Stupid consultant tricks

“Do you promise measurable improvement?”

Many of our consulting competitors make measurable improvement a centerpiece of their sales pitch. We don’t, which is why the CIO I was speaking to asked if I’d make that promise.

Having long ago learned to answer most questions with questions of my own, I said, “What measure would you like us to improve?” His reply: “Aren’t you supposed to tell me?”

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Advice Line is about what it’s going to take to become a next-generation IT organization. Sooner or later, we’re going to have to tackle the eye-glazing, mind-numbing, incredibly boring, and absolutely essential subject of metrics. So now that you’ve recovered from your Thanksgiving triptophan-induced drowsiness (a myth, by the way), we’re here to restore the effect, without the use of any amino acids.

Starting with this: If you decide to engage consultants to help you with any aspect of organizational effectiveness, it’s perfectly valid to insist on measurable improvement. Accepting the consultant’s offer to define the measure, in contrast, is a sucker bet. Consultants who can’t improve a measure they themselves choose are consultants who — sorry, sarcasm has temporarily failed me. Let’s just say they long ago left ineptitude in the dust and are sprinting toward utter incompetence.

Stupid consultant trick No. 1: Switching metrics midrace

I once watched another consultant fail to improve a measure he’d chosen himself (cycle time). Rather than figure out what was going wrong, he announced that he’d made a mistake. What really mattered wasn’t cycle time, he explained. It was how accurately the department in question predicted cycle time — how close its actual cycle times came to their original estimates. This measure (a quality metric) had improved, he proudly pointed out.

It was intellectually dishonest, but the rubes usually fall for it. To be fair, the consultant in question wasn’t lacking in integrity. What he lacked was an understanding of how metrics work and what they’re for. What was particularly embarrassing was that after all this took place, a member of the project team discovered a bug in the reporting program. Once that was fixed, it turned out cycle time had improved after all. Oops!

Stupid consultant trick No. 2: Cutting cycle time to spite throughput

Another enjoyable consultant pastime is improving the measure with which they’re most comfortable — most often, quality or cycle time. In a particularly egregious case, the consulting team did an exceptional job, cutting the cycle time of the process in question by nearly two-thirds. It was a huge success, supported by inarguable metrics.

From that, they concluded all of the employee complaints about the new process were nothing more than the result of their natural resistance to change. However, it turned out that their “natural resistance to change” had more to do with the new process having destroyed throughput — cut in half — than with any emotional attachment they might have had to the old way of doing things.

Stupid consultant trick No. 3: Getting what you measure

As long as I’m telling tales of metrics-challenged management consultants, here’s another: the exceedingly nice fellow who suggested his client establish employee turnover as a core measure of management quality. When a member of the management team asked if undesired turnover might not be a better metric, the consultant responded that the difference between the two metrics would probably be in the decimal places, which meant the additional complexity wouldn’t be worth the trouble.

It was a case of someone being perfectly wrong, even though he was absolutely right. He was right about the difference being in the decimals. What he failed to grasp was the single most important rule of business metrics. Call it Lewis’s First Law of Metrics.

Lewis’s First Law of Metrics: You get what you measure — that’s the risk you take

The sole reason to institute any business metric is to drive behavior. That’s what it does. Start measuring employee turnover and every manager in the company, except for those too stupid to understand the rules of the new game they’re playing, will start to assess every employee’s performance as “exceeds expectations,” doing all they can to give everyone compensation increases large enough that they’d never be able to come close to matching their income anywhere else.

In other words, some of the behavior that a given business metric drives is aimed at gaming the metric whenever that’s easier than actually improving the business. It’s especially true when a company ties anyone’s compensation to measurable improvement.

Don’t believe me? The proof lies no further than something you might be going through right now: the effort to “make the numbers” at the end of the fiscal year. The list of what companies do to make the numbers — to hit budget and earnings targets — is little more than a rogue’s gallery of very bad ways to run a company, and you’re probably asked to be part of the conspiracy of incompetence.

In fact, here are some common strategies:

• Defer filling open positions until after the start of the new fiscal year. If the idiocy of this technique isn’t immediately apparent, try this: The company either makes a profit on the position or it doesn’t. If it makes a profit, deferring that profit is dopey. If it doesn’t, filling the position is dopey.
• Defer important purchases until after the start of the new fiscal year. The same logic applies here as applies to delayed hiring.
• Offer customers extra discounts and incentives to buy products now instead of in January or February, thereby reducing profits in order to gain revenue a month or two earlier than would otherwise be the case.

There’s a science fiction story I probably won’t ever get around to writing. The premise: Humans colonize Mars. Ten years later, the first Martian corporation opens its doors for business. Ten years after that, the last corporation on Earth closes its doors, unable to overcome the overwhelming Martian competitive advantage: As the Martian year is twice as long as Earth’s, Martian companies have half the number of year-end closings.

Take the survey: The relative importance of processes and practices

On an entirely different subject, a frequent topic here in Advice Line is the difference between processes and practices, and how much trouble corporations get into when they confuse the two. Over in my other blog, Keep the Joint Running, we’re conducting a survey to get quantitative information about the relative importance of the two in modern businesses.

Please take the time to participate. The more evidence I collect, the more useful the results will be. Here’s the link to the article; here’s one to the survey itself.

I’ll report the results both here and in KJR once I’ve had the time to tabulate them.

Thanks!

This story, “Stupid consultant tricks,” was originally published at InfoWorld.com. Read more of Bob Lewis’s Advice Line blog on InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.