Smarter Consultants Don’t Follow Conventional Wisdom

by Jay Deragon on 09/04/2013

conventional_wisdom_is_an_oxymoronCompanies have failed at executing strategies 70% of the time.

Two decades ago, 70 percent of McKinsey’s revenues came from strategy and corporate finance but most now flow from hands-on work in risk, operations and marketing and less from strategic thinking.

So strategic execution fails most of the time and the demand for strategy development has fallen considerably. The conventional wisdom of management consultants has been that you must have a business strategy for the future before you develop a business plan to follow.

Has the wisdom of the market become unconventional in the 21st century? This is an important question for any business. If the answer is yes then there is no wisdom in following conventional wisdom.

Conventional wisdom is not necessarily true. Conventional wisdom is additionally often seen as an obstacle to the acceptance of newly acquired information, to introducing new theories and explanations, and such wisdom operates as an obstacle that must be overcome by legitimate alternative views seen as unconventional. Such ideas as real-time and crowd sourced strategies considered unconventional to the conventional wisdom of traditional management consultants. Yet these are real alternatives for the unconventional thinkers.

Unconventional Paradigm Shifts

The pace of unconventional trends that quickly become reality have disrupted the conventional wisdom of the past is accelerating faster than most want to believe. Consider some of the emerging trends:

  1. Stakeholders now have more power than companies through social media and networks
  2. Business has moved from strategy to execution centric focus
  3. Data historically viewed statically is now moved to being viewed in real-time and dynamically
  4. From mental models of owned to shared models
  5. From top down to bottom up flow of information and control of decisions that impact stakeholders
  6. From work here to work anywhere
  7. From measuring tangible results to creating & measuring  intangible value
  8. From Enterprise IT to Consumerization of IT
  9. From making the transition to embracing the disruption
  10. From workplace to socialplace: the convergence of work and life as one, not two places

There is nothing conventional about the issues listed above except these trends are resisted by conventional wisdom.

Markets have become complex, more nuanced and less predictable than what conventional wisdom has led us to believe. Smarter consultants, and companies, understand the demands of a marketplace that has become transparent, social, informed, demanding and more influential than the marketing efforts of the supply side.  Smarter Consultants focus on understanding the value of human capital, the ongoing creation of relationship capital, co-creation of strategic capital in real-time with a broader definition of stakeholders and leveraging shared structural capital with a community.

Smarter Consultants help organizations improve productivity and joy in work by enabling people to make decisions that better serve other people, stakeholders. Smarter Consultants are about helping organizations improve results by empowering behaviors that improve results. Empowering behaviors is an unconventional wisdom because it is more about managing the intangibles than measuring the tangible.

Smarter consultants, and companies, don’t follow conventional wisdom they do things the unconventional way.

{ 27 comments }

Kehinde Abisola October 10, 2013 at 10:50 am

Thanks for the article. Only change is parmanent. Most entrepreneurs and marketers agree and try to comply but some are still conservative and glue to the conventional wisdom. Being dynamic guarantee result.

Amber Chamberlain September 9, 2013 at 1:42 pm

As someone who perceives global cultural shift in, among many things, how we work now and as an ‘evolver’ out of old school business principles myself, I think this is a good article from Jay Deragon regarding the new trends of business and industry. He notes that “the pace of unconventional trends that quickly become reality have disrupted the conventional wisdom of the past (and) is accelerating faster than most want to believe.” People like me are extremely pleased the changes are happening. I am in the second half of my career life and am enormously grateful to consciously be a part of that shift.

Mike Kojima September 9, 2013 at 6:41 am

Intangible value itself is based on old conventions. They are merely harder to calculate or observe outcome values which are now far more important to understand than in past. The world and market motivations have changed rapidly and the next major shift is 2 years away, not 20.
Damage control is no longer less expensive than preventing the damage; customer service is no longer a minor expense item but an essential budget item of marketing; lasting perception is now more valuable than initial impression. We have current social media and information access to thank for that. As information depth becomes greater, the perception of value to customers will change. The promise of service has been replaced by the performance of service. The current disposable mentality will quickly evolve to a don’t want to dispose attitude.
Conventional companies will celebrate the profits made from their 2% market share, forgetting they missed the other 98% and what they may have done wrong. Shifts now can come far more quickly and more brutally.
Thanks for a great article…. hope the world is listening to you.

