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Tag: Consulting

What are you saying again?

More for that consulting dictionary, from an old gem by Lifehacker (HT: Sophia)

Let’s think out of the box: Really means, "Can you creatively anemic people please come up with something?" The person who says, "Let’s think out of the box" is usually desperate for a new idea and surrounded by people who are not known for generating ideas. So the phrase is actually an announcement that says, "I’m in trouble."

I need someone who can hit the ground running: Really means, "I am screwed." Because no one can hit the ground running. You need to at least assess what race you’re in and who else is running.

Do you have the bandwidth? Note that bandwidth is not time. It is something else. If you ask someone "Do you have time?" you mean, "Am I a priority?" If you ask someone "Do you have bandwidth" you mean, "You seem like your brain is fried. Can you pull yourself together to do this for me?"

Let’s hit a home run: "I’m desperate to look good. Even though the odds of a home run are slim, I’m banking on one because it’s the only thing that’ll save me." Something for all your sports fans to remember: If you have a bunch of solid hitters you don’t need a bunch of home runs.

You and I are not on the same page: "Get on my page. Your page is misguided." No one ever says, "We’re not on the same page, so let me work really hard to understand your point of view. If you want to understand someone else, you say, "Can you tell me more about how you’re thinking."

I’m calling to touch base: "I want something from you but I can’t say it up front." Or "I am worried that you are lost and I’m sniffing around for signs to confirm my hunch." Or "I’m calling because you micromanage me."

Let’s run the numbers and see how they look: "I know they look bad on first blush. But the true use of Excel is to keep changing the formulas until you find a format that makes the numbers look good."

My plate is full: "Help I’m drowning," or "I would kill myself before I’d work on your project."

Let’s close the loop: "Let me make sure I’m not going to get into trouble for this one."

Let’s touch base next week: "I don’t want to talk to you now," or "You are on a short leash and you need to report back to me."

Keep this on your radar: "This will come back to bite you. or me."

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"Give me the view from 10,000 feet"

One of the most atrocious examples of consulting-speak that I see on a day-to-day basis is asking for the “10,000-ft view” — a euphemism for “give me the general idea, but leave out those annoying details that I don’t care much about.” If you don’t care about the details, just say so — don’t give me some contrived “oh I’m thinking at a level far above you ground-cannon-fodder” term to avoid saying what you actually mean.

Of course, instead of suffering in silence, what I should do is really give them that “high altitude view” that they so crave (a la Dilbert):


Ahh… the life of a termite


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It’s beginning to look a lot like September

What does September mean? To countless parents out there, it’s time to for your good-for-nothing kids to head back to school. But, to the select group of college/MBA students out there, it’s something much more horrifying: recruiting.
Last year, I posted a brief sketch on how recruiting works and some general tips on how to improve your chances. I’ll probably extend the series somewhat this recruiting season, but to get everyone off on the right foot (and more or less give away a pretty key hint), here’s a brilliantly constructed video from consulting firm Deloitte:

Yes, it can really be that simple.

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Apparently, I made the wrong career choice

In all fairness:

  • Not all bankers went to public schools, nor did all consultants go to private schools; Actually, in general, there’s a fairly good chance they both went to private schools
  • I wish I could get home by 7:15 everyday…
  • My Blackberry isn’t 4 years old (my firm subsidizes 1 purchase every 2 years)
  • I really doubt that bankers “create value”; find it, maybe, but “create” is a stretch
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You use Excel for what?

image I heard the story of a girl – let’s call her Betsy — who started a couple years back at my firm, who had a very interesting exchange with a partner.

Betsy was a sweet girl, and this was her first time doing any business-related work. She had been an art history major in college, but felt like consulting was the right way for her to get introduced into the professional world.

Betsy’s first assignment was to help a partner with some client-development work. At pretty much all consulting firms, consultants spend some part of their careers helping partners pitch new cases to new clients. In this case, Betsy was asked to help build a model in Microsoft Excel.

