The Relationship Between Change Management Consulting and Valentine's Day
Topic: 2) The Consulting Trade

If you've made a New Year's resolution but have not read this blog entry yet, there may still be hope. Most people have probably broken their New Year's resolutions by Valentine's Day. How can you prevent this from happening to you?

Digging up a study from the University of Washington, there are some key suggestions for succeeding with one's resolutions:

- Have a strong initial commitment to make a change.
- Have coping strategies to deal with problems that will come up.
- Keep track of your progress. The more monitoring you do and feedback you get, the better you will do.

As it turns out, these are the same types of principles that apply to change management consulting projects in the business world. Although style of change management tactics in organizations also plays a role (e.g., leading people to a goal versus spreading gasoline around a organization and coercing people by insinuating that a fire is going to happen), many change management initiatives fail to work out because:

- organizations get distracted,
- do not use project management methods to manage processes (e.g., date, milestone, & issue tracking),
- or ignore the importance of using a microscope on activities early on in the process of change.

Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Implementing Metrics Is Connected But Separate from Choosing Management Style, Company Culture, and Incentives
Topic: 2) The Consulting Trade

More often than not in traditional management consulting engagements involving operations, there is usually room for setting up or revising goals, metrics & reporting, and service level agreements. Depending on the phase of development of a company (often couched as Stage 0 [Ad-Hoc], Stage 1 [Functional], Stage 2 [Intrabusiness Cross-Functional], etc. maturity levels by a consulting firm), the next higher-level of metrics and reporting may apply and be a goal for the client organization to strive for.

Where management has to be somewhat careful about applying metrics, however, is how people and company culture play a role in getting everything to work together right.

To put a finer point on things, one can put in place a perfectly appropriate set of metrics and reporting systems for a company yet miss the boat completely on a management-level as to how the results should be applied because of the culture.

As an example in sales operations, I have frequently seen a competitive environment laid out. People's individual performance levels are exposed, and poor performing people are weeded out. This environment can work out in some cases. On the other hand, in a collaborative engineering or product development environment, cooperation may be encouraged.

On a related topic, a friend of my wife and I, Dr. Uri Gneezy at the University of Chicago, has some great research on the relationship between competition and gender. From the research summary:

Gneezy suggests that CEOs creating incentives in their firms should be aware that making the internal environment more competitive might create a bias that helps men, while putting women at a relative disadvantage.

My take on applying this type of research would be to recognize and raise one's sense of awareness to the environment one is implementing metrics in. Although metrics may be encouraged to be tracked to an individual-level doesn't automatically equate to that the environment has to be a competitive one. Choosing a collaborative versus dictatorial management style that is compatible with the desired company culture is a separate choice from metric implementation.

Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

You Can Still Get A Coke With Loose Talk, But You Need To Be Careful In The Management Consulting Business
Topic: 2) The Consulting Trade

Brian had the following post which covers the geographical differences of the use of the terms "Soda", "Coke", and "Pop". Thought it was a pretty striking graphical map of a social norm that I've never been able to put a finger on. In any case, it triggered me to write down a couple of brief thoughts about the importance of nomenclature, and more generally, clear communication in the field of management consulting.

On the one hand, in the early phases of a consulting engagement, there is usually a steep ramp-up curve to gain a common understanding of where detailed operations are at (even in cases where the consultant has experience directly in the client's vertical industry). I have sometimes referred to the ramp-up period as "drinking from the firehose." During this period, both the client and consultant use terms that may not be fully understood by one another. Regular dialogue and monitoring are needed to make sure things are on track.

Such early problems usually work themselves out. However, for all parties to ensure that the consultant is adding the highest amount value, it becomes more and more important as the engagement moves forward to get beyond nomenclature and to understand the vision of what needs to be achieved. As an example, when a client says, "No problem at all. I have that operational data," there is a difference between "having that data" and "having that data and proactively using the data to manage the business". Proactive management requires organizing data regularly, synthesizing new information from the data, developing hypotheses, setting goals, proactively applying controls on a day-to-day business based on the information (as opposed to treating data like exhuast eminated from an automobile), and making data and results transparent to all."

Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Why Playing Politics Is Good For Government Officials But Not For Management Consultants
Topic: 2) The Consulting Trade
With the elections behind us now for a couple of weeks, I thought that I would jot down some thoughts about the role of politics in business. Now there are courses taught in business schools (including the University of Chicago) on how power and politics play a role in a organization. Some key aspects of politics are that they are a natural part of having 1) an organizational structure and 2) interdependencies between people in the organization.