J B ODURO September 6, 2013 at 11:19 am

Nothing is normal any more. The world had changed so dramatically, you just can’t believe it. Today consultant must be smart and unconventional. Especially for us working in LDC’s , let us be ware, as most theories work no more.

Bruce La Fetra September 6, 2013 at 10:47 am

I really like how the article and Jay’s follow up comments emphasize the shift toward intangibles. Strategy is critical, but it’s no longer a dusty document that remains static. I assume initially my clients (mostly professional firms) have a workable business strategy. Where I push them is in defining their positioning really well, and then using that to guide the entire organization. For lack of a better term, I call this a “marketing culture.” Since it is rare that the actual product or service is the real differentiator, this forces them into thinking deeply about how their own customers view them and the value created in the eyes of their customers. If the initial business strategy doesn’t hold, it shows up here. Conventional wisdom builds and executes strategy based on what we logically believe customers *should* think. More often, it’s less intangible. With all the changes today (those listed in the article and others), we have to build and execute strategy around what our customers actually think. No more lip service. Embrace the intangible.

You end up with a strategy, but it’s much more dynamic and focused on the things that really matter rather than filling out someone’s model. Because it doesn’t reside in a report on the shelf, it needs to live across all reaches of the organization–while remaining coordinated. It’s a information challenge, a management challenge and a social challenge.

Walter Sanders September 6, 2013 at 7:46 am

Thank-you, this article and the ensuing conversations has given me pause to think and take note of the larger implications of “instant feedback” and “big data”. Having lived through “Right Sizing”, “TQM” and other processes, I can state, in the companies I worked for, that everyone thought the “measurements” would solve everything. Leadership was largely ignored and the philosophies slowly faded away.

Walter Sanders September 6, 2013 at 7:39 am

Thank-you, this article and the ensuing conversations has given me pause to think and take note of the larger implications of “instant feedback” and “big data”.

Jay Deragon September 6, 2013 at 5:55 am

Excellent feedback as usual. However while some have suggested that the ten listings of Unconventional Paradigm Shifts are not unconventional for main stream businesses I would disagree.

Maybe it is in the definition of mainstream businesses. Companies like REI, Kickstarter, Kiva, Twitter, Starbucks — they get it. They live it. And to them, notions like distributing power to everyone, working in extended community to get things done, or allowing innovation to happen anywhere and everywhere are, well, ridiculously obvious. But too many major companies — Bank of America, Sports Authority, United Airlines, Best Buy, J.C. Penny and Walmart to name just a few — that need to get it, don’t.

More importantly few can meet #7. From measuring tangible results to creating & measuring intangible value. I keep track of those that do and the list is very very short so if anyone cares to enlighten me with others that do please do so.

Many talk the talk but few walk the walk that would suggest a transformation in thinking and behavior has truly not been achieved in main stream businesses…….or just maybe I am studying the wrong sample…..:)

Gerry Toner September 6, 2013 at 5:28 am

Definitely agree! I like this article for its portent of a new set of conventions about management / consultant thinking, but the subject is already overrun by events on the ground. The ten items appear very conventional and already adopted as policy by many mainstream businesses. I would caution that the conventional / unconventional coupling is it self conventional. The truly ‘unconventional’ thought or act whether in art or science or business is created out of desire and orginal purpose; it is not to avoid being coventional. It is the conventioal who use this coupling like the media use ‘good and evil’ etc when producing infantilsing commentary about the economy or politics. For example globalisation is positioned today as good or evil by many in the media as a new ill that has beset us when in fact is is a centuries old dynamic.
The smarter consultants will be uncoventional but they will not stop to think about it.
We do indeed as consultants need to sit up and listen and observe that all around us leadership of business and policy is falling down on the job and has lost what respect it had. This is not due to sedition or other social patholgy but the failure of industrial age management.
I fear that ‘smarter consultants’ can mean clever and this is conventional thinking. Convention has it that ‘big consultancies’ mop up conventionally educated people as a basis for overemphasis on presentation of analytics.
Smarter consultants would recognise that the 20th century consultant model is dated and is in its death throes as it is now commodified via IT. The smarter consultant constantly evolves how to add value to clients and to work with clients who add value.

