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Tag: analysis

Reading for value

My buddy Bill shared an article on Google Reader about the demise of Newsweek which linked to this New York Times article (does anyone else find it ironic that one newspaper experiencing financial problems is calling out another publication’s financial problems?):

American newsweeklies were built on original reporting of Large Events, helping readers make sense of a complicated world, but it is a costly endeavor with diminishing returns during an era of commodified and chewed-over news. Both The Economist and The Week were built, rather Web-like, to “borrow” the reporting and then spread analysis on top, thereby making a sundae without having to crank the ice cream maker.

And in this instance, the foreignness of the brands gives the reader an intellectual sheen that once Olympian domestic brands can’t. The Economist and The Week not only make you smarter at cocktail parties by giving you a brief on the week events, but name-checking them will make you sound in the know. Mention Newsweek and people will wonder whether you’ve been going to the dentist a lot lately.

Don’t you love British wit? 🙂

I’m an avid reader of The Economist, and Bill’s shared article got me thinking of why it is that I read The Economist (and many of the other things in my reading list) rather than the numerous other publications out there:

  1. It makes me look smarter. Okay, lets cover the least important (albeit still true) reason first, so I can get it out of the way and focus on the more substantive stuff :-).
  2. It’s analytical. I’m an analytical guy. If there’s one thing consulting has taught me, its that a reasoned conclusion requires both quantitative and qualitative analysis. I’m not satisfied with soundbytes, and I’m not satisfied with superficial reasoning. But, I probably don’t have the time to follow each thread/claim to its origin, nor do I have the time to crunch through all the numbers. Enter The Economist. How many other publications do you know who’ve created an index for measuring purchasing-power parity based on McDonald’s Big Mac? Or run their own quantitative models on the Greek economy to project how the Greek debt situation might look 5 years from now? Or are even in the business of selling macroeconomic analytical data?
  3. It’s opinionated, but still balanced and rigorous. A lot of newspapers strive to be “unbiased.” I think that’s the wrong approach. There are few articles in The Economist which I would say are truly unbiased. And much to its benefit, I might add. When done correctly, having an opinion means doing the necessary research and analysis and thinking. It means carefully considering opposing views. What distinguishes The Economist’s approach is, even if I disagree with the opinion they conclude with, I am given plenty of the background needed to disagree. What newspapers should focus on is not to provide “unbiased” coverage, but balanced (as in carefully presenting all sides of an issue) and rigorous (going beneath the soundbytes).
  4. It’s timely enough. As a weekly, The Economist can’t exactly provide the up-to-the-minute coverage that cable news networks provide (although a lot of that can be remedied if you just check their website). But, frankly, unless you’re a day-trader or a diplomat, I fail to see why you would ever need to know everything on a “as-it-happens” basis. And, if the tradeoff for not getting the news “as-it-happens” is missing out on hours of repeated soundbytes and the very trite cable news network commentary, then I am more than happy to make that tradeoff.
  5. Original content/coverage. Related to the previous point, although it may not be as timely as a cable news network, the Economist also goes places most cable news networks don’t go. It’s the one place I know I can go to get decent analysis of happenings in the Middle East, Africa, Latin America, Eastern Europe, and Southeast Asia – parts of the world that the cable news networks and major newspapers ignore in favor of endlessly hyping up soundbyte-ridden coverage of more “popular” news items. Also unlike many news sources, they’re also one of the few I can reliably turn to who provide decent science coverage in a way which is respectful of scientists and what they actually found rather than what the newspaper thinks the public is interested in the scientists finding.
  6. It’s witty/doesn’t take itself too seriously. Let’s forget, just for a moment, the witty phrasings/titles that are all over The Economist. Take a look at these covers, and tell me that this is a magazine that takes itself too seriously:

image image image

The interesting thing is, without even thinking about it, the list of news-y blogs/web feeds I follow (right-hand-side column of my Links page) has steadily fallen more in line with the 6 reasons I mentioned above. Of course, the list could always use some pruning/adjusting (and as anyone who’s seen how much I share over Google Reader or on Twitter, they can tell I have a lot that I could cut from my list), but I think this set of 6 criteria is as good as any for helping people to manage their information sources.

What other criteria do people use in finding good sources of information/news to follow?

(Image credit – cover 1) (Image credit – cover 2) (Image credit – cover 3)

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Try Every Flavor

image Two weeks ago, I sat down and had a long overdue chat with a partner on my case about my career and what I should do to make the most out of my consulting career.

