BCG: Atlas of Strategy Traps

Much more graphical.  Take a look at Boston Consulting Group’s new website here – the design is more graphical, interactive, and actually. . . fun. Of the big 3 consulting firms, they are the first to step away from the standard menu-driven, list of solutions and industries. Their old website was very staid, but this is something different and fresh.

BCG front page 1

BCG front page 2

BCG front page 6

BCG front page 3

Strategy Traps  – On the right hand side of the front page, there is a link called Perspectives.  This takes you to a section called an Atlas of Strategy Traps here which takes you through the 10 different strategy traps, but using history and anecdotes:

  1. Definition of the options space
    1. Backyard exploration – Sticking to the options you already know
    2. Combing the ocean – Defining the option space too broadly
  2. Calibration of exploration
    1. Trapped in the past – Exploiting the same option over and over again
    2. Perpetual search – Looking for new options without ever adequately exploiting them
  3. Consideration of Available Resources
    1. Misjudged harshness – Not considering the cost of exploration
    2. Unleveraged resources – Missing opportunities unnecessarily
  4. Investing in Options
    1. Drop in the ocean – Big goals and small incremental investments
    2. Risking the ship – Always going for the big push
  5. Learning from the environment
    1. Fixed Itinerary – Never adapting your methods
    2. Forgetful wanderer – Always following the latest lead

BCG - Strategy Traps

Telling a story – Consulting is about telling stories. BCG (known for their creativity, dating back to Bruce Henderson days) tells strategy stories using historical figures and recent business examples to craft their arguments:

1b. Combing the Ocean here. BCG tells the story of Alexander the Great and how his 11 year campaigned created a huge empire, that eventually collapsed a mere 3 years after his death. The business case is of Danone (yes, yogurt) and how they smartly culled their portfolio of non-core businesses and stopped “combing the ocean” and applied their efforts in a smarter way.

BCG - Combing the Ocean

2a. Trapped in the past here. Apparently, “Big Alex” MacDonald was successful gold prospector and investor who owned 75 mines at the peak of the California Gold Rush. He kept “doubling down” on his investment even though most of the gold had been discovered.  He was trapped in the past, and died almost penniless.

The modern day analogy may be the global pharmaceutical industry which has suffered from diminishing returns on research productivity; in short, they don’t have any blockbuster drug discoveries. Question: is pharma trapped in the past?

BCG Big Alex

5b. Forgetful wanderer here – Francisco Vazquez de Coronado, a Spanish explorer, was looking for the 7 cities of gold in the 1500s in present-day southwest United States. He followed so many different leads, rumors, twists-and-turns that he ended up in Kansas with nothing to show for it.  The analogy made is for the dot-com bust of 2000.

BCG Coronado

Sirens and Lighthouses Like any good consultant, there are best practices and leading indicators to help steer you to the right path.  They poetically describe these as Sirens (dangerous and beautiful creatures that would lure sailors to their death) and Lighthouses to guide your way safely.

BCG Siens and Lighthouses

Kudos to BCG – The way they have integrated design, infographics, storytelling, and research makes this content super-memorable and engaging, at least for management geeks like me. Will tool around the BCG website more – but it’s a sunny Sunday afternoon here – going for a 6 mile walk with my wife.  Be good.

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Consultant’s or Mechanic’s Motto?

Saw this sign at the car mechanic. It covered an entire wall at the place where I changed the oil on my car. It was about 10 feet tall.  Big talk on a big wall.

If this the mechanic holds for himself, shouldn’t it be the minimum standard for us professionals – who are billing at $250-$500 an hour?  Look and you tell me. . .

Integrity. Of course. Cheating clients is a fools errand. You are poisoning the well you are drinking from. Even if no one knows, you will know.  Be a professional.

Friendliness. Yes.  We are change agents. People like us, and give us a chance to build a case, persuade and lead them. You have to be likable.

Pride of workmanship, quality. Yes. Your work is a calling card. It’s your face. The greatest compliment is when people use/re-use your work.  Make it great.

Trust, honesty, respect. It’s a relationship business. I have met a few partners who have built their entire career on successful client relationship.

Teamwork. No question. Teaming among consultants and clients.

Continuous improvement. This is bread-and-butter DMAIC process for consultants.

FROM COMMENTS: Benjamin by Tweet brought up this great 5min podcast here from the Financial Times on how ineffective “values” statements can be for a few reasons:

  • No one believes you if it “self-describe” how great you are
  • Ironically, most companies list the same values (respect, innovation)
  • Most of your own employees cannot recite your value statements
  • It only takes a VW scandal to show how your SUSTAINABILITY value is bunk

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Consulting week recap in 16 photos

Busy week. Two projects and alternate travel today to the west coast.  Good times.

