What strategy consulting for big businesses taught me about starting upJithamithra Thathachari
Strategy consultants are a much maligned lot in the startup and business world. Over the five years I spent at the Monitor Group (a strategy consulting firm started by Michael Porter), I heard various complaints:
- How can a young consultant say anything useful to an industry veteran?
- What's the use of a plan that’ll take five years to execute?
- Consultants don't do anything except make slides.
- You don't know how to make decisions. Sure, you can advise people…
- You never put your money where your mouth is. (I think Paul Graham meant this, when he called management consulting a version of 'gaming the system').
I heard many such comments during my tenure; from friends, relatives, and chatty fellow travelers on long flights. And seeing how we addressed these complaints at Monitor – while advising large conglomerates in established industries - paradoxically enough, prepared me for starting up.
- It doesn't matter who you are or what you know. You need to have a hypothesis, and be ready to learn.
When I started in strategy consulting, the first thing that struck me was the novel hypothesis-based approach.
Coming from an engineering background, I was used to the deductive approach – start from what you know, and proceed towards the conclusions. But a hypothesis-based, inductive approach starts from the other end – you make some predictions, and then proceed to test them (and modify them as needed). This data-driven learning approach is a great complement to industry understanding. That's why companies hire strategy consultants – to hold up a mirror to their beliefs, test them, and help company executives understand how the industry is evolving.
Performing this process – of making predictions, being proved wrong, and correcting them – repeatedly over multiple projects gives you a healthy appreciation of your own ignorance. I've found this invaluable when starting up – I may not know the right answer, but I know how to test my beliefs and work my way there.
- You need to be OK with uncertainty.
One of the differences between strategy and operational consulting is the timeframe – strategy is more long-term. The industry trends you bank on may play out over 3-4 years – some may not have even started yet. So there will be ambiguity. But you still need to make some bets, and find creative ways to validate (or invalidate) them – talk to industry experts, observe trends in related industries and evolution of similar economies, etc. But none of these will give you the perfect answer – you need to 'satisfice'. Thus, not only do you not know the answer starting out, but you also may never know the answer with certainty.
And it's the same at my startup - I don't know if my product is going to be loved, hated, or worst of all, ignored – first by early adopters, then by followers, and then the rest (if I get that far). But I'll keep plugging away, and figure out ways to run small tests often to ensure that I'm on the right track.
- Serving your clients' needs is your foremost objective.
Ignoring the double entendre for a bit, client service is the priority in consulting – I heard this all the time from the Partners at Monitor. Whether it's sudden weekend work or an ill-timed field visit, you do it if it benefits the client.
Today, I have a consumer-facing Android app. Every once in a while I get a caustic review, or a needlessly harsh 1-star rating. But it's not my place to rail against unreasonable users – if I focus on serving them well, then I hopefully won't have to worry about these ratings in the future.
- Brevity is the soul of communication.
Naysayers are right when they say consultants make a lot of PowerPoint slides. Boy, did I make a lot of them! But the thing about slides is that, unlike a Word document, there's limited space. So you need to make your point succinctly. And you need to say first up why that message is important (or as they say at Monitor, you need to bring out the 'so whats').
I've done my 10,000 hours of slide-making. I'm still far from a genius at it (Gladwell was wrong), but knowing how to deliver the key message upfront and in as few words as possible, is a very useful skill to have at a startup. Whether it's in crisp emails to potential clients, impactful copy for Facebook ads, or elevator pitches to investors with short attention spans, brevity is invaluable to startups.
- Ideas are worthless. Execution is key.
I know this sounds very ‘global’ (and it is – I won't lie), but project after project has taught me that the best-articulated strategy can stop making sense once you start implementing. There was one case where we designed the strategy and left, and the client came to us after a few months saying everything is shot to hell and can we please come back and help them. We could definitely have done better – it was our responsibility to devise a plan that the client could implement, and explain it to the client's team.
But the larger learning for me was that your plan doesn't matter so much; it probably wasn't rocket science to begin with. But you need to be able to execute on it effectively. It needs to be 'actionable'.
In the same article where Paul Graham says that management consulting is gaming the system, he also mentions the similarity to college. And while I may not fully agree with his first comment, his second is spot on. A strategy consulting firm is one of the best finishing schools you can go to, if you want to build a business of your own someday.