Bain & Company is an interesting company. “Bainies”, as they refer to themselves, take enormous pride in their culture and the “true north” value system which lies at the core of their cultural values. On my first day at the office, sitting through an induction led by a team of partners, the following three points were driven home:
• Bain believes in developing solutions which work. The Monday-morning-principle was the belief that any Bain recommendation must lead to an action that could be implemented by the client on Monday morning.
• Bain also believes in 80/20 rule. But the rule is different from the famous Pareto principle. Bain’s 80/20 rule refers to the fact that it is better to have 80% of the best answer, provided this could be implemented by the client to get success. Chasing the best theoretical answer with limited room for operational success was not an option.
• Clients come first. Period. Bain ties this to their “true north” value system of only doing what lies true to their value system, and by default, the client.
We went through a long induction period lasting one complete week. A whole host of topics were covered in this intense mini Bain MBA week:
• History of Bain
• Bain Approach to Management Consulting
• Bain Value System
• Bain Path to Partnership
• Bain Knowledge Systems
• Research Skills
• Presentation Skills
• Writing Skills
• Speaking Skills
• Dressing Skills
• Engagement Etiquette
• Office Etiquette
• Etiquette for Engaging Clients
• Maintaining Client Confidentiality
The thing that immediately hits you at Bain is the intellect and wide-ranging skills of the people in the room. In my group of 12 new hires there were a NASA rocket scientist, a Rhodes-Scholar economist who served on the Clinton campaign, several Harvard, Wharton and Stanford MBAs, a former musician and now MBA from the University of Chicago (now the Booth School of Business), a poet and Fulbright scholar…and then me, a physicist. Therefore, it is an intimidating place. That kind of pedigree exists throughout the rest of the organization.
It is better to have 80% of the best answer, provided this could be implemented by the client to get success. Chasing the best theoretical answer with limited room for operational success was not an option.
Bain is unique among management consulting firms for several reasons:
• Bain is the only one of the truly prestigious firms to be run by a woman, Oriet Gadiesh. Orit is a chairman of the firm. You should read her interesting Harvard Business School Case Study for her complete story, but basically her tough survival attitude is part of the Bain culture.
• Bain almost went bankrupt. This embarrassed the firm immensely but also made them more conservative and forced them to put in place measures to make sure this never happens again. Therefore, Bain seems to be very analytical when examining its own actions.
• Bill Bain walked out of the Boston Consulting Group along with a handful of key people to set up Bain & Company across the town from his rival. The firm tends to avoid discussing this part of its history. However, it does shape who they are. It’s almost as if they try so much harder to bury their past.
With so many big egos around the room, everyone is trying to outdo the other and be seen as serious competition. The positioning and verbal spars do come across clearly. The Bain partners and existing employees try to create a more collegial atmosphere. However, with such high salaries and reputations on the line, everyone is trying to one-up the other person even if this is done subtly.
Bain almost went bankrupt. This embarrassed the firm immensely but also made them more conservative and forced them to put in place measures to make sure this never happens again. Therefore, Bain seems to be very analytical when examining its own actions.
The business analysts/consultants (different firms use different names for the entry-level position) were separated from the more senior associate level recruits. The six of us went through a more detailed orientation about the Bain approach to research.
Typically, even the consultants are staffed onto engagements. However, Bain was going through a period of rapid growth and the research support systems worldwide were struggling to keep up. A decision had been made that three of the consultants would be assigned to an internal role primarily to support the partners on client-development studies.
I was one of the three. We would be a type of internal research unit supporting partners in this office only. Another Bain partner and three managers would be assigned to the unit full-time to ensure it could operate to the highest Bain standards.
I remember looking forlornly at the other consultants as they went out onto client-site. It was seen as a badge of honor to be on a live engagement working with clients. Despite what the firm told us, we felt being kept back in the internal unit was a decision taken as we were not ready and needed to be trained in this safe environment. Of course, it was not true, but that’s the way we felt.