Guns and Roses and Queen on Pandora while waiting for security. Rewarded myself with Nutella  when I got to my gate.
Sunday travel for client presentation on Monday. Room service – wings and a negro modelo beer. Went to the parking lot to see the lunar super moon eclipse. Apparently we had a visiting sports team in our hotel.  Or, they think I am famous.

Also, check out the ties they have for sale at the hotel store – guess that is an emergency item too.

Great beer coaster at the local pub.  The life of a project graphic is  cynical and true.

The green apples and potato chips were left overs from a big internal meeting.  Seemed like a waste, so gave it to a local team member to take home.

 Went to JFK.   Dropped off a letter – the Marriott was good enough to give me an envelope with postage.  Lots of tchotchkes with New York on them.

Best 16 podcasts from PLANET MONEY over last 2 years

For anyone who knows me, I am an avid podcast listener.  It is something I will promote to literally everyone I know.   The benefits are enormous:

  • Free entertainment
  • Easier than reading
  • Great learning of a variety of topics
  • Exercises your imagination and listening
  • Focuses your ADHD mind
  • Shows you what great story-telling sounds like
  • Gives you stories to share – makes you more interesting
  • You can SUBSCRIBE and they will be loaded automatically to your phone

Planet Money is one of my favorites.  Here are the best ones from the last years.  Free.

Consultantsmind Planet Money Podcast Logo

  • Salmon Taboo here: Apparently, the Japanese used to not eat raw salmon – until this Swedish guy convinced them it was safe.
  • Scariest Thing in Hollywood here: The production studio that applies strict rules to making low-budget, high-volume movies – like a VC – and makes a fortune.
  • Hard Work is Irrelevant here: Netflix HR – it’s all about outputs, not inputs.
  • Taxi King here: Uber has disrupted the taxi market – this is the guy who is taking a bath on his huge bet on NY taxi medallions.  Uber is killing this guy.
  • Bottom of the Well here:  Messed-up incentives in California is encouraging. farmers to plant water-intensive crops even though there is a 4 year drought.
  • The Chicken Tax here: Weird legacy tax which links an import tax on foreign pick-up trucks with chicken.  Seriously odd.
  • A Rose on Any Other Day here: Roses are popular on Valentine’s day – not because they are the most beautiful – but because they ship well.
  • The Chocolate Curse here: The world is running out of chocolate.
  • When Women Stopped Coding here: Some ideas on why women stopped coding, and the guys took over computer science.
  • Mall of Two Minimum Wages here: Shopping mall that sits in 2 states, and has 2 different minimum wages – in the same damn building.
  • What’s Your Major here: Unsurprisingly, your wage at graduation is more highly correlated to your major than your university.  A lot more correlated.
  • The Real Price of College here: Nominal college prices are skyrocketing, but honestly, few people pay the full price.  Price discrimination at its best.
  • Is a Stradivarius Just a Violin here: Double blind test to see if these legendary instruments really sounds better.  What is your guess?
  • Inside the Credit Card Black Market here: Amazing behind-the-screens reporting in the “dark web” of thieves.  Fascinating and frightening.
  • What Happens When You Just Give Poor People Money here: Self explanatory.
  • The Most (and Least) Lucrative College Majors here: College grads – listen.

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Travel folly: Oh #$^#, this is not my room

Today was a travel day – like most Mondays.  There were two odd things about today.

Good  thing: There was no one sitting next to me on the plane today.  I completely spread out, and put my stuff in the seat next to me.  It felt like business class. #winning.

Consultantsmind - Empty Seat

Bad thing: I left my hotel keys in the room.  After dinner, went to the front desk, told them my name and picked up a set of keys. The front desk gave me 2 keys and wrote down the fateful room #. Went upstairs, clicked into the room. Walked in, noticed it was dark . . .hmm, I remember leaving the lights on.  Keep walking, looking for the light – and I hear some guy groggily making noises, waking up.

“Oh @#^@, am I in the wrong room?”

Oh, yes.  They gave me the keys to the wrong room.  As I scurried back out to the hotel room, I looked back, and in the shadow of light from the hallway . . I could see a pair of sunglasses on the counter (not mine), a pair of black sneakers (not mine).  Uh, there were a lot of things in that room, which were not mine.

