There's a Problem With Consulting

Consulting has become a game that most everyone plays the same. Most consulting firms are set up in the same fashion, hire the same type of people and go after the same types of clients. Really, is one Harvard MBA different than another? Does having 15 of them as Senior Managers make you a better, smarter, more competitive company? Once every company has adopted the same model it won't be long until they can only compete on price. After you become a commodity it's a long, hard road.

This is the trap that most industries fall into after a certain period of time. The best way to categorize it is "Group Think." Once everyone is trained the same way, they work on the same types of projects, then begin to fall into a certain silo of specialty and you can't expect them to actually see the world through a different shade of lens. Out of all this comes your typical consultants that spout buzzwords like it's going out of style and offer generic solution after generic solution to every problem that they see.

Any consultant that you get out of the typical top firm is going to be out of this mold. They certainly have their strengths which usually include sales, client relations, asking the right questions, creating informative presentations and spotting trouble spots in an organization. The problem becomes their weaknesses. Traditional MBA programs are designed to train a certain style of thinking and decision process. That process is typically financially driven and risk averse. It leads to the natural selection of a low risk solution that creates good net present value, internal rate of return and acceptable payback period. This is all great if all you want is to be average.

Great companies all assume some element of risk. Great solutions require people to think outside the box. Great value requires a project manager not just thinking about how to get the next sale. I won't sit here and say that we here at Integrated Strategies don't ever look for the next sale, but I will tell you why we're different. We think our next sale is in the implementation of our recommendation. We'll take more consulting work but what we're really in this business for is to implement our ideas, make them work and then make them successful. Next time you get a consultant in for a meeting ask him if his firm will personally do construction management and implementation of their plan. I'll bet that they won't.

The trick to changing consulting is getting the answer from people who will do the work after they show you their solution. Consulting firms that hand you the solution and walk away accept no responsibility for your success. Wouldn't you rather have a partner than some abstract adviser?

Changing Tides and Gen Y

Do a search through any online news aggregator and you will find hundreds of stories related to how Generation Y is changing the rules of the workplace. Stories about how they don't stay with the same company for long periods, how they don't want to come in at the entry level but start with responsibility, and how they question everything. I've grown up as part of this new generation. I went to school with other people of this generation and I'm finally in my third year of real work. I'd say that I may have some insights into why things are the way they are.

First, every 15 years or so when a new generation comes along there are huge obstacles that must be overcome. The difference this time around is the swiftness of the change. Gen X was just fine sitting back and waiting for their turn because they had better things to do. Gen Y wants to change the world from day 1. There is a reason that Google has no problem hiring as many smart young people as they want, they give them opportunity to change things and make a difference.

Your typical company has a structure with positions filled by people with experience and certain skills. Those people got there by one of two ways: 1) worked their way up by proving themselves internally or 2) were hired from the outside because of previous experience. Generation Y is looking to change all of that and are surprised to meet resistance. The funny thing about it is that they don't mind the resistance since they simply find another way around. We are the most entrepreneurial generation ever. If you don't want to hire us for the job we'll simply go out and do it ourselves.

There are very few ties that keep us in one place or in one job. The internet allows us the ability to be instant experts on any given topic - learn about a topic one day, spend the next researching it, teach it the third. With the right resources and determination it is a very easy process. Sure, we won't be experienced experts but we'll know what the tools are, what the problems look like and some general idea of how to mix the two. Creativity will fill in the gaps.

Top that off with the fact that Gen Y are a generation of networkers. How hard is it to transform an active group of 100 friends and acquaintances into a business network. The connections that we make in our network are easy to retrace and remember. Conversations are stored on computers or phones in multiple locations. Pictures are abundant thanks to digital cameras and free online storage. If we need an expert in obscure applications of the third law of thermodynamics they aren't that difficult to find with a quick search or two.

The problem for the generations ahead of us is that we move very quickly. Before you know there is a major issue the person involved has blown past it and either moved on or resolved it. Flexibility is the goal of the day. Let us do what we know we can do. Sure, we will stumble and sometimes fall as things get rough but we will also perform great works before we are 25. We will change the world by 30. Make no mistake, we have lofty goals and strong beliefs that we can and will achieve them. Right or wrong, the only path we know is to chase down those dreams until we succeed.

Benchmarking

The year has only just begun but there is already a new hot topic that is flying around among our clients and it will probably be one of our focuses for the year: benchmarking. Interest in this topic is being driven by clients trying to get a handle on what they are doing right, what they are doing wrong and what is the magnitude of those things.

Reports are flying around newspapers and business circles of the economy turning down. This situation leads to companies looking toward ways to improve what they are doing today in order to weather the storm they see coming. Cutting costs is always an initiative on the table but it becomes more important as short-term growth projections are cut. Costs exist across the board but largely fall into a few large buckets: overhead, distribution, manufacturing, and real estate.

