The Peculiar World of the Management Consultant
There are people who work for those who are not their employers. Many of them call themselves consultants. I suppose I could call myself a ballerina, but it doesn’t make it so. Most people who work for those who are not their employers are actually contractors. There’s nothing wrong with being a contractor, it is a perfectly respectable occupation. The difference between a contractor and a consultant is in what they owe the client: the contractor owes the client what he wants, the consultant owes the client what he needs.
Within the world of consulting are many sub-types. Most specialize in a single domain, such as beauty, or design, or warehousing. These are expertise-based consultants, and often call themselves management consultants. They have deep subject matter expertise and can tell you everything you need to know about, say, how to design and operate your warehouse. When you, as a client, are certain you know what you need, then an expertise-based consultant is for you. A few expertise-based consultants, usually accountants, are able to advise on areas outside their domains. The other type of management consultant is very rare. He/she is an issue-based consultant. She won’t tell you how to build and run your warehouse. Instead, she’ll tell you whether you need a warehouse, where it should go, and why. She has vast breadth. He or she knows how to define the actual issues underlying a business opportunity or problem, and what to do about the issues.
This is a peculiar world to inhabit. I had always started analyzing a problem from an unusual perspective. The goal is always to find the right questions, not the right answers. The perfect answer to the wrong question has no value. The right question is far more valuable. My first conscious use of this was when I was in the US military and was faced with a seemingly insolvable problem. The US Government regularly shares sensitive or classified information with other countries. We were viewed as uncooperative because we took forever to share anything. The process was to identify the individual with the most knowledge of what the effects of releasing the information would be, and forward the information through his chain of command to him, give him two days to answer the question, then forward his response back through the chain of command. The trip down and back up the chain typically took six months when a maximum rush was applied; more typical was eight to twelve months. I asked the right question. “When we have identified the individual best qualified to understand the implications of releasing the information, why not start the process with him and give everybody above him the chance to comment or disapprove?”
I was upbraided for insubordination, until nobody could think of a reason other than We’ve always done it this way. So, we eliminated the first half of the process, which actually eliminated almost all the consumed time. We now had answers in a week or two, instead of six months. That set me at examining my own thought processes, and I came to realize that what I brought to the table was the valuable gift of ignorance. I didn’t know how it had always been done.
Further introspection told me that no matter how much time I used finding the right question to ask, it was always worth it. By the time I had the process down I had retired from the military, and joined the number two global business management consulting firm. The next big accomplishment was when the commercial side of my firm sent my boss a fax asking for a subject matter expert in aviation security. I was so tired of doing government work that ninety seconds later, when I arrived at my boss’s desk, fax in hand, I was a bona fide aviation security expert. I flew to the Middle East, began real business consulting and never looked back.
My task was to assess the security of an absolute monarch’s private aviation organization. I landed and started asking questions. It quickly became apparent that at least two thousand years of history had left these Bedouins with highly-developed skills at focusing on real problems. If it was in front of you, it was real, and you protected the king with your own life and didn’t let anyone approach him. If it wasn’t in front of you, thinking about it was a distraction and yielded no benefit. Thus, you expected that if you left an aircraft parked somewhere for three months, nothing would occur until you needed it. It ceased to exist in reality until it came into your view. That is called a shared assumption about how the world works, and no one questions it.
Two millennia of wandering the desert had also yielded another shared assumption: the best way to protect the ruler was to put trusted men with guns around him, as close as possible. These two shared assumptions, unquestioned by everyone, created a high-risk environment, and I had the data to prove it. The third shared assumption was the real killer: the more important a person was, the less necessary it was to assure he couldn’t attack the ruler. The fourth shared assumption was the final nail in the coffin. Westerners had flooded the oil emirates in the 1960s with magical tools and bright shiny objects that they claimed ensured security. So high-cost false-color x-ray machines were in use in the king’s aviation organization. Crew members would place their luggage on the machine, start it, run the luggage through, stop the machine and pick up the luggage to go onto the airfield. The magic machine had removed all danger.
This may sound silly to some, but it’s easily understandable and was not the fault of ignorant savages. These people weren’t stupid, they were highly intelligent, but they had been conditioned by their environment to adopt a set of disabling assumptions and encouraged by lying Westerners to fork over millions for technology that did no good. I had the right questions, and I had the answers.
The client was the de facto Chief Operating Officer of one of the wealthiest countries on the planet. He was also the Commander of the Armed Forces, a General. Everyone else bowed before him and called him “Highness.” I called him “General.” He told me to be blunt, so I was. “Without significant changes, the king will be dead and it will be your fault.” Without skipping a beat, he replied, “That’s blunt enough.”
That was the beginning of a beautiful friendship. I vowed brutal honesty; the General didn’t have me executed. Fair trade. I spent a couple of years in the Middle East learning Arabic, studying the Koran, and honing my questioning skills. I spent a lot of time studying the price-of-entry tools for my profession: accounting, financial analysis, Lean, Business Process Re-Engineering, Neurolinguistic Programming, SWOT, PEST, MOST and Heptalysis before facilitating business changes. Some of the other tools are de Bono’s Six Thinking Hats, EVA (Economic Value Add), CATWOE, Five Whys, MoSCoW, SCRS, and VPEC-T. There are about a dozen others. They are price of entry, and the issue-based consultant needs to understand each one without falling in love with a single tool kit. And I learned business functions and industries.
Before I struck out on my own, I was hired by a Fortune 500 company to fix consulting jobs that had gone off the rails. That turned out to be almost all of them, and I learned that large institutions are extremely difficult to change. A change in direction is typically arduous and painful. Fortunately, I don’t mind inflicting pain. Some people believe I enjoy it. I’ll take the Fifth.
