You Too Can Be a Strategy Consultant: Three Secret Tools Revealed
You always suspected it, and I’m here to tell you it’s true.
The art of general management and strategic consulting lies in the mastery of a few simple tools. Now, despite the inevitable threats against my person made by parties who do not want to see the Truth revealed, I am about to share with you, Trust Matters readers, the Three Strategic Secret Sauces. Guard them carefully.
Secret Sauce One: The Rule of the Axes.
Short form: Draw two axes. Now decide what to label them.
You’ve seen this rule before, though perhaps you never noticed it for what it was. Consider:
- • The Laffer Curve: tax rates by governmental revenue
- • The classic Business Barnyard Matrix: market share by growth rate of a business
- • Newspaper headline font levels on disaster stories by distance between the paper’s home town and the location of the disaster
- • New York Magazine’s Approval Matrix (highbrow/lowbrow by brilliant/despicable)
Why is the Rule of the Axes such a hit? Because it simplifies complexity, immediately giving the axes-author the appearance of wisdom.
(Close cousins: Occam’s razor, and the rule of “always use 3-4 bullet points”)
Secret Sauce Two: The 80-20 Rule.
Short form: Look for concentration—in anything.
Classic formulations of the 80-20 rule include:
- • 80% of the revenue/profit comes from 20% of the clients
- • 80% of the taxes are paid by 20% of the citizens
- • 80% of the crimes are committed by 20% of the population
- • 80% of the Ivy League admissions come from 20% of the population
The 80-20 rule works because it forces the mind toward points of leverage. A good strategist always looks for maximum effect with minimum resources—just like a military general, or a change manager. (Note: it doesn’t have to actually be 80/20, in fact it rarely is. Anywhere above 60/40 can work.)
Secret Sauce Three: Vicious and Virtuous Circles.
Short form: Find what works, or doesn’t; add a few interim steps, draw them in a circle to make it appear permanent.
Here are some examples:
- • Parental abuse drives fear, which drives aggression, which drives pre-emptive defense, which drives abuse
- • US auto companies give up low-margin segment, which drives market share for low-margin Asian competitors, which increases their volume, which lowers price, which lowers margins, which causes US auto companies to give up the next-lower margin segment
- • You empower what you fear
- • The fastest way to make a man trustworthy is to trust him.
The Circles are powerful because they force us out of traditional linear models, and because they make sense of what often appears contradictory. The Circles offer a narrative, and usually suggest points at which to intervene to change the narrative. They also sound amazingly like rules and laws of nature, even when they’re bogus.
So there you have it. And guess what:
- • If you chart usage of these three tools against business success, you’ll find a clear correlation;
- • In fact, 80% of general management and strategic consulting goes to the 20% who have mastered these three tools;
- • The more these three tools get used, the better known they get, the more clients learn to recognize excellent tool mastery on the part of consultants, the more they get hired for excellent use of these three tools, and the more they get used.
Now you too can be quoted, command high rates, and gain that aura of the oracle that surrounds the Great Strategists. Just use the three tools.
Your financial tokens of gratitude for this revelation may be sent to me at trustedadvisor.com. Credit cards and PayPal are accepted. You’re welcome.
All those years of creating 2×2 matrices, curricula, programs and interventions to train consultants and in one fell swoop… you managed "to pull away the curtain" to succinctly unveil the secret! Charlie, I laughed so hard I thought I was going to have to change my clothes! Oh, BTW, the check’s in the mail.
Charlie,
What about the all powerful QUADRANT?
Then again, perhaps the quadrant is a master-master level tool and should be covered in your Advanced course.
Thanks for empowering us again!
Cheers,
LEO
Great post. I think if most strategy consultants did these, we’d get a whole lot more for our money.
Rats, Charlie, I have been unmasked.
Bit thanks anyway; I needed a smug smile and a touch of humor today.
Jim.
Hey Charles, I’ve just come back from a pitch where I used all three of these techniques to demonstrate our clearly superior abilities. But hey, so did our competitors! Now we’re stumped! Can you let me know Secret Sauce nos 4 & 5, ummm… secretly?