Benchmarking comes into play because it allows you to look at people in similar positions as you and helps you identify your strengths and weaknesses. Costs are then cut by focusing on strengths and improving weaknesses. By driving more of your focus into your strongest areas you focus on hitting your higher margin zones that carry less risk. Improving weaknesses shores up the resources to focus on the better areas.

So why is benchmarking the way to go? Let's look at Southwest Airlines and how they benchmark airplane turnover - the time it takes to clean and refresh between flights. When they benchmarked themselves against their competition they couldn't find anyone who was doing it better than them. Instead of turning their focus onto other areas they decided to take the benchmarking to another level and focus on other groups that performed similar operations. Now they benchmark their airplane turnover against the likes of NASCAR pit crews.

The operations being compared are the same processes on different scales and in different environments. But when you are already best in your industry it makes sense to innovate and compete with groups outside of your specialty. If it seems like you've reached the top you probably haven't looked around to see the other mountains around you that go higher yet. There are always ways to improve, some just have yet to be put in place in your industry.

This leaves us with improving the weaknesses. Most companies are lagging behind in some core area. Either their percentage of overhead is too high or their inventory turns are too low or their transportation rates leave something to be desired. It's hard to have an expert around to diagnose every problem. Sometimes it's important to step back and see what you're missing and why it's happening.

If you operate a call center that uses 250 square feet per person then you are using more real estate for that function than most of your competitors. The lease cost associated with that extra space is a cost that you have to pay every month. It may be possible to consolidate another group in with that call center and get rid of real estate that you don't really need.

Benchmarking gives you the final advantage of knowing what to look at long term and the ability to track progress. Improvement is a long-term activity that should be constantly moved towards. If it's not part of your corporate culture it probably should be.

Youth and Progress

This is a topic near and dear to me because it is something that I have to deal with on a regular basis. I'm young (only 24) and I've been out of school for two years next month. My youth is often seen as a detriment to many people when I first deal with them on a new project. The same is true for when I walk into a store to buy furniture, jewelry or any other expensive item. People see the youth and think that this kid can't possible help them improve themselves.

At the age of 24 I have more experience than many engineers 5 years older than me. I've been personally responsible for construction on a ground-up 822,000 SF distribution center. There were two project managers assigned to the project and I was in the second chair. I was responsible for budget, contractor selection, architectural design, installation inspection, final punch and most of the holes that go in between. Why was I put in that position a year after school? Because I had a manager that was willing to put me in a position to add to the project team. I was able to quickly prove that I belonged.

Am I saying that all 24 year olds should be running major projects on their own? Of course not. But at the same time, some people with 24 years of experience shouldn't be running major projects. My argument is that each and every person in an organization has a value to add that is not currently being utilized. Young people in an organization have the most value to add. It's the fear of allowing them to screw up the well oiled machine that often keeps that value from getting tapped.

Most people are surprised by the fact that your average Gen Y'er will only stay with a company a year or two before moving on to the next. Why is this a surprise? We have been brought up to know our worth and been given some of the most powerful tools available to help us perform. Why stick with a company that is holding us back simply because we're young? That doesn't make good business sense. If you are part of a business relationship where you are recommending clients to another business but they never return the favor are you going to keep recommending? Odds are you are going to start talking to their competitors about a better deal for your business. It's simple good business practice.

How will you know that the person you just hired has any worth or not if you don't let them sink or swim at some point? Sure, people need to start at the bottom to some extent. Everyone needs to know the basics behind the job. I had to learn to stamp and fill out invoices before I was allowed to control a budget. I had to develop warehouse designs in collaboration with other managers before I was allowed to do it on my own. It's a matter of timing that changes the game. Why should an intelligent member of Generation Y sit stamping invoices for a year while people that they may be better than get the actual projects? Would any team in the NBA have left Michael Jordan or Lebron James on the bench for a year simply because he was a rookie? No, it wouldn't have helped the team.

When working out an employment strategy think about this. Over-training someone simply because they are young will never help your business. Teach them what they need in a reasonable amount of time and then see if they are worth what you pay them to do. Entry level jobs shouldn't exist just to put the rookie into. In the end, you will develop better, more loyal employees by adding responsibility regularly to any Generation Y'er. In a couple of years your company will thank you.


Technorati Tags: gen y, progress, hiring

Finding the Right Talent

I've written before on setting up your org chart to enable your business to succeed. There is another aspect to that though that is sometimes overlooked- the right people need to fill the positions that you created. Forbes.com has written a great article called "The War for Talent." Beyond the issue that the war isn't really new and has been going on for as long as there have been big businesses, this is critical to long-term business success.

