Tag Archives: Best Practices

Bad data: 9 reasons clients often have data problems

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No consulting project has perfect data.  In fact, it is usually a little bit like an Easter egg hunt where the team has a good idea where the data eggs might be, but can’t be 100% sure until they really start looking for it.

Most companies have trouble with their data.  While there is a lot of talk of BIG DATA and the revolution it will have in predictive analytics, in reality, many organizations have trouble patching together their SMALL DATA.  I would guess that only 1/3 of companies can can satisfy the consulting team’s data request.

Oddly, lack of data = consulting project.  For a bit of circular logic. . . it is often because the data is difficult to find, that the client has not really solved the problem yet.  As Seth Godin remarked in a blog post about “perfect problems”:

The only problems you have left are the perfect ones. The imperfect ones, the ones with a clearly evident solution, well, if they were important, you’ve solved them already

So, as odd as it sounds. . . consultants need to be thankful that the client’s data is usually a mess.  It means more work, projects, billing and money.

Data collection is often painfully slow.  Even when the location of the data is clear, it is common for the team to spend several days hunting down the right people to get the data.  Consultants often go to the client site just to request (read: pester, nag) the client to give them the data.  Clients could save themselves 5-10% of fees if they would just get the data to the consultants quicker.

Bad Data - Data is SomewhereGood data is hard to find.  In my experience, the larger, the more geographically dispersed, and the older the company = the messier the data.  Using the analogy of data flow like plumbing . . . the larger and older the house, the more it leaks.

Bad Data - 9 Reasons by Data is Bad#1-3. IT needs to update and standardize.  Too often IT only makes tactical repairs and spends their energy and budget just playing catch up.   Too often, clients customize the enterprise resource planning (e.g., SAP, Oracle) to match their process, instead of listening to the systems integrators and stick with best practices.  “Oh, we like to do it our way” is usually code words for messy data down the road.

#4. Sometimes legacy = bad.  Too often there is a resigned exhaustion of existing legacy processes.  “Yes, we do it on paper because we always did it that way.”   “No, I don’t have it written down because I remember it all.”  Those are all signs of trouble and poor planning. There is always someone – often with white hair and a beard – who knows how things really work. Talk about disaster planning: What happens if Al leaves?

#5-7. Time to clean the data.  The customer master (where you list all the key information of your clients) needs to be clean because it is used for billing, accounting, and other customer-relationship activities (e.g., sales calls, marketing direct mail).  Too often these are a bit of a mess.  For example, there will be 4 ways to spell Wal-mart, Wallmart, Walmart, Wall Mart.  With junky data, it is hard to analyze anything.

#8-9. Figure out the roles / responsibilities.  Who’s job is it anyways?  If it is everyone’s job, then in effect, it is no one’s job.  It’s not a good sign when veteran office workers who are uncomfortable using basic excel commands like sort and pivot.  While it seems basic, sometimes real-time analysis is just not valued enough to put into job descriptions and performance reviews.  Inevitably, it is the managers fault.

Data is not just lying around.  For those new to consulting, get ready to start digging for the data. Just some of the crazy examples from my past:

  • On my first consulting project, I spend several late nights alone typing shipping data from paper invoices into an excel spreadsheet
  • Just a few months ago, we consolidated data from 60+ separate emails into one excel.  How can you look at trend data when it is sitting in 60 daily reports?

Ask any analyst, and they will have their own hazing story of collecting data in some manual and crazy way.  As long as companies don’t take the time or the effort to do this, they will continue to pay $$$$ / hour for this mundane task to get done.

Data is a bit of a misnomer because it treats everything the same.  In my mind, there is a progression / hierarchy of the value of information which looks something like this.  It starts as noise, gets organized into data.  That data turns into information as it is structured, cleaned, rearranged, and sorted so it makes some sense.  Analysis takes shape as information is pivoted, correlated, appended, hypothesis-tested.  Insights are really gems and diamonds.  They are rare, valuable, and often very polished.  Only analysis and insights should be presented.Value of Data

Lack of data requires consultant creativity. Sometimes, consultants have to uncover, create, cleanse, triangulate or even create data to answer key questions.  Creativity is needed here.  It is also a great way to “wow” the client.

Creating data is not sketchy or unethical. Some of consulting tools used to find new data include: surveys, interviews, focus groups, workshops, financial comparisons, observations, estimates, simulations, business models, benchmarks, maturity models, and others.  More on surveys in the next post.

Please feel free to add any data war stories you might have. 

Misleading Graph #1: Starbucks Investor Presentation

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Charts can mislead.  In most cases, it’s accidental.  Perhaps someone was over-eager to show good results, or maybe, just did a sloppy job of formatting.  Whatever the cause, it’s bad mojo to put together analyses or charts that mislead.  Here are some bad examples  from Starbucks’ recently investor conference.  You can see all the slides here:

#1.  No axis label.  This is no-no.  A chart without a labeled X&Y axis is like a car without an odometer.  Not a good idea.

