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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: Career Management|Last Updated:

The ability to building consensus is a critical leadership skill. What if the leader you report to doesn’t have it?

In past weeks we’ve covered several managing-up situations, including how to deal with managers who base their decision style on personal preference rather than what the situation calls for.

Sometimes, though, the problem isn’t the wrong style. It’s poor technique.

Take, for example, a decision that should be made by consensus: Either buy-in matters more than anything else, or no one person has the authority to make it.

You’re in the meeting and what started off as a productive discussion long-ago descended into mere looping. And your manager seems content to let it run its course.

What’s needed is to stop arguing about the decision, and instead agree how to make it. That’s an easier consensus to get, and it makes consensus on the decision much easier.

Start by becoming a non-combatant early. The moment you realize things are starting to loop, stop talking and make your goal distilling the key points of view being expressed.

Then, get everyone’s attention and summarize the status of the discussion. “We seem to be repeating the same points over and over. From what I can tell, these seem to be the main points of view,” and here you take control of the whiteboard (the room does have a whiteboard, doesn’t it?) to write them down as you list them. It will either be a list of between three and five alternatives, or a single alternative followed by the question, yes or no.

Next, ask your manager’s permission to try something (for this to be managing up you have to operate under his/her authority, not subvert it). After the automatic “yes,” tell the group, “I think we should be asking how we’re going to make this decision. The standard method in a situation like this is a simple comparison matrix.” That’s if you have a list of alternatives. If you have a yes/no decision instead, the standard method is a simple list of plusses and minuses.

Then ask the group whether this seems like the right approach, and if not, what might be better. If nobody answers, ask those who had been arguing the loudest if it makes sense to them.

Congratulations. You have consensus on the process.

Next is to list the criteria — the factors your group should be taking into account when making it. Get everyone’s thoughts on the board. Consolidate any repetitions in real time (“What you just said sounds a lot like x. Is it different enough that it needs to be kept separate, or should we rephrase x a bit so it covers it?”)

Not all factors are created equal, so weighting them comes next. I recommend a three point scale to keep it real simple. A factor gets a three if it’s essential, two if it’s highly important. Everything else gets a one.

To get there, vote. This is one of the few times where it’s the only practical alternative. One very effective way of handling this is to give everyone three votes. They can use all three votes on one factor if they care about it a lot, or they can spread their votes around. Just have them walk up to the whiteboard and add tally marks. Total them up, give the top third a weighting of three, second third a weighting of two and the rest a weighting of one and you’re done.

To score each factors, vote again. This time I recommend a five point scale, where five means a particular alternative is outstanding for the factor in question, and one means it stinks.

Tally, crunch the numbers, and see which alternative floats to the top.

Usually, you’ll all find there’s a clear winner. If so, declare it and perform a “consensus check” — go around the room and ask everyone in it, one at a time, if they can live with it. If anyone answers no, here’s the key: Don’t ask why. Don’t do it.

Instead, ask what they think was wrong with the process that they think it delivered the wrong answer. Whatever they say, will almost certainly be just one more factor to include in the analysis. So add it. It almost certainly won’t change the result.

Most likely, though, once everyone has gone through the process together, they’ll accept the answer it delivers. That’s when you turn to your manager to ask, “Does this make sense to you?”

You aren’t trying to subvert your manager’s authority after all. You’re just helping your manager exercise it more efficiently.

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