Posts Tagged ‘consulting’

Walter Kiechel’s “The Lords of Strategy” fills in a missing piece of business history

Wednesday, May 26th, 2010

lords of strategy coverHow did management consulting get to be where it is? Did firms like McKinsey, Bain, and Boston Consulting Group simply appear out of nowhere, fully formed, to foist re-engineering on companies everywhere and snap up graduates of the top business schools? Well, no. To find out what really happened you need to read “The Lords of Strategy: The Secret Intellectual History of the New Corporate World,” by former HBR editor Walter Kiechel, a well-written, cheeky history of the birth and growth of the modern consulting industry.

Kiechel paints vivid pictures of industry pioneers like Bruce Henderson of BCG and Bill Bain, and cannily outlines the keys to their success (in Henderson’s case, a passion for using mathematics to analyze business; in Bain’s, an ability to build relationships with CEOs and a willingness to tie project compensation to increased stock price). He also traces the next wave of strategy emerging from universities, most prominently the ideas of Michael Porter and their impact, through the re-engineering craze to the current day.

But most importantly, he puts into context what the strategy revolution, as applied by the firms he focuses on, meant to US (and eventually worldwide) business. One, a belief in the power of analytics; and two, the value of models to spread learning (i.e., best practices).

The book ends with a whimper rather than a bang. The last couple of chapters, looking ahead at the future of strategy and discussing the impacts of the financial crisis, are not up to the standards of the rest of the book, as if the events of 2007-2008 derailed Kiechel’s intended story arc. As a result, the summing up is a bit disoriented, as I suppose we all are in business after those cataclysmic recent events.

I also wish the book were more carefully sourced. After reading several chapters, it becomes clear that much of Kiechel’s source material comes from direct interviews with key members of the consulting world. The book would be better if those sources were identified and end-noted, and that other assertions connected back to their sources as well. Why this wasn’t done is a mystery to me and undermines the book’s authoritativeness.

Nonetheless, “The Lords of Strategy” is a valuable addition to the business bookshelf. It shines a light on and humanizes a part of the business world that operates in secret but which has significant influence on businesses the world over.

The myth of the “SuperCorp”

Tuesday, December 22nd, 2009

I had lunch with a friend and fellow consultant last week. I was mentioning some impressive recent reading on innovation that I thought his clients might be interested in. He said this:

That Harvard Business Review stuff is great. I used to read it a lot. But you need a certain corporate culture to be able to do these types of things. You need to have basic management stuff nailed down, you need a clear mission and vision and have that communicated and understood across the company. You have to be good at collaborating.

The places I work with don’t have that. They couldn’t do these innovation processes even if they wanted to.

My friend works with medium-sized local businesses. But I remember my big company days, and the picture wasn’t much different. They couldn’t pull off big management initiatives either (I remember failed attempts at creating a Learning Organization and embedding Value-Based Selling).

I have to admit, I love to read stuff like Rosabeth Moss Kanter’s writings around her book SuperCorp. Kanter writes that companies like Procter & Gamble, IBM, etc., are implementing “management 2.0″ – doing well by doing good, adopting socially-conscious principles and through them are gaining profits and positioning themselves for the future. But in my heart, I’m skeptical.

Here’s some recent writing of hers:

…keeping people employed in good jobs – is a goal of the vanguard companies I describe in my new book, SuperCorp. Companies such as Procter & Gamble, IBM, and others are trying to create innovation and profits through values and principles that enable them to have a positive social impact. They are thinking their way out of twentieth-century assumptions (e.g., that a job must be performed in a facility at specific times and assigned by a boss who observes performance) to create twenty-first century dynamic workplaces.

The Super-corporations want to be employers of choice. Their leaders prefer not to talk about insecurity but instead invoke flexibility. That semantic distinction might be scorned by the uneasily employed, but it conveys a new reality that can have positive as well as negative consequences.

Flexibility shows up in family-friendly policies. Vanguard companies are likely to offer family leave for care-taking, reassign husbands and wives so they can work from the same city, and provide lounges for breast-feeding new babies. They also give employees opportunities for community service, to help them express their values and make a difference to causes they care about, as part of their employment, which is an effort make work meaningful even for those in jobs with a high drudgery quotient.

These companies’ leaders say that the challenges of global change require a shift of responsibility from employer to employee. Employers must give people opportunities and tools to succeed, but individuals must keep themselves ready for the future.

It’s possible that big companies have changed since the years I spent working for them. But to me it’s likely that Kanter’s thesis is valid when you talk to the CEO, but completely invalid at ground level. A big company I used to work for was recently acquired by an even bigger one. And the people I still know there are scared to death, worried about when the ax is coming down next. They’re working hard, but working scared, and that’s not a good environment to get important work done. IBM and Procter & Gamble live in the same world as this other big company. I would be surprised if down deep their employees don’t share the same insecurities and fears (and compensating unproductive behaviors) as my former colleagues.

If the CEO lives in one reality, and the customer-service reps live in another, what difference does it make? It comes down to where the value is added in a business. At large companies, the vast majority of value creation happens at the ground level – the hundred thousand people on the ground floor, or the five thousand first-line managers who support them. Not at the executive level.

And at ground level, I’d bet that many employees of Procter & Gamble and IBM don’t view their company as a SuperCorp. They probably see it much like the clients of my consultant friend – a company with plusses and minuses and a lot of basic things that aren’t fixed yet. No matter what the CEO thinks.