Lesson learned:  When you are in your room, use that “latch thing” 

Consultantsmind Door latch

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Consulting tip: don’t read your slides

Last week I was a in a painful 1 hour meeting where the presenter kept reading his slides.  Ouch.  Each page was like a kick to my shins.  Imagine, this is what clients see and feel when you read your PowerPoints.  Boring, and distracting.

Consultantsmind When you Read Your Slides

This is a novice mistake.   The PowerPoint slides are there to help give structure to the narrative, remind you of what to say, and generally provide a visual element to your consulting story-line.  Of course, it should be logically structured.  Of course, it should be neatly assembled and relevant.  Of course, the graphs and data should be legible, cogent, and authoritative.  Of course, your deck should be good.

No, you should not read your slides.

  • People read faster than you can talk
  • It is insulting – as if don’t trust them to read it for themselves
  • Your back will be to the audience, like an awkward human carousel
  • It implies that the words on the screen is all there is. . nothing else
  • Once you start reading 1 slide, I bet you will read them all
  • You should tell stories, not read script

How to fix this bad habit:

  • Make your presentation shorter.  Cut the # of pages in 1/2
  • Ensure each page has 1-2 points only
  • Use graphs to tell the point visually, make it obvious with the analysis
  • Learn PowerPoint English (phrases, not full sentences)
  • Use numbers to drive home the point
  • Use titles to say something. .  not just chapter headers (introduction, analysis, interviews, observations, best practices).  that is BORING, and you are wasting the most valuable visual real estate on the page.  USE the titles effectively

If you are consultant who charges $250-$500 an hour, you are a pro.  You know your stuff. The client expects this.  What would you think of an actor reading his script on TV?  What would you think of a chef who repeatedly looks at the recipe?  What would you think of a pharmacist who kept looking up the answers to your pharmaceutical questions online?  Put in your 10,000 hours.  Don’t read your slides.

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McKinsey’s managing partner interview – failing to make partner twice

For those interested in management consulting – Dominic Barton is a name you will recognize – the managing partner at McKinsey & Company.  Basically the chief of the chief consulting firm.  This interview with him is a 1,500 word read, but worth it here by Knowledge@Wharton, the business school’s magazine.

Stay humble and learn.  Barton’s first assignment was to “determine how many pieces of KFC should go in a lunch box”.  If the global head of McKinsey’s first assignment was optimizing how much fried chicken goes in a box, your project cannot be that bad.

Consultantsmind KFC

Made partner after 3 tries. Barton failed twice at making partner. The first time, the partnership told him to “be tough and go at it”. The second time they questioned whether he was a good problem solver. In his own words, “This is like telling someone in the church that they’re an evil bastard.”

Hustle. Hustle.  Barton calls himself a student of leadership, and it only makes sense. Apparently, he has met with 2 government officials or CEOs a day, for the last six years.  WHAT?  Yes, that is crazy.  If my math is right, uh, 3,000 leaders (assuming business days only, thanks Marina).

It’s about people.  Barton notes that when CEOs reflect on their careers, they talk about how they could have spent more time focused on people.  People are the key:

They would have “moved faster on people … taken people out faster, moved them up faster and spent more time on people….”

So the questions to you:

  • Are you learning everyday on your projects?
  • Are you complaining that you are doing menial work (counting pieces of chicken)?
  • Did you go after your goal (making partner) 3 times?
  • Are you pushing yourself to meet leaders daily?
  • Are you investing in people – pushing them up / out of your organization?

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I am sorry.

I said this to five different people on Friday. An overly curt email. Late for a meeting. Over-stepping bounds, a little disrespectful of the staffing process. Not bringing an extra copy of a document for signing. Basically, a day of “humble pie”.

My take.  When you are doing good work, important work, moving fast, shaking things up, things will get broken. Did I do any of those things to do harm? No. Was any harm done long term? No. Do I regret some of my actions. Yes, slightly. Am I going to brood on them, no.

I  made 3 of the apologies directly and publically. I will make my rounds on Monday and apologize to 2 more people directly.  Maybe I am superficial, but I find apologizing the fastest, most effective way to move on. I make mistakes. I am sorry.  Let’s trust each other and keep doing good work.

Advice. When you make mistakes (Seth Godin reminds us that we will), just apologize. Simple mistake = simple fix.

As I told a consultant today.   “Take your work seriously, don’t take yourself seriously.” Just say the words. . . Sorry.

Maybe this is zen reflection because I am  blogging from a hammock in a state park.

Can hear the creek babbling, see my wife reading. Blogging from a hammock. I need more afternoons like this. Life is good.

I am not sorry about that.