On our first day in the unit, we (three consultants from the unit) went out for lunch. One of the consultants was quite upset because she felt her career would be held back and she was not developing by working in the office. Over steak and grilled vegetables we decided that if we were going to be the internal team, then we would be the best internal team ever. We would make the Bain partners see the enormous value we were generating.
It went without saying that we all three were wishing we would be the first to be assigned out of the unit and onto a project.
A couple of massive client engagements put a crimp in our plans. Rather than having a generous leadership group with a full-time partner and three managers, we were soon down to a part-time partner and one full-time manager. In hind-sight that turned out to be an amazing blessing. The senior partners in the office started spending more time with us, we were given more senior roles to carry out and since we needed more support, we were sent on much more formal training to exotic destinations like London.
Spending time with the senior partners was especially important. For our colleagues on engagements, their performance was fed through several lines of communication before it reached the partners. We were working directly with the partners. Our success or failure was squarely in our hands.
One month into our time in the unit, a major opportunity arrived to demonstrate the unit’s value. Bain had been trying for some time to break into a major biscuit (not the real category) company. For the sake of writing, we shall call this company Nabisco (although it was not Nabisco). Bain had tried a few times but nothing ever really happened. McKinsey had somehow always managed to arrive at the right time to snatch away the work.
Nabisco was going through a CEO transition and the new CEO wanted to relook at the portfolio of brands in the business. Since the new CEO did not have a preferred consulting partner nor did he know the industry, he invited a Bain partner to discuss ideas for improvement. With the change of the guard, change in the client’s board and due to conflicting diaries, the first of these meetings was set for 10 weeks into the future. That gave us plenty of time to put together something formidable to support the partner.
Working with the partner we mapped out a strategy for the discussions. We did not know enough about the sector and client. Therefore, we developed a two-pronged approach.
• First, we could not do the research to tell them what was not working and needed to be improved. We did not have access to the data and that would need to be the engagement itself. Therefore, we decided to do a study to show him how he should go through analyzing his company.
• Second, we decided to show him the consumer perspective in-store.
Working with the partner was a fantastic experience. He drummed into me and showed me the value of an approach that I still use to this day and have carried with me even when I left Bain for another consulting firm:
• Be clear about the question you are answering.
• Ask yourself if answering this question would allow you to reach your objectives. The wrong question is more damaging than the wrong answer.
• Break down this core question into smaller sub-questions.
• The questions must be mutually-exclusive and collectively-exhaustive. Getting the handle of this was painful. However, being MECE is the single most important skill in management consulting.
• Design the analyses to answer the sub-questions.
• Collect the data for the analyses.
• Run the analyses.
• Go back to the start and test for logic, test for completeness and test for common-sense.
This is the management consulting way. In every single engagement and across thousands of issues, I have successfully used this approach. It is the root of consulting success. Of course, learning how to do this was a painful and difficult process.
It is very difficult to understand what a storyboard is when it is explained to you. I do not know about other people, but I personally have always struggled to generate a perfect storyboard. It took me many iterations to get it just right. The same goes with preparing perfect slides. So many people do not know how to prepare slides and are comfortable with this. At Bain, you need to learn their templates and learn how to deploy it well.
We split the work up. Given the partners experience, he would work on the storyboard and slides for the framework to analyse the company and I would handle the in store experience analyses. Completing the in store study posed a big problem. What was the central question I was answering? How would I do this? Eventually, after much iterations I settled on showing the disconnect between what Nabisco was trying to achieve in store, as explained on their website, annual report and in numerous analyst calls, and the actual customer experience.
So off I went and designed my storyboard and decision tree. Once that was signed off, after 5 iterations, I then designed the tests and started the data collection. Management consulting is a lot like the show CSI:
• Typically, people are trying to hide something from you. No one comes out and says, “Hey Mr Consultant, thanks for coming over. At the moment I am the problem since I have weak self-confidence and need to see constant recognition for my ego. Therefore, I structure all decisions to come through me. I know this creates many bottlenecks, is causing delays and losing us money, but it makes me feel so good. So please fix this problem and everything will work well.” We have to investigate and find the truth when nothing is what it seems.