And, like a good MBA/consultant, he put together a framework – although instead of it being a 2 x 2 (as is most common in business/consulting circles), he put together a 3 x 3:

Strategy Diligence Operations
Analysis
Team
Client

Across the top are the three basic types of consulting projects that most management consulting firms partake in:

  • Strategy work: Helping a company develop a winning strategy or a successful response to a competitor
  • Diligence: Helping either a company or a private equity/venture capital/holding company conduct strategic and financial diligence on a potential acquisition target
  • Operations: Helping a company streamline its decision-making or business processes (e.g. manufacturing, call center, etc)

Across the left-hand side are the three types of tasks that consultants need to master to add value to their clients and their firm:

  • Analysis: Understanding the analytics and business drivers to allow you to solve the key questions a business needs to answer
  • Team: Contributing to team by providing leadership and support for one’s teammates
  • Client: Being able to successfully create a meaningful partnership with the client

My partner’s advice to me, unsurprisingly, was to make sure to touch every aspect of the job. Unwilling to go for a simple “diversity is good” argument (as I’m not especially fond of the long hours of diligence work that my firm performs for private equity clients), I pressed him on the reason for this.

In response, he told me about a conference call he had with several other senior partners to discuss the technology client’s future. On the call, the operations-centric partners and the strategy-centric partners all saw different aspects of the project.

The operations partners saw the client through an operational lens – they felt the client was secure due to its strong market position and profitability. They saw opportunities for rapid improvement (cutting out extra waste, etc) to further fund the company’s ability to develop the technology it needed to stay competitive.

The strategy partners saw a different picture. They saw the client as sub-scale in a scale-driven industry. They saw the client chasing the wrong technology and saw the client’s differentiation eroding as the client’s competitors pursued a path towards greater integration with other technologies.

My partner, on the other hand, because of his involvement in cases along each of these dimensions over his 15 years as a consultant, painted a more holistic picture. What he saw was a company that would be in a strong position in the near team (as the operational partners were saying), but would be in a poor competitive position over the long haul (as the strategic partners pointed out). But, to this, he added the perspective he had received from his numerous diligence projects – instead of chasing a strategic or operational strategy to maximize the client’s chances of winning in its market, he advocated that the company figure out how best to sell itself.

image In his mind, the client’s struggles was just a small part of a greater backdrop involving two enormous technology titans who would eventually run straight into each other. And much as many developing countries learned to play both sides of the Cold War to their benefit, my partner’s recommendation was for the client to figure out how to capitalize on this struggle to better position the client to win in a new market or to sell itself to the victor.

Of course there’s no way to tell if he’s right or not, but the ability to see the holistic view is something I would value. And, given my lack of experience thus far in the operations and client-facing side of equation, I’ve currently preferenced that my next staffing assignment be an operations-heavy and more client-facing role.

(Image Credit) (Image Credit)

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“Boiling the Ocean”

In many ways, scientific training crosses over very well into consulting. It trains individuals to think critically about the world around them, to take in all observations for careful analysis, to skeptically consider evidence, to craft and test falsifiable hypotheses, and to find rigor in numbers and computation. It is no small wonder that so many science students at all levels successfully make the jump into consulting.

On the other hand, scientific training also instills within trainees a few trends which run contrary to what a successful consultant needs to be. Science emphasizes thoroughness and depth. Your training is not complete until you know every little detail relating to your field of interest — and quite a bit more about associated fields. It is quite inconceivable to the layperson just how much a grad student has to read just to be able to “tread water” in his or her field, let alone be successful at it. To that end, grad students are not only forced to but strongly encouraged to read broadly and constantly, leaving no stone unturned; no tree missed, no matter how large the forest.

Unfortunately, while this focus on depth can lead to very deep insights and very complete analysis, a consultant rarely has the time to “boil the ocean”, or perform an analysis with a thoroughness and completeness which leaves no room for uncertainty. It is simply not feasible for a single consultant to read every relevant piece of literature dealing with a given client or industry or division or even a product and yet still have time to complete a segment of analysis fast enough for a client team to meet a deadline or be agile enough to switch strategies when necessary.

Instead, a consultant (or anyone in a non-research oriented job, really) has to learn when enough is enough — when there is enough information to make a judgement or perform a piece of analysis but not too little such that the judgement or analysis has no possibility of being reasonable.

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