In defense of management consulting
Why consultants add value, what I learned (and the applicability to entrepreneurship)
When I tell people in the start-up community that I used to be a management consultant, I usually get one of three responses:
- Oh great! So I guess that means you’re the business guy and looking for a techie, eh?
- Bet you’re pretty glad you finally got out, right? Doing something real for a change!
- Interesting, what’s that?
Only #3 is innocuous. I’d like to take a moment to clear the misconceptions around both #1 & #2.
#1 is positive. But I don’t know everything about business (I admit, I’m not very good at investments and valuations). Even if I did, learning “how” to work has been infinitely more important than learning “how” to do market research or model finances. At Bain, our core “how” is to develop a hypothesis and efficiently prove or disprove it.
For example, I hypothesized users would want to borrow to save money and closet space. But what keeps people up at night is the gnawing fear that borrowing means being perceived a “cheap mooch.” Therefore, I pivoted to focus on alleviating the fear and guilt.
I believe I was only able to make the change because the framework highlighted where the core hypothesis was flawed. This is also exactly what Lean Startup espouses; I’m always surprised at how many entrepreneurs are surprised that this is something consultants do daily.
Further, consultants think broadly about: 1) what’s the outcome, 2) how do we get there efficiently. This extended version of the hypothesis-validation approach can be applied to everything else, from making a slide deck (e.g., which key slides do I build first, to support the main argument), to coding! For example, when it’s so easy to go down a hole chasing bugs, keeping the larger outcome in mind (the overall application) allows me to change methodology (e.g., use a new gem) to avoid wasting time. In this way, being a consultant has prepped me equally well for the technical side of the work, which in fact I am also doing.
#2 is negative. There is a whole book about it: How Management Consultants Steal Your Watch and Tell You the Time. I think consultants provide three key benefits:
1) Unique insights based on experience dealing with similar problems in different contexts—consultants bring the experience of other companies, in other industries, markets, sizes, etc., to bear. And, as anyone who has taken a writing class knows, a fresh set of eyes always catches mistakes.
2) An open, honest perspective about the state of your business—consultants have no incentive to not be upfront when the business sucks. In fact, consultants are often hired to tell senior management the hard news that they don’t want to hear from the ground floor
3) Telling you the time in a way that you’ll listen—let me first start by saying, stealing someone else’s watch is not an option, nor is building you a new one. Neither of those are helpful (or legal). Yes, consultants take your 100GB database files and regurgitate them back at you. The difference is that they do it in a visually-compelling, action-oriented way so that you’ll actually listen and then use those insights to make better decisions.
So, is that valuable? Well one can still argue and say, no. But a good number of corporations believe yes and so do I. I didn’t leave because I wanted to “get out.” I left to try new things. Frankly, if I have the tiniest possibility for success, it will be because of the things that I learned (see above), experiences that I had (which will forever shape my views on how to run my own company), and people that I met (as they say, networking is critical).
If it seems like I’m already drunk off the Kool-aid, let me spare one paragraph to talk about Bain; because while I’ve assumed that the above is true for all consultants, I have experience at only one firm. The culture at Bain is one that I would have previously thought only possible at small start-ups. Even in San Francisco, one of our largest offices globally, I regularly feel like I’m going to work with friends (rather than going out later in the night with co-workers). The degree to which people, no matter how senior, take time to listen to and mentor your crazy ideas astonishes me. In my first year, I had a surreal moment where I had collected a group of seven senior partners, heads of major practice areas at Bain, on one phone call to talk about my vision of building our sustainability practice area. Our principles of open, honest, direct truly resonate throughout the firm. In short, if I can build an organization with this kind of culture and success, I’ll be pretty pleased with myself!
Also note: When I left the company, I handed out a short slide deck about the wonderful lessons I’ve learned to the many, many co-workers who inspired me. Check it out here.
This blarticle was written in the context of building a product that helps people borrow occasional-use items (e.g., sleeping bags, electric drills) from their friends & neighbors. Check out the prototype here.
