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“Competition keeps SaaS profits artificially low.”

Authors don’t write their own headlines, so don’t blame Kevin Kwang. Someone at ZDNet stuck this in front of his perfectly reasonable analysis of why so many SaaS vendors aren’t profitable.

Memo to headline-person: You have it backward. Lack of competition keeps profits artificially high. Markets are supposed to have it; thin margins are supposed to result.

In fact, if Kwang is to be believed, the SaaS marketplace exemplifies all that’s good and right about capitalism: Instead of harvesting profits, SaaS vendors are plowing them back into their services to make them more attractive, so as to gain marketshare, so as to either: (1) survive the inevitable marketplace consolidation; or (2) be acquired by a larger, more diversified player, to become part of their product portfolio, to survive the inevitable marketplace consolidation.

We management consultants understand these things.

We management consultants understand many things. Including, it appears, things we don’t understand at all.

My friend Jeevan Sivasubramaniam, executive managing editor at Berrett-Koehler, sent me a reproachful little book titled I’m Sorry I Broke Your Company: When Management Consultants Are the Problem, Not the Solution (Karen Phelan, 2013). It reinforces the old joke that the 90 percent who are bad ruin it for the rest of us.

Which is too bad. Not that the old joke is wrong. It’s that when management consulting engagements go wrong, it’s usually because of an unspoken conspiracy between the consultants and the person who brought them in — a point the book makes well, but that’s likely to get lost by skimmers who read nothing but the title and a few chapter heads.

So here, in my own disorganized way, are three random thoughts on the subject. Ms. Phelan and I mostly agree on them; they are, in any event, my own:

Don’t bring in a consultant to read a script. I’ve had this sort of engagement, not that I knew it when the client asked us in. If you know the right answer, but need an outside voice to explain it to your boss, the board of directors, the IT steering committee or what-have-you, you have a bigger problem than the need for an outside voice to explain it.

You have a credibility problem, and no outside consultant will fix that. My advice: Hire an actor to read the script for you. Actors come a lot cheaper than management consultants and reading scripts convincingly is their job.

Then hire a leadership coach to help you figure out how to fix your credibility problem.

Don’t bring in a consultant who promises measurable improvements. A subtlety here: Measurable improvements are fine. That isn’t the problem.

The problem happens when the management consultant tells you which measure or measures will improve. “We’ll cut waste,” is terrific, so long as you brought in a consultant to cut waste. If what you need is to improve your ability to deliver customized results, though, it isn’t so terrific, especially as many of the “improvements” consultants make to cut waste eliminate the ability to deliver customized results.

Even that isn’t the worst that can happen. I’ve seen process consultants “improve” a process by “discovering the pain points,” making changes and then discovering which measures improved. Whichever ones they were, they’ve delivered on their promise, never mind that other measures their client cared about more got worse.

Measurable improvements? They’re just fine. But deciding what “improve” means is your job. So is insisting you be informed of the trade-offs … of which measures will get worse as part of the process … in advance.

Bringing in a consultant isn’t a sign of weakness: As a manager at any level, you aren’t supposed to be an expert in everything. Sometimes, what the organization needs isn’t where you have your expertise.

For example: Many managers are excellent at operations … at getting the work out the door every day, making quotas, maintaining quality, keeping employees motivated and so on. Many of these managers aren’t all that good at making change happen, because (1) that isn’t their day-to-day job, and (2) making change happen in an organization is complicated.

When what the organization needs isn’t something you’re all that good at, asking for help is a sign of strength.

And oh, by the way: Sometimes, the hardest part is recognizing a need that’s very important but is also outside your repertoire. That just might be the best reason to bring in a consultant — to help you when the problem is that you don’t know what you don’t know.

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“Oh, you hate your job? There’s a support group for that. It’s called Everybody, and they meet at the bar.”

It’s a Drew Carey line. Think he was exaggerating? He was. By 35 percent. That, according to the “Bad Boss Study” led by Michelle McQuaid, is the fraction of U.S. employees who are happy at their job. The remainder would, if given the choice, prefer a better boss to a raise.

How reliable are the numbers? Beats me. While the results of this study have been widely reported, the study itself is well hidden. I know nothing about the methodology, whether survey questions were without bias, the sample and error bar sizes, whether the study was subjected to peer review, or, for that matter, anything else that would affirm its validity.

It is, that is, pretty much par for the course for this sort of thing. Caveat emptor.

But even if we imagine the study was poorly done, it’s hard to escape the conclusion that the leadership provided by U.S. managers is pretty bad.

Why is that? And what, as a leader yourself, can you do about it in your organization?

Here’s one place to start: Stop reading the Harvard Business Review. This will save you time and money, and will have the same effect with respect to bad ideas that frequent hand-washing has on infectious diseases: It will help you avoid exposure.

There is, for example, “One Out of Every Two Managers Is Terrible at Accountability,” (Darren Overfield and Rob Kaiser, 11/8/2012, and thanks to Mike Bowler for bringing it to my attention). According to the authors, “… far and away the single-most shirked responsibility of executives is holding people accountable. No matter how tough a game they may talk about performance, when it comes to holding people’s feet to the fire, leaders step back from the heat.”

How do we know? Their “database of 5,400 upper-level managers from the US, Europe, Latin America, and Asia-Pacific gathered since 2010” tells us so. But speaking of missing methodologies, theirs is conspicuously absent.

Want evidence of the authors’ contempt for evidence? They ascribe much of the problem to “The youngest members of the workforce, especially in the U.S.,” who have a poor work ethic, an entitlement mentality, and “have grown up in a sheltered environment; they expect praise and recognition and can be indignant when it is not forthcoming.”

The evidence? “… blogs at US News, Daily Finance, Forbes.” That’s right. Several other bloggers say so too.

The authors don’t even bother to explain why they think holding people accountable is a good idea. They simply assert it as a management axiom.

But it’s a practice whose drawbacks exceed its virtues. Holding people accountable – “holding their feet to the fire” in the authors’ terms – assumes the root cause rather than discovering it. It simply presumes that if something goes wrong, someone must be at fault, and that the manager knows who that person is.

But if there’s fault, it’s almost always the manager’s, because when something goes wrong the most likely causes are such barriers to success as bad processes, frequent interruptions, inept delegation, politics, a failure to provide proper training, or otherwise leaving systemic problems in place that exemplify Peter Drucker’s principle that “Most of what we call management consists of making it difficult for people to get their work done.”

And if the root cause really is a bad employee, who made the hiring decision?

Now, imagine the manager dodges all of these pitfalls. Something goes wrong and it is one person’s fault – not malfeasance or sabotage, but an employee simply botching a responsibility. Does anyone seriously think that, given a choice between negative reinforcement and positive coaching, the negative reinforcement leads to a superior result?

The answer: Yes, some people do think so. They’re called “bad managers” because negative reinforcement turns teams into a giant game of Whack A Mole, where employees keep their heads down so they aren’t the ones to get whacked when something goes wrong. Let the manager know there’s a problem? That’s an invitation to be the scapemole.

So as holding people accountable leads to employees doing everything they can to keep their manager in the dark, it also leads to managerial ignorance. Perfection!

My recommendation: If you want to fight the scourge of bad management, start by helping the managers who report to you choose their sources of information wisely.

Like, for example, avoiding The Harvard Business Review.

The superior alternative is right in front of you.

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