Discover more from Course Notes: Continuous Business Learning
I'm Sorry I Broke Your Company: When Management Consultants Are the Problem, Not the Solution 1/6
Many of the points here are obvious, which doesn’t make the book less interesting.
Every business problem is about people reacting to circumstances.
The bullwhip effect is caused by emotions – fear (order less), optimism (order more) and mistrust (risk management if things go unexpected).
Management models attempt to dehumanize the workplace. Maximization of human output as if we’re machines.
Business are not rational and managing by numbers ONLY ignores the human factor. Managing by numbers only manages the numbers.
Many companies are obsessed with new methodologies in a similar way how people have fads about diets. The issue is – fads don’t work and may be harmful to the health.
Strategic Planning Can’t Predict the Future
Strategic planning requires you to predict the future.
Pursuing a strategy has a downside of lost opportunities.
Ignoring opportunities in pursuit of strategy may be detrimental.
Focus on market share and asset efficiency may be very misleading. As well as on ROI, ROE, ROA and ROCE.
Ignoring numbers to proceed with a project not meeting the target ROI —> politics.
Strategy should in fact create/shape the future, but it’s much easier said than done.
Many business books (their examples and recommendations) from ‘70s and ‘80s are about manufacturing, which is not really applicable now.
Jack Welsh’s (GE) idea of shareholder value doesn’t make sense in 2020. [MK: there’s a bunch of articles debunking the myths about this charlatan]
Executing strategic plans require one to be able to (successfully) predict economic conditions (hello 2020), industry changes, competitor actions and customer desires.
What company would want complete makeover? A struggling one, of course!
Investment strategy of investing only in blockbusters is similar to becoming rich by buying only the winning lottery tickets.
CEO’s vision of the future is in fact the highly paid consultant’s report.
The current state of strategy development and execution:
o Predict the future [MK: must be easy, right?];
o Define an audacious stretch goal based on that prediction;
o Persuade staff with salaries at risk to work on this new shiny goal;
o Ignore other activities;
o Celebrate success.
Business strategy (at least according to Porter) is warfare, so the winner takes it all and kills the losers. [MK: I can’t stop laughing.]
Planning, not the plan, adds the value. [MK: by now it must be obvious]
Planning improves intelligence and expands horizons; following the plan does the opposite.
Consultants leave with essential knowledge and give just a Powerpoint deck, which no one reads. If they don’t get to oversee the implementation – the acquired knowledge is gone.
Strategy development in firms must be a quest for corporate self-discovery, not making plans. And acting fast.
Many unplanned opportunities are key to winning in the future.
Building strategies on the top ignores important market feedback. [MK: just had to write it here]
Strategy development is about providing the foundation for making informed decisions.