For those of you who are unsure what that means, financial models are tools used by businesspeople to help determine the financial impact of a particular decision. It usually involves forecasting sales and profit margins for a couple of years, a task which lends itself to being done in an Excel spreadsheet. Successful financial models are those which clearly lay out their assumptions (i.e. sales will grow every year by 5%) and are “soft-coded” (e.g. in the sense that it’s easy to change the assumption of 5% sales growth and the rest of the spreadsheet cells will update themselves automatically).

After spending an entire day working on her model, Betsy proudly presented it to the partner. The partner looked at it – it was a little choppy, it was her first model after all – and was impressed; it looked very nice. He then asked, “Betsy, what would happen if we changed the growth rate to 10% instead of 7.5%?”

Much to his dismay, Betsy burst into tears. Not sure what was wrong, the partner assumed that Betsy had hard-coded the model (i.e. did not make the Excel model flexible enough to easily change assumptions) and immediately began to try to calm her down.

It turned out that not soft-coding was the least of Betsy’s problems. You see, Betsy had thought Excel was merely a way to format data in a pretty way. She had not been aware that people did calculations in Excel, and so, she had done all the number-crunching with a calculator and pen & paper, and then manually entered the numbers into the spreadsheet.

I’m fairly sure she never made that mistake again.

Image credit

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Straight from the Horse’s Mouth…

My good friend Shang explains consulting:

Sometimes I sit around trying to figure out how to explain consulting to my friends. Sure, it’s about providing strategic advice to various clients in all industries. When it comes down to it, consulting is a client-oriented service, and one that works with tight deadlines and intellectually demanding work. It’s not intellectual in that I’m inventing a new computer or a new vaccine or writing a new scientific postulate, but it’s intellectual in that one day, I could be ramping up to become expert in calculating the costs to a shoe store, and the next day, I’m talking heart disease with cardiologists, all with an aim at understanding the business that it can support.

This is why consulting is such an unpredictable lifestyle. Luckily for me I’m not on traveling cases, but some weeks – like the last 2, I’d never have to buy groceries because I order in dinner all the time, and I also never see my roommates because I cab home around bedtime. Some weeks I get to go home (almost) like a regular workperson at 6:30 ~ 7:00 PM. On average, especially during fall / winter when caseload was heavier, I worked until around 10 or 11 PM every day. Sometimes I want to play all weekend because I haven’t been able to do so all week, but then I run the potential of exhausting myself as well, and I sometimes take hermit weekends to sleep in and clean my apartment.

Coming away from 10 months of doing so I think I’m doing a much better job at managing my time. I’m able to estimate how long I can finish a piece of analysis and I also know when to push back on a consultant / manager when a piece of work is just going to take too much time and add little value to the slide pack.

I still wish I had more time to get in touch with friends. I’m really bad about phone calls, I’m even worse at running 9 – 5 PM errands such as dry cleaning and postal mail, but I’m using Gchat more on light work days. I still send out an absurd number of emails each week. And yeah, I still pursue photography – not as a career, but as something that keeps me sane

In addition to having an unpredictable lifestyle, the work itself is very unpredictable. One day, I’ll be using an Excel model to forecast the future of the PC industry, the next day I’ll be at Safeway trying to figure out women’s shampoo, and the day after that I’ll be cold-calling analysts to try to tease out what sorts of competitive moves my client needs to worry about.

I’ll say one thing about it, “Management consulting is never boring.”

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Consulting to the next level

image The assumption underlying most consulting professions is that it is possible for highly trained individuals to be brought up to speed quickly on unfamiliar projects/businesses/initiatives to contribute valuable advice. Whether or not this is true probably varies from type of consulting, but it raises an interesting issue, why stop at just advice or support?

And it seems I’m not the only one who is asking this question. I’ve identified two (out of probably a whole world of other companies) who really seem to take consulting to the next level, bringing in special forces (hence the picture of Marvel’s Winter Soldier) rather than merely slidemaking advisors:

Pivotal Labs

Pivotal Labs is a small software company who’s business model is an interesting hybrid of consulting and software development. They are hired by software companies who cannot solve key programming problems. Think this means that only small little startups hire them? Think again – their list of clients includes the mighty as well as Twitter, which has recently been dealing with the limitations of the Ruby on Rails programming framework.