On of the early pieces outside the Middle East and my friend the General was being asked to review a plan to double the number of currently-shared dormitory rooms in a men’s college. I was told I would be paid ten percent of what I could save out of the $12M budget, which included closing the dormitories, dividing all room, renting every motel room within a twenty-kilometer radius, shipping in millions of dollars in construction equipment, buying a large fleet of buses. The project was to take a year.
The need for individual rooms was a cultural issue that wasn’t going to change, so not doubling the number of rooms was out of the question. I walked the campus with the man who had asked me to do the work and asked what the plans were for empty land next to the existing dormitories. There were none. I got the name of the builder of the original buildings and called him. Within three hours I was done.
I cut the cost from $12M to $6M by getting a bonded bid from the original contractor to build an identical set of new dormitories and agreement to rent half the motel rooms in the area. We bought a quarter of the planned bus fleet and none of the equipment. I presented him with a bill for $600,000. He refused to pay it, saying no one was worth $200,000 an hour. I volunteered to take twice as long, even three or four times as long, if he thought that the extra time would make the solution more valuable. I didn’t ever collect on that bill, but I learned a valuable lesson. In the region of the world where I had done the work all deals were handshake. I never again made a handshake deal.
At one point I was asked to do the 35% design of an international airport. Twenty minutes of reading and I knew that nothing mattered except tarmac. It might look like paving, but it’s not. It is carefully formulated in layers to support specific loads per square inch. With the advent of jumbo jets in the 1960s, the loads were enormous. When I was, as part of the work designing a hangar, I knew that the design had to support the weight of many tons. But I didn’t know how it was supposed to be done, so I looked for ways to cut costs but not safety. I carefully measured how close to each wall it was possible for a plane’s wheels to approach, and then designed a formula for a sloping tarmac that would be adequate to support each aircraft’s three individual wheel assemblies. I didn’t know that was not the way to do it, but the client was happy with the million-dollar savings.
I think the next highlight came when I was tasked with selling some work to a manufacturing company that was losing money. They couldn’t afford to pay us, so I looked at the operations. A day later I had the whole answer. I walked into the CEO’s office trailing an old tractor-pull computer paper behind me, stretching thirty feet to the door. It was the list of all the customers by sales promised, sales made, and amount of dedicated inventory. I asked him where he thought the 80% mark was for profit by account. He pointed halfway to the door. I tore the first page in half and handed it to him. That was his profit. Everything else was a money loser.
He had a factory where labor was very expensive. They would forecast sales and manufacture to forecast. Each item was made from separate pieces and assembled to forecast. Once assembled, the item was committed to a specific customer and carried the customer’s label. It couldn’t be sold to anyone else. The company’s focus was on new customer acquisition, and sales reps would invent promised sales. I talked briefly with the CEO about Michael Hammer’s Re-engineering the Corporation, specifically about carrying the wounded and shooting the stragglers, and we were done.
He called a meeting of the sales reps and told them that they could no longer promise labeled items to new customers. They would establish an inventory site and use inexpensive low-skilled labor to assemble to order. The head of sales said he wasn’t doing that, so the CEO told him to leave the building immediately or be arrested for trespassing. Once he understood the real issues, he was a ball of energy. In four years, he turned the company around from losing $16M/year to earning $16M/year on only $10M more in revenue.
The issue-based management consultant often doesn’t do well in a competitive bid situation. After retiring in 2002, I slept for six months, then began selling work through online consulting brokerage boards. The big problem was that I had to give away the real issue to win the work. I called a man who was desperate to sell his business in the Virgin Islands. He had a balloon payment coming up and couldn’t come up with the money. I told him his problem wasn’t a balloon payment, it was saving his business. When the issue was reframed, I told him he needed access to enough money to make his payments and keep his business. I then referred him to another independent consultant who was better, faster and cheaper than I at finding money. I was paid $200 for identifying the issue and solution, the other consultant made $15,000 for finding the money. Not a problem for me.
When my step-father developed Alzheimer’s dementia, he had to be placed in a group home. My mother called me in a panic, because he had always had a good monthly income but spent it all, much of it on his collection of late-model Cadillacs and their insurance. How would she pay for his care? The immediate need was to generate cash, so I told her to cut her tax withholding until she reached equilibrium. Where had he bought his cars? Most from a single dealer.
I outlined the rest of the program, which was to contact the dealer and ask him to accept the cars for sale on consignment, and ask him to include them on his master insurance policy. The dealer agreed, and she generated enough cash from reduced tax withholding and insurance costs to pay for his care. Selling the cars actually let her start a savings account.
My health crashed in 2014 at the age of 66, and travel was no longer an option. I had to rely entirely on internet brokerages. A few long-term clients, who relied on me for advice on existential issues, remained, but when my health became worse in 2019, I had to discharge all of my clients. I had developed late-onset hydrocephalus, which is a guaranteed one-way ticket to non-Alzheimer’s dementia. I wouldn’t know when my faculties would fail, and it was unethical to continue. I contacted a long-time friend, who also was a veteran of top-tier management consulting but was now serving medium-to-small businesses, and she assumed responsibility for them. I am at peace with my life, with my approaching death, but you all have known that from the day you signed up for this column.
That’s much of everything I will ever say about working with my clients. It’s been a hell of a ride.
It's rare to see the solution and be in position to have that be heard. You had both.
I have a little solution to for you....the style button on the editing box will let you make different sized bold-faced subheadings. (can't do in comments)
Then the readers who may be daunted by wall of print would find their path.
The Gift of Ignorance
The King will be Dead and it Will be Your Fault
How to Help Companies Off the Rails
I Never made a Handshake Deal Again
The 80% Solution
Sell the Cars
Hell of a Ride