‘How not to’ allocate business!
This blog format is relatively straightforward. Grab attention. Make the point. Move on. But every now and again, a slightly more difficult topic is worth exploring. Indulge me this week as you take a 5-minuteexecutive break!
Avoiding Decoys: In the bad old days of consulting, the focus was on avoiding decoys. A decoy was an opportunity to pitch for a piece of work with a client. On the surface, this sounds good. But, sometimes, the work didn’t actually exist; like an oasis in the desert, it was a mirage of potential income.
How It Worked: Most clients asked 3 consultants to submit proposals. They then selected one firm to work with. In cases where the client had a preferred supplier, internal procurement procedures forced them to go through the motion of asking a number of consultants to make a bid. The selection process seemed outwardly objective. Hence the word ‘decoy’ – it looked like a duck and it swam like a duck – but it wasn’t a real opportunity. Most consultants, acknowledging the presence of decoys, rationalized the time involved. The chances of selection were of the order of ‘1 in 3’i.e. not too shabby. As there’s always some migration to newconsultants over time, decoys provided the opportunity to meet potential clients, albeit like flogging a 747 Aeroplane, it sometimes took a couple of years to get the sale over the line. Very early on in the consulting business you learn a key lesson; there’s alot of distance between a lunch and a cheque.Looking back now, it all seems somewhat innocent; the rules on procurement were about to change dramatically.
EU Legislation: To conform to EU legislation, all government tenders above a threshold value (as low as €5K in some cases) now have to be advertised on the E-Tenders Website. A couple of scandalsin the public sector underscored the need for a transparentapproach to awarding contracts and the science of ‘procurement’ was born. In this scenario, consultants who pitch for a piece of work are 1 of god-knows-how-many. For example, Tandem Consulting won an open competition for a Management Development contract in a semi-State company. Turned out that we were one of 110 consulting companies that pitched i.e. there was 100+ unsuccessful bidders. This is an enormous amount of wasted time for the unsuccessful bidders, some of whom had very little chance of winning this contract in the first place. It’s also terribly laborious for the client to wade through a raft of complex tenders. The better managers in the public sector know that the system is hugely wasteful, but feel powerless to change this.
Competition is Good: I can almost hear the pushback from some quarters. ‘What’s the problem here’?Competition is a good thing. It drives quality up and prices down. So what if a couple of overpaid consultants have to ‘burn the candle’ writing proposals? That conclusion is overly simplistic on several fronts.
Unclear Specifications: In the Management Development proposal cited the specification was crystal clear. In my experience, this is seldom the case. I’ve seen many instances where the client is wrestling to define the problem and unclear on potential solutions. When this gets written up, the result is a muddled specification. Resolving complex organization issues presupposes understanding which comes from exploring issues in depth. As often as not, the solution emerges from debates betweenthe organization and external consultants. It’s like going on holidays. You need a break and a Vitamin D sunshine hit. With tons of options, you talk to a travel agent who has actually been to the place you’re thinking of visiting. Eventually you opt for Sardinia (or wherever). In trying to resolve organization problems, skipping the ‘exploratory’ stage simply doesn’t make sense. The result is often a poorly thought through project, which external consulting group then ‘bid’ on.
Recent Example: A recent experience in the public sector organization will bring this point alive. To save blushes, I won’t mention the organisation. The company asked for a single proposal on two separate issues. Both were areas of expertise for Tandem Consulting and we made a detailed submission. The topics were complex and the timelines tight (we ended up finalizing the submission at 2:30 am on the morning of the deadline). Then we waited on a response. And waited. And waited. At one stage we were planning to kidnap the postman, praying for a ‘Dear John’ letter to give the thing a proper funeral. We phoned the organization several times. When I met one of the senior managers (by chance) at a conference his answer was that some of the key personnel involved had taken early retirement and the process was delayed. Over one year later, we still don’t know what happened. That poorly conceived project has since disappeared into a black hole. In another example, Tandem Consulting actually ‘won’ the competition. The original tender proposal was whittled down to 3 external consultants and we were awarded the contract following a subsequent presentation. But the organization then decided not to go ahead. The time consumed in both of the above projects was enormous – 20+ consulting days – and that’s just our group. God knows how many other organizations chased those particular decoys.
Empire Strikes Back: Some time ago, the advertising industry made a decision to boycott Dublin Bus – for exactly the reasons noted above – an abuse of power in asking reams of consultants to pitch for their annual marketing contract. A full creative pitch in the advertising world is estimated to cost about €80,000 with staff working around the clock to produce these. These major documents have to be customized to the individual organization and have very limited ‘re-use’ value. And, here’s the rub. At the moment, all proposals are completed for free. If the clients had to pay for the time involved, they would be much more selective in the way they run the process. Imagine a scenario where you walked into your local GP. She runs the ruler over you and announces the good news. All is well – clean bill of health. You then tell her you’re not paying; you are simply meeting a number of doctors to get a general update on your vital signs! You’d be arrested. But, that’s precisely what happens in the consulting world.