From what I can tell of their site, not only are they brought in to help their clients with software issues, they engage in many practices which well-managed management consulting firms follow:

  • Rotate staffing – According to Pivotal’s web site, not only are their employees staffed on challenging problems, they are rotated between projects, probably to prevent boredom, but also to help workers develop experience and to foster a sense of community (we don’t work for Salesforce, we work with each other on Salesforce or any of our client’s problems).
  • Training of the client – The difference between a good consulting firm and a bad one is that the former will help facilitate skill and responsibility transfer to the client. This may mean that in the short-term, the firm sells less projects/cases, but in the long term it improves the value proposition of the consulting project and, at least in theory, leads to future demand for the firm’s services.
  • Proprietary and non-proprietary frameworks/toolkits – Every consulting firm has their own magic “bag of tricks” which they constantly develop and deploy when faced with consulting challenges. Pivotal is the same way, having developed a number of web application programming tools which they are happy to explain (most seem open source) and even happier to deploy.

Bain Corporate Renewal Group

Bain & Company is one of the “Top three” management consulting firms (along with BCG and McKinsey) and is known for being somewhat of a maverick in the consulting industry – when it started, it promised not to work with your competitors, demanded access to top-level management, and became known for its emphasis on protecting the secrecy and confidentiality of its clients. These are now fairly common practices across the management consulting industry, but at the time, they were fairly unique – a pattern which followed with Bain pioneering private equity consulting, again something which the rest of the industry is now copying.

It’s not a surprise, then, that Bain recently announced the formation of its Corporate Renewal Group, an arm of the firm which doesn’t merely provide business advice and analysis, but which actually takes over a troubled company/division and turns it around. After all, if consultants truly believe they have the business savvy and the know-how to help troubled companies, then why not take a hand at actually managing the turnaround?

Unfortunately, the Corporate Renewal Group appears to be in its infancy, so the Bain website and a general Google search hasn’t turned up significant evidence of its success. But, it will be interesting to see if Bain is capable of pulling this fairly significant departure from its core slidemaking advisor competencies to the world of “special ops.”

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Slides done properly

After about a year of slide-umentation, it’s nice to finally see a business person use slides the way they were meant to be used. And, no, this wasn’t at my client, it was at this past week’s Apple WWDC. Take it away, Mr. Jobs (all pictures are from Engadget’s liveblogging):


Simple. Unwordy. Clear in meaning. What is he saying in this slide? He’s saying that Apple rests on 3 major product groups: the Mac (PC), Music (iPod/iTunes), and the iPhone. That’s all you need in a presentation, people!!


Bam! We know that the iPhone 3G has several enterprise features: Push Email, Push contacts, Push Calendar, Auto-Discovery, Global address lookup, and Remote Wipe. Notice how we can tell its about the 3G, because there’s a big picture of the 3G that takes up the left half of the slide. Notice how the right slide just has big text, not tiny text to describe what “Push Email” and “Push contacts” mean, or the little technical specifics on everything.


Now, for something “technical” — but, oh look — the slide makes it again very simple to understand without resorting to an insane mind-numbing wordwall or any overly sophisticated diagrams. It’s just, email pops up in server, is then pushed to the push notification service, and then pushed to the iPhone.


I mean, seriously, using words to describe this slide does injustice to the slide.


Frankly, Jobs could’ve done without the horizontal grid-lines, but again, very simple and elegant chart.


Somebody at a typical consulting firm/business would want to put on this slide the dimensions of the iPhone. Jobs knows, however, that all you need to do is show a picture — so the audience understands how thin it is. How many inches doesn’t stick in one’s head. This image, however, does.

As always, Mr. Jobs, well done. Now, can I please have a free iPhone?

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Pay as you Go Performance Review


Earlier this week, I received my first full performance review. In consulting firms this is a bit more challenging to do as each consultant has probably worked with several teams and each in very different contexts and circumstances.

To deal with this variability, at my firm, each individual is assigned a “consensus reviewer” — someone who compiles feedback and review comments from every team that the individual in question has worked with.