Bad graph - no axis

#2. Not drawn to scale.  Below, you can see that Starbucks is comparing its revenue with operating income.   Since the scale is different, the operating income actually looks bigger than revenue.  That ain’t right.

Bad graph - Not drawn to scale3. False or unnecessary comparisons.  Same problem below.  The coffee executives compare US & Canada & Latin America but use different – seemingly random – scales.

The 2012 revenues are shown with red dotted lines.  When you line them up, they look similar in size – when in reality – it should look like the graph at the bottom right.  The US is where the current revenues come from and Latin America is a rounding error.

Bad graph - inaccurate comparisons

Why make the comparison?  There was no reason to compare the US, Canada and Latin America.  They are at different stages of their growth.  Why force the comparison?

Comparing the US and Canada makes sense.  They are both mature markets with similar GDP per headcount and analogous cultures.  Taking the population for the US and Canada here, you can see that the average American and Canadian spends about the same on Starbucks annually.

Starbucks per AmericanAnalyze Latin America by itself or against other emerging markets.  Looking at Latin America over the last 3 years, looks like they went from $76M to $115M to $143M.  Nothing shabby about that.  Why not focus on that story separately.

Clarity is your job.  At the core, a consultant’s job is to drive clarity – through the data, analysis, and presentation.  Anything you do to over-simplify, obfuscate, or muddle the issue is bad.  The client can be confused by themselves – without paying your fees.

Bain & Co: Management tool and trends 2011 survey

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Bain & Co conducts a survey every few years on how executives use management tools.  Unsurprisingly, these are the exact tools that management consultants often use when coaching, prodding, and helping executive think about their business.  If you want to learn more about any of the following 25 management tools, please download the Bain & Co Management Tools and Trends 2011  (67 pages).  Good references.

  • Balanced scorecard
  • Benchmarking
  • Business process re-engineering
  • Change management programs
  • Core competencies
  • Customer relationship management
  • Customer segmentation
  • Decision rights tools
  • Downsizing
  • Enterprise risk management
  • Knowledge management
  • Mergers and acquisitions
  • Mission and vision statements
  • Open innovation
  • Outsourcing
  • Price optimization models
  • Rapid prototyping
  • Satisfaction and loyalty management
  • Scenario and contingency planning
  • Shared service centers
  • Social media programs
  • Strategic alliances
  • Strategic planning
  • Supply chain management
  • Total quality management

Looking at this expansive list, I know that large Fortune 100 companies use all of these management tools.  How could P&G not use supply chain management or pricing optimization?  To me, it is more of a barometer of management trends, fads and perceptions.  Nonetheless, it is useful to read and instructive.  And free.

It is written by Darrell Rigby, a long-time partner at Bain & Co.  He authored a recent book (have not read yet) called Winning in Turbulent Times.  Good interview with him on Harvard Business Review Podcast here.

There is also a 16 page executive brief here.    Some of the takeaways:

  • 89% said that “culture is as important as strategy“
  • 81% said “ability to change” is a competitive advantage
  • 68% said “taking care of customers and employees” should come before shareholders

Bain SurveyFrom the 1,100 executives who responded to the 2011 survey, revenue growth was the #1 priority, followed by customer satisfaction / loyalty.

Bain Survey executive prioritiesLook at the graphic below.  Bain uses a 2×2 matrix to compare the usage of a tool with overall satisfaction .  In the top right box, you can find that strategic planning was commonly used and considered useful.  In contrast, benchmarking was used as often, but not as satisfactory.

Bain MatrixRelated posts:

How consultants interview clients

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This week my team interviewed more than 20 people, everyone from VPs down to the analysts and clerks.  The interviews were a gold mine of insights – especially since we were still in the early days of the project and collecting data.  My throat was killing me, but these interviews helped us get our bearings on the client’s business, the personalities, and the politics.  Every consulting project has interviews and here are my top interviewing tips:

1. Be prepared. It’s no different than if you were going to a job interview for yourself.  Do the research.  Know the audience.  It’s painful to watch a consultant lose credibility when he asks questions that can be answered by the FAQ page of the company’s website:

  • What are the company’s key products, customers, competitors?
  • What is the title, background of the interviewee?
  • Where does the interviewee’s function sit within the larger organization?
  • What the 3 most important events (ERP launch, acquisition) in the last 12 months?

Management consultants usually create interview guides.  It helps the consultant prepare for the interview, but it also forces them to organize their thoughts.  It is usually a simple list of well-organized questions.  It’s good practice for analysts.