Geoff Howse September 5, 2013 at 10:34 pm

This article rings some interesting/valuable “bells”, and I like the “oxymoron” t-shirt image!
One minor but not trivial issue is the mistake in the following sentence: “There is nothing conventional about the issues listed above accept these trends are resisted by conventional wisdom.” It should read “except” not “accept” – which are similar in sound but “accept” has no meaning in this context. This is not being pedantic but to avoid risk that the core issue about questioning conventional wisdom is not lost.

Hany Elgamal September 5, 2013 at 7:14 pm

Thank you for the interesting article and following discussion. I really enjoyed it.

Jay Deragon September 5, 2013 at 2:25 pm

Darcy

Thanks again….Context is everything…..interestingly enough I worked with Deming in the 80′s before he pasted away.

Deming claimed that his philosophy of continual improvement was in fact revolutionary: “We are here to make another world,” he declared. But his “other world” was more complex, more nuanced and less empirical than most adherents understood. His “other world” had two components. One was the world of statistics, measurement, rigor and process: an appealing array of tools that, in isolation, promised control and predictable outcomes. But there was a second dimension to Deming that was more often than not simply ignored.

This second dimension for Deming was the need for “personal transformation” and the recognition that you cannot substitute leadership with measurement. The leadership piece of Deming was critical because he understood that it was the system that caused outcomes, not individuals. And no matter how well you might measure things, you have to lead the system itself. And the system was built and influenced by intangibles.

But “knowing” is almost always more appealing than “not knowing,” so businesses and organizations tended to co-opt the empirical side of Deming – the control side – and simply ignore the less tangible, softer side of Deming. Consequently, TQM as a “business philosophy” would usually fail, just as innovation deployments fail more often than not today. I knew deming and he hated everything that consultants did with his philosophy.

This leads us to the intangibles, which is the second organizational dimension. Mary Adams Book Intangible Capital defines intangibles into four categories, Human, Strategy, Relationship and Structural Capital with each having a number of related elements that can be identified in every organization. Furthermore she has developed a methodology to identify, measure and assess the inytangibles using digital tools and she calls them ICounts, you can see further explanations and examples here http://www.smarter-companies.com/page/icounts.

Many, if not all, of the authors I mentioned previous point to the rising influence of intangibles as the new competitive differential that is recognized by the stakeholders more than it is by the suppliers. Much of the digital social space is evidence of the rise of intangible value created, co-created, distributed, connected and indexed like a virtual library of human knowledge with access to 1/3 of the planet 24/7. Innovation, collaboration, creativity and communication are the things that drive the economy and all are intangible.

Hope this makes sense…or as Deming would say…There is no observation without theory so now you have my theory :)

Also, to your suggestion about a post for innovation in management consulting here is a link to a four part series, in PDF, we did just 2 weeks ago about disrupting management consulting…I have plans to further this series with more data we’ve been collecting :)

http://www.smarter-companies.com/forum/topics/why-management-consulting-will-be-distrupted-series-part-i-iv

Darcy Elliott September 5, 2013 at 1:28 pm

As I read this response I realize that what I am reacting to is your use of “conventional” to contrast your thoughts about current thinking. Perhaps the problem is that we have a different definition of conventional. When you say, for example, that pursuing innovation means pursuing unconventional ways of doing things, I think, this is just like Kotter in the 80′s again. Of course pursuing innovation (i.e. change) is mandatory, but since everyone (I work with) already knows that, it is what I think of as conventional wisdom. Which distracts from the real value of your premise. I particularly like your concept of fast, fluid, flexible networks of connected people. There is definitely something in that mind set, but it is too early to really understand the potential, at least for me.

