In light of major scandals driven by ex-McKinsey employees (e.g. Jeff Skilling, Rajat Gupta and Anil Kumar) and consequent sharper focus on ethics by top consulting firms, lets continue our discussion about ethics and delve deeper into how to think about ethics, and what shapes ethics.
Ethics is required when the law is not written, not enforced or wrong
To think about ethics, let’s picture a bar chart running vertically. The entire bar represents all the actions you could undertake in your country. It is obviously a hypothetical bar since we could not list every action we could take. Yet, we know we can do countless things.
The bar chart goes from one all the way to the one billion things you could do. The bar is split into two parts. Twenty percent of the bar is dark blue and eighty percent of the bar is white.
Everything that is dark blue depicts every action you can undertake in your country that is covered by the legal system. Therefore, for the dark blue part there is a law that determines if what you are doing is legal or illegal.
Everything in the white section depicts actions not covered by laws in your country.
When we talk about ethics we are most of the time talking about the actions within the white space, where the laws have not been written to cover your actions. If there was a law telling you how to behave in a situation, would it be an ethical debate given the law instructed you what to do? In most cases it will not be.
However, the world is not perfect.
There are times when the law is wrong. For example, when black people were not allowed to attend universities in South Africa or parts of United States. There are laws like that, unjust laws, right now in parts of the world. Therefore, in situations where the law is wrong, ethics should dictate your actions.
That is one example where ethics does not just apply to the white space but also applies to the blue space.
There are other situations where ethics applies to the blue space as well.
Think of countries that have exceptional constitutions. Their constitutions are so amazing that other legal systems around the world quote from these country’s constitutions and higher court opinions. For example, South Africa’s constitutional court rulings are highly referenced internationally.
However, there are parts of that country that are lawless. Clearly the law is not enough if there is no enforcement. If there is no enforcement people will misbehave unless they are ethically bound to behave themselves. Therefore, there are two situations where we need to apply ethics to actions governed by law, when the laws are wrong and when the laws are not enforced.
To summarize, ethics is required when the law is not written, not enforced or wrong.
The application of ethical principles is inversely proportional to the correctness of the law, the reach of the law and the enforcement of the law. If there are no laws, or the law is weak, or the law is wrong, or the law cannot be enforced, you are reliant on your personal judgment to make decisions.
The question is, how good is your judgment.
If ethics is about judgment, what drives our judgement?
We established that ethics is about judgment. Now I will give you 4 situations and I will show you what drives our judgment.
Imagine it is 1940 and you are a brilliant engineering student in Germany – blue eyes, blond hair, handsome but a bit naive. All you know is what is told to you, and you just happened to be a member of the armed forces. You are sitting at a hip Berlin bar. You are in a situation where everyone thinks it is just fine to persecute the Jewish and Slavic nations. Not only is this the kind of group you belong to, it is also aligned with the law in your country.
Let’s take another situation. Let’s assume it is 1910 in Canada. You are going out with your buddies, upstanding gentlemen who don’t agree that women should have the right to vote. That is all you see in the press. That is what people talk about. That is accepted.
How do you break away from that, when it is the only thing you know to be right?
Some of you will say, “Well, we actually know that’s wrong”. However, the reality is, to a large degree, we are defined by our circumstances. It is easy to apply a higher ethical standard in hindsight. We can prove this.
In the first two examples I have presented scenarios that today, in hindsight, we know to be wrong. In the next two examples I will give you things that we don’t necessarily know to be wrong today.
Think about eating animals. Human beings consume millions of tons, may be tens of millions of tons, of animal carcasses every year. It is completely acceptable to do this. It is acceptable to make jokes about it. In a hundred years people may look back at us and think we were animals for doing this.
We think it is acceptable because the network we belong to thinks it is acceptable. If you belonged to a social network whereby your friends thought it was horrible and distasteful to eat animals, you would probably not do it.
If your reaction to this was, it is not so bad so I am going to do it, then remember this is how unethical behavior becomes acceptable. We justify it based on what we see as being commonplace.
Let’s look at another example. Something that I notice every single time I am in a group of people – sexist comments. It is remarkable how much we tolerate sexist comments on television and in social settings. In fact social settings reinforce this behavior. Comments like “you are acting like a girl”, “you throw like a girl” or “only girls do that” are basically accepted discriminatory banter.
Just about every major comedy show in the United States has made some off-hand sexist comments. Some thrive on it and their ratings are directly proportional to this behavior.
One of the most popular shows in United States, “How I Met Your Mother”, actually has a scene whereby the main antagonist, Barney Stinson, talks about how he may have sold a woman into slavery. That show went on to have one of the highest ratings in prime time television for United States. It was a joke, obviously, but the fact is we find those things funny.
This happens right now. We think it is acceptable to belittle half of the human race. So why do we do that?
We do it because everyone else is doing it.
The social group you belong to shapes your ethics
In conclusion, the social group you belong to (your friends, the people from whom you seek acceptance, the people you spend time trying to impress, the people with whom you socialize, engage with, build relationships with etc.) shapes your values, or lack thereof.
The social network you choose to belong to will determine how ethical or unethical you choose to be, want to be or even could be.
So ask yourself: “How do the groups I choose to belong to shape my career and my life?”. If you are not happy with an answer to this question, make the necessary changes.
QUESTION(S) OF THE DAY: Which behaviours or beliefs currently acceptable in Western culture will, in your opinion, not be socially acceptable 100 years from now? Please let us know in the comments.
SPREAD THE WORD! Like this? Please share it.
Subscribe to the Firmsconsulting podcast on iTunes.
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.
SPREAD THE WORD! Like this? Please share it.
Subscribe to the Firmsconsulting podcast on iTunes.