2. Build rapport quickly. This is a core skill of any management consultant.  It comes easier to some than others, but the idea is simple – build a connection with the interviewee so he is comfortable opening up and speaking frankly.  It is nothing new.  All the things you would find in How to Win Friends and Influence People, by Dale Carnegie:

  • Be personable and attractive (more on this later)
  • Find a connection (look around the office)
  • Describe the objective of interview
  • Respect the interviewee’s time and space

If this is an area you would like to improve, practice.  Seems odd, but sales and business development people were not all born that way.  It takes a lot of emotional intelligence.  Everyone’s is different, but there is a lot you can learn by watching partners and senior managers.  Be authentic, but inviting.  Be willing to share details about yourself – it is disarming and makes you more human.  Be self-deprecating, when appropriate.

3. Ask open-ended questions.  The first few questions should be open-ended.  Let the interviewee say what she wants to say.  See where the conversation takes you.

  • “Why do you think there has been a problem with XYZ?”
  • “What are some changes you would like to see?”

4. Hone in on the details.  Like a detective, once you hear something promising – either a surprising fact, or confirmation of your hypothesis – ask follow-up questions:

  • “Would long would you say that XYZ process takes you?”
  • “How often does that happen each week?”

For consultants, it is not enough to get a laundry list of problems (client will say, “yeah, I knew that already”).  Nudge the interviewee to give numbers or estimates that provide more detail and context.  If you hear of a report, or presentation that has the information – get a copy of it right then or get it sent by email (perfect time for business cards).

5. Transition between topics.   This is where the art comes in.  Junior analysts have a tendency to run down the interview list, as if they were calling off BINGO numbers.  This can be unnerving to the interviewee, and also a bit dogmatic.  The trick is to create a conversational tone while listening to the interviewee’s answer (while also writing down notes), and also making smooth transitions between the topics:

  • “Sure, that makes sense.  Would you say that XYZ is the main reason for that?”
  • “Has it always been that way?  Has anything changed organizationally?”
  • “Understood.  Does it make sense to take a look at costs next?”

Thinking back to our high-school prep days, my English professor would constantly point out that my essays did not have transitions between the paragraphs.  It is as if I would talk about A, then B, and C. . . but there was no stitching between the topics.

The goal is to stitch together as much of the interview as possible and create a narrative to keep the conversation going.  Refer to things already said in the first half of the interview.  Refer to similar comments made from other interviewees (no names).  If the interviewee feels that you really listened to what they said, you are getting buy-in for your recommendation as you go.   If the interviewee feels like you just stormed in and made them answer 20 questions, you have just created a skeptic, and perhaps an unfriendly.

6. Earn the right to continue with the interview. An interview should be a conversation, not an interrogation.  While it might be slightly more efficient to just blaze down the list of questions, I would argue that the interviewee will get more defensive, and just give you short, one sentence answers.  You will be winning the battle, but not the war.  With each set of questions, your demeanor, confidence, and empathy will determine whether you are earning the right to continue the interview.  This will become quickly apparent by the interviewee.  Either they remain engaged and feel interview was worth the time, or they start to mentally check out (checking their watch, rolling their eyes, tapping their fingers, itching to leave)

Relevance to Case Interviews:This is where many MBAs do poorly in case interviews.  MBAs know the basics of business problems, structure their thinking well, and even can do market sizing (read: # of meter maids in NYC) in their head.   What they do poorly with is keeping the interview conversational and building rapport.

The BCG / Accenture / Bain interviewer is asking herself, could this MBA effectively handle an interview with a super-jaded, war-horse of  interviewee?  How would this kid fare against a 57 year-old who has been doing Materials Management for the last 20 years?  A lot of this has to do with emotional intelligence and keeping the interview conversational.

What if #1: Interviewee is scared.  This happens.  There are all kinds of projects, and sadly, some of them end with organizational changes, layoffs or worse.  It helps to:

  • Confirm that you will be speaking with a lot people, not just him
  • Ensure confidentiality of comments (and be sure to keep your word)
  • “Prime the pump” by offering up some of the comments from other interviews
  • Focus the conversation on the existing process (less on the solution)

What if #2: Interviewee is rude or a jerk.  Here you need to make a determination pretty quickly what you want to get out of the situation.  First, be deferential and offer to re-schedule the appointment (we all have some bad days).  Figure out if it is a credibility issue because she/he thinks all consultants are full of crap – in which case you may need to do some name dropping of the executive sponsor and also refer to projects you have done in the past.   If they are a hater (some exist), then just ask open-ended questions and listen.  Let them vent, and at least you can say that you fielded their opinion.

What if #3: Too many interviewers.  This happened on Tuesday.  There were 4 consultants interviewing 3 people.  In order to keep from tripping over ourselves, and having the conversation go in 12 directions, we had a lead interviewer

What if #4: No more questions to ask. Wrap up the interview, summarize some of the comments, and end early.  Always ask “Is there anything I did not cover, that you might think it relevant to this issue?” It is a freebie question.