• It is a little messy to find the information and document everything. Lots and lots of new consultants get hooked into the glamour image of management consulting. Glamour is the outcome of doing all the messy work. It is tough and sometimes painful to find the data you seek. Nothing is given to you and there are no nice looking case study appendices with perfectly formatted data. We need to sift through an organization to find the information and create the pretty slides which we hand to clients.
• The burden of proof is on us. That’s right. We need to prove our recommendation and findings are correct. If we fail, the client does not trust our recommendation and we lose credibility. Clients never care that their data sources may be incorrect. If we choose to use the data, we own the problem.
The theme I choose is a Day-in-the-life of a Nabisco Brand. Using a set of photos and time series analyses we tracked the packages all the way from the distribution warehouse, supermarkets and stores, their warehouses, onto the shelf, shelf replenishment and to the consumer.
Doing this was tough since many stores do not like shutterbug consultants snapping away near their loading docks and display units. Customers also do not like this. This was also way before the iPhone and digital cameras. I am sure it would be much easier to do this now. We also solicited some consultants to send us photos of the biscuits when it was opened up at home. Was the box easy to open? Were the biscuits broken? Could the box be stored without damaging the remaining biscuits? What did children do with the toys inside?
We timed deliveries, timed the OOS (my Pepsi experience came in useful here) and were able to show the client how damaged the boxes were, how peak shopping time traffic was missed since the stock was not replenished and many other useful insights.
The biggest benefit was spending one complete year working and learning from the firm’s most talented partners. That was priceless. I had built relationships with them. By the end of the year I knew how each partner operated and could tailor my communication and work to meet their expectations.
The pack we put together went far. Further than I thought it would. The client loved it and eventually awarded Bain the portfolio analyses work. The deck itself became something of a best-in-class internal study guideline on how to combine field work with desk-top research to produce powerful and insightful presentations.
My time in the unit was interesting and very beneficial. I actually liked knowing where I would be the next day unlike my colleagues who were sometimes given one day notice for their travels. I also liked to have one office which I could call my own, where I could develop a routine. The office had a great cafeteria and the food was excellent. While I travelled out to collect data, I could predict with a high degree of accuracy when I would finish my work. I now had more money and the time to develop a social life. Late nights were very rare since we had ample time to plan.
The biggest benefit was spending one complete year working and learning from the firm’s most talented partners. That was priceless. I had built relationships with them. By the end of the year I knew how each partner operated and could tailor my communication and work to meet their expectations. It was especially gratifying when partners tried to get me onto their projects after the Nabisco study. Spending all this time with the guardians of the firm also allowed me to see how they operated in front of clients, nurtured the firm’s values, managed client expectations and developed multi-million dollar engagements from the kernel of an idea.
Once things settled for Bain worldwide, the need to keep the internal unit disappeared. However, given its success the global firm decided to set up a dedicated research team in that office. I think that was a great feather in my cap and it was good for the rest of the team. I was willing to take any credit I could.
Many aspiring consultants feel they have to get out to clients to move ahead. That’s partly true. Yet there are many, many benefits to first joining the internal research units. That worked very well for me and I would say gave me a major advantage over other consultants.
I did one other similar study for a retail bank before I was hauled off onto my first engagement, analyzing an airline. I was the first person out of the research unit. Things seemed to be looking up for me. I should have known better.
Through a Bain business case, Terance discusses how to distinguish between analyzing a problem and assembling the answers to arrive at a strategy.
I felt lucky and relieved to have survived the scare of my last Bain business case. The relief did not last very long. I had to very quickly show that I deserved to be at Bain. With the engagement manager having left, I felt there was greater attention on my performance.
Would I be able to rise to the occasion and prove that this was a personal issue or was there something really wrong with my performance? I also felt a personal obligation to not disappoint the partners who had stood up for me. I did not have long to wait for the opportunity to prove myself.