Brainstorming over dinner – 7 (crazy) business ideas

I really enjoy my consulting work . . .and yet, my friends and I spend time in our rental car rides, and dinners talking about business ideas.  Some of my recent ideas:

  • Customized ironing boards.  Women’s clothing is notoriously difficult to iron, and expensive to dry clean.  What if you can order an iron board that was perfectly tailored to your measurements?  Built to handle the A-line dresses, pleats, and things that make women’s dry cleaning 2-3x more expensive than men’s.
  • LED pricing on grocery store shelves.  If you have ever gone to Wal-Mart at night, you will see them re-stocking supplies and sticking hundreds of manual prices to the shelves.  Why not have a strip of LED where the prices of each item could be changed with a flick of a switch, instead of a printed sticker?
  • Rent-a-pet: Yes, a bit of a sacrilege among pet owners, but this is just the fractionalization of an asset (pet) like ZipCars, NetJets, and VRBO.  Before you get all upset and offended, it kind of exists already here.
  • Elderly companion calls: Another potentially controversial service.  Grandma and grandpa get bored and want to talk.  You don’t want to.  Why can hire a service to call them periodically to chat?  Yes, there are LOTS of potential liability and problem / privacy issues.  Yes, the service already exists here.
  • Food truck app: Ever have trouble finding a food truck? Yes, each have their own twitter and facebook following, but what about a simple app that aggregates and tracks all the food trucks. It takes coordination, but it helps you answer, “Where should we go eat [when the trucks are somewhere different every day?
  • Swimming pool shades:  I have some friends who own swimming pools, but they complain that the summers are so hot that that the pool water is actually too warm to be refreshing.  Why not have reflecting pool shades – like those for cars?
  • Drone sunshades:  Instead of buying an expensive canopy to sit over your patio set, why not have a drone which hovers 300 feet above you and cast a nice shadow over your summer picnic?

Consultantsmind 7 Business Ideas

As Chris Sacca – famous angel, turned venture capitalist – mentioned on a podcast here, there is almost no fear in sharing ideas, because everything takes execution. Also, no surprise – early examples of these services and products exist:

If you take any of these ideas, and get super wealthy, famous, let’s talk.

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What is accounts receivable (AR)? Consultants gotta get paid

Accounts receivable (AR) is what people owe you.  For anyone who has written an invoice or had difficulty getting a client to pay you for your work, you know how awkward and stressful it is wait for the money.  Checking your email, mailbox and bank account to see in clients have paid their bills.  Frustrating.  Why don’t they #$%^@ pay?

  • AR is a reflection of how much work you have done recently
  • AR is a reflection of the quality of the clients you have
  • AR is the lifeblood of your business, your cash still sitting in your client’s pocket

Watch your cashflow.  As I wrote in a previous post, just because you are profitable (revenue – expenses = profits) does not mean you are successful.  You may be making a 30% net profit, but unless you collect from your client – you are doing free work.

No surprise, business is tough.  There are a number of potential issues you could run into which can easily bankrupt the business:

  1. Too much inventory (wrong type, level, timing of consultant hires)
  2. Lagging sales (no new consulting projects)
  3. Slow collections (projects in-flight that are delayed)
  4. Slow cash conversation (clients who are slow to pay)

Consultantsmind Potential Problems

They say that most businesses fail because of poor cash flow management, which completely makes sense to me.  There is a lot of timing needed to find the right “rhythm of business” so that you don’t have too much money going out (accounts payable) before you have the money coming in (accounts receivable).  Yes, the wheel of money starts with you investing in the business, getting people, getting projects, getting started, but unless you finish the wheel – get paid – your business is dead.

So what can we, as consultants do, to prevent this AR problem?

Before the project:

  • Create clear statements of work and proposals that outline the deliverables
  • Negotiate up-front with the client what is included and not included
  • Set expectations as you go, explaining what has been done, and what is left
  • Be careful with contingency or fee-at-risk work; set a clear baseline and measure.  Don’t get caught up in a “no that is not what I meant” later in the project
  • If possible, build a business around trust and referrals.  The more you are working with the type of clients you want, is a sign that you business is on track

During the project

  • Structure interim deliverables for partial payment; don’t wait until the end
  • SEND OUT THE BILL on time; remember most payment terms are 30-60 days AFTER sending out the invoice.  Send out the invoice NOW.
  • Demonstrate results; it’s hard to argue with the bill when you like the work

End of the project

  • Keep the projects rolling; every company has problems – find more problems for you to fix, and get those projects started too; be a sticky consultant, stick around

Consultants – what else are you doing to make sure clients pay their bills?

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