular, common, or repeatable.

In summary, to sell many types of consulting services (not all), one often needs to know how to actually do consulting work. That tends to be the primary reason why consultants sell work and not salespeople brought in from the outside. A corollary to this is that partners in consulting firm will often have to do some minimum amount of consulting work and not just sell services; consultants need some continuing involvement with field work to stay fresh and be able to sell.