This is then synthesized into a “consensus review” which compiles feedback (both positive and negative) as well as the perspective of the reviewee into a performance review which management then uses to decide on promotions and compensation.

Long story short, the review went well. My reviewer identified a number of my strengths (e.g. analytical skills, “idea ownership”) and weaknesses (e.g. slide presentation, tendency to “boil the ocean“), but noted that I was on a good upward trajectory.

While this was heartening to hear (I have at least a few more months of employment!), I must confess that I find the process of performance reviews to be unnecessarily tedious. Not only do they suck up time, they artificially create periods of extra stress for management as well as the rank and file who, every review cycle, feel the crushing weight of being scrutinized and compared.

What would be much more effective (and should be where the bulk of the work is done) is a “pay-as-you-go performance review“, one where management and staff understand that feedback is not something to be saved for an artificial deadline, but given freely and whenever necessary — both positive and negative. This way, management is not scratching their heads trying to come up with something to talk about from four months ago every review cycle. From a performance perspective, this also helps as it fosters a more open culture where feedback on a regular basis is not only desired but expected, and problems are corrected as they arise, rather than referred to vaguely several months later.

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The Vasa Ship

imageI have recently been embroiled in a long and involved exercise involving a very complicated set of analyses to look at where the profits are in the broader technology industry — something which my manager and two partners have jokingly referred to as a Vasa ship.

When I stared blankly back at them, they chuckled before “kindly” explaining what it meant.

There was a time (a long long time ago) when Sweden was a great military power (no, I’m not joking). The King of Sweden, Gustavus Adolphus, wanted to create a flagship for his fleet — something enormous and powerful — not only to wave the Swedish flag but to also help bolster Sweden’s Navy which found itself frequently involved in wars with the other great powers of the time. To do this, he commissioned the construction of a ship — the Vasa — which was supposed to be the best and largest of its kind.

Of course, ships take time to build, and before the ship was completed, the King had became aware that the original Vasa design was already outdated by the newest models from England and France. To “keep up with the neighbors”, the King then demanded that his shipbuilders build something even greater — larger sails, better guns, etc. The shipbuilders did the best they could — given that they had already built a reasonable piece of the ship — and remade the ship — bigger and badder.

And of course, like all big engineering projects, this cycle of revision occurred again. And again. And again. Until, the ship became some bizarre, monstrous hybrid of what it was originally designed to do and all the myriad features and designs that the king had wanted in addition — becoming something it was never ever intended to be.

And, of course, on its maiden voyage — the Vasa sank to the bottom of the ocean, sending its architect to prison.


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The Secrets of Consulting

… have been revealed. Well, sorta (hat tip: A. Phan).

Pamela Slim from the blog Escape from Cubicle Nation did a guest post on I Will Teach you to be Rich about the consulting profession and some classic consulting pitfalls to avoid for those who are just starting (like me, I suppose). I picked out three of the most interesting:

1. I have seen consultants swagger in to a new company with the sensitivity of slave traders. They view the existing employees as stupid and “backwards” and do little to hide their disdain. This attitude will guarantee that employees will do whatever they can to sabotage your project. You may disagree with the way the organization is run and get frustrated by the attitudes of resentful and complacent employees. But never think that you are superior by virtue of your role as an outside “expert.” You aren’t.

Pamela makes a very good point. Consultants oftentimes expect that through sheer force of will and brilliance, they will “shock and awe” the client into some magical conception of a perfect business. The reality is very different from this fairy tale. The senior management team probably have their own misgivings over whether or not the expensive consulting fees will be worth it, while the employees are probably nervous at the thought of total newcomers judging and picking apart at their routines, and some may even be resentful at what looks like a lack of faith in the firm’s own employees by senior management. One intern at my firm who was helping out with client interviews was even asked by a senior VP, “Am I about to lose my job?

Learning to deal with people from the client (and help them put their fears to rest) is not only polite, but very important for the success of a consulting project. If you can’t get the client to be invested in the solution you’re developing, it doesn’t matter how brilliant your solution is, it will neither be implemented nor respected.

