Category: Business, Organization, and Management

1) WHAT I LIKED ABOUT BUILDING CONSULTING COMPANIES

(reposted by request) (original october 5)

A consulting company is little more than an intelligence organization that collects information from various organizations and uses it to sell solutions to different organizations where they gain new information and repeat the process. I love it because I learned so much every day. You get paid to do basic research on the operations of various companies. You are paid to collect information that most companies work to hide from the outside world. The price is volatility. You have to be able to tolerate that volitility. Consulting companies react early to economic fluctuations expanding quickly in booms and contracting quickly in recessions.

2) LET ME HELP YOU: A CONSULTING FIRM IS AN INTELLIGENCE ORGANIZATION: A PROFESSION OF BENEVOLENT SPYING.

(reposted by request) (original on November 22nd)

Why do you think I built so many consulting firms? And I was very good at it by the way – thanks. Because I am honest with myself about that business.

In the most part, as an intelligence specialist, you gather information from one group inside the organization and transfer it to another group who is dis-incentivized for various compensation and status reasons to cooperate with, defer to, or obey the directions of the other group.

In most large organizations the answer to every current problem is hosted in someone’s brain somewhere in the organization (often in the marketing department’s middle management, or in the bowels of accounting where some uncomfortable truth is protected from release).

But the incentives to act on that knowledge – often precisely because of the individuals who host it – cannot or will not be acted upon. Otherwise, people will not act on the solution to a problem because the incentives of the organization are perverse (counter productive). Or because the individuals currently in positions of decision making would be subject to negative effects (usually middle and upper management other than the c-suite).

So the job of a consultant is to simply get people to talk to you on one hand, and to produce a deliverable that provides a means by which the knowledge that exists in the company can be brought to fruition by some sort of reorganization of goals, processes, responsibilities, incentives and compensations.

But mostly – at least a the level I tend to work – by giving people in the organization PERMISSION to change alliances and loyalty relations without breaking an alliance or loyalty.

The mistake of most neophytes is to assume people are ignorant, stupid or stubborn, when in fact humans pretty much demonstrate rational action.

Despite their policies against it I have, (and many agency networks have) had parallel projects in multiple cell phone providers. Each desperate to protect some strategy that is well understood by the competition – so much so that the internal ability to execute has been inhibited by this defensiveness: which I usually view as an excuse to not get work done more than defensiveness.

At every level of the organization there is information that is either true and actionable, false and actionable, inactionable, or irrelevant. The trick is to find it.

Why? Because a company and processes aren’t special or unique or interesting, or special or a competitive advantage any more than whether a culture practices tea ceremonies or dances ’round the may pole.

What separates a good company from a bad is the quality of people, their ability to reorganize in response to market changes, and the quality of information they make use of, and the technological means by which they warranty that they are not privatizing the shareholder commons either by action or inaction, statement or silence, constructive suggestion or destructive rumor and gossip.

They are probably obvious and the central problem of organizing production under voluntary employment, is in preserving the will of those with knowledge to make use of it.

Basically, truth wins. Discover the truth. Provide a plan. And in that plan, find a way to preserve signals for everyone. Pay people if you must to take a hit. Don’t expect them just to take a hit for you. If you try to do things without compensating people then you’re not engaging in exchange.

3) THE “BIG FIVE” WORKPLACE TRAITS IN CONSULTING

(original 2013)

People are not a commoditized “meat” that is reducible to P&L Numbers. It takes a variety of skills to produce excellent service work. And Oversing measures (at least) those five different properties:

—TRAIT————————-Measurement———–

1) “Like-ability” (Peer 360 system

2) “Soft Skills – Trustworthiness” (Skill System by Peers)

3) “Revenue value of hard skills” (Skill System / Peer Skill Ratings)

4) “Customer Trust and Retention” (Net Promoter Score)

5) “Profitability” measured as:

a) Utilization and

b) Chargeability (Standard financial metrics)

So, any individual is always represented by oversing using all these ‘metrics’. Their “Personality Profile” so to speak.

THE WORKPLACE AS EXTENDED FAMILY RATHER THAN LABOR POOL. We found that feedback from PEERS was MORE ACCURATE and MORE RESPECTED and produced GREATER BEHAVIORAL CHANGE than all feedback from management combined. In fact, management opinion of any staff member was usually a CONTRARY INDICATOR of the individual’s value to the business.

So, our use of these measures helped us create a culture of a ‘family’ by giving honest feedback, the purpose of which was to ‘advance the individual and the family’ as a whole. Not through threats, not through incentives, not through pressure, but through advice and counsel. Humans want to do the right thing to fit into groups.

And you just have to give them to tools to do so. Reliable information is the best tool. Like the original meaning of ‘confession’, almost all feedback is publicly visible. Your sins are public, as is your heroism.

ONE OF THE SECRETS OF ANY BUSINESS IS NEED FOR EACH OTHER. One of the secrets is “IDLE HANDS MAKE ILL WILL”. And people will naturally free-ride and rent-seek, which creates animosity in the ‘tribe’. The best way to prevent bad behavior is by minimizing the potential of it. The best way to minimize potential, is to always be marginally short of staff, so that everyone has to chip in to keep everyone else successful and happy. Furthermore, the incentive to overstaff is usually crated by the most populous RENT SEEKERS in any business : middle management.

Oversing reduces the ability of middle management to rent seek, hide information for the purpose of obtaining political power. Our experience was that we needed only talent leadership, not ‘management’ per se. Because the feedback and ‘management’ of individual behavior was democratized into a marketplace of voluntary exchanges of assistance, appreciation and complaint.

Oversing is revolutionary if you use it as we intend that you do. It will transform not only your ability to manage your business by looking forward, and by increasing utilization but it will transform you business by making the ‘family’ manage the business, and thereby feeling PART OF IT, and able to INFLUENCE IT.

Management hierarchy is, just like government, little more than rent seeking and obfuscation of facts. And just like government, management hierarchy is the primary reason why individuals feel resentment toward the business. Make them LOVE IT INSTEAD. IF TALENT IS YOUR BUSINESS, THEN USE IT, AND TAKE CARE OF IT.

4) THE SOCIAL CLASSES OF SOFTWARE DEVELOPMENT COMPANIES

Scientific Software design and development – Operating Systems Design and Development – Enterprise Software Product companies – Consumer Software Product companies – Business Software companies – Small Independent software companies – Internal Operational software – Consulting business operational software. – Internal IT staff. – Temporary (or long term) staffing. – Short term staffing. – Independent software consultants. – IT independent consultants. Varies a bit by company. But basically it’s driven by scarcity. (I need to write this list for economists, because it’s pretty funny.)