Project Management: The second issue of concern relates to project management. In the tender documentation, even where the project is only understood in a very loose way, the consultants are asked to ‘map out’ the process in minute detail. My guess is that somewhere, a long time ago, a public sector management team hired a group of consultants who could not put together a project plan. And they spake:
“Lord, this shall never happen to us again. We will request the most sophisticated and detailed project plans, even for simple projects, that we will nary lose face.”
And so it came to pass – that consultants all around the world are now developing detailed, colour-coded project plans, with histograms running off the page. It’s based on the misnomer that if it looks good, it must be good. Never mind the quality, feel the width.
The Price is Right: Finally, lets touch on the issue of price. Most of the e-tenders specify that ‘price’ is only one of the selection criteria. To add some ‘science’ to the argument, price is listed alongside a number of factors (typical weighting = 20%). The consultants then play a game called “Let’s guess how long this project is going to take.” In a fixed price project, the consultant carries the downside risks in project delays – often in areas where they exercise zero control. Organization development projects are not like supplying stationary; there are enormous variables. While the client needs to have some indication of potential costs, this can only ever be a guesstimate(the actual costs can be less or more than this). Fixed priced contracts actually inflatecosts, as consultants seek to cover the financial risks by ‘featherbedding’ their time input.
Unintended Consequences: The overall e-tendering process is designed on a cover your asssystem, a paper trail to demonstrate ‘transparent’ decisions being made. But it doesn’t lead to quality decisions. It’s the equivalent of producing concrete life jackets – as long they are made in a consistent way. Not every government contract is the award of a 3rdmobile license and they don’t need the same rigor. The false scienceof procurement has actually stopped some of the best consultants in the market from tendering. While Tandem Consulting still tender for some work, we probably select about 5% of the jobs that come up in our specialist areas. It’s just too time consuming. Realistically, we can have better quality conversations in the private sector.
Poor Outcomes: So, where have we ended up? The public sector, which, arguably, needs the highest quality consulting talent, is being fed a diet of bland same-o interventions. The bigger consulting companies ‘churn out’ proposals using an identikit format. These pro-forma pitches are cobbled together – without the requisite research on the client – by junior consultants following a formula in the same way that people follow a Jamie Oliver recipe. Most senior consulting teams don’t like competitor odds of 100: 1 and have disappeared from the pitch.
The Answer: So, what’s the solution? One idea might be to ask all consultants to donate a day a month to not-for-profit organizations or pick up all the paper along the Royal Canal i.e. something socially useful. Anything, rather than writing junk proposals that are time consuming and soul destroying. However, a superior solution might be along the following lines:
1/ Clear Proposals: The Buckinghamshire Council in the UK also run e-tenders. The difference is that they select a few consultants to road test and refine the tender specification before it goes live on their website. This makes the service being sought by the council crystal clear. Those consultants are paid for their time – just as all professionals should be paid for their time.
2/ Smaller Field: Reducing the field to a manageable size makes perfect sense. Public Sector organizations should continue to use the e-tenders process, but ask consultants to complete a simple pre-qualifications stage. They should then talk superficially to 5 or 6 consultants, asking for detailed proposals from 2 or 3. Lots of times the decision is made on ‘chemistry’ anyway i.e. companies that the client feels comfortable working with. This idea would save a rainforest of trees and a lot of consulting time in chasing decoys that don’t exist.
3/ Project Roadmaps: The smaller number of consultants should be tasked with producing a project roadmap and the intellectual property included in this should transfer to the client. Consultants should be asked two simple questions: (a)what is your understanding of the problem/opportunity presented? (b)How would you move this forward? Where the client organization subsequently decides to work with only one consulting firm, they should be able to use the ideas generated by each of the consultants who made it to the final stage. A payment should be made for the roadmaps completed by each of the final group consultants (perhaps billing at 50% of their normal rate). In this way the system maintains a competitive edge, but is a slimmer and fairer process, which produces better outcomes for all parties.
The current system isn’t just bureaucratic. It is an abuse of power. Understandably, no one wants to be the 1stto shout stop, for fear of being labeled negative or even blacklisted. It’s time that Management Consultants pushed back. We have an obligation to our staff to run our companies efficiently and not engage people on ‘make work’ projects. As we are in the business of telling clients how to respond when their environment changes, shouldn’t we take the same medicine ourselves?
Thanks for taking the time to stay with this one.
