Most consulting firms hire young analysts to brainstorm strategy but leave the implementation to grey hair veterans in the boardroom. And as many in the industry believe, consultants lack the skill set required to execute their winning game plan. As consulting is a profession that relies overly on of intellect and aptitude; for instance, as a consulting partner you can always roll up your sleeves to get things done whereas, a project manager cannot do the same. But more importantly, we need to understand that strategy is like clay modelling rather than Lego blocks that come with instructions.
Strategy is Clay, which lacks instructions unlike Lego
Strategy is ‘what you do’ to move from your current to desired state. Everything may look logical and reasonable on paper, but just as rubber hits the road there will be inertia and friction. Hence, hiccups are bound to surface once strategy moves into implementation. Over decades, the Big4s and MBBs had adopted an hands-off approach to implementation, knowingly leaving billions on the table. Yes, you’ve read the later part of the previous sentence correctly. Why would someone knowingly leave billions on the table?
First, the Business Models for Strategy & Management Consulting are better suited for quick and dirty – fixed duration or well defined scope; second, the greater uncertainties in implementation lead to schedule risks and subsequent reputations risks. Furthermore, strategy may require to be re-visited or even questioned after discovery of new information or clarity on assumptions. This may create a maker-checker situation where the maker may stick to denial for obvious reasons.
However, this blog focuses on the later; including uncertainties, resulting in challenges and surprises; and constraints of implementation – making it worth to leave billions on the table!
Starting with Constraints, as today’s generation believes in bottoms-up!
Absence of constraints would eliminate the entire subject of Microeconomics. It is better to identify and acknowledge them at the earliest possible to decide whether to work-with or work-upon the constraints. However, more often than you think, management chooses to remain in oblivion, by denying or ignoring constraints. This results in the worst kind of dead blocks as expected results become unrealistic in the given scenario.
The usual constraints include talent and information. Although you might consider Money, in most cases budget is not a constraint until things go wrong and management commitment reduces. Furthermore, conservative estimates (sandbagging in PM terms) and over optimistic timelines leading to delays shake management commitment; thereby, impacting budgets.
Most consulting firms engage top-tier talent that their clients are either unable to afford, hire, or retain. Unlike consulting analysts with brilliant articulation and presentation skills; most corporates cannot expect output from vague descriptions or high-level briefings. And this goes a step further, as one might have to engage poke-a-yoke methods to prevent #REF! nightmares in excel models .
Consulting firms are far more resourceful not only in terms of sources such as knowledge banks, industry data, libraries, publications, etc.. but also in terms of SMEs (Subject Matter Experts) and network of practicing professional with refined knowledge from recent engagements. Such set of curated knowledge and refined wisdom is often unparalleled. This skill set is continuously refined with new engagements; whereas, product companies often seek to move from Zero to One. Also, even if things are standardised in later iterations, uncertainties beyond foreseeable risks and conceivable assumptions keep posing challenges.
Although uncertainty is the basis of an entire industry called gambling, or perhaps Venture Capital!
After spending last few months in Project Management, I feel that Project / Program Managers are way under appreciate as compared to Fund Managers. Both are supposed to work on the success of the Project or Investment – without having much knowledge, access to ground level information, or direct ability to steer decisions! However, the start difference is that a Fund Manager can get away with a 10% strike rate; whereas, the only option for a Project Manager is 100% strike rate.
They way consultants and fund managers deal with uncertainties is by merely creating scenarios and probabilities in financial models or provisions and branches in decision trees. Whereas, the Project Managers have to get their hands dirty and also undertake the risk of those probabilities going wrong along with improvised thinking. Furthermore, given their wide spectrum, it is difficult to encompass them in consulting contracts; for instance, engagements with uncertain outcomes such as R&D that entail high risks are mostly governed by time and materials contract rather than deliverables and their perceived value, which is often the source of high profit margins.
As a closing thought, this is not meant to undermine the efforts or intellect of consultants as they are definitely experts at solution development along with outside perspective but rather as a commentary on realities and challenges of strategy implementation.
Photo by Garrhet Sampson on Unsplash
Savvy Munshi 