2. There is an infectious plague propagated by large consulting firms that compels new consultants to create huge, incomprehensible presentations and reports. Your executive sponsors love them because they justify the huge rates they spend. The problem is that these 400-slide PowerPoint presentations are decks of death for the poor souls who have to view them. Many consultants see the creation of these presentations as their core work output. This misses the point! The key responsibility of a consultant is to offer clear, timely advice and help an organization implement it as quickly and efficiently as possible for the best business results.

You don’t say.

3. My best friend Desiree, who used to work at both IBM and Accenture, would laugh with me at the “uniforms” we saw on young consultants. I don’t know if there was anything explicitly written in corporate policy, but everyone at Accenture seemed to wear the same black pants (or skirt) and purple-blue button-down collared shirt. What the outfit screamed was “no personality” and “member of consultant flock of sheep.”

I have no idea what she’s talking about. I clearly have lots of personality.

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Why consultants?

image Just who are the clients that turn to management consultants and why do they do it?

On the one hand, companies that turn to management consultants tend to have challenging problems which they need outside help to solve. This suggests that the clients should tend to be distressed companies.

On the other hand, these firms need to have sufficient cash flow to pay the fees that consultants charge. A good example of this comes from the 2001 recession, where almost every consulting firm experienced significant setbacks, with some firms even canceling extended offers and slashing their staff, as a result of the lack of firms willing to put up cash for outside consultants.

This balance suggests that a management consulting firm’s clients will tend to be one of three types:

  1. Healthy firms in healthy industries reacting to unexpected bad news (e.g. two competitors merging)
  2. Strong firms in healthy industries attempting to gain market leadership position or grow into an adjacent market
  3. Firms expecting bad news (e.g. a recession, change in government regulation, change in competitive pressures)

Because the first category is random at best, the successful consulting firms learn to excel at:

  • Identifying quick and new growth opportunities – This probably represents the majority of non-due-diligence/deal-related consulting business during good economic times, as it is during boom times that firms have surplus cash which they will want to convert into greater growth. For this reason, it is imperative that the partners at a consulting firm are constantly aware of new business expansion opportunities (e.g. the best way to get into Asia, the best way to break into a new customer segment, etc.) and are very “fluent” with strategic mergers and acquisitions (e.g. quickly buying up current players to quickly build market share). Such expertise can help the firm attract clients who need to react to sudden bad news by quickly growing, or to clients who would like to invest windfalls on future growth engines.
  • “Pitching” potential threats to potential clients – While a consulting firm may not be able to control or even predict bad news to come, they should be able to paint a negative picture of the future for potential clients, all the while pointing out the insufficiency of the client’s current plans to deal with these problems and simultaneously pointing out the firm’s expertise in creating contingencies to specifically address those threats. I would venture a guess that this is probably the stable core of most consulting firms’ revenues, as it is a revenue source that always exists, regardless of economic environment, and is tied more to the firm’s talents at selling cases than to chance.


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Work-life Balance

imageThe most challenging thing to deal with at a any job is balancing a personal life with the demands of the job. This is something that is especially difficult in a professional services setting, where client demands make the job unpredictable and very stressful. This is not only a problem for individual consultants who oftentimes have to juggle a myriad number of duties and tasks along with a hectic travel schedule, this is a particularly important problem for the firm, which depends on motivated workers to put in the extra time and effort for the client and for recruiting.

It’s no wonder that most firms have evolved different means of helping workers strike a healthy equilibrium. I happen to be very lucky in that my current case team has two mechanisms in place to ensure that, although our work may not always let us have as much free time as we want, we will always be mindful of maintaining a balance between personal life and work.

1. Ombudsman – A Swedish word, ombudsman means “man of the people”, a position in many European governments who’s role is to represent the interests of the public. What the ombudsman does in the team setting is to act as a constant link between the “people” (aka the poor working grunts) and the team management, presenting concerns about (a) what management should continue doing, (b) what it should consider doing, and (c) what it should stop doing. This is done on a weekly basis, with the ombudsperson presenting the results at team meetings for candid discussion.

Although I was skeptical at first when our Swedish transfer brought up the idea, I am very happy to admit that it has been a success; management has been very responsive to team member requests, and the team members have presented valuable suggestions to improving work-life balance.