I would be interested in what you are thinking of as intangibles. Accountants try to quantify intangibles as the value of goodwill, which is really a proxy for one’s competitive position in the marketplace. I find competitive position very easy to define but difficult to measure and quantify in a meaningful way. Perhaps that is the conventional thinking you were mentioning? Hmmm.

One of the most powerful intangibles that I have been dealing with for the past five years is organization culture. As consultants we are working more and more with clients to transform their organization culture rather than just restructure the organization and refocus the business units. After 30 years of consulting, this is (at least to me) something new and value adding. Is that the kind of intangible you mean?

I am also challenged by your comment about not tweaking our way into the future, but pursuing innovation. It reminds me of the business reengineering days, which gave way to kaizen style continuous change (all part of the glorious age of TQM!). The way I understand your comments, reengineering would be the innovation you speak of and kaizen the tweaking. I confess that for the past ten years or so I have pursued continuous improvement over the radical change of reengineering. I have found far greater impact for clients by helping them make real, immediate but small scale improvements than grand and innovative projects to change the way the business is done (or what the business itself is). One of the reasons is that the big projects too often fail (see your own earlier comments about 70% of strategies failing), but you are making me think. Maybe it is time to revisit the big leap forward strategies.

Thanks for the discussion. I need to think more about this.

[Just a thought, but have you given thought to the subject of innovation in consulting itself? Not just the ideas we profer, but how we do our business? That would be an interesting discussion, to see if we can apply the principles we push on our clients to our own business! Speaking as someone who has done this for 30 years, no matter how much I try, our business looks very similar to what it was when I started. The subjects are different and the solutions change every few years, but the services and the processes are all pretty much the same. At least for most of us.]

Jay Deragon September 5, 2013 at 12:54 pm

I simply love the exchange here and thank you everyone for taking the time to read the post and offer up your opinions. In response to your positions allow me to further respond:

Conventional wisdom primarily honored the institution as a construct of creating value. And the information age (inclusive of Web 1.0 and Web 2.0 phases) primarily honored the value that data could provide to institutional value creation. It allowed for greater efficiency to do the same things that were done in the industrial era. The 21st Century honors the value creation starting with the single unit of a connected human. In this framework, powerful organizations look less like conventional wisdom and more like fast, fluid, flexible networks of connected individuals — like, say, unconventional wisdom.

Companies cannot survive (let alone prosper) without recognizing that The Digital Era as a phenomenon can allow us to redefine our organizations to be inherently more fast fluid and flexible by its very design. Not by doing a little bit more, or slimming down a bit here or there, or by doing a few things a little bit faster. No. We will not tweak our way into the future. We have to pursue innovation which means pursuing the unconventional ways of doing things.

Strategic thinking is changing to be more inclusive rather than exclusive. To think more in real-time dynamics rather than 2,3 or five year frames of reference. Recent work by Andrew McAfee, Race Against The Machine, Nilofer Merchant, 11 Rules of the Social Era, C. Otto Scharmer, Leading From The Emerging Future, Gary Hamel, What Matters Now, Seth Godin, The ICarus Deception and Umair Hague, Betterness: Economic for Humans collectively document and synthesize a growing body of evidence that clearly shows unconventional wisdom of the markets and market leaders that are creating massive disruption across all market segments globally.

Conventional wisdom would pursue tangible measures to define ways to improve strategically. As Andrew McAfee says “The intangible organizational assets are typically much harder to change and difficult to measure, but they are also much more important to the success of the organization.”

It is unconventional to think about building a strategy around the intangibles because it doesn’t fit with conventional wisdom. Yet all evidence shows that it is the intangibles that is driving the markets value today…80% of the S&P 500 market value assigned to the intangibles…..go figure.

