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I'm Sorry I Broke Your Company: When Management Consultants Are the Problem, Not the Solution [NOOK Book]

Overview

It’s the People, Stupid!
Karen Phelan is sorry. She really is. She tried to do business by the numbers—the management consultant way—developing measures, optimizing processes, and quantifying performance. The only problem is that businesses are run by people. And people can’t be plugged into formulas or summed up in scorecards.

Phelan dissects a whole range of consulting treatments for unhealthy companies ...
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I'm Sorry I Broke Your Company: When Management Consultants Are the Problem, Not the Solution

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Overview

It’s the People, Stupid!
Karen Phelan is sorry. She really is. She tried to do business by the numbers—the management consultant way—developing measures, optimizing processes, and quantifying performance. The only problem is that businesses are run by people. And people can’t be plugged into formulas or summed up in scorecards.

Phelan dissects a whole range of consulting treatments for unhealthy companies and shows why they’re essentially fad diets: superficial would-be fixes that don’t result in lasting improvements and can cause serious damage. With a mix of clear-eyed business analysis, heart-wrenching stories, and hard-won lessons for both consultants and the people who hire them, this book is impossible to put down and impossible to ignore. Karen Phelan and other consultants may have “broken” your company, but she’s eager to make amends.


“Finally, an author challenging our broken management models who has credibility—she has been there. Karen Phelan not only explains why the emperor—our sacred ways of managing—has no clothes but provides us with insightful alternatives that promise to add real value to our organizations and the people that make them function.”
—Dean Schroeder, award-winning coauthor of Ideas Are Free

“Funny, irreverent, and outrageous, this book is making a deeply serious point: talking to actual people and figuring out how to help them work together better is what’s going to make organizations stronger, not another PowerPoint presentation.”
—Rosina L. Racioppi, President and CEO, Women Unlimited, Inc.
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Editorial Reviews

Publishers Weekly
Former Fortune 100 executive Phelan skewers the mystique of management consultants in this entertaining guide for how not to manage a business. Drawing on her own consulting experiences, she portrays them as providing pre-packaged, unproven theoretical constructs that "substitute for getting people to work together better." Phelan argues convincingly that using statistical models to solve all problems exalts the process of measurement above the goals of improving employee efficiency and performance. Phelan's unpretentious style engages the reader in the unfolding revelation that prevailing business models are wrong. If, as she maintains, the misconceptions propagated by the consulting industry underlie many business problems today, a fresh approach is needed. Readers will be intrigued by her thesis that no principles apply universally, and that companies that hire consultants to think for them are courting doom. Her message that consultants can contribute to "a two-way relationship" offers a hopeful contrast to her earlier warnings. Although Phelan belabors her main points, her caution against relying on "one size fits all" advice rings true. (Jan.)
From the Publisher
Named one of The Globe and Mail’s top ten business management books of 2013

I learned early in my consulting career as a professor coach that it is all about building relationships. Karen reminds us, It's the people stupid! and then shows us in this wonderful book how the recommendations of the the commercial consultants are basically just ways of keeping the consulting industry profitable. The best thing about this book is the concrete examples, not just the critique. It shows us over and over again how problems are not solved by extensive programs and studies, but by getting people together and building relationships. The most important of those, and often missing, is the relationship between the client and the consultant. This book shows over and over again that when the consultant finally talks to the client and establishes a relationship, problems begin to be addressed and solved. In the end this turns out to be a book about how to manage and how to live, not just how to be careful of consultants.

—Edgar H. Schein, bestselling author of Humble Inquiry and Helping

Former Fortune 100 executive Phelan skewers the mystique of management consultants in this entertaining guide for how not to manage a business. Drawing on her own consulting experiences, she portrays them as providing pre-packaged, unproven theoretical constructs that "substitute for getting people to work together better." Phelan argues convincingly that using statistical models to solve all problems exalts the process of measurement above the goals of improving employee efficiency and performance. Phelan's unpretentious style engages the reader in the unfolding revelation that prevailing business models are wrong. If, as she maintains, the misconceptions propagated by the consulting industry underlie many business problems today, a fresh approach is needed. Readers will be intrigued by her thesis that no principles apply universally, and that companies that hire consultants to think for them are courting doom. Her message that consultants can contribute to "a two-way relationship" offers a hopeful contrast to her earlier warnings. Although Phelan belabors her main points, her caution against relying on "one size fits all" advice rings true.

