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.

Opening Comments

  • 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.

Part 2.