Providing the reasons are at all plausible, boards 68
and shareholders tend to have short memories and a client can get away with making optimistic forecasts and never achieving them for many years.
But if you find that this has been the client’s game for the last few years, you’re probably on to a goldmine.
Once you show the client a couple of hockey-stick graphs and they realise you’ve sussed out what they’re up to, they tend to become quite amenable to the idea of buying consulting from you to bring in the results they regularly promise and just as regularly don’t achieve. Giving you a couple of million of their shareholders’ cash is better than having you going around spilling the beans to all and sundry.
If there are no hockey sticks to be found, then you must try something else. Another good wheeze is to juxtapose and compare some figures in a way the client has never looked at them. Often you can achieve quite dramatic visual and emotional effects by taking one set of figures from the client’s top management reports –
usually these are the big picture figures like costs, revenues or profits. The trick is then to compare the trend of a big picture figure with a much more operational figure taken from the coalface deep down in the organisation and therefore normally invisible to top management.
You could, for example, draw a graph of the trend of profitability versus customer service. If you’re lucky profitability might be stable or increasing, but customer service may be going nowhere or even decreasing as customers get more demanding. If this is the case, bingo! You’ve got a good story to tell. “Your people are content and lazy because profitability today looks acceptable. But you’re giving lousy customer service – so, how’s your profitability going to look next year and the year after?”
I was once doing a First Phase in a manufacturing plant in France, which was owned by one of the largest Swiss pharmaceutical companies. We drew a pile of graphs and noticed that although costs were regularly increasing each year, output was static. We asked the managers of the plant for their reactions to this. One of them just shrugged and said the great words, “bof, ça ne fait rien, les suisses ont les poches profondes. ” (“Oh, that doesn’t matter, the Swiss have got deep pockets”). With relish, we played back the results of the first week’s work to the Swiss German gentleman responsible for worldwide manufacturing and told him that we had the impression that the people at the plant weren’t really trying hard because they felt cushioned from any pressure by the vast profits made by the company. The effect was truly wonderful. It was almost like turning a switch in the man’s brain from, ‘I don’t like consultants and don’t trust them’ over to ‘those cheating conniving Frenchmen have been pulling the wool over my eyes for years. I’m going to send the consultants in to really shake them up. That’ll teach them a lesson they’ll never forget.’ Three weeks later, he bought a million plus euro project from us. Later we descended on several more of his factories and found the same story –
extravagance, indifference and waste. After all, who cared about being efficient – pharmaceuticals are enormously profitable, so nobody bothered even trying to run a tight ship. We changed that. That was the first of a string of million plus projects we did in that company and all because some idiot confided in us, “bof, ça ne fait rien, les suisses ont les poches profondes. ” Never confide in a consultant, however honest and innocent they might appear.
C. Update 1
The climax of the first week is your first presentation to the client, what we used to call ‘Update One.’ When you go to see the client and their management team with the results of Update One, you’ve usually only been in their organisation for four or five days and are still finding your way around, whereas many of the client’s managers may have been around the place for twenty years or more. They know the score and you definitely don’t.
Therefore you can make some hideous mistakes if you make any definite statements so early in the study.
In training our new analysts, we always used to tell them that in Update One, they should emulate the American TV detective Columbo and not Kojack. Kojack-type consultants are the experts; they know all the answers and just barge in and tell the client what needs to be done. The Columbo school of consulting is much 69
more subtle and deferential. By posing indirect questions and by dropping hints rather than banging the table and pointing fingers, we let the client arrive at the horrible realisation that their world is collapsing around them and that they definitely need a boat-load of consultants.
In Update One, you tell the client that you’re not going to give them any answers yet. You just want to feed back what their people are saying in the interviews and test with the management team the first impressions you’re getting from chatting with employees and from the first trawl through the numbers. Although you tend to play down the results of Update One by saying you’ve not yet done any studies and so cannot reach any conclusions, there’s usually enough material from the interviews and the numbers to send messages like:
•
Very few people understand what the organisation’s strategy is.
•
Most people believe communication is very poor.
•
Most middle managers find the management numbers all but useless.
•
Departments don’t work together and often have conflicting goals.
•
Most people believe that the organisation could easily improve its performance by 20% -30%.
•
Few people believe that customers or clients get good or excellent service.
•
Few people believe that you can make any major improvements to the situation without outside help –
from, for example, some nice friendly management consultants like us.
So, gently but firmly, you give this feedback and use this flood of negative energy from the organisation to test how top management see the situation. Sometimes, the people at the top just dismiss the results as their staff whingeing and moaning. In this case, you know you’ve got what we called a ‘controlling/taking’ client who will make the decision whether to buy consultancy or not regardless of what their people think. That calls for a ‘top down’ sales strategy – convince a couple of people at the top to buy a project and the rest will obediently fall into line.