PS: Lighter Moment: True Story…On a recent holiday, I was worried that the top of my head (thinning hairline) would get sunburnt. I only need to get a lick of the sun and I end up redder than Rudolf’s nose – so I wanted ‘full protection.’ Linda had bought an Ambre Solaire factor 50+ and I rubbed it all over my head and face, before jumping into the car to go and meet a potential new client who was holidaying in the same location. The only thing it didn’t say on the bottle was that this level of sun protection actually turns Blue about 7 minutes after you apply it. I was completely unaware of this until I came back from meeting the potential client and the kids started calling me Papa Smurf. Despite my best sales patter, the meeting hadn’t gone that well and I couldn’t quite figure it out. Until I looked in the mirror!
Subject: FW: Dr. Geezer’s Clinic (from Larry McGivern)
An old geezer became very bored in retirement and decided to open a medical clinic. He put a sign up outside that said:
Dr.Geezer’s clinic. Treatment $500; if not cured, get back $1,000.
Doctor Young, who was positive that this old geezer didn’t know anything about medicine, thought this would be a great opportunity to get $1,000. So he went to Dr.Geezer’s clinic.
Dr. Young: “Dr.Geezer, I have lost all taste in my mouth. Can you please help me?”
Dr. Geezer: “Nurse, please bring medicine from box 22 and put 3 drops in Dr. Young’s mouth.”
Dr. Young: “Aaagh!! This is gasoline!”
Dr. Geezer: “Congratulations! You’ve got your taste back. That will be $500.”
Dr. Young gets annoyed and goes back after a couple of days figuring to recover his money.
Dr. Young: “I have lost my memory, I cannot remember anything.”
Dr. Geezer: “Nurse, please bring medicine from box 22 and put 3 drops in the patient’s mouth.”
Dr. Young: “Oh, no you don’t – that’s gasoline!”
Dr. Geezer: “Congratulations! You’ve got your memory back. That will be $500.”
Dr. Young (having lost $1,000) leaves angrily and comes back after several more days.
Dr. Young: “My eyesight has become weak – I can hardly see anything !!!!
Dr. Geezer: “Well, I don’t have any medicine for that so, here’s your $1,000 back.” (handing him a $10 bill)
Dr. Young: “But this is only $10!
Dr. Geezer: “Congratulations! You got your vision back! That will be $500.”
Moral of story: Just because you’re “Young” doesn’t mean that you can outsmart an “old Geezer.”
One Good Man (Courtesy of Aidan Cahill – a great source for jokes).
All the members of the company’s Board of Directors were called into the Chairman’s office, one after another, until only Ted, the junior member, was left sitting outside.
Finally it was his turn to be summoned.
Ted entered the office to find the Chairman and the other four Directors seated at the far end of the boardroom table. Ted was instructed to stand at the end of the table, which he did.
The Chairman looked Ted squarely in the eye, and with a stern voice, he asked:
“Have you ever had sex with my secretary, Miss Hoyt?”
“Oh, no, sir, positively not!” Ted replied.
“Are you absolutely sure?” asked the Chairman.
“Honest, I’ve never been close enough to even touch her!”
“You’d swear to that?”
“Yes, I swear I’ve never had sex with Miss Hoyt, anytime, anywhere,” insisted Ted.
“Good. Then you fire her.”
– Hello! Gordon’s pizza?
– No sir it’s Google’s pizza.
– So it’s a wrong number?” Sorry
– No sir, Google bought it.
– OK. Take my order please
– Well sir, you want the usual?”
– The usual? You know me?
– According to our caller ID data sheet, in the last 12 times, you ordered pizza with cheeses, sausage, thick crust.
– OK! This is it …
– May I suggest to you this time ricotta, arguably with dry tomato?
– What? I hate vegetables.
– Your cholesterol is not good, sir.”
– How do you know?
– We crossed the number of your fixed line ☎with your name, through the subscribers guide.We have the result of your blood tests for the last 7 years.
– Okay, but I do not want this pizza! I already take medicine …
-Excuse me, but you have not taken the medicine regularly. From our commercial database, 4 months ago, you only purchased a box with 30 cholesterol tablets at Drugsale Network.
– I bought more from another drugstore.
– It’s not showing on your credit card statement
– I paid in cash
– But you did not withdraw that much cash according to your bank statement
– I have other sources of cash
– This is not showing as per you last Tax form unless you bought them from some undeclared income source
-WHAT THE HELL?
– I’m sorry, sir, but we use such information only with the intention of helping you.❤❤❤
– Enough! I’m sick of Google, Facebook, Twitter, WhatsApp. I’m going to an Island without internet, cable TV, where there is no cell phone line and no one to watch me or spy on me
– I understand sir, but you will need to renew your passport first as it has expired 5 weeks ago!
Check our website http://www.tandemconsulting.ie or call 087 2439019 for an informal discussion about executive or organization development.