What say you?

Lenann McGookey Gardner September 5, 2013 at 9:42 am

Best. Tshirt. Ever.

Any consultant with half a brain is evolving with the market. Their (our) greatest value is bringing new insights plus years of experience in seeing how organizations can get off track with ANY initiative — new think or old think.

A good consultant has experience bringing fresh, and potentially profitable, ideas … and then supporting leaders in keeping business initiatives on track, as well as getting business efforts back on track — or onto a new, better track — when focus is weak.

Darcy Elliott September 5, 2013 at 9:25 am

After writing the following I came back up to the top again to start with an apology, or at least a clarification. I like the direction and tone of the article, but really would challenge you to challenge us a little harder. When you publish these and leave them open for comments, you can either start a difficult conversation that leads to something even more interesting, or delete the ones that don’t conform to your thinking. I assumed you were seeking the former. And so, my comments follow…..

An interesting approach but I am not sure how you made conventional thinking and strategic planning synonyms.
True strategy is, and always has been, about finding the alternate pathways that others were not pursuing, or not even aware of. And just to make one minor point: Every organization has a strategy. Sometimes it is a written plan that looks ten years into the future (ala Porter) or sometimes it is how they make decisions and manage day to day (read Mintzeberg from the 1980′s). Like quantum physics, both contradictory approaches work at the same time in the same universe.

Smarter consultants today are already past crowd sourcing, which as been around for decades but only just recently rebranded and hyped (think of it as the stock market just in a different form and media), and are taking the concept to whole new frontiers of previously unheard of collaboration. The true challenge today might be the potential to redefine the competitive marketplace as technology and social change opens up new models for collaborative networks at many levels that form for a purpose and dissolve, reforming again as circumstances change.

In fact, I would challenge you to take a harder look at your ten “unconventional” ideas and try to push the envelope a little further. Not to be critical, but “from work here to work anywhere” is leading and unconventional?! From top down to bottom up? Really?. Consultants have been talking about those for over a decade, and not just “smarter consultants”. Even average consultants. (and for the most part have gotten it wrong anyway.)

Just a thought… Believe it or not, I liked the article. It got me thinking, and I never provide comments to these kinds of things. So thank you.

Jeff Levy September 5, 2013 at 8:54 am

This is a great article because it makes a stronger case for embracing the value of of the intangible – the emotional energy that turns strategy into impeccable execution.

Perhaps we need a new, unconventional way to think snout strategy. Rather than a finished product -a strategic plan – it is a conversation about creating a future that’s never happened before. Isn’t that what growth and leadership is all about – creating a future? If any team desires growth, that means change, which involves creating a future. Developing strategy is just a way to get people together and having an important conversation – asking such vital questions as: what results are we committed to producing?

Ed Birch September 5, 2013 at 8:35 am

My experience is an organization needs an written, well defined strategy but the trap is management is motivated by measuring success with a scorecard that has not been validated. Having the correct scorecard that can track progress, that is based on the appropriate baseline and considers the impacts of the initiatives variables is not an easy task and one that is drafted in an hour after everyone is engaged in the initiative. The big question is how is the organization going to see the impact of “empowering the intangibles” over and above the typical business drivers. You need to be able to convert the intangible action into a quantifiable result. In our consulting business we focus on improving an organizations energy intensity through empowering the intangibles and quantify the results by constructing a multi-variant regression model and track the cumulative sum of differences.
The second critical design element is understand that a new strategy goes through a discovery phase as implementation is underway. The process in the strategic plan must provide a venue that accepts new conventional wisdom and allows for program revision. The basic Shewhart Cycle – Plan – Do – Check – Act.

