Five Ways Consultants Do More Damage Than Good

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Karen Phelan's latest book focuses on management consultants and how they can often do more damage than good. --> Bringing in outside consultants can rejuvenate an organization with fresh perspectives, new capabilities, and formerly unthought-of options, but unfortunately many of the large, industrialized consulting practices do just the opposite. 

Here are five ways consultants get it wrong :

1. Focusing on delivering those deliverables – “Deliverables”  is consultant-speak for the end products,  like that binder full of flow charts or the 200-page power point deck, that are contractually required for the huge fees and provide proof of the consultants’ value.  Many consultancies obsess over creating deliverables instead of building capabilities. Worse, those documents usually become obsolete shortly after you print them because they’ve been based on….

2.  Assuming the world is static – Promising optimized business processes is dependent on a static world. How do you optimize something that is constantly changing? Even those 5-year strategic plans become obsolete before they can be executed. Do you really want to execute a plan based on years-old assumptions? Rather than disseminating knowledge or offering options, many consultants recommend one course of action as the right answer or recipe for success. If the world changes, then that answer is no longer applicable. Unfortunately, many consultants require that one solution for…..

3. Constructing command and control functions – Often, a consulting team will walk into a client site and be appalled by the lack of oversight. How can the executive team be so naively trusting that their employees will do the right things? That prompts a major effort of implementing command and control functions where every employee and every action is monitored and measured, hence stifling innovation, flexibility, and engagement. Many companies fall for this rigid system because the terms “management by objectives” and “performance metrics” have become part of the management theory lexicon. And much of this jargon exists because consultants are so good at ….

4. Propagating management consulting gobbledygook  – This takes the form of the indecipherable jargon,  a quadrant chart with cute animals, or a formula that calculates shareholder satisfaction.  The only thing this gobbledygook succeeds in doing is to distort thinking, either by boiling down complicated human systems to an x-by-y plot or by disguising what is actually happening by calling it something else, ala right sizing.   All this gobbledygook is a result of consultants …..

5. Seeking fame and fortune as thought leaders – While consultants are rewarded on client satisfaction, the real money and recognition comes from being a thought leader and creating a trademarked model that brings both royalties and renown.  The problem with thought leadership is that it is not usually derived from extensive real-world experiments or years of data gathering.  If you call thought leadership what it really is – it’s making stuff up in your head and getting other people to follow it – then it’s obvious that the impressive sounding methodologies only look good on paper. 

A little raw, perhaps, but there it is. Thoughts?


Five Great Advantages that Startups Don't Take Advantage Of

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Peter Cohan has started several profitable companies and is also a venture capitalist who knows what startups have to go through to get established. In his latest book, Peter discusses how startups can take advantage of various factors to launch their businesses.

For this blog entry, Peter shares Five Great Advantages that Startup CEOs  Don't Even Realize That They Have:

1. You have the ability to attack big competitor vulnerabilities.
A big market is big because there are huge competitors who are likely dominating it. You might think that those big companies will do anything to defend their market share, but you would be wrong. They won’t cut price below their costs because that would threaten their quarterly profits – which would crater their stock price.

Since you have virtually no costs, you can sell your product at a much lower price than they do and still make a profit. If you start to gain market share, the big company won’t match your price unless they can cut their costs enough to preserve their currently fat profit margins.

2. You can lure top employees and talent
I don’t know anyone who actually liked working for a huge company because they often feel like powerless drones whose work has very little personal or professional meaning and mainly benefits a handful of people who don’t even know they exist.

This means that your start-up has a chance to lure some of the best talent –even though you won’t be able to pay high salaries. People crave the chance to do work that they find personally meaningful and work with other people who feel the same way. If you can convince talented people that your start-up can create that kind of profound meaning, they will gladly give up a chance for a high salary in a big company. Your offer of stock options or equity won’t hurt either.

3. You have a steeper learning curve.
Big companies take a long time to make decisions because countless bureaucratic obstacles have to be overcome before a big company can introduce a new product, raise its prices, lower its costs, or go after a new market opportunity. And as long as it takes big companies to make decisions, it takes them even longer to implement those decisions.

But a start-up can go through seven such learning cycles in the time it takes a big company to complete one. This means that your start-up can get much smarter than a big company about a new opportunity because it can get prototypes to customers, find out fast what works and what does not, and adapt to what you’ve learned.

4. You can tap your network to get needed resources.
People and other leaders are much more willing to help out gifted and inspired start-up CEOs than to lend a hand to corporate power brokers.

If you have a track record for winning, then the people in your network will want to give you their time and money (some more of each than others). If you need help making a marketing plan, raising capital, deciding who to hire and fire, which company to acquire, getting customers, forging partnerships, or designing products – people in your network are there to help.

5. You have the ability to take market share by delivering far more value.
If you’ve picked the right market opportunity, big companies have set the bar pretty low by giving customers a product that is priced too high and does a mediocre job of meeting their needs. But because they dominate the marketplace, they have little reason to do better.

Your start-up is poised to deliver them much more bang for the buck by finding a problem that is causing that industry’s customers great pain but that no other competitor is solving, and figure out a way to solve it while charging a lower price. Then people start coming to you instead. (Remember the pain of video rental late fees and having to drive back and forth from Blockbuster? Netflix did.)

These five start-up resources only look like nothing to a big company. But if you’re an entrepreneur worth your salt, you’re already exploiting them to scoop up that big company’s customers with a spoon.


Five Ways Scenario Planning Can Help Social Action Groups

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Author Adam Kahane was a leader of the groundbreaking Scenario Planning Team for Royal Dutch Shell, the energy company, -- widely credited as the originator of scenario planning. In his latest book (Transformative Scenario Planning), Adam takes the basic principles of scenario planning and explains how they can be used for social action initiatives.

Here are three ways scenario planning in the social sector (what Adam calls "Transformative Scenario Planning") can help social action groups:

1. Transformative Scenario Planning helps us see a bigger picture of what is happening now and might happen in the future.
We cannot be effective in changing what is happening in the world is we only see our own little part of what is happening. Transformative scenario planning enables actors from across a whole social system—a community, a sector, a nation—to pool their perspectives and so to see more systemically and act more effectively.

2. Transformative Scenario Planning helps us not be blindsided by futures we don’t want because of a narrow focus on what we do want.
People who are passionately trying to change the world often focus their attention on the way they want things to be. The discipline of Transformative Scenario Planning is that is requires us to focus dispassionately on how things might be, and so helps us improve our peripheral vision and our resilience.

3. Transformative Scenario Planning builds diverse alliances of actors, all of whom want to change the status quo.
More often, the problems we face are too complex to be solved by any one person or organization or sector. But the diverse actors who would need to work together to make progress usually don’t agree on the solution or even on the problem. Transformative scenario planning, because it initially focuses simply on describing “our complex problematic situation,” provides a practical way for such actors to begin to work together.

4. Transformative Scenario Planning helps us develop the capacity to think and talk and work with strangers and opponents, not just with friends and colleagues.
In a transformative scenario planning process, diverse actors rigorously and creatively talk through a set of relevant, challenging, plausible and clear scenario stories about what is happening and might happen; what these stories imply; and in the context of these stories what the actors can and must do. In this way the actors learn to work together across difficult differences in positions, perspectives, and interests.

5. Transformative Scenario Planning helps in constructing better ways forward together for a better world for all.
Transformative scenario planning is a way for a broad alliance of committed actors to build new understandings, relationships, intentions, and actions. These four types of results enable these actors to achieve together what they cannot achieve separately: to co-construct new and better futures.