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|In: Business Ethics|Last Updated:

“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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|In: Industry Commentary|Last Updated:

Twitter, the curmudgeons complain, is worthless, because how can you write anything worth reading in just 140 characters?

Samuel F. B. Morse could have answered. He sent the first telegram in the United States in 1838.

A century and a half ago, sending a tweet-length telegram would have cost about $150 in inflation-adjusted dollars. Senders and receivers considered messages that length valuable enough to warrant the price.

The problem with Twitter isn’t the technology. It’s plenitude. This, not the medium itself, is what encourages so much uninteresting chaff that finding the few tweets worth reading is so difficult.

My unpublished opus, Lewis’ Laws, contained an entry about plenitude. It said, “The ability of software to be slow will always outstrip the ability of hardware to be fast.”

Have too much of anything and we waste it. It’s why, for example, we have spam. With direct mail, the cost of each additional recipient is high enough to matter, so senders carefully prune their lists to reach only those with encouraging characteristics. Spammers have no reason to care.

Faced with abundance, there’s little incentive to be frugal, whether the abundance comes in the form of memory, computing cycles, or toothpaste.

Yes, toothpaste. Don’t try to fool anyone. When you open a new tube, you squirt more toothpaste onto your brush than you do when the tube is nearly empty. What’s true of toothpaste is true of everything else, too.

It’s in the nature of long division that when we have something in abundance, the value of each bit of it is, to us, tiny.

So if Larry Ellison, or Bill Gates, or Warren Buffet were to accidentally drop a dollar bill when a stiff breeze was blowing, none of them would expend the time and energy necessary to chase it down.

But were a homeless man to accidentally drop the exact same thing, he’d run after it as if his life depended on it.

Plenitude is, I think, half the reason so many Americans are so angry so often. The other half is plenitude’s flip side — that luxury isn’t absolute, it’s comparative. Luxury, that is, is something I have that you don’t have. If we both have it, it isn’t a luxury any more, whether it’s a Lexus, a Rolex, or beef Wellington.

Why are we angry? We all have so much that we devalue it, and because someone else (the detestable “they”) has it too, it’s worth even less.

Encouraged by the shouting heads on the various cable news outlets (most long-ago stopped being talking heads), we ignore what we have, which is everything we need, most of what we want, and a lot of what we desire besides. Instead, we pay attention to what they have that they don’t deserve.

If we’re poor (which in America means being far better off than people in much of the rest of the world), what we have doesn’t matter because everyone else is living in what is, by our standards, luxury.

If we’re wealthy, which in America means a lifestyle that’s literally unimaginable to much of the rest of the world, we resent poor Americans, who receive goods and services they don’t have to pay for because we foot the bill instead, through all the taxes collected from us.

In my first “Holiday Card to the Industry” back in 1996 I imagined King Arthur traveling in time to visit us. He discovered that, compared to how he lived in Camelot, the average IT professional is much, much better off. We are, it concluded, wealthier than ancient kings.

In spite of the various economic bumps and bruises we’ve experienced on the road that’s taken us from 1996 to the present, this hasn’t changed. Everyone reading these words lives a more luxurious life, in nearly every respect, than any medieval monarch ever did.

And on average, most of us in most of the world have more power than the average person did who lived anywhere on earth since history started. We each have one vote to cast, which is one more vote than most of our historical predecessors.

So here’s a happy thought for what’s supposed to be a happy season: To be less angry … to enjoy our lot in life more than we do right now … all we have to do is remember that luxury isn’t absolute, it’s comparative.

Then we just have to choose who to compare ourselves to.

You can choose Bill Gates, if you like. Me? I’m choosing Philip II, King of Spain when Columbus sailed. Compared to him I’m living in luxury’s lap.

And a comfortable lap it is.

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