2. Virtual Babies – The idea of “virtual babies” originated when a new parent asked if it would be possible for him to make it home everyday by a certain time to be with his baby. This led to concerns of fairness amongst the younger folk who lacked such “trappings” (read: they’re single and/or childless), and the concept of a “virtual baby” was born — something key to work-life balance which the case team could track on a weekly basis to quantitatively show how the case team was doing on lifestyle sustainability from week to week.

On my current team, despite the abundance of team members with very young children, the virtual babies have all tended to be exercise-related. Each member sets a specific, but reasonable goal (e.g. “my virtual baby will be ‘fed’ if I work out 3 times during the week”), and his or her progress tracked each week. As my team’s “virtual nanny” (the individual responsible for tracking these scores), it is my duty to not only present to the team management how well the team is doing on any given week (to alert to management if there are problems), but to also present suggestions for how to handle work-life balance, and to determine if any individual is on track to having a dangerously unsustainable work-life balance. The exercise has been interesting, not in that too many valuable insights have come from it, but from it focusing every individual on ways to change our work patterns so that we can better “tend” to the priorities in our personal lives.

The cool thing about these suggestions is not only that they work, but that they are not specific to consulting. They can be applied to any work setting. The only critical “must haves” for these to work are:

  1. Team members have to take it seriously. Virtual baby scores and ombudspeople are useless if people do not accurately report their scores, consistently contribute comments, and carefully consider meaningful suggestions for management to consider.
  2. Management needs to show a credible commitment to sustainable lifestyle. Paying lip service to the ombudsperson or the virtual baby scores without actually thinking about them and carefully considering and implementing suggestions will mean that these efforts are a sham.
  3. Reasonable expectations. At the end of the day, there has to be recognition that work is not vacation. One can’t expect virtual babies to deliver a work environment in which everyone works fewer hours, but is paid more, and delivers more impact. What it can do is help track when problems arise, or when management is doing a good job, and that is an important distinction to make.

Does anyone else out there have any useful work-life balance suggestions?

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Love "Actually"

Slide-umentation is more than just bad as a form of communication, it can break up your relationships (hat tip: co-worker who somehow stumbled on this recently updated Boston Consulting Group classic)

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Project Bunnyrabbit


Consulting, for better and for worse, involves a great deal of secrecy. On the one hand, it means my firm pays for each consultant to have a company laptop (Thinkpad T60) with encrypted hard drive and a 3M privacy filter. On the other hand, it makes it extremely difficult to talk about my work, or to request information.

My firm, for example, makes it a point to never mention client’s names. Even with our dealings with senior management (at the VP level), treating information on a “need to know” basis would be considered a very loose policy. This may seem odd, but makes sense seeing how we are oftentimes discussing potential acquisition targets and potentially sensitive issues (e.g. laying off a division). If such information were to leak, it could lead to a particularly tricky situation for management (e.g. if the division which was to be axed caught wind of this), or, worse, lead to an investigation by the Securities and Exchange Commission.

The bar for confidentiality is set even higher for private equity clients. Because private equity firms basically make large bets on companies by either buying up entire firms or divisions (e.g. like how Cerberus bought all of Chrysler from Daimler-Chrysler, or how KKR bought up all of RJR Nabisco) financed by borrowing all the money, their success depends strongly on getting the best deal for an acquisition. This means that if even the slightest word got out that a certain company or strategy was under consideration, there is a big chance that the acquisition price will go up or a competitor will move to neutralize that strategic opportunity.

It’s no small wonder, then, that in private equity cases, and in situations dealing with potential acquisition targets, case teams at my firm follow the strictest of privacy guidelines. We even take it to the next level by assigning each acquisition target a code name, making it a practice to never use the actual target name, not in slides, not in written correspondence, and not even in face-to-face discussions.

This may seem absurd, but it’s happened on more than one occasion, that two separate case teams at a firm will be working with two different private equity groups, but both be considering the exact same target. Going this extra mile insures that confidentiality is protected, and conveys to the clients that we as a firm take their priorities very seriously.