—Publishers Weekly (Reviewed January 2013)

“Finally, an author challenging our broken management models who has credibility—she has been there. Karen Phelan not only explains why the emperor—our sacred ways of managing—has no clothes but provides us with insightful alternatives that promise to add real value to our organizations and the people that make them function.”

—Dean Schroeder, award-winning coauthor of Ideas Are Free

“Funny, irreverent, and outrageous, this book is making a deeply serious point: talking to actual people and figuring out how to help them work together better is what’s going to make organizations stronger, not another PowerPoint presentation.”

—Rosina L. Racioppi, President and CEO, Women Unlimited, Inc.

I highly recommend the iconoclastic and people oriented book to any organizational leaders, decision makers, managers, and consultants who are seeking an approach to finding workable, realistic, and lasting solutions to the most pressing problems within the firm. The author shares timeless and empowering ideas that will engage and inspire the employees, and avoid the latest fads and acronyms at the same time.

—Blog Business World Review, April 2013

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Product Details

  • ISBN-13: 9781609947415
  • Publisher: Berrett-Koehler Publishers, Inc.
  • Publication date: 12/5/2012
  • Series: BK Business
  • Sold by: Barnes & Noble
  • Format: eBook
  • Edition number: 1
  • Pages: 224
  • Sales rank: 890,689
  • File size: 3 MB

Meet the Author

Karen Phelan is a cofounder of Operating Principals, a consulting firm that replaces bad business practices with ones that work. A former engineer with degrees from MIT, she spent more than a dozen years as a consultant with Deloitte & Touche and Gemini Consulting and afterward worked in management at Fortune 100 companies.
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Read an Excerpt

