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  • Consulting (and a bit of politics)

    Posted by Carl from Chicago on January 5th, 2008 (All posts by )

    Over at LITGM we all have political beliefs but we generally don’t talk about politics unless we have something unique to say because, well, it’s already “done to death” elsewhere. With Mitt Romney, however, I do have an insight.

    The Wall Street Journal recently described Romney as “a 60 year old uber-management consultant” who also has an investment management background. Unlike the detailed machinations of politics, management consulting and investment banking is something that I know stone-cold.

    And while Mr. Romney was caught flat-footed that his well funded and organized campaign was beaten by Mike Huckabee in the state of Iowa, I could have told you this right away. Why?

    BECAUSE EVERYONE HATES CONSULTANTS

    Like most of my personal insights, this didn’t come from some sort of laboratory setting or deep research. I was a consultant for over a decade, at probably more than 100 companies, working for a variety of consulting firms. When I started out in the consulting business, I was pretty cocky and lackadaisical in building relationships with client personnel (as a staff person). The traditional consulting model is as follows:

    1) research the problem
    2) write recommendations
    3) let someone else implement the recommendations

    Under this model, consulting firms hire smart people with academic (MBA) type backgrounds that apply lessons learned (generally from case studies, since most consultants don’t have a lot of actual operating or management experience) from other companies or circumstances to the current client that is paying the bills. The consultants do a lot of financial research and build nice graphs comparing market performance against competitors, and then they hit the ground at the client, gathering data and conducting interviews, hilariously spoofed in “Office Space” when the “Two Bobs” attempt to determine just what the employees of that firm did to fill their days.

    The consulting (and accounting) firms sometimes trained staff on a bit of etiquette (I remember being surprised that gazpacho soup was served cold) but by and large it was all methods and tools for efficiently documenting and organizing conclusions. You went to the client site, did some research, conducted some interviews, slaved over your power point presentation (if I told you the hours wasted on “harvey balls” and power point minutiae you wouldn’t believe me) and then presented the results to the client.

    One thing that was mainly lost was the “human element” – people were cogs on the way to a solution, or merely actors as divisions were re-organized or spun off. Since most of consulting was about systems, financials, and operations, people are a by-product of these processes and methods, and weren’t regarded (in reality) as a key indicator of the ultimate success or failure of a company or division.

    While the consulting companies showed up and went about their business, the actual staff people that sat right next to the consultants seethed. These people weren’t stupid; in fact a lot of the “ideas” that the consultants had were the same ideas that were percolating in their heads, but no one was listening to them (or, more likely, no one ever asked). The consultants wore sharp clothes (myself excepted) and went out to fancy restaurants after their “work” of creating excel models and detailed power point diagrams was completed.

    After a while it dawned on me that in fact many of these staff people had good ideas and there was some logic to the way they worked. Consultants love to “blow up” processes and value continuity at zero, but in fact there is a lot of value in the web of interpersonal relationships that allow communications to flow and work to get done. Our haughty manner and style weren’t doing us any favors, and the fact that new, smarmy staff people who often make more money than the clients in our midst were pissing off the staff people was recognized as a liability.

    My orientation for new staff people told them this explicitly – the staff people hate you, so be polite, respectful, and don’t “feed the fire”. Often the staff people will get over their initial and instinctive hatred and view you merely as a cog of a different wheel, which is what you really are, since most consulting engagements were really to justify decisions that were already made and provide someone (other than management) to blame. Or if you were there to build a system or process that would be used when you left, getting the client personnel on board would increase the (extremely low) odds that the resulting “deliverable” wouldn’t either gather dust or be killed soon after by the next passing-by consulting firm.

    Romney obviously never “got it” that people hate him. He doesn’t show much empathy for those around him, while his competitors often don’t have anything but empathy. Romney is a “technocrat”, and this goes down well in Massachusetts because 1/2 the state either works at the university, for government, or is a technocrat themselves, but this dies about as fast as Dukakis in a tank-helmet in the rest of the country.

    So that concludes this detour into politics, except to say that we all ought to visit this museum below if Huckabee really turns out to be the man.

    All right, back to the politics-free blog…

    Cross posted at LIGTM

     

    12 Responses to “Consulting (and a bit of politics)”

    1. Jonathan Says:

      I think that you are right about Romney. But why put “technocrat” in quotes? A technocrat is exactly what he is.

    2. Anonymous Says:

      Good point on technocrat. Is that a real word? I thought it was an unofficial word… but I guess it is in wikipedia, so it must be true :)

    3. Carl from Chicago Says:

      Whoops that was me above forgot to sign in on my other PC…

    4. Jonathan Says:

      It’s an old and established word that fits in this case. When Romney is asked questions he usually gives process answers rather than ideological answers, and when he gives ideological answers he often comes across as phony, at least to me. The technocrat label has a negative connotation, and it’s a bit unfair to Romney, who is obviously very able in many ways, but it also has enough truth to stick.

    5. Shannon Love Says:

      …since most consulting engagements were really to justify decisions that were already made and provide someone (other than management) to blame.

      I have long wondered if the use of oracles in many different cultures arose to solve just this sort of political problem. When faced with logjam in the decision process where one party or the other does not want to give ground or accept responsibility, blaming the ultimate decision on a the random utterances of an oracle lets everyone save face.