Kind regards, Michael Holt
That’s 3/4’s of being a certain type of pundit, too.
Any insight as to a difference between the tactical and the "strategic" .. function-specific "strategies", business "strategies", vs. corporate "strategies" … yours, an active competitor’s, vs. near-market participants? Alas, I fear this article highlights yet another purveyor or consumer of genericised strategy who confuses good communications skills or good process with actively competing and thinking more effectively. Ascerbic anti-authoritarianism is no substitute for leadership.
Good luck with that,
Mary
Ah – all those years of strategy consulting apprenticeship wasted…
An observation on the use of tools:
For my MBA dissertation many moons ago I studied the use of strategic and finacial tools in UK and Japanese companies (this was in the early 90s when Japanese companies were regarded pretty universally as the bees knees).
I’d expected to find that British companies used (short-term oriented) financial tools more, and Japanese companies used (long-term) strategic tools more.
But in fact, British companies used more financial tools AND more strategic tools.
The same finding was replicated in a comparison of British and German businesses.
Turns out that Japanese and German companies weren’t really using any tools.
The reason: they actually understood their businesses.
The senior executives – particularly the CEOs – were all very close to their customers and their products. They were usually from engineering backgrounds (and hence understood their products and how their customers used them) and had spent a lot of time in their careers working directly with customers.
The result: they knew what their customers needed, and they knew how their operations worked.
By contrast, the vast majority of the British businesses were run by finance people. they’d spent their entire careers in finance roles – or working for accounting firms/banks.
The reason they used more strategy tools than their Japanese or German counterparts was that their grasp of how their businesses ran from an operational perspective, and their understanding of what their customers actually wanted and how their businesses ran was weak. They needed the tools to simplify things for them and help them understand their environment and make decisions.
The German and Japanese executives didn’t need tools to simplify things for them. they understood them deeply because they’d been immersed in them for most of their lives.
Ian
PS – One thing I’ve repeatedly noticed about the 80:20 rule is that for some reason people think the two numbers have to add up to 100. They don’t. They’re percentages of two different datasets. So it’s perfectly possible to have an 80:10 or 70:40 or whatever. Yet no one in the history of explaining the rule has ever highlighted this as far as I can see. They all say 80:20 or 90:10 or 70:30 or whatever.
I never fail to be impressed/humbled by the readership of this blog. Great comments all, many thanks.
Barbara your check bounced. Talk to you later.
LEO, I tend to think of the quadrant as an extension of the two-axes rule–just extend the line. A great example is the New York magazine quadrant I mentioned. No question though it adds spice by expanding the axis names from necessarily numeric to more qualitative opposites.
Michael, secrets 4&5 are on the boat to NZ, hopefully they’ll arrive in time. I have the same problem, competitors also seem to steal my greatest ideas. Don’t they know who I think I am?
Mary, I honestly don’t know what you’re saying here.
Ian B. thanks for that most excellent observation about tools and culture. I remember realizing the same about strategy in general decades ago when looking into Japanese strategies. What westerners called "Japanese strategy" was merely a westerner’s cognitive interpretation of a set of cultural norms. To mix metaphors, we marvelled that they had been speaking prose all their lives. They didn’t find it remarkable at all; you might even say they didn’t get the joke. For all we in the west talk about living the values and following mission statements etc., we are remarkably ill-equipped to execute strategies that require broad collaborative execution because–well, because we over-think it and under-live it.
Not to beat a dead horse, but this is precisely the same sillineness that underlies our cultural obsession with putting "neuro-" in front of everything business-related, believing that somehow translating the interior life will ‘explain’ the mind. It doesn’t explain much at all, it simply translates terms into a new, chemical, language. Most of the time, that translation is about as useful as westerners describing Japanese strategies; while we’re "explaining" it, they’re running circles around us by simply doing it.
You do not necessarily have to understand something in order to do it. Take that, Sigmund Freud and David Rock. Sometimes, as ee cummings put it, a cigar is just a cigar. And a strategy by any other name is just a strategy.
nice one !