When you look at where you business will be five years from now, besides yourself, who do you see in top management positions? Can you picture anyone who is currently on your staff making the important strategic decisions and doing it right? When you hire it is important not just to hire for the position you have open today, but to look to fill the position you will need tomorrow. Even in large companies this principle should apply. If you are the manager of a group shouldn't you be operating that group as if it is a small business?

Most groups have a unique business plan that ties into the plan of the company as a whole. On the day-to-day level you still have internal and external customers you must satisfy, business demands you must meet and a budget you must work against. The dynamic that makes larger companies different is that internal customer component. You can't turn them away or refuse them service, that would be acting against the good of the overall company. However, you can treat them as an external customer and make sure that the time and resources that you used to assist them with are accounted for accordingly. If there is a way to charge them back for your work it would probably make them realize exactly what all those "little tasks" they keep asking you to do are worth.

United Parcel Service (UPS to most of the world) has a start at the bottom and work your way up promotion strategy. Upper management started out in warehouses and driving trucks before they got to where they are. Most technology companies have a hire the best available candidate approach to filling their positions. For the most part these are the two most common hiring practices in the marketplace. Knowing which one is best for your business is the first step to understanding what talent you need to be fostering.

Promoting from within has the advantage of keeping the company culture intact with a resulting lack of short-term change. The business will evolve with the times, but often slower than everyone else around them. It offers great stability but no real creative punch. "Groupthink" will often set in and allow even the most uninterested outside observer the ability to predict the decisions and actions of your company. Internal promotions rarely result in management failures as the hires have already learned what's expected and will maintain the status quo.

Hiring the top gun on the market offers a different set of advantages and disadvantages. The most obvious issue is company culture. If your new hire decides to completely go against the grain you could be facing a rebellion and drop in productivity. Failures become a business risk. If your new guy isn't working out, waiting for the problem to solve itself may not be an option. You may be forced to pull the trigger quickly and find someone else. However, when you do get it right, the new ideas that someone from the outside can bring, mixed with the successful tricks you've already developed over the years can offer some truly exciting results.

Every company is different but for most companies a policy of only promoting from within is probably not an option just due to size. Recruiting and hiring management talent is a must. Therefore evaluating that talent effectively and accurately is a must.

There are all kinds of books in the stores on how to hire the right people. How to pick the right person for your company. Finding the qualities of successful leaders. Don't buy into the fads. In the end there are three qualities that distinguish good hires. Mike Myatt over at n2growth says it well as does Jack Yoest at Small Business Trends and so does BusinessPundit. Hiring for character, integrity, and honesty will always serve you well. It is these three qualities that breed loyalty to you and your company if you treat them right. It is these qualities that will make a person do everything they can to help your business succeed. These are the qualities you should want and hire for in every staffing decision you make.

It's often hard to know how a decision is going to turn out in the long run. Do what you can to give yourself the best chane at success.


Technorati Tags: hiring, talent, integrity, staffing

Employee Driven Change

Where does your company stand in the business pecking order? Businesses know their competition within their industry inside and out. They know who they compete with for customers and who they are consistently bidding with or against. An overlooked aspect of business is who the labor competition is or brand competition. Small businesses aren't just competing against their competitors for employees, but against related industries, large multi-focused companies and the potential of starting up a new business.

One of the ways that our company guards against these is by providing a way for new employees to maintain their own entrepreneurial interests and activities within the context of our business. I've mentioned our innovation process before and it is really the driving philosophy behind our success. We bring in the services of small businesses that we work with a lot to improve the capabilities of both parties. Our most successful employees are the ones that treat the business as if it is their own and tailor our offerings the way that works the best for them.

I work a lot with about four or five different sales people and not one of them uses my services the same way. Each one of them has their own version of our main presentations with their own flavors introduced. Each one has their own way of making sales presentations and their own version of proposals that are all written within the context of the overall business goals. This constantly drives each person to pull the best from each of their coworkers and create new service lines.

How does your business deal with alliances, partnerships and competition? Are your employees motivated to evolve their methods to improve the way your business is run?
Change always comes from within. It will happen naturally if the proper motivations and people are in place. Competition is the driver that shows you what you need to be doing, the direction you need to go. Do you embrace it and adapt or fight and try to do things the way that you have always done them? The answer to that question is the difference between a growing business and a dying one. Look at the RIAA and MPAA with their current business strategy. They are doing everything possible to protect the way they have done things.

Don't be like them. Embrace your competition, even the competitors that bring an entirely new model to the table that is seemingly makes yours out dated. Keep pushing forward and you will continue to succeed.


Technorati Tags: innovation, consulting, entrepreneur, riaa, consulting