In all corporate environments, you need to pay attention to
who and what has power.
This is a human dynamic that is rarely discussed out loud
but is always present in any corporate environment. As a
new consultant, it is something you MUST pay attention to.
Let me give you some examples.
Authority = Who is officially in charge.
Your senior client is the person with the authority.
Authority is one of many types of power.
Another type of power is influence.
Influence comes from who you have access to, and of course
whose opinion you can alter.
As a consultant, your "power" when working with front line
employee-type clients comes from your access to senior
management, your influence (or perception of influence) over
senior management, and your ability to request senior
management to exercise their authority to help you
accomplish a goal.
Your power with senior management comes from having access
in this case to facts and analysis that the senior clients
do not have access (or easy access) to.
Your power also comes from your perspective as an outsider.
Do not underestimate this.
Many senior clients very much value a fresh set of eyes on
their situation.
Often many months after working together, they might ask you
to recall what your first impressions of their business,
markets, or company was many months prior.
Be sure your remember those first impressions!
Those impressions are usually made in the first month or so
of working with a client.
However, the client often doesn't know you or your team well
enough to ask for those impressions until several months
later.
So be sure to make a mental note of these impressions.
In addition, these impressions can often help determine your
team's initial hypothesis about the client's situation.
You might be wondering what kind of insights you could
possibly bring to the table on a first impression basis...
especially if you are younger or don't have an MBA.
You might be surprised!
(By the way, if you have this attitude, I suggest you lose
it. An MBA is not the end all and be all about business. It
is simply one of many ways to learn about it. An MBA is
useful, but it also has its limitations and liabilities -
which I will elaborate on at some point in the future.)
By far the easiest (and equally useful) observation you can
make is that of noticing inconsistency.
There are many different types of inconsistency to look out
for. Here's a partial list:
1) The company says it is focusing on X, but in reality it
does not.
The client says they are focusing on growing their XYZ
product line, but in reality, there are no sales people
dedicated to selling it (or perhaps they are supposed to
promote it, but in practice they do not).
In addition, there is only one person in marketing who
tries to market it, and there are no dedicated R&D efforts
to improve the products in this area.
This is inconsistent.
Now you might think this hypothetical example is too extreme
to be possible, but it happens more often than you might think.
There is enormous value in you noticing it and pointing it
out to a senior client (and the best way to do that is to
state the observation in the form of a question).
"Jane, I couldn't help but notice a disconnect (by the way,
McKinsey people love that word) between your stated focus
and how your resources are allocated.
Is there a particular reason the resources are allocated
this way that I haven't been able to notice?"
Notice how you are essentially saying to the client, "Hey, I
think you screwed up," but you are phrasing it in such a way
that asks the client if YOU made a mistake.
There are many ways to delicately phrase a remark about
this situation. The key rule of thumb is to make the point
without emphasizing blame or judgment.
This is just one subtle way to bring up the point without
it being conveyed as a criticism, attack or judgement.
By the way, in my example above, I probably would not use
the word "disconnect" with the client initially in this
context.
Once I have a well established relationship, I would tend to
use much more direct language with a client.
Well established = the client knows you are looking out for
him/her... so the client perceives any comment you make as one
designed to protect him or her.
In contrast, earlier in a relationship, a client is not sure
if your comment is one passing judgement (an attempt to
usurp the client's authority position) or one designed to be
helpful.
Incidentally, this is why consulting is a relationship
business. When you have a long-term relationship with a
client, you can get away with saying very direct and blunt
things and have it be taken favorably.
In comparison, an equally skilled consultant from a
different firm could say the exact same thing and have it be
taken negatively by the client.
Now let me circle back to my original topic of noticing
inconsistencies. Here's another one:
2) The company thinks it is doing X in the marketplace, but
customers disagree.
So maybe the company thinks they offer the fastest service
in the industry. Maybe customer's barely notice... sure it's
5% faster, but that's such a small difference that no
customer actually cares. Yet the client believes they do.