Michael Fanghella September 5, 2013 at 8:33 am

As noted by one of the comments we suggest a strategy if asked and then we implement it assuming the commitment to its execution is there in those stakeholders who have hired us. This thought process sounds like a start up strategy where the management is fairly flat lined, the plan which is already in place is subject to change on a day to day basis and can turn on a dime. No resources other than money is committed and gossip through social media is a fools analysis. In my opinion and I have launched more than 20 start ups, raised more than $4 billion in capital resources for them over thirty years this is a convenient way to skip the particulars and short cut the process to your goals which are not that well articulated. Excellent product and or service, Experienced management (knowledge), Enough Capital to meet the long term growth means if you short cut the process you won’t know when you are over the edge. Consultants that are brought in early are there to help sell the company, when brought into an already existing company they are there because of a problem. So I don’t necessarily buy into this paradigm.

Michael Holdgate September 5, 2013 at 8:19 am

Thanks Jay, So good to turn the conventional on it’s head and refocus from a different perspective. I have been involved in promoting community engagement to improving health and wellbeing and it has taken this economic recession to finally get professionals to accept that they need to do things differently, to challenge the accepted health strategies and accept that behavioral change really can offer more for less. The conventional wisdom that people have problems and experts have the solutions with academics measuring the imponderables goes out the window but the need to be needed remains very strong.

Rick Filsinger September 5, 2013 at 7:55 am

How about that!
Thanks Jay, it’s kind of unfortunate that we tend to repeat the same mistakes over and over again.

Vance Renfroe September 5, 2013 at 5:43 am

Jay, thanks for sharing your paper. We need more substance from you. Conventional and unconventional approaches are in continual evolution. One’s entry point into the ever-shifting ballet between business success and failure establishes a perspective. Historic sensitivity establishes a perspective. What traders understand as momentum of the market (“Don’t fight the tape,” used to be the phrase.) might be simplified as fundamental situation awareness. That quality of observation establishes a choice. That choice may be status quo, but it always an informed choice. You might consider exploring the concept of agility in your next work. More later. Again, thanks.

Francis Hooke September 5, 2013 at 2:37 am

Hi Jay,
I’d agree with the other guys above – interesting article.
You wrote that “conventional wisdom is additionally often seen as an obstacle…” I think we’ve got to be really careful with this point. Perhaps it might be better characterised as a balance between conventional wisdom and new insight. Sometimes conventional wisdom will hold the best answer. Other times new insight will reveal the best answer.
Yesterday I blogged about the important of conventional wisdom in the project management domain. In this space we have tried and tested methodologies. All to frequently they get rejected because of a senior management desire to ‘see progress’. The project team then focuses on just doing ‘stuff’ to demonstrate progress, rather doing the ‘right stuff’. You can read more at blog.qualityprojectdelivery.com …hope it’s useful!
All the best,
Francis
http://www.qualityprojectdelivery.com

Kim Karme September 5, 2013 at 12:27 am

Good thinking Jay. However I believe strategy is still important, but not created in the traditional way. The big questions are what knowledge is used, what is included in the strategy, by whom and for which use it is done. A good strategy should not need to be “implemented” in the organization in order to be executed.

Vish September 4, 2013 at 10:27 pm

I think strategy is important. But it is not limited to board rooms now. They have co-create it with the people responsible for implementing the strategy- which Jay recommends too.

Bryan Neal September 4, 2013 at 10:10 pm

Interesting article. Personally I operate on the basis that ,in the corporate world, both a strategic and an execution mindset must co-exist. Strategic development if done correctly will reveal many benefits and help speed subsequent execution. No strategy is perfect. indeed some plans can be less than useful BUT planning is an excellent process when done properly. Constant review and improvement are needed to all strategic and business plans but that’s a good thing! Ask yourself, would you invest in a company without a strategy? Or worse still one that solely relied on real time execution? As ever a balance is best. A good strategy includes imperatives demanding creative and responsive execution.

Francis Lambert September 4, 2013 at 4:34 am

Thank you Jay for the interesting article. Although I have been a management consultant for close to 25 years now, I have always worked for what you described as the smarter consultants, companies that help implement the strategy not think it through. And although I would disagree that companies don’t need a strategy, a strategy alone does not create value. As you rightly point out value is created by people in their day to day activities.

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