Leading the business case
Just one week after my performance review, I was assigned to another aviation project. As you will see over time, the aviation sector and strategy became my area of specialization. Bain had been appointed to develop an IT strategy for one of the largest air carriers in the continental USA.
I was assigned to lead an important piece of work. The firm wanted to test me and asked me to be the analyst leading the business case under the support of a more senior consultant. It was going to be tough for me. I had no real finance or accounting background other than my 3 weeks MBA training at the Bain University.
Although I was assigned to work with an experienced consultant, the partner made it clear that I would need to drive the business case. The other consultant would oversee my work and provide input as needed. They would not be responsible for delivery. I would need to own this piece of work.
To be honest I was scared. While I appreciated the opportunity to lead something this big, I was not sure I could do it, and frankly surprised the engagement manager would place such trust in me.
My peers on the engagement did not help matters. The team assigned to this project was a stellar team. All were high-flyers within the ranks of Bain and were regularly cited for their outstanding team work, delivery excellence and exceptional client relationship.
Bain awards outstanding consultants with vacations away to some exotic locale with all expenses paid and they are allowed to take their families. Each of the guys on the team had won a vacation during the last 3 years running. The team consisted of 5 consultants including the partner leading the study.
I really appreciated the way the engagement manager approached this study. That is the reason I decided to bite the bullet and plunge into this project. We sat down and had a long discussion about what he wanted from this Bain business case. He was very hands-off, which I found surprising. He spoke a lot about the principles of the Bain philosophy.
I could see this guy led teams by bringing in smart people, inspiring them and allowing them to work. He mentioned he asked for me to be on the project because he heard I had spoken up for the client’s benefit on my last project. He admired that and wanted a similar style on this study. I clearly remember the 6 principles he had for the engagement:
- Take charge and dazzle the client, project team and Bain.
- Titles mean nothing. As far as he is concerned, I am the point man on the business case.
- A policy of no surprises.
- He would provide air-cover as needed and I just needed to ask for help.
- Follow the Bain approach but be creative.
- Have fun and work as a team.
Having this conversation really helped me. Not only did he inspire me to give my best, but he kept his word. At no point on the project was I treated like a junior member of the team. I was treated like a really senior and established Bain consultant. I remember sitting in the planning meetings and the engagement manager would deflect all finance questions to me.
He made a point of ensuring that no one, not even the engagement partner, would approach the Finance Director unless I was involved and it was part of my plan for the study. This gave me a tremendous boost in confidence. Now I just needed to deliver behind that.
Business case can mean so many things
What the hell do I do? Business cases can mean so many things. I spoke to the Bain business case experts and everyone had different ideas. In one project a business case meant working out the return-on-equity and in another it meant finding the increase in profitability. In yet in another it meant calculating the reduction in labor.
So for the first week, I worked with the engagement manager, partner and the rest of the team to see where they were taking the study. I decided that if each business case is unique, then the business case must serve the needs of the project. Therefore, I could only plan the business case once the needs of the project were clear. That sounded logical to me.
As I worked with the other team members to develop their plans, I developed a framework for my analyses. In hindsight, the framework is so obvious and logical, but at the time, I was pulling my hair out.
It helps to arrive at the framework by yourself since you can then understand why it was developed in the format chosen. The engagement manager would calmly listen to me and make polite suggestions and it was up to me to make the final decision. With power comes great responsibility – or so they say.
My analyses approach
So my analyses approach was simple:
Step 1 – Conduct a 2 weeks review of the IT department’s finances. Basically I was creating their income statement, which they did not have. I was also creating an easy to understand capital investment overview, something which they again did not have.
Step 2 – Determine if their total expenditure was appropriate.
Step 3 – Determine if investments were made in the appropriate parts of the business.
Step 4 – Determine what they could do to improve.
Step 5 – Determine the business case for the recommended strategy.
I ran this by the engagement manager and partner and both of them were happy with my analyses approach. They thought it was easy to follow, exactly what was needed and just a question of finding the information and drawing the insights.