Now one can see why there is a tendency for some of the unsavory things (e.g., mud slashing) to happen in an election of the President of the United States. Well for one thing we are hiring the chief honcho. Secondly, there are a lot of interdependencies between us as citizens of the United States and part of the larger world.

Politics are bad for management consultants because helping a client needs to transcend the organization. An effective consultant needs to adopt Renaissance capabilities to work up and down in the organization and to cross-connect the organization in new ways in conjunction with the client. This may be of tremendous value to a client because sometimes existing employees may be fearful or reluctant (and perhaps rightfully so) to upset others in the organization (sometimes their peers or bosses). A good consultant should only focus on the goal of fixing things. Consultants are temporary guns to help get an organization through change, and they should be fired or put on the street if not adding value.

Now I've lost myself again ... why can't this goal-focused reasoning apply to political elections too?


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

A Brief Intro to the Process Flow Mapping of Operations
Topic: 2) The Consulting Trade
Starting to get some things off the back burner that I started but haven't had the chance to complete until now. Here's another short business note entitled, "A Brief Intro to the Process Flow Mapping of Operations". (pdf version) (html version)

Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Note on the Perimeter of General Management Consulting
Topic: 2) The Consulting Trade
I've authored a short business note entitled, "A Note on the Perimeter of General Management Consulting". Hope it helps some folks to learn more about the profession!
*click here*

Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Calibrating the Value of Management Consultants
Topic: 2) The Consulting Trade
The topic of tracking the value of management consultants is fertile ground for many jokes. Ever hear the joke about the consultant using the client's watch to tell the client the time? On a serious note though, management consultants need to provide value that exceeds their "costs" (although the same standard could also be applied to employees within a firm). Outlined below are just a few perspectives for looking at the problem of setting and calibrating the value of consultants.


1) The Consultant "Rule of 10x" - In goal setting, good consultants are trained to aim for problems where solutions will yield value exceeding ten times their cost in professional fees (e.g., cost reduction, revenue growth, market capitalization). This provides a way of ensuring that the consultant and the client are aligned at the start of the engagement (and ongoing communication and updating should occur throughout the engagement). If after execution the client achieves a return of 10x or more, this is fabulous. If 5x, this is still great. Even 3x, 2x, etc. are also acceptable returns. That said, those that apply the Rule of 10x are thinking along the right lines.


2) Strategic Need - Sometimes the value of using management consultants can be viewed as a one-time cost to achieving a strategic goal. For example, executive management may say that it is worthwhile to incur $1M in consulting costs to integrate two businesses at an operational level. As another example, management may say that it is worthwhile to spend $500K to project manage the rollout of a new line of business and avoid extinction in the marketplace.


3) Running Versus Changing a Business - There are many circumstances where change management is needed. It is sometimes very difficult for those running a business to have sufficient bandwidth to both change a business and create all of the necessary tools, processes, organization, and infrastructure at the same time. The value of consultants can sometimes be looked at as a means to get over these hurdles, and good managers will recognize the potential costs of getting over a hurdle.


4) Assessment and Inventory - Sometimes third-party perspectives are simply needed to provide a fresh look at the business and to provide assessments of where things are at. Management consultants can be used to inventory, diagnose, and analyze where a company is at. The value of these types of services can be estimated by looking at comparable costs of other firms.


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Interim Management and Auditioning
Topic: 2) The Consulting Trade
The term "interim management" connotes different things to people. Some view it as a niche separate from consulting where the interim manager takes responsibility for a particular aspect of the business for a short period of time. Others view interim management positions as turnaround-type positions for a firm.

Rather than define the term, I think its useful to view interim management in terms of fitting a role to the need at hand and minimizing side effects. On the one hand, a good purpose of interim management could be to bring in world-class resources immediately. One the other hand, a tendency may develop to make the company overly dependent on an interim manager like a crutch.

I have been involved in cases where an interim manager is used in conjunction with the immediate process of placing a permanent manager. If designed properly, such a structure can yield excellent results including faster time-to-market, creative tension, and a coaching and supportive environment for the prospective permanent hire. If the prospective permanent hire in mind does not work out, senior management can use the auditioning period as a means to determine what to do next, e.g., move the team players around a bit, let the evaluation period for the permanent hire go longer, or work with the interim manager more actively to get the permanent hire on track.

Steve Shu, Managing Director, S4 Management Group
sshu@s4management.com