Introduction
Most people, if not all, have a hidden talent—some goofy or useful ability that they share with few other humans. I once met a woman with an uncanny ability to call coin tosses. I know another woman who can mimic the tones of a telephone and get her voice mail without pressing buttons. My older son can manipulate three-dimensional images of objects in his mind. When we built models together, I noticed that he built his in his head first. My younger son converses in his sleep. I don’t mean he utters random words or phrases. You can have an entire conversation with him while he is sleeping. My husband can dead reckon anywhere through the woods. If you ever need to get out of the woods quickly, he can navigate a path without a GPS and get you within one hundred feet of your car. I have a skill, too. I realized exactly what it was only a few years ago.
In 2006 I attended a Sloan School class on systems dynamics. Our first task was to break into teams and play the beer distribution game, a simulation of the supply chain of a beer manufacturer. The game illustrated the bullwhip effect, a phenomenon well-known to people who work in supply chains. The effect shows that small variations at one end of the chain can become amplified along the chain, resulting in large variations at the other end. A few minutes into the game, I realized what was going on and figured out the correct order quantities while the rest of the class struggled. I am familiar with supply-chain problems, so I thought little of it. However, in problem after problem, the answer was just plainly obvious to me. While everyone else was documenting cause-and-effect loops, I thought about the problems and found the answers. My classmates marveled at my ability, and I became something of a phenomenon. Only I felt like a fraud. Yes, I could solve all the systems problems in my head in a few minutes, but I didn’t have a remarkable computer-like ability to solve systems problems. My talent is empathy—being able to put myself in someone else’s shoes.
With each problem, I immersed myself in the situation and pretended I was there, making decisions as the various actors until I found the one that worked. How I really differed from everyone else in the class, including the instructor, was that I knew these problems weren’t about supply chains, factory maintenance, improvement initiatives, or construction schedules. They were about people reacting to circumstances. Every business problem is about people reacting to circumstances.
Textbooks, consultants, and experts blame the bullwhip effect on forecast errors, unpredictable demand, poor information, poor inventory management, and so on. What they don’t mention is that the bullwhip effect is primarily caused by emotions. It is caused by fear when demand falls off slightly, and people become scared and order less and less all along the chain. It is caused by optimism when demand increases slightly, and people hope demand grows and worry that they won’t have enough supply so they order too much. It is caused by mistrust as each person adds to or subtracts from his order to cover his ass if the supplier can’t ship as planned or the customer changes her mind. The only way to eliminate the bullwhip effect is to eliminate the fear, hope, and mistrust of the people ordering inventory.
I wrote this book because, after a thirty-year-long career, I am tired of pretending. I’ve had to do a lot of pretending—pretending that the inventory management system I am implementing is the answer when I am really getting each part of the supply chain to trust each other, pretending to reengineer the new product development process when I am really getting the Sales, Marketing, and Research and Development (R&D) Departments to work together better, pretending that my amazing ability to solve problems is due to computer-like thinking rather than human-like imagining. Most of all, I am tired of seeing employees treated as assets that need to be monitored, measured, standardized, and optimized. I can’t be honest about what I do because no one would buy my services if I said that I help people work together better. Instead, I pretend to sell methodologies, models, metrics, processes, and systems.
As a young consultant, I created many models, processes, and programs, all with the purpose of taking the variability out of tasks, the emotions out of decisions, and the judgment out of management. In short, I was trying to eliminate the human element from running a business. I was not alone. Over the last two decades, management methods have proliferated and embedded themselves as corporate best practices with the goals of improving efficiencies, standardizing skills, and optimizing performance. Balanced scorecards, pay for performance, core competence development, process reengineering, leadership assessments, management models, competitive strategy, and cascading performance measures are some of the models that are now entrenched in business management, even though there is little evidence that they work as advertised. All these models and theories attempt to dehumanize the workplace, and they have succeeded, though not as intended. People are treated like machines that have to be maximized until they break, and all their unique and goofy talents never see the light of day.
We have been led to believe by management gurus and management consultancies that businesses are logical and run by the numbers and that their models and theories will provide step-by-step instructions on how to succeed. Companies try to implement these models or make decisions strictly by the numbers and never realize the expected successes because businesses are not actually rational. Human assets are not a part of a business. If you take away the human assets, you don’t have a business, just a bunch of offices and equipment that can’t do anything. Businesses are people—irrational, emotional, unpredictable, creative, oddly gifted, and sometimes ingenious people who don’t operate according to the theories. This book is a reminder that we need to stop trying to dehumanize the workplace and that if you manage the people element, you pretty much have everything covered. This book is intended for consultants, people who hire consultants, non-consultants, and anyone who is tired of pretending that modern management practices work. If you have ever been at work and wondered if everyone else was insane, you are not alone. I wrote this book for you.
Why I blame management consultants