Developing a storyboard
I already knew that the engagement partner would be on my case to prepare my storyboard. So I spent the first week doing the following:
- Summarizing the key questions and hypotheses I needed to answer.
- Building a decision tree to ensure I was not excluding anything important.
- Developing my analyses and data collection templates.
Once this was done, I started working on my storyboard. I must say that developing my first storyboard was a painful experience. It is such a foreign concept when done by yourself for the first time.
Although I had practiced this in the office when I worked in the research team, I had taken for granted the important prompts and pointers provided by the consulting partners. Their comments were really useful to nudge me in the right direction.
I would just have to work without them. I reworked my storyboard every single night and discussed it with the manager the next morning. Each morning he sent it back with the following kinds of comments:
- Do we need to tell clients we did this?
- What is this data telling us? Are you sure?
- What does it mean if they do not adhere to global best practice?
- What is the most important finding you expect? Why is it not in the story?
- Why is your story so long?
- Did you know Winston Churchill demanded his war cabinet provide feedback using one single-sided typed page with double spacing? Why is your storyboard 80 pages? Is the news eighty times as catastrophic as World War II?
He was never flippant or arrogant. He just asked interesting questions in a nice way. It forced me to think this through over and over. I used to literally spend hours talking to employees and helping the other consultants all the while stressing that I had not started my data collection and analyses. The engagement manager did not seem worried. He wanted me to first develop my storyboard.
Presenting a storyboard
By the end of week two I was still not sure how my final storyboard would look like. This was after 7 iterations. Unfortunately for me, the next day the entire project team was having a meeting and we each needed to present back our storyboard. We were scheduled to have the meeting from 9am to 11am.
My tactic was to stall and hope to buy time to gather my thoughts over the weekend and hopefully present on Monday. The project partner rarely came in between Monday and Wednesday, so if I could survive Friday I would have about 5 days to spare.
I did quite well on Friday. Stalling that is. When the partner came in Friday morning, I strongly suggested he have some pastry from the new Dean & Deluca boutique on the ground floor. That killed about 25 minutes since I was extremely polite to allow every woman to pay before me. We spent another 10 minutes on pleasantries upstairs before getting into the detail.
Once we got to work, it was an intellectually tough session. The storyboards were dissected and analyzed. The partner checked for logic in thinking, robustness of the analyses and so on. It was interesting to watch. I also kept asking questions to stall.
At 10:55am, the partner checked his watch and mentioned he was running out of time. The rest of the team got up to leave since they had 11am meetings. The partner motioned for me to stay and quickly brief him. He wanted me to give him the basic message from my storyboard.
Damn! I thought I had escaped.
I basically sucked in a deep breath and told him what I thought the analyses would show. I just went with what I think the data was telling me and its implications:
- About 75% of the IT budget is locked into legacy contracts decided at corporate level and over which the IT department has no control.
- The legacy contracts are never reviewed and likely not meeting performance criteria.
- The planned budget cuts could only be taken on the capital projects side, where passenger and ticketing IT upgrades would be made, since the rest of the budget was controlled by corporate. This would directly impact sales and customer satisfaction.
- Despite popular opinion, Pacific Air is not spending more than peers, although its pattern of spending does not make sense. It is spending too little on core systems (ticketing) and wants to cut them even more.
- It is the only airline in its peer group having such a large percentage of its IT budget tied to internal systems versus customer supporting systems.
- The IT department could invest in the customer systems without requiring a budget increase. They would be able to tighten internal IT costs and shift the savings to the customer facing systems.
I waited for the expected criticism. It never came. The partner said that was a “brilliant” storyline and he looked forward to seeing the analyses.
The insight which indicates you understand management consulting
That taught me a very, very important lesson. Sure, management consulting firms have many phenomenal tools to construct decision trees, hypotheses and hundreds of guides to work out costing and rates of return. However, those tools only breakdown the problem. They do not put the pieces together to present the answer.
That takes intuition, creativity, experience and guts. That was a fundamental lesson in this project which I believe set me up for great success as a management consultant. I realized all the tools exist to break down problems into neat parts for comparison.