      Consultants let us do the same thing in modern world. One management faction or level can’t concede that another faction or level has a good idea without losing face so they bring in the consultant to provide the idea from the outside.

    6. Carl from Chicago Says:

      Good idea for a post on consulting motivation some time. I think that your view of human nature is too charitable… consulting ideas aren’t necessarily good ideas, they are usually execution ideas that fill the void of “doing nothing”. When a new management team comes in, change is inevitable, whether warranted or not, and consultants are often the ‘hatchet men’ doing the dirty work.

    7. Lexington Green Says:

      “…there is a lot of value in the web of interpersonal relationships that allow communications to flow and work to get done.”

      I would make a wild-ass guess that MOST of the value in most firms consists of precisely this web. It is the difference between a real, living, human marketplace or organization and the Soviet Union. Hayek would tell us that this is the only way to take advantage of local knowledge. Ronald Coase would tell us this is the reason you have rules in the first place. Peter Drucker would probably also agree.

      We have replicated many mini-me USSRs within our supposedly private economy. This seems to occur when someone with a goal other than profitability tries to actually enforce the cookie-cutter model in place of the informality that allows actual work to be accomplished. These non-profit-related goals are typically things like ideological conformity, promotion of minorities or avoidance of regulatory or litigation problems as a predominant concern. Law firms are among the worst offenders, from what I have seen.

      On the main point, that Romney is a technocrat, that is certainly true. It is also true that most voters do not like or trust such people. Huckabee’s quip that voters prefer someone who looks like the guy you work with rather than the guy who laid you off is funny and astute.

      The idea that Dukakis and Romney are two flavors of the same product is interesting and accurate, too.

      All that said, I like Romney at least as much as anyone else in the race.

    8. joseph hill Says:

      Some of my best friends are consultants but I would not want my daughter to marry one.

    9. david foster Says:

      This relates to the “pulpit style vs powerpoint style” which I linked a couple of posts down.

      In his novel That Hideous Strength, C S Lewis described his protagonist, a sociologist, as follows:

      “..his education had had the curious effect of making things that he read and wrote more real to him than the things he saw. Statistics about agricultural laboureres were the substance: any real ditcher, ploughman, or farmer’s boy, was the shadow…he had a great reluctance, in his work, to ever use such words as “man” or “woman.” He preferred to write about “vocational groups,” “elements,” “classes,” and “populations”: for, in his own way, he believed as firmly as any mystic in the superior reality of the things that are not seen.””

      This kind of abstractification (if that’s a word) is by no means limited to academia, although it may be worst there. It is also increasingly effecting business.

      See my posts on Management Mentalities and The Dictatorship of Theory, here.

    10. Robert Schwartz Says:

      [$ubscription]
      “Iowa Touches Off a Free-for-All: Romney’s Best-Laid Plans Mugged by Political Realities” by Monica Langley in the Wall Street Journal on January 5, 2008 at Page A1:

      MERRIMACK, N.H. — To get a feel for why Mitt Romney took a drubbing in Iowa Thursday night, consider the reception he got from a little girl in the next battleground state, New Hampshire.

      At a recent “Ask Mitt Anything” night here, a nine-year-old girl asked the Republican candidate what is the first thing he will do as president. “I will build the right team,” Mr. Romney replied matter-of-factly. “I tend to be a person driven by data and analysis, not just what’s political.”

      The girl looked at him blankly.

      The response was vintage Romney — the 60-year-old über-management consultant who achieved front-runner status by planning and plotting details of his presidential bid, from PowerPoint presentations to performance benchmarks. Now, as he tries to close the biggest sale of his life, Mr. Romney’s carefully-crafted “operating plan” is under siege.

    11. Mitch Townsend Says:

      Romney is an interesting contrast to Reagan. Reagan evaluated things in terms of how they furthered his central goals: to get government out of our hair and the Soviet Union into the dumpster. He was not especially interested in process (see Iran-Contra), and often gave other politicians the fits by going outside the normal process to appeal directly to the people. Romney is all about process. He prided himself on being able to work with a veto-proof state legislature, but there has been no overarching theme to his administration. About all you could say is that he provided some adult supervision to the lunatics on Beacon Hill.

    12. John Jay Says:

      …since most consulting engagements were really to justify decisions that were already made and provide someone (other than management) to blame.

      Exactly. So I would modify your process outline (based on my own experience in a Fortune 100 company trying to actually excute the happy horse s*$t that consultants spew out) as follows:

      1) find out what senior management wants to do
      2) research the problem
      3) figure out that two months is far too short a time to come up to speed on a complex subject
      4) pump experienced company staff for knowledge
      5) write a doorstop-sized report by repackaging staff knowledge
      6) ignore the staff knowledge when making the recommendations so that the information in the body of the report says one thing to the creaful reader while the written recommendations actually correspond to #1 above (in rare instances the two agree, but not often)
      7) don’t credit any of the internal sources used in the document
      8) let the staff whose ideas they plagiarized implement the recommendations

      Can you tell I really hate consultants? All you have to do to raise my blood pressure is mention the words “McKinsey” or “Boston Consuting Group”.