What if #5: Cannot remember what was said.  This is why it is critical to write up the interview notes as soon as possible, and have them passed to other people who were in the interview.  They can layer on comments, and hopefully, little detail will be lost.

It’s also a good habit to ask permission to reach out to the interviewee again – if additional questions come up.  Get their business card and don’t hesitate sending a thank you follow up email, if you believe it is appropriate.

What if #6: Not a good place to interview.  No such thing.  I have interviewed people in board rooms, hospital exam rooms, warehouses, airports, and sadly, utility closets.

Consultants are in the business of asking good questions.  We conduct interviews on every project – without fail.  People want to be heard.  It is also a chance to socialize some of the recommendations.  It is like the wisdom of the crowds. . . after hearing the diverse opinions of people through interviews, you will have a better recommendation.

Once, a partner told me, “If you tell the client what they told you, they think you’re brilliant.” Very cynical, but also very true.

Why consultants love best practices

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Management consultants use the phrase “best practices” often.  Perhaps too often. You will see that magical phrase mentioned numerous times in white papers and research on these websites: Boston Consulting Group, Deloitte, PWC and Accenture.  A few pictures that help explain why best practices are so popular with consultants and clients.

Best practices are like good hiking trails. . . Hiking Trail - Consulting blog

. . . they are market-tested:  Many of these best practices have been around for years.  Clients have a sense of comfort that they are following a well-worn path.  You don’t have to read the most recent article in Harvard Business Review to know that the Toyota Management System for lean production still works today.

. . . they are repeatable: Consulting firms work with so many clients that they see what works and what does not.  Clients think they are unique (n=1), but a lot of the back-office functions are more alike than different.  No reason to “re-invent the wheel” on mundane processes.  Better to just follow the trail that is already there.

. . . they save time:  It might not be perfect or holistic, but best practices will get you most of the way there.  Not all clients want to spend the time or the money to dig into the problem.  They want the 80% solution.

Best practices are like powerful telescopes. . .

Telescope - Consulting blog

. . . they appeal to the curious:  Clients want insight into what competitors and other leading companies are doing.  There is a fine line between best practices, benchmarking, competitive intelligence – but the basic conformist tendency is the same: “Show me what other people doing.”

. . . they help you see farther:  Having access to best practices or other “special sauce” positions the management consultant as an expert who can bring new and external insights.  While the client can draw on 10-20 years of personal experience, the consultant can tap into the firm’s collective history (for Trekkie fans, think of the BORG) and dig up example after example of previous client projects on the same topic.

Danger: Best practices can also be like cookie cutters. .  .

Cookie Cutter - Consulting Blog

  • If abused or misunderstood, best practices can become the lazy person’s way to propose a quick, often ill-fitting solution without thinking through the problem
  • Best practices are excellent tools, but you cannot “copy” your way to operational excellence or strategic differentiation.  The most you will get is parity
  • Best practices cannot be simply a cut/paste into an organization.  They do not work without the necessary leadership, culture, resources, IT systems etc. . .
  • Large ERP implementations (read: SAP, Oracle etc) force companies to adopt industry-standard processes.  Whether these are best practices is up for debate\

Photo credit: Kid Cowboy, Flikr creative commons; Pale Side of Insomnia, Flikr, creative commons;

Pauses: A consultant’s public speaking tip

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Good speakers pause.  After they finish one thought, they don’t rush to the next sentence.  They don’t rattle off useless verbal fillers (uh, ah, um, well, so, right, hmm).  Instead, they embrace that millisecond of silence, harness the awkwardness, and force the listener to pay attention.  Many people call it the pregnant pause.

Public Speaking Tips

In 2008, my employer paid for me to attend a 3 day coaching session on effective public speaking.  It was professionally run and cost approximately $2,600 per person.  We learned the nuances of posture, eye contact, voice inflection and gesturing.  We practiced constantly.  The facilitators shot video of us and gave feedback. However, the most common feedback, was also the most basic:

Don’t forget to pause

There are many reasons to pause:

  • Gives you a breath and more oxygen to your brain
  • Gives you time to structure your thought, less stream-of-consciousness blathering
  • Prevents you from, um, putting in, uh, useless filler words
  • Creates drama in your speech, changes the inflection, improves the syntax
  • Breaks up the droning effect of continuous speaking
  • Allows you to do a pulse check on the audience (Are they getting bored?)
  • Gives your words more heft and makes you sound more decisive

Listen to good speakers and how they effectively use pauses

Listen to yourself by calling up your own phone number and leaving yourself a message.  Essentially record yourself presenting.  Then listen to the voice mail and count the number of fillers (uh, um, like, hmm) and number of good pauses.

Keep practicing the pauses. Practice even when you are talking with coworkers, friends and family.  Just don’t tell them you are practicing. They might charge you.