The truly outstanding consultants understand this and develop a knack for looking at the pieces and trying to fit them together to present a new picture. That’s a very important lesson that I hope to convey in this piece. Great associates and engagement managers can use formidable analyses to break down problems. Those who can reassemble them into the solution become partners. It’s that simple.
Much later I realized that Henry Mintzberg and Kenichi Ohmae (McKinsey) both outlined this understanding as a critical skill for management consultants. Mintzberg said that not everyone can be a management consultant. Bringing the right combination of intuition, creativity, experience and guts to a problem is something that cannot be taught and not everyone has it. Therefore, not everyone can be a management consultant.
Ohmae arrived at the same conclusion in his book “The Mind of the Strategist” but explained it differently. He said that engineers are linear problem solvers and are excellent at breaking down problems. However, this skill at breaking down problems is a major disadvantage when combining the pieces to develop the solution. Linear thinking does not work. In other words, all management consultants must have the skills of engineering thinking, but having these skills is by itself not enough.
In hindsight I cannot think why anyone would ever solve problems by scurrying off to analyze every piece of data. It is such a waste of time. The deductive approach of solving problem with decision trees and hypotheses is so powerful, it really boggles the mind. Once you make that shift to understanding and using the process, you become a powerful and efficient thinker.
You can imagine your career consisting of 3 parts:
Part 1 – Learning to correctly break down problems and analyze them.
Part 2 – Assembling the pieces to develop the solution and recommendation.
Part 3 – Implementing the solutions and becoming an operator.
Analysts, interns, consultants, senior consultants, managers, case leaders, engagement managers (different terms for different firms) all are in phase 1. It’s that simple. They are still learning to break down problems. An analyst is helping to break down a problem, an associate is breaking down a problem and an engagement manager is overseeing many people as they break down problems.
Phase 2 is much tougher and very few consultants make the transition. Until consultants get to the associate principal, partner, senior partner, director or managing director level, they are not crafting solutions. They are just preparing the pieces which the more skilled thinkers will use to craft the final solution.
Many consultants managed out of Bain, McKinsey and the Boston Consulting Group never understand this point. They leave as associates or engagement managers and think they know how to develop solutions. Unfortunately they have not learnt the skills needed. They only have half of the skill set required. Do not get me wrong, the skills they have are still important, but not enough.
Phase 3 will be discussed much later. The bottom line is that you cannot be an operator in a management consulting firm. You need to transition to a corporate role, run a P&L with resources and fight the daily battle to succeed in the market.
Using the storyboard to structure my analyses
It would be nice to say that I worked brutal hours every day. That fits into the stereotype for management consultants. I did not. Using the storyboard to structure my analyses and data collection made the project ridiculously easy. I should not say that, but it is true.
If you follow the Bain approach to break down problems and follow the guidelines to develop the analyses, you cannot go wrong. You need to constantly think about what you are doing, communicate and incorporate information. If you do this, you will succeed.
Always learn the process for solving problems. Really understand it and use it. Then sit with the data and think about what it is saying. Think long and deep about it.
The business case did dazzle the client
Despite being the junior consultant on this team, I can safely say that the business case did dazzle the client. Most of the hypotheses were proven. The client did manage to make huge investments in the customer facing side of the business, with only a 5% increase to the IT budget.
Rather surprisingly, the client retained us for much more work. I was also surprised when people at the office started referring to me as an aviation and business case specialist. Yet that is the power of the management consulting approach. It works. My star was rising.
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Storyboard matters in studies because useful insights mean very little unless they can be woven into a compelling story. Critical insights which are not presented as a story, generally fail to get any traction at a client. In fact, that is one reason strategy studies collect dust on a client’s desk: they did not present a clear message.
When I was a corporate strategy partner, I pretty much drove teams a little crazy to constantly refine the story. I still do that. If you are following the US Retail Banking Study you would have seen us push for a crisp and compelling story. We do the same on the current power sector study. We just push and push for the best story out of the data. A great storyboard will get the client to act.