On a lighter note, though, case teams occasionally use more “colorful names” — “Project Bunnyrabbit” comes to mind as one example from my firm — leading to very bizarre conversations, which, when overheard, sound absolutely ridiculous:

CONSULTANT 1: Yeah, Bunnyrabbit looks really good.

CONSULTANT 2: I agree. Especially this past year, it did really well compared to its peers.

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10K for life

image I’m not sure if this is typical for other consultants, but I spend a lot of time reading through corporate annual and quarterly reports (called 10K’s and 10Q’s, respectively, after the SEC form names). These reports give lots of information, including a description of the business (useful for technology and biotech/pharma companies which can be difficult for the layperson to understand), snapshot of performance for the period that is reported, the relevant historical comparisons for current performance (e.g. the year before, the same quarter from the year before, etc.), and a list of risk factors for the business.

These reports are produced by public companies (and by some private companies, no doubt) for the benefit of investors who no doubt want to know exactly what they are investing in. But, I do also believe that the very process of making these reports is good for management as it forces them to think very hard about their strategy, their competitive environment, and their ability to execute.

This is why, despite scoffing when I first heard about a consultant at my firm who compiles an annual report for himself (complete with a letter to the shareholder — himself), I have recently started compiling these reports. Yes, I know this is incredibly nerdy, but hear me out. Four reasons why everyone should think about making personal annual and quarterly financial reports:

  1. It forces you to track your finances regularly. The practice of having to make annual or quarterly or semiannual reports is impossible unless there is some effort made to regularly check your finances. This is good as it alerts you to irregularities (e.g. credit card fraud) and helps to make sure that you are sticking to your financial goals (e.g. save 10% of my income every month).
  2. It lets you quickly see mistakes in your judgement. Hindsight is 20/20, but only if you look. By thinking about your past year, or quarter, or whatever period you decide to make these reports on, you are forced to think about what you could have done better. Only by routinely thinking about and being honest with yourself can you make better decisions in the future.
  3. Have an idea of where your finances are going. This has been very helpful for me as I plan out big purchases (e.g. vacations, electronics, etc.) and think about how much of my savings to put into investments month-after-month.
  4. It helps you plan for the future. This, in my mind, is the best and most important reason to do these financial reports. I made one for the 6 months since I graduated from college, and by tallying up my purchases and my income and my investments, I found that I was better off than I had thought I was. As a result, I am planning to increase the amount of money I invest in equities for this coming year. I also looked at my purchases and realized that, by making a few changes in what I buy for lunch, I could easily cut down my expenses by several percentage points.

It’s not necessary to copy the form that corporate annual reports come in, and it’s not necessary to do monthly reports or to make them especially pretty. What is important is to pick a schedule which sounds reasonable (I suggest every 3 months as a good balance between having to do it too often, and having to do it not often enough) and to pick a form which is reasonably easy to do but still forces you to write down your past track record and future plans (could even be scribbles on a notepad if that works for you).

Or if you’re more artistically inclined, you can do what Podravka, a Croatian food company, does which is make an annual report that is only readable after you bake it (hat tip: Eric).

But that’s just for extra credit…


It is my expert opinion that…

There are two things that can happen when a consultant is tasked to work with an unfamiliar and esoteric technology.

Either the consultant will do his or her own research, reading reports, calling experts, and asking for guidance from knowledgeable individuals and extract the relevant information for a good outsider’s perspective on the business…

OR, if the consultant is less inclined to building credibility and doing his or her job, what will happen will be more like this.


I think I am technically the rat…

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Life’s Little Victories

My current case is working on high-level strategy work with a tech company, the goal being to help guide their strategic thinking as they attempt to map a strategy for future growth. The case, while very challenging because of its breadth, has been very interesting, not only because of the interesting strategic questions that we are trying to answer, but also because the tech geek in me is literally being paid to learn more about future gadgets and software products.

Oddly enough, though, despite the vast amount of work I’ve done on the case on studying technology markets and technology companies, the work that earns me the highest praise from the partners and stands the greatest chance of being presented by the client’s senior management deals with, of all things, women’s deodorant.