The term “consultant” is used very loosely. Anyone who is a contractor to a business is considered a consultant. Plus, there are all sorts of technology consultants, marketing consultants, and design consultants. When I use the term “management consultant,” I am talking about those who work with the top layers of corporate management and advise them on what to do. More specifically, my ire is mostly addressed at the large consultancies that hire MBAs straight out of school and arm them with spreadsheets, pro forma methodologies, incoherent jargon, and a not-small amount of arrogance. I blame these people for conceiving and propagating the many management myths that are the roots of some of the biggest problems in business today—lack of innovation, short-term focus, obsession with financial gains over creating valuable products and services, and stressed-out, overworked, and disengaged employees.
Rather than focusing on the obvious question—How can my business make life better?—corporate leaders have spent the last few decades fixating on other, less-meaningful questions like,
• How do I gain a competitive advantage?
• How do I maximize my shareholder value?
• How do I increase my bottom line (both personal and corporate)?
• How do I optimize the efficiency of my human assets?
The result is lean and mean companies that operate alike, offer copycat products and services, and are dependent on acquisitions for growth. Many of these problems are rooted in the accepted management wisdom that abounds with little proof of veracity. The beginnings of all this management dogma started with one or more management consultants. The best analogy I can use to explain this cycle is diet and exercise fads. It seems like every year brings a doctor or fitness expert who has found the solution for weight loss. That solution may be a miracle food or a rigorous diet program or a new exercise regimen. However, none of these fads work, and worse, they often result in yo-yo dieting that leads to more weight gain and overall poor health. To be healthy, you need to eat a variety of foods in moderation and get plenty of exercise and enough sleep. The secret to weight loss is the same secret that everyone has known forever. There is no secret.
Similarly, every year, management consultants develop some new model or theory that will be the answer to all your business problems. Visit the website of any consultancy and you will see that it sells “business solutions.” Management consultants strive to achieve thought leadership by creating new models and theories that hopefully will be adopted widely by businesses and make them famous (and rich). However, all this has just led us to fad after fad after fad. The widespread adoption of each fad brings with it its own set of problems that lays the groundwork for the next fad. Competitive strategy based on external factors led to competence strategy based on internal capabilities, which led to blue ocean strategy based on top-down ideation, which led to adaptive strategy based on bottom-up responses to the marketplace. Each one corrects the deficiencies of the former fad but then creates deficiencies of its own. The result is a vicious cycle similar to dieting, gaining weight, more dieting, and more weight gain. The only way to stop the fads is to stop the management consultants creating and selling them.
About this book
This is not an academic book offering original research or proof positive of my ideas. This is the story of how I came to realize that everything I believed about business was wrong. It’s my story woven with the rise and fall of some of the management fads I helped propagate. I chose the examples based on how they changed my thinking about what I was doing. The first three chapters recount my experiences with strategy development, process improvements, and metrics implementations. Many of the examples in these chapters are from my early career as a young consultant, when I worked for large consultancies. The next four chapters discuss the methods that fall under the banner of “talent management” and cover performance management systems, management models, high-potential programs, and leadership competencies. Most of the examples in these chapters relate to my experiences in a later part of my career in the corporate world, where I got to live through many of the methods I had helped implement.
I would like to be very clear about my purpose. The point of this book is to debunk the conventional business wisdom and not to add to it. Although I offer my recommendations, I offer them as alternatives to the theories that don’t work. For the most part, I recommend replacing the model or process with a candid conversation among colleagues. Unfortunately, I haven’t done a major study to show that improving dialogue and relationships has a business benefit. I will let you be the judge of that theory. Fortunately, debunking a theory is much easier. It requires only one piece of evidence that disproves it. I’m going to repeat this because most consultants I know have a hard time understanding this: you need only one piece of contrary evidence to disprove a theory. Proving a theory to be true is much harder, requiring that it works in all situations. This is where management consultants often get it wrong. They find something that works once or twice and label it a best practice to be followed by everyone when it is useful only in a specific situation.
I offer recommendations and alternatives as a starting point to help us get out of the faulty thinking that pervades today, like “You can’t manage what you can’t measure.” (Well, yes you can!) I am in no way suggesting that I have the solutions. I’m just suggesting that instead of implementing a method that is often wrong, we try doing something else that might work. I’m suggesting that we cut through the dogma to find the kernel of truth and base our new solutions on that truth. Isn’t it better to have only a chance of being wrong than to most certainly be wrong? I think that’s pretty obvious. In fact, if I were to describe what this book is about, I think it’s about the really obvious.
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Table of Contents

Introduction
Chapter 1: Strategy development is a vision quest
Chapter 2: Optimized processes look good on paper
Chapter 3: Numerical targets are measuremental
Chapter 4: Standardized human asset management is a SHAM
Chapter 5: The Successful Manager’s Handbook is 609 pages long
Chapter 6: Albert Einstein was a poor performer
Chapter 7: Steve Jobs failed my leadership competencies
Chapter 8: Check your sanity here
Epilogue: Are management consultants bad people?
Appendix 1: A Measure of Truth
Appendix 2: The Method of Truth
Bibliography

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