And that is what you want at the end of the day.
Where a storyboard fits in a strategy study
Boiled down to the basics, the strategy engagement structure can be explained as follows. First the key question team needs to answer in the engagement is determined. The key question has to be split into smaller questions in a logical format. This allows the team to develop a decision tree.
The decision tree has to meet two criteria. It has to be mutually exclusive and collectively exhaustive (MECE). There are two other criteria to be met and that is taught in our online strategy training program, though if you stick to the MECE rule that will be fine. Based on the decision tree, the hypotheses are developed.
The storyboard is the message engagement team delivers to the client, using the decision tree and hypotheses that has been developed, and it is based on the anticipated results of the study.
Next the team develops analyses to test each hypothesis. Based on the results of the analyses the hypotheses are proved or disproved and the storyboard is refined.
The diagram below shows a structure of a strategy study and a point at which the rough storyboard is developed. Although this diagram helps to understand how strategy engagements are conducted from the structural perspective, keep in mind that a strategy engagement is an iterative process and can be messy. In fact, it is usually messy.
Finally, the idea of using an objective function works in almost all types of strategy and operations engagements, but does not work in corporate strategy. In corporate strategy a very different approach is used because those engagements are different. That will be covered in a different article since corporate strategy studies are so rare.
What is a storyboard
To explain the management consulting storyboard concept, lets use an example from the animation industry. Before producing detailed animations and more, the animation team must first agree on the story.
The animation team gathers together in a room and takes blank pieces of A4 paper, they write out a short 10-word description of a scene on the top of the page and produce a rough 15-second pencil sketch to outline the animation which could go into this part of the movie.
In all, they can produce about 30 to 120 such A4 pages, stick them on a wall in sequence and everyone will be able to follow the story. This allows the animation team to debate the story and messaging without expensive animation work which would definitely change as the story changes.
To extend this analogy to a management consulting storyboard, the team needs to prepare a story of their message so that everyone in the team can understand their thinking and provide feedback. The management consulting storyboard is basically the headlines of the presentation which summarize the anticipated results from the work stream or from the entire strategy study.
Question from a reader about developing a storyboard
To dig deeper into the concept of developing a storyboard, I will answer a question we received from a reader, lets call him Henry.
Henry was avidly following the life blog on a study we did in the United States, where we were helping one of the largest Latin American banks to put together a strategy to enter the profitable, large and rapidly growing US financial services market. The study was focused around providing financing to low income entrepreneurs, either immigrants or US citizens.
We had been live blogging the study so everything we did you could follow it in real time and we spent a lot of time discussing what we were putting together. Fascinating work. It is definitely a new way to teach strategy consulting and tends to be very popular.
“Michael, what you are doing is very interesting but one thing I don’t understand is how is it that you are able to come up with a storyboard for the client only in the beginning of your 3rd week of a 8 to 10 week strategy study?
This kind of seems to me as if you are giving a client a solution that you already have versus relying on the analysis to tell you what the answer will be. And isn’t that the criticism that consultants get that they don’t really develop new ideas for clients but put out what they already know? It does not make any sense to me so I am not sure how it can be right. “
I can understand the reader’s confusion but he is wrong and I want to explain why he is wrong.
Piece of advice on how to communicate
First I want to point out one thing about this guy’s communication style. And, to be fair, many people have this style of communicating so it is worthwhile to address it here.
Henry is basically saying, “I don’t understand something. And because I don’t understand it, it must be wrong“. This is a really bad way to communicate.
It is extremely naïve or egotistical, or arrogant, you pick, to assume that if there is something you don’t understand then it must be wrong. For all you know, it may make perfect sense but you don’t have the necessary mindset or the necessary prerequisite knowledge to understand it.
If you don’t understand, it is better to say, “Look, I am sure it makes sense. I don’t actually get it so I will let you try it out and maybe I will get it later.” But don’t make it sound that if you don’t understand it then there is something wrong with the actual work.