About two weeks ago, I receive a completely unexpected email in the morning from my CTL. Instead of giving me some guidance on my workstream from the previous day concerning profit margins in different technology markets, I was being asked to do research on Procter & Gamble, the large consumer products company. It turns out that the partners on the case are trying to present the client with examples of companies who are able to be more profitable than their peers and explain how they are able to sustain that advantage — and Procter & Gamble was one example of such a company. Our working hypothesis was that P&G was able to be more profitable by effectively becoming the “premium product” in many of the product niches they attempt to play in.

The tricky part was how do we prove this? After a little discussion, my CTL and I decided that the simplest way to do this was for me to drive to the nearest Safeway and go up and down the aisles comparing the prices of P&G goods (e.g. Tide, Pampers, Crest) to their competitors.

Sure enough, I got a lot of weird looks from the store people and from the other shoppers as I canvassed the aisles looking for P&G products and their relevant comparisons. In the hour that I was there searching for products, I learned more about the product diversity of toothpaste, deodorant, detergent, dishwashing soap, than I had ever known (or wanted to know).

Worse was coming back to the office and presenting my preliminary price data to my CTL and manager, both of whom grilled me (although I could see the smirk on my manager’s face and the chuckle in my CTL’s voice as they did so) on whether or not I made the right product comparisons (is Infusium 23 comparable to Finesse? Or Pantene? Are Huggies comparable to Pampers? What’s similar to Tide? Or Secret?)

After begging for help from wiser friends (read: female friends — big shout out to J. Sasaki and K. Teng and V. Liu for all their help!), I prepared a slide showing P&G’s price premium across a number of product categories, and sent the slide out to my CTL and manager, never expecting it to go anywhere or amount to anything.

A few days later, one of the more senior partners in the firm walks by my desk and tells me that the client was very excited about the slide I had prepared and that it stands a decent chance of making it into the CEO’s presentation. Not the other volumes of analysis I’ve done on tech markets, on tech products, on tech companies, on financial forecasts — but the slide I make on women’s de-odorant, women’s shampoo, diapers, and laundry detergent, researched from a couple conversations with friends and a hasty trip to Safeway.

Welcome to management consulting, people.


How Not to Handle Professional Services

image In consulting, the client is king. The same is true for many professional services industries. It makes the job particularly challenging, as success involves more than just getting at the correct answer to a client’s problems, but presenting it well.

While it can be pretty difficult to do this well, it should be very clear that the following pitfalls should be avoided at all costs:

  • Not being responsive to phone & email – There is nothing that spells disrespect and introduces doubt quite like being unresponsive to requests for contact. It makes the client feel like a loan shark trying to call in some loans.
  • Talking down to the client – Unless you enjoy working on answers that never go anywhere, making sure the client impedes rather than helps you in your quest for the right answer, and guaranteeing that the client never hires your firm again, stop talking down to your client, and treat them like the partners they should be.
  • Directly going against the client’s wishes – If the client says, “No, we are not going to do this,” the solution is either (a) don’t do it or (b) work with the client to arrive at a reasonable compromise. Your response should not be, “Well, we think you’re being foolish; let me now waste the next 30 minutes on our phone call pointing out why.”
  • Give unclear and round-about answers to your client’s questions – “Car salesman” does not usually bring up positive thoughts — so don’t act like one. Give clear answers to your client’s questions, not answers which suggest you are either hiding something or have absolutely no idea what you’re talking about. Even if you don’t know, it’s oftentimes better to speak the truth than it is to lie and then lose all credibility when the truth does come out.
  • Make bizarre jokes about the nature of the relationship with the client. Being casual with the client to build camaraderie – good. Making jokes about possible means to increase the fees that the client has to pay – not so good.
  • Not delivering on promises. This should go without saying, but, if you promise to email something by the end of the day, and then don’t, then you apparently just don’t like having clients.

I was recently on the receiving end of all of these — in the course of one phone conversation in an interview with a carbon offset provider (as research for my firm’s Green initiative) who could have been a potential partner for us. Suffice to say, they won’t be now if I have anything to say about it.

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