Again, it seems like such a major disconnect (there's that
word again) that it couldn't possibly happen in a big
company. Yet it does.
Here's why.
The customers used to appreciate the speed difference, but
over time, competitors have closed the gap such that the
client still leads the industry -- but not by much.
And the senior clients didn't notice this shift in the
marketplace.
It's the same reason why on any given day I do not notice my
daughters changing that much. From Monday to Tuesday, they
look the same, act the same, and pretty much seem the same
to me.
But when my parents visit every few months, they always say,
"Oh my, look how much she's grown... wow."
My reaction is always, "Huh, what are you talking about?"
The pace of change in a 24-hour period is too small to
notice. But when you put 365 of those 24-hour periods in a
row, or 2 - 3 years' worth, it is not surprising some of the
changes do not get noticed initially (that is, until you
point it out!)
Here's another little secret.
In many big companies, the senior executives don't actually
spend a lot of time talking to customers. There might be 7
layers of employees between the executive and customers.
Many executives rely (I would argue over-rely) on getting
reports, market research studies, and yes, even presentations
from consultants.
Personally, I think this is a mistake on their part, but it
is what it is... and it creates an opportunity for you.
One of the things I used to do a lot is interview a bunch of
my client's customers, interview all the front line
employees about what their customers are saying and what the
company should be doing about it... and then synthesize it and
present it to the senior client.
This is where all those criticisms of the consulting
industry come from.
The front line employees can't believe their employer just
paid $2 million to tell their bosses something they've known
for years.
The reaction is, "Geez, just give us the money instead,
we've been telling you for years!"
Yet, despite this criticism, there actually is value in
doing this.
Where does the value come from? And why does it exist?
Often the senior client doesn't trust the information being
passed up from the front lines.
The senior client can't tell if the people lower down in the
organization are exaggerating, trying to cover up their
mistakes, heavily biased, or trying to promote a particular
agenda. In short, the client is not sure his or her front
line staff is objective and can put front line feedback into
a big picture context.
Other times, the information is presented in the form of
lots and lots of opinions with no structure, no quantification,
and no recommendation about what to do about it.
So perhaps they heard the comments before, but they had no
idea if 1) it was true, 2) if it's actually significant, or
3) what do do about it.
(Now you know why interviewers tested you on problem-solving
structure so much during the case interview... it's because
clients (especially the more junior ones) are terrible at
it, and senior clients have difficulty getting good
information from their staff.)
So taking a bunch of unstructured opinions from the front
lines, re-organizing it in an issue tree format and
illustrating how the client's only course of action left is
to improve customer service (because no other option makes
sense or the economics don't work) does add value.
It adds value because by process of elimination (sound
familiar?), you've led a client to the only possible logical
conclusion (still sounds familiar doesn't it?)... such that
they now have the confidence and conviction to take action...
whereas before they just heard a lot of opinions.
This is also why I have continually emphasized the synthesis
approach to presenting recommendations at the end of a case
interview.
I did so because that is exactly how you want to communicate
with clients... tell them what to do first when opening a
conversation (or tell them what is important) and then tell
them why (and always, always in that order).
Hopefully I have impressed upon you how something as simple
as noticing inconsistencies in a client's organization,
operations, or strategy can provide enormous value.
Also notice how noticing inconsistencies doesn't actually
require much industry knowledge or even business expertise.
This is also one of the reasons why I can meet a CEO for the
first time, spend less than an hour with him or her, and
have the prospective client just be amazed at how fast I am
able to notice certain things about the business (things that
took them three years to conclude, I'm able to do in 35
minutes).
In reality, all I'm doing is just extremely fast pattern-
matching of the client's situation with situations I'm
familiar with. And one of the patterns I am always searching
for is inconsistency. It is something you should be looking
out for too.
The key takeaways for today is to not only notice these
inconsistencies, but to also realize the enormous value you
can provide by communicating these inconsistencies to your
clients.