It is just not appropriate. It sounds really bad to clients, superiors and colleagues when you do it. You sound like a 5 year old child.
How we could come up with a storyboard in such a short time
Besides that piece of advice on how to communicate, lets get into how we were able to write a storyboard in such a short time.
Note that anything that I will be able to teach you here will be at a high level. You can learn these concepts in depth as you go through our strategy training. How to develop a storyboard and other strategy capabilities is also taught in our book “Succeeding as a Management Consultant“.
Now lets address how we were able to come up with the storyboard so early.
Think about the logic here. We are not doing analysis just because we have to do it. We are doing analysis because we are trying to answer some questions.
If you just doing the analysis because this is the analysis you always do in a strategy study (e.g. market segmentation, cost effectiveness and revenue analysis), then yes, you have to wait for the analysis to be done to see what the analysis will tell you.
But this is not the way we do things at elite strategy firms. We do the analysis for a reason and that is the fundamental mind shift you have to make.
We start off with the objective function. What is the problem we are trying to solve for the client? We then break that objective function into the direct drivers of the problem. We then continue breaking down those drivers until we get what looks like a Christmas tree, that is actually a decision tree.
The objective function is the apex of the tree and the tree breaks out. We then prioritize the branches that are most important in the decision tree to help us figure out where to spend most of our time (refer to the exhibit below for an example).
For each of those prioritized branches we then say, “Ok, what is the hypothesis to explain why this is the issue impacting the objective function?”.
Once we have the hypotheses, we can then say, “Hey, if this is the hypotheses, what tests do we need to do to prove or disprove the hypotheses?”.
Those tests then become the analyses.
We do the analysis which directly help us answer the hypotheses, which directly helps us determine if each of the prioritized branches should in fact be prioritized and, therefore, what drives the objective function.
So even before we finish the analysis, because we know why we doing the analysis, we can say, “Ok, if the analysis turns out to be this, what is the message we will give to the client?”.
For each analysis you probably will have one or two, at most 3, possible outcomes. Rather than writing a storyboard for each outcome, we write a storyboard for what we think is the most likely outcome. And then, if the analyses turn out to be a little bit different than we expected, obviously the storyboard will be revised.
But more or less we don’t turn out to be wrong. We turn out to be right most of the time because of the logic we apply and because we are attacking the problem from so many angles that this allows us to cross reference and cross check things.
And that is the crucial point here. We don’t just do analysis for the sake of doing it. And, therefore, we don’t have to wait to see what the analysis is telling us. The analysis is being done to check certain hypotheses that we developed at the start of the study. And the hypotheses are not random. They are built off the decision tree, which is also not random because the decision tree is actually brainstorming the issues which are driving the objective function.
And this is the important difference in which elite firms do analysis. We don’t just decide, “Ok, this is the checklist of analysis we need to do, lets do it”.
We say, “Hey, hold on a second, why are we doing the analysis? What purpose does it serve?”. In our mind we are developing the storyboard which states if these are the issues and this is the way the issues turn out in the analysis, then this is the recommendation we give to the client.
We can write that storyboard in the first, second or third week. And once we complete the analysis, we can go back and check if the storyboard we wrote out, based on what we thought the analysis will turn out to be, makes sense.
And if it does not, we will revise the storyboard. But I can tell you right now, 80-90% of the storyboard usually turns out to be correct. The more and more you think about it, even 95% of it could turn out to be correct.
By the 3rd week of the study, the storyboard is more or less there. Yes, few things will change. The data will definitely change. For example, we may know that certain segment of the market is unprofitable, but likely will not know why it is unprofitable or by how much it is unprofitable. But we more or less will be able to figure out it is unprofitable.
So that explains how we are able to come up with the storyboard so early. Because we are not doing analysis for the sake of doing it but because we have a reason for doing it, and the reason allows us to structure the storyboard.
QUESTION(S) OF THE DAY: What challenges will you face in applying this technique in a corporate or tier-2